I would like to raise one side point, however. To wit: when I was growing up, I was taught (or imbibed through osmosis, or both) that the clearest lesson of the Great Depression was that governments' failure to spend in response to the crisis was the height of folly. The economic orthodoxy of the time opposed deficit spending, but that orthodoxy was proved wrong; pump-priming in a depression was obviously the correct policy. That's what I gathered from everything I read, in school and out of school, about the period, and I assumed, until fairly recently, that it was pretty much universally acknowledged to be true. Even as late as the 1990s, it was -- or such was my impression -- fairly unusual to find an academic economist (let alone historian) contending that governments were actually right and sensible in their failure to spend more vigorously at the onset of the Great Depression.
In recent years, however, this consensus -- or what I took to be a consensus -- has fallen apart to such an extent that Ferguson, in his 'open letter' in The Harvard Crimson, can write this:
Throughout my career as a historian, I have regularly written and spoken about Keynes, who had one of the most brilliant minds of the twentieth century. That, of course, is the most important thing about him. You may disagree with his argument that, in a depressed economy, the government should borrow and spend money to stimulate aggregate demand. But you cannot ignore it. (emphasis added)I take "you may disagree" to mean, in effect, "it is reasonable to disagree." In other words, Ferguson is saying that reasonable people disagree about whether governments should seek to stimulate aggregate demand in a depression by spending. Would any historian or economist of any reputation, including conservative ones I mean, have written this passage 25 or 30 years ago? If the answer is no, then this is a small sign of how much the prevailing intellectual and political winds have shifted in recent years. Of course, the entire debate about 'austerity' and the policies adopted by various European governments are a much louder signal of the same thing, but I nonetheless find this passage worth remarking.
Added later: Just in time for the WW1 discussion: A review of The Sleepwalkers (Clark) and July 1914 (McMeekin) in the current NYTBkRev. (Haven't read the review yet.)