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In terms of economics, the twenty-first century promises to be one of experiments and mixed economies that display features of both a private enterprise market and an intrusive government sector. To fully understand this coming trend, William Hixson presents this study of the U.S. economy since World War I and its experiments with mixed economics. Hixson describes how the largely laissez-faire economy prior to 1929 was so structured to make a crisis of illiquidity and overindebtedness inevitable, and how the mixed economy that has prevailed since World War II is structured to result in a similar crisis. His work challenges the generally accepted views of both U.S. and Marxist economists.
Following a brief introduction that outlines Hixson's approach and theoretical framework, the book begins with a seven-chapter study of the basic operating principles and procedures of a laissez faire economy. The next three chapters examine the Great Crash of 1929 and how it was a predictable outcome of the U.S. economy's operation in a laissez-faire mode. A set of four chapters then analyze the emergence of the government sector as an increasingly significant factor, and the evolution and institutionalization of mixed economy. The last set of chapters considers the past four decades of a mixed economy and why it lacks long-term viability, while the concluding two chapters suggest changes in operating principles and financial practices to make the mixed economy a viable one. This work will be a valuable resource for professionals involved in all types of financial and investing fields, as well as for students and scholars of economics and national economies.
- Table of Contents
Foreword by John H. HotsonIntroductionThe Realization of ProfitsProfit Realization and Aggregate DemandAggregate Demand and the Money SupplyMoney Supply, Output, and PricesHow Increases in the Money Supply Are Brought AboutHow Increases in Money Supply Affect Aggregate Spending and Aggregate IncomeThe Investment ProcessDebts and Illiquidity in the Private Sector in the 1920sComplexities in the Economy of the 1920sThe U.S. Economy-- 1929-1933The Period of Recovery from the Great Crash-- 1933-1939The Mixed Economy of the 1930sThe U.S. Economy-- 1939-1946The Early Post-War YearsGNP, Money, Banking, and the Fed-- 1947-1987Debt, Interest, and Illiquidity in the Post-War PeriodOn the Maximum Rate of InterestRising Prices in the Post-War EraIndustrial and Financial Sectors-- 1947-1987Other Observations Concerning the Era Since World War IIRestructuring the Money Supply and the Banking SystemOther Restructuring of the Process of Financing the EconomyReferencesIndex
Accepting bits and pieces of Marx, Hobson, Veblen, and Keynes, but not the body of establishment economic theory, this businessman turned author focuses on the performance of the US economy since WW I vis-a-vis the size and growth of the money supply, the expansion of private and public debt, and the interest burden that debt generates. The soaring ratio of interest to total income is said to be the single most significant economic indicator in recent decades; depressions like that of 1929-32 arise because the economy, in order to grow, becomes increasingly indebted, illiquid, and interest burdened. Indeed, 1987 was more illiquid than 1929, though no panic had yet developed in the absence of public disillusionment that must eventually emerge. Hixson departs from mainstream economics in many surprising ways, e.g., his belief that moderation of money growth and high-interest rates promotes inflation and his approach to counting interest only as cost and not income. This volume should provoke educated general readers as well as others to compare these views with standard principles of macroeconomics on the debt burden issue. Upper-division undergraduate and graduate students.
A Matter of Interest is a good example of the important contribution that an independent scholar can make to a subject where the professionals have become dependent on an orthodoxy which has been highly insensitive to criticism.
We are most fortunate that William F. Hixson's important book of diagnosis and prescription is appearing just as the public is at last starting to realize the great danger to the economy caused by overborrowing and high interest rates, and the resulting increasingly unbearable load of public and private debt.
Hixson's analysis is highly original, well written, and comprehensible even for readers not well versed in economics.