The editors of The Defining Moment pose an interesting set of questions: Did the Great Depression cause a quantum increase of the federal government's involvement in the U.S. economy? If so, how and why?

Given the multitude of federal interventions into various sectors of the economy, the editors sensibly subdivided the questions into twelve topic areas, so that each chapter pertains to a particular program or sector. They then assigned the topics to respected academic economic historians affiliated with the National Bureau of Economic Research. Most of the authors actually try to answer the editors' questions, which gives the collection unusual coherence for a conference volume. Still more remarkable, most of them write well. They offer arguments and evidence that are far more accessible than those a reader will typically find in academic economics journals. The authors do not examine the question of whether the new roles played by the federal government during the 1930s contributed to, rather than only resulted from, the length and severity of the depression.

In their introduction to the volume, the editors set forth the quantum-increase or "defining moment" hypothesis and summarize the authors' answers. They provide useful line charts plotting the growing size of total government spending during the twentieth century, as a share of GNP and as divided among federal, state, and local governments. To my eyes, the time series for total government purchases of goods and services as a share of GNP shows two distinct upward steps. It first rises from a plateau of around 8 percent in the 1920s to a higher plateau of 14 to 15 percent in 1932-40. It then (after the spike associated with World War II) rises to a still higher plateau of around 21 percent after 1952. As is consistent with the theme developed by Robert Higgs in Crisis and Leviathan (1987), the crisis of the Great Depression is associated with the first upward "ratchet effect." The second ratcheting upward is a puzzle not examined in the current volume, beyond a passing reference or two to "the cold war."

Like most conference volumes, The Defining Moment is a mixed bag; some chapters are stronger than others. Few readers will want to read it cover to cover, but anyone seriously interested in the economic history of the United States in the twentieth century particularly those called upon to teach that subject should give the volume a look.

Prof. Bordo is my instructor for my Financial & Monetary History of the US class here at Rutgers University. He is a brilliant guy and I am sure this book is great. I have never read it but he is no slouch.

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