It is a great pity that we only hear about the Keynes-Hayek debate. Unlike those two towering figures, Cassel was consistent throughout. Economics, and the world economy, would have evolved very differently if Cassel´s “voice” had been given the same “air time”!
Eric Rauchway finds an astonishingly timely quote about the Obama administration — said by Harry Dexter White in 1935:
There were, in meeting the crisis of the 1930s, two positions.
(a) Let the Government spend the minimum necessary to keep men alive and to prevent social disturbance; or
(b) Let the Government spend on such a large scale as to provide a positive powerful stimulus to recovery.
This second alternative is often formally embraced by those who in practice support the first position. That is, the actual scale of expenditures that they propose, while sufficient to bring about a serious derangement of the budget, is not sufficient to exert an adequate stimulus to recovery. In consequence, depression conditions tend to be frozen over a considerable period.
And this is Cassel (1933):
“considering what governments have done and still do to deter private investment by high and arbitrary taxation, by all sorts of restrictions, national and international, and by bad monetary policy, it is, to say the least of it, curious that such mistakes should be exploited as a ground for widening the functions of governments as entrepreneurs”