Reply To: Literature on WWII economics


The reason for the dichotomy is that monetarists, who are otherwise favorably disposed toward the free market (like Friedman) because of their microeconomic analysis, accept the Keynesian aggregate demand framework in macroeconomics. If one presupposes that aggregate demand determines production and employment it seems to follow that war spending must lift an economy out of depression.

Here is Roger Garrison’s article on Friedman and Keynes:

Check the references in Robert Higg’s seminal article for fellow travelers with the Austrians against the claim of war prosperity: