Published by EH.Net (September 2012)

Alasdair Roberts, America?s First Great Depression: Economic Crisis and Political Disorder after the Panic of 1837. Ithaca, NY: Cornell University Press, 2012. vii + 255 pp. $26 (hardcover), ISBN: 978-0-8014-5033-4.

Reviewed for EH.Net by Peter L. Rousseau, Department of Economics, Vanderbilt University.

In this entertaining monograph, Alasdair Roberts of Suffolk University?s Law School casts a long shadow on economic events near the end of the Jackson presidency. And while it is safe to say that the form of populism defined by Jackson influenced the nation?s course well beyond his term as President, it is challenging to build a model in which economic events of 1837 continued to drive domestic and international decisions a decade later. But Roberts makes the argument in a straightforward manner: hard times and repudiation of state debts heightened the level of rhetoric across the Atlantic and exacerbated territorial tensions between the United States and Britain. The United States, portrayed as being in no position to wage war directly with Britain, though it had been down that path several times before, responded to the apparent attack on national honor by starting the 1846-48 war with Mexico over Texas. Along the way, hard times produced civil unrest in Northeastern cities and in upstate New York, the former over voting rights and the latter over archaic land use policies. The ?long shadow? hypothesis goes beyond the standard economic analysis of the period that views the recession as turning around in 1843. This is thought provoking, but carrying the narrative forward through the Polk administration also requires moving from data to anecdote to speculation on causes and effects.

Roberts also intends to relate disturbances in the 1840s to current events in the United States and abroad. This is understandable. If hard times in the 1840s were driven by irresponsible excesses in state spending and an inability of the Federal government to broker a solution, parallels with the current U.S. crisis in personal debt and sovereign crises across the Eurozone seem almost immediate. Yet as economic historians we must be circumspect in viewing history as a simple series of repeating events devoid of learning in the interim.??

Using contemporary accounts to build a theory of the 1840s frees the author from standard economic analysis, which would rely strongly on empirical evidence to support its claims. Indeed, any economic motivation provided is conventional, drawing heavily but with little attribution from a number of important and more recent secondary works. Avoiding long-standing debates on the domestic and international causes of the financial panics of the 1830s, Roberts focuses on a narrative that places non-economic British headlines at the center of civil unrest and a rising nationalism in the United States. This Anglo-slanted view attributes the state bond defaults to bad investment decisions and rogue banking within the United States. British creditors are seen as indignant victims of U.S. actions, and the fact that British capital dried up well before the defaults is not considered as a possible cause of abandoned projects and debt repudiations. Rather, the United States is characterized as a federal state paralyzed by the realities of the world economic order and rife with the same types of reckless actors that many view as responsible for the 2008 recession.

Whether I agree with the emphasis applied in this interpretation or not, the book has led me to reconsider my priors about several important figures in the 1840s. For example, many financial historians think of the Tyler administration as both inept and ineffective. Tyler?s dismissal by his own party and veto of central bank legislation no doubt influence these views. But was the emergence from the recession just a cyclical rebound or the result of a strong nationalistic impulse and crackdown on civil disobedience set into motion by Tyler? Roberts makes an intriguing case that Tyler was actually a shrewd administrator who used the resources at hand to undo the unrest that came as direct consequences of actions by his predecessors.

The book gets a bit sidetracked as the Tyler administration closes and the narrative turns to territorial disputes taken up by President Polk. This is not to say that the stories are uninteresting! But linking them to the panics and state debt defaults is speculative at best. After all, to say that disparaging public statements by influential British creditors in the early 1840s caused the United States to lay claim to territory that seemed naturally within its domain reaches well beyond basic economics. And to say that the hard times of the 1840s were the reason why individuals in Philadelphia, Providence and upstate New York turned to violent protests and other unlawful acts is again not obvious. Indeed it seems just as likely that people who felt disenfranchised by the political process would rise against an unsustainable status quo recession or not.

At the same time, economists are sometimes too closely bound by the discipline of rigorous theories and the scanty data that often represent the only evidence available for testing them. If a narrative theory can be put forward that relies on anecdotal and contextual evidence, why worry that the argument is something less than airtight? In this respect Roberts does students of the period a service by thinking outside of the normal constraints to conjure a broad and international view of the decade that followed the Jackson presidency.

Peter L. Rousseau is Professor of Economics at Vanderbilt University and Secretary-Treasurer of the American Economic Association. He is author of ?Jacksonian Monetary Policy, Specie Flows, and the Panic of 1837,? Journal of Economic History 62:2 (2002), 457-88.
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