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The closer the scrutiny of policy responses to the Great Depression of the 1930s, the narrower seem the possibilities for innovation, and the more powerful seem the political and financial constraints in favor of fiscal retrenchment, sound currency, and sound finance. Departures from orthodoxy were rare and often involuntary; governments were concerned to minimize the crisis rather than to risk greater difficulties through radical innovation. In New Zealand, a strong record of state economic management and relief programs in the 1920s was reversed in the 1930s, as financial crisis brought a retreat to orthodox principles (pp. 149-52). In the United States, Franklin D. Roosevelt attacked Herbert Hoover in 1932 for extravagant public spending and unnecessary government intervention in the economy. It took time for the severity and duration of the crisis to suggest that extraordinary measures were needed. Departure from the gold standard and the growth of political pressure for active policies to counter the crisis prompted some new initiatives, but tight fiscal constraints, administrative antipathy, and fear of inflation prevented any real "revolutions" in policy.
Capitalism in Crisis collects eight essays examining policy responses to the Depression in Europe (including an essay on Eastern Europe), the United States, Australia, and New Zealand. The strengths of the...