State Structures and the Possibilities for “Keynesian” Responses to the Great Depression in Sweden, Britain, and the United States
When the Great Depression of the 1930s swept across the Western industrial democracies, it undermined classical liberal orthodoxies of public finance. Economic crisis called into question the predominant conviction that government should balance its budget, maintain the gold standard, and let business reequilibrate of its own accord during economic downturns. Demands were voiced for extraordinary government actions on behalf of industrial workers, farmers, and other distressed groups. Established political coalitions came unraveled, and new opportunities opened for politicians and parties that could devise appealing responses to the exigencies of the decade. One of the greatest dilemmas was how to cope with an unprecedented volume of unemployment in suddenly and severely contracted economies.