Summer School 7: The Great Depression, the New Deal and how it changed our economy
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Support comes from our 2024 lead sponsor of Planet Money, Amazon Business. Everyone could use more time. Amazon Business offers smart business buying solutions so you can spend more time growing your business and less time doing the admin. Learn more at AmazonBusiness.com. This is Planet Money from NPR. Welcome back everyone to Planet Money Summer School, economic history of the world.

The only way to make your summer feel like it's 5,000 years long. In a good way, of course. We have only two episodes left before Labor Day. Like every history class you've ever taken, we have to pick up the pace if we're going to finish. So today we tackle the big one. The moment so often referenced by Planet Money that we made a jingle about it. We're going back to the Great Depression.

Lesson seven, the Great Depression, the New Deal, and how it changed economics. I'm Robert Smith. Usually transforming an economy can take decades, centuries even, but the Great Depression rapidly transformed the relationship between government and business. Today, we'll trace how the 1930s altered the very nature of money itself and how we went from the worst moment for workers in the United States to one of the best.

Joining us again is our U.S. financial history professor from Providence College, Sharon Murphy. Hey, Sharon. Hey, thanks for having me back. When we last left the United States of America in our economic telling of history, they were just starting to feel like they had gotten their act together. We're talking about the early 1900s here. They finally had one paper currency, the U.S. dollar. They had come up with a central bank, the Federal Reserve, and they really thought, what could possibly go wrong?

Yeah, exactly. They really felt like they've figured out the boom and bust cycle. This isn't going to happen again. 1920s coming out of World War I. United States was virtually untouched by the war. We really, our economy's just, you know, doing great. They also had this sort of

Economic philosophy known as laissez-faire capitalism. We probably all heard this in our history courses. What is that exactly? So it's the idea that you want as little government involvement in the economy as possible. The economy will take care of itself. Everything will go better if you just leave it alone.

Looking back, we, of course, know that everything wasn't perfect in the economy of the 1920s. Leading up to the Great Depression, what was the problem lurking underneath that would end up causing it? So the Great Depression, I would say, is a confluence of issues, but one of the underlying things was really debt.

There's a lot of debt in the economy, consumer debt, government debt. Everybody's buying appliances, buying cars. Buying stocks. Buying stocks, yes, and going into debt for that as well. On top of that, we have vast wealth inequality. So this wealth inequality, this oversaturation in the market, the debt, all of these kind of came to a head in 1929. ♪

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This message comes from Insperity, providing HR services and technology from payroll, benefits, and HR compliance to talent development. Learn more at Insperity.com slash HR matters. Welcome back to Planet Money Summer School. In the fall of 1929, the U.S. stock market dropped by half. This marked the beginning of the worst economic crisis in modern U.S. history. I wanted to just play a bit here from our sister podcast at NPR, ThruLot.

It was panic. Sixteen and a half million shares of stock sold in a single day. The tremendous crowds which you see gathered outside the Stock Exchange are due to the greatest crash in the history of the New York Stock Exchange. ThruLine featured oral histories from the Great Depression. This one is from the writings of Dorothy Haidt, a college student who ended up living in Harlem. I looked with great anticipation into going to New York.

And then when I got down to New York University, I found there were so many men there, and they were all selling apples. Little man, what now? Well, you can always sell surplus apples, five cents apiece, on the street corner. They were five cents, but no one had five cents to buy one.

I realized there was such pain in Harlem because you had whole families that were being evicted at any time. You could go down the street and there would be a whole family sitting whose every possession was placed on the street just because they didn't have the money to pay the rent. You'd see little babies and little children and their parents trying to deal with what was an impossible situation.

An excerpt from NPR's Throughline podcast, Lives of the Great Depression. When faced with economic crises in the past, governments often just waited them out. Things would get better eventually, right? But no one had seen anything like the Depression. Businesses closed, banks collapsed, eventually 25% unemployment. Think about that. One in four people out of work.

And this was happening all over the world. Presidents and prime ministers around the globe didn't know what to do. But it began to dawn on smart people that there was something that was making the Great Depression worse. Something that had been the bedrock of economics. That money was based on gold. The gold standard. David Kestenbaum and Jacob Goldstein pick up the story in this Planet Money episode from 2015.

The world was falling apart, stock markets were way down, unemployment was way up, banks were collapsing. And the gold standard was becoming a big problem. So just to review the way the gold standard worked was that

Every major currency in the world was backed by gold. In the U.S., you could take $20.67, and the government had to give you an ounce of gold. In England, it was 4 pounds 86 pence for an ounce of gold. That was fixed. And in normal times, people didn't even really think about trading in their money for gold. They were perfectly happy with their paper dollars and their paper pounds.

But, of course, 1931 was not normal times. People were saying, you know what? I don't trust my paper pounds. I'm freaked out. I want gold. The stock market crashed in the U.S. Banks are going under. I'm worried the whole financial system might crash. So everybody started trading in their cash and demanding gold. And this was a big problem because at some point the Bank of England is going to run out of gold.

So Montague Norman, who is running England's central bank, has to stop this. And the only way to stop the rush of people converting their pounds for gold is to raise interest rates. Why raise interest rates? Well, if you raise interest rates, that's an incentive for people to hold on to their paper currency. People will say, OK, I won't trade it in for gold. If I keep it in the bank in England, I can earn all this interest.

And this is why economists today look back and say the gold standard was such a disaster. In times of crisis, you want to be doing the exact opposite of this. You want to be lowering interest rates to make it easier for businesses to borrow money and hire people to get the economy going. This is what we do now when we hit recessions. Liaquat Ahmed wrote a book about this era called Lords of Finance. So you had this perverse system whereby in the middle of the Great Depression,

with 15% unemployment, countries were raising interest rates. And that is essentially what converted what was a terrible depression into the Great Depression. This is Montague Norman's dilemma. He has to raise interest rates to keep gold in his country, but by raising interest rates, he's causing the Great Depression. Of course, Montague Norman does have another option, right? He could just say, we're off the gold standard. You can no longer trade in 4 pounds and 86 pence for an ounce of gold.

This would solve his problem. He wouldn't have to worry about the Bank of England running out of gold, so he wouldn't have to keep raising interest rates. But for Montague Norman, the idea of going off the gold standard was insane. England was the world's biggest economic power, and in his mind, Britain's economy rested on the gold standard. So what does Montague Norman do? Faced with this choice between two impossible paths, go off the gold standard or choke the economy by raising interest rates? What does he do? He collapses.

The sort of pressures of the job got to him, and he collapsed one day. Like loses consciousness? Yeah. I mean, he just couldn't get out of bed. And I don't quite know what all of the symptoms are of a nervous breakdown, but he basically couldn't function and would have terrible headaches and...

So, his doctor told him that you're going to have to leave the country and go on a rest cure. This is the most important central banker on the planet at the time. Yeah, during the worst financial crisis.

I suppose he was worried that if he did the wrong thing, he was going to bring the entirety of civilization to a halt. Well, that's exactly—you know, he thought that the entire—the future of Western civilization was in his hands. So with the future of Western civilization in his hands, Montague Norman gets on a ship and takes a trip to Canada. He writes in his diary, quote, "'Feeling queer.'"

And then while he's gone, actually while he's on the ship on his way back home to England, the people he's left in charge, they decide, you know, we said we weren't going to do this, but we have to do it. We have to abandon the gold standard because if we don't, we, the Bank of England, we're going to run out of gold. And they have to notify the boss, Montague Norman. So they send Montague Norman this cable in code. Remember, he's on the ship coming home. And the cable reads,

Sorry, we have to go off tomorrow and cannot wait to see you before doing so. And Montague Norman, he actually thinks this just means, oh, my friend's going to be out of the office when I get back. But of course, what the cable means is we're off the gold standard. They're not leaving work early. They're taking one of the most radical steps in the history of finance.

And not only is England catapulting itself into this crazy new world where money is just paper, they're also setting up what will be a chain reaction around the world. So to understand this, imagine two people in London the day before England goes off the gold standard. Both have 20 pounds in cash money.

One of them goes to the bank that day and trades in his pounds for gold. He gets about five ounces of gold, just like it's always been. The other guy, he holds onto his paper money. All right, next day, Montague Norman's colleagues at the Bank of England drop the bomb. Boom, England's off the gold standard. What

What that means in practice is that when England cuts those strings tying the pound to the gold standard, the pound drops in value. So this guy who traded in his pounds for gold, he made a smart move. He did great. His five ounces of gold are now worth more than 20 pounds. He just made money by getting rid of his pounds before England went off the gold standard. The other guy, the guy who kept his pounds, he's the sucker. And obviously nobody wants to be a sucker.

So people all over the world see England go off the gold standard. England, the mightiest economy in the world. And they worry, will my government do the same thing? Am I going to be the next sucker? So as their economies get worse, they start turning in their paper money for gold, including people here in the United States. Because of undermined confidence on the part of the public...

There was a general rush by a large portion of our population to turn bank deposits into currency or gold.

This is FDR's first fireside chat on March 12th, 1933. The U.S. has just had the mother of all bank runs. People are afraid that banks are going to fail, so they're yanking their dollars out. And they're also worried that the U.S. will follow England and abandon the gold standard. So a lot of people are trading in their dollars for gold. People are hoarding cash and gold. And FDR is really upset about that. Let me make it clear to you that the banks will take care of all needs.

Except, of course, the hysterical demands of hoarders...

And it is my belief that hoarding during the past week has become an exceedingly unfashionable pastime in every part of our nation. But FDR is actually about to make a move that will take all those unfashionable gold hoarders and turn them into winners. Everybody who's not hoarding gold, FDR is about to turn them into suckers. Here's Barry Eichengreen. He's an economist at the University of California, Berkeley, and one of the world experts on the Great Depression and the gold standard.

He's preparing to take the U.S. off the gold standard.

He's preparing to say we will no longer pay out gold at a price of $20 an ounce. You know what's amazing to me? He doesn't say, look, I know a lot of people are really attached to the gold standard. It sounds like it makes sense, but it doesn't make sense and I'm taking you off it. He doesn't say that at all. It's sort of in code. Yeah, he is kind of tiptoeing around gold.

And that's for two reasons, I think. Number one, to say the gold standard was a disaster and we are abandoning it for something better. Stay tuned for what that is. Wouldn't have been confidence-inspiring. But the other part of the answer is that Roosevelt was kind of still grappling toward –

a full response to the crisis. In fact, FDR's top economic advisors are saying to him, do not go off the gold standard. They basically felt the same way as Montague Norman. Gold is the rock. It's holding everything together. But the U.S. is in the same bind that England was. If you stay on the gold standard, you got to keep raising interest rates, which is strangling the economy. There is one guy advising FDR to leave the gold standard. A

A guy, Liaquat Ahmed says, was definitely not part of the economics establishment. A guy named George Warren. FDR has been talking to this one crank, George Warren, who was a professor at Cornell, who he'd met because George Warren had helped him

had helped him deal with some of his trees on his estate at Hyde Park. His trees? Yeah, he had a problem with some of his trees. I don't know, they were suffering from some disease. You don't imagine calling an economist in when you have that problem. Well, he was an agricultural economist, and Cornell had a very famous school of agricultural economics. You're right that he's known as an expert on cows and chickens. Exactly.

Exactly. So this expert on cows and chickens had actually published a huge monograph on how the gold standard affected commodity prices in the economy. And he said, you've got to leave the gold standard. It's the only way. And FDR took his advice. FDR comes into the room in the White House, and all his advisors are gathered around. And he announces—

By the way, we're off the gold standard. He had introduced the decision to go off gold as an amendment, a sort of minor clause into, I think it was the Agricultural Adjustment Act. He snuck it in. He snuck it in. And he sits there in this room with all his advisors and says, I know you think I can't do this, but here it is. We passed this thing. And they all exploded. And Dean Acheson resigned over it.

He was an assistant secretary of the treasury. And one guy, one of Roosevelt's advisors, told him that, you know, this is going to be the end of Western civilization. And Roosevelt is just kind of winging it here. He has this idea from the guy who helped him with his trees that now that he's off the gold standard, his hands are freed and he can fix this thing he thinks is a key problem, fossilization.

falling prices. This is what economists call deflation. And we've talked about this a lot on the podcast. Deflation means prices are dropping. And this can lead you into this thing called the deflationary spiral, where prices start falling. So businesses, they have to cut people's wages. People are getting lower wages, so they don't spend as much money. So that means prices have to fall some more. And this just keeps going on and on, back and forth in this downward spiral. And imagine a business. Say I'm thinking of opening a shoe factory.

I need to borrow money to get started, but borrowing money seems scary because it's going to be really hard to pay that money back if the price of shoes keeps dropping, if I'm going to have to charge less and less each year for shoes. So I don't borrow the money. I don't build the factory, and I don't hire anyone. So FDR looks at this and he thinks, "I've got to stop prices from falling. I've got to push prices up."

And the price of gold, it's linked to the price of everything else. So FDR starts raising the price of gold. He has the government start buying more and more gold so that the price of gold goes up and up and up. And Liaquat Ahmed says Roosevelt does this over breakfast. You know, he would have his whatever, boiled eggs and toast, and he'd be lying in bed and these guys would come in and he'd say, so how much should we raise the price of gold today?

And one day he said, let's do it by 21 cents. And the other said, why 21 cents? He said, well, seven times three. And, you know, that sounds like a good number. My lucky number. Lucky. Yeah. I mean, it's completely absurd. There was no economic rationale, although he sort of conveyed the image that

that this was a very well thought out, sort of well-conceived plan. So this works. It did work. And the U.S. got out of the Great Depression almost, you know, most economists now agree 90% of the reason why the U.S. got out of the Great Depression was

was the break with gold. After all, there is an element in the readjustment of our financial system more important than currency, more important than gold, and that is the confidence of the people themselves. The Great Depression lasted for a long time after 1933, but 1933, the year we went off the gold standard, that was the year things stopped getting worse and started getting better. ...by rumors or guesses...

David Kestenbaum and Jacob Goldstein from 2015. Without the gold standard in place, central banks were free to lower interest rates to stimulate the economy, get more money in the system. And you can see it in the data. After we went off the gold standard, prices started to go up again. The deflationary spiral we talked about had stopped.

But President Roosevelt still needed to help jumpstart a stalled economy back to life. He would do it with a massive set of changes and government investment known as the New Deal, starting in 1933.

Sharon Murphy from Providence College is back with us. Hey, Sharon. Hi, how are you doing? So all of a sudden overnight, we are no longer on the gold standard. What is a U.S. dollar then? Well, that's a great question. I mean, it is just trust in the government. That's all it comes down to. I mean, we now have a truly fiat currency, fiat coming from the word Latin faith, right?

We don't have anything backing it anymore. You can't trade it for anything anymore. The only thing that gives it any value is the fact that the government says it will accept it for taxes. Otherwise, it's just a piece of paper. The technical term for this is fiat currency from the Latin meaning let it be done, which is part of the magic. If the government says it's worth something, poof, it becomes true.

I want to move on now to the New Deal, the set of government programs that Roosevelt launched after he was elected. And I have to say, I always thought it was like a single plan. But when I started to read about the New Deal, it was...

so many things. You know, they bailed out farms, they built things, they had a public works program, they regulated banks, deposit insurance, unemployment insurance, social security. It's an impressive list. Yeah. There was no plan in this. FDR, he talked about a new deal for the American people, which is where the idea comes from. But he basically just called in the smartest people he knew from around the country, told them all to come to Washington, put them in a room and

And just started throwing spaghetti at the wall, started what do we think might work? Some of it was brilliant. Some of it was disastrous. Some of it was in between. And at the center of it all, FDR believed very strongly that he wanted to rescue humanity.

There were lots of people saying capitalism has failed. We need to walk away. And he's saying, no, no, no, we need to rescue it. We need to regulate it. We need to make it more controlled.

But we need to find a way to make it work. And so that was really important for him, having both capitalism and democracy, which are both under threat in the 1930s around the world. So he wanted to maintain both of those. So in the midst of all this change in the relationship of the government to the economy comes a British economist, John Maynard Keynes. What was his big theory and how was it used in the U.S.? Yeah, so Keynes comes along and he says, you know what?

We're thinking about this all wrong. The problem with these booms and busts is that...

Every time you get into one, they take on a life of their own. So a boom becomes too big until it blows up. And then the bus, everybody just follows it down and it's their cycles. And he said, we can intervene and smooth out these cycles, but we need the government to do it. The government needs to step in to cool the economy when it's getting too hot.

and to inject more money into the economy when it's cooling off too much. And remember, at this point, it is now easier for the government to create money out of thin air because there's no more gold standard. So when no one in an economy is spending any money, the government can go into debt, pick up the spending, create government programs. And once the economy is healthy again, the government can back off a little. This was a huge change for the way the economy was managed.

We will return with our professor after the break when we will tackle what this all meant for the American worker. Roosevelt helped save the economy, but workers would still have to take a stand for themselves. This message comes from NPR sponsor Merrill. Whatever your financial goals are, you want a straightforward path there. But the real world doesn't usually work that way. Merrill understands that. That's why he's here.

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We are back with Planet Money Summer School. One of the themes we've tried to trace through the economic history of the world has been how workers gain or lose power. And we talked about how after the Black Death in the 1300s, artisans could demand more money, and about how the Luddites in the 1800s tried and failed to keep their jobs. The Great Depression was a huge setback for workers. With one in four people unemployed, it was hard to negotiate anything. Wages fell by 43%.

But part of the New Deal was a law that guaranteed the rights of workers to unionize. And when the economy started to look a little bit better, organized labor made their move. I did an episode with Jacob Goldstein in 2015 about a big strike at an automaker in Flint, Michigan that changed the power dynamic.

It was December of 1936, and a few auto workers had a plan. They wanted to shut down the biggest car maker in the world, General Motors. The way they were going to do it was they were going to seize a few key factories in Flint, Michigan, shut down the machines, kick everybody else out, and stay there until the company gave them what they wanted. Leo Robinson, one of the workers, remembers how it went down. There was one guy who gave the signal, and then... We waited just about five hours

six minutes before we started to pull. Pull. Pulling switches. Turning off the machines. And I had three bosses running behind me, brother, hollering, you're fired, you're fired, you're fired. And I was still grabbing switches. Leo Robinson was interviewed by a BBC documentary crew back in the 1970s. We started for the stairway and here we met a bunch of bosses and there was about 50 coming through the dining room and up the steps.

And they got us, 15 or 16, took us to the front gate, shoved us out, and slammed the gates to and locked them. And me and three or four other guys clung the gate and went back in. On the first day, the workers managed to turn off all the machines in two different auto body factories. Most of the workers and all the supervisors were outside, and a few men stayed behind to keep the factories closed. They were members of the United Auto Workers, which would go on to be one of the biggest unions in America, probably one that you've heard of.

But at this time, it was this tiny new organization. It represented a small percentage of GM workers at the time. Kevin Boyle, a historian at Northwestern, says the UAW had a problem signing up more people. A lot of workers were interested in the benefits a union might bring to them. But before they're willing to take the chance of joining that union, which was a big risk, get fired for doing that. You don't want to lose a job.

In December 1936, before they were willing to take that chance, the union had to prove that it could actually deliver what workers wanted. What workers wanted is basically what we think of as a union, right? A group that could negotiate with the company on things like benefits and job security.

But companies like GM just didn't negotiate that stuff with unions then. The UAW was caught in this catch-22. How could they deliver what workers wanted when a vast majority of the workers are not in the union? That's why they chose this kind of sit-down strike, right? Because it doesn't take that many people to shut down a factory. If they had just like a regular march-out, walk-a-picket-line kind of strike, it would have been a joke. GM would have been like, that's not enough people to scare us. And it was hard to get workers to join in on these strikes because they didn't

end well. You know, it was common for companies to get court orders. They would demand the union and the strike. And if you're a company, once you have that court order... Yeah, you call the cops, you call the National Guard, you send them in to open up the plant and bring workers into the plant to run the plant. That's some of the greatest conflicts in American history.

economic history took place at exactly that point. This was bloody, bloody conflict. Steelworkers, miners, people who worked on railroads, they all had strikes where people got killed. They were famous events that, you know, we still know the names today. The Homestead Strike, the Ludlow Massacre. And the workers striking in Flint, they would have known about these events. And for a couple of weeks, there was this sort of stalemate. GM posted guards outside the occupied factories. The workers stayed inside.

Victor Ruther was a union organizer for the UAW, and he'd come around and visit the occupied factories every day. Here's Ruther speaking in a documentary called Brothers on the Line. When I arrived there and I started playing some music and started talking...

And they said, cut the crap, Ruther. Don't you know what's going on? One of the factories was two stories high. The workers only held the second floor. So people had been bringing food into them by climbing a ladder that went up to an open window. But earlier that day, GM guards had taken the ladder away. Around the same time, the company cut off heat to the factory, and it was 16 degrees out. Then, after Ruther showed up...

The guards disappeared. Something was coming. And pretty soon, Ruther saw what it was. The police had gathered at the top of the hill.

And as they got close enough to the bridge, they began firing tear gas shells. Ruther picked up the microphone in that sound car, and he told the strikers to go up to the roof of the building. They'd been making weapons up there out of spare parts they'd scrounged from the factory. They had these pound-and-a-half hinges, which they made there, and they stretched inner tubes between two heavy steel poles

so they could use them as a great slingshot to throw these hinges. Hinges? You know, so it's the '30s. These are great, big, heavy metal cars, and they have these big old hinges for, you know, like for the door on the body. These were big, heavy pieces of metal. There was a barrage of hinges that flew over there, and when they hit the first cars, they damaged them enough that our people on the picket line

They pulled the cars and turned them over as a sort of barricade. We blocked the traffic. It was intense. The strikers turned over the sheriff's car with the sheriff still in it. Then the sheriff got out of the car and got hit in the head by a flying hinge. The National Guard shows up in Flint the next day, along with the governor, Frank Murphy. But, but...

The guard doesn't try to kick out the workers. It doesn't start shooting. Instead, Murphy orders the guard to keep the peace, to get between the local police and the strikers. We are not going to settle this strike by force and violence. We will work our way out of this strike peacefully and without injustice to anyone.

He's essentially saying, hey, union and company, you two need to work this out on your own. And this is huge for the UAW. Because remember, what they really wanted was not some particular wage increase or anything specific. They wanted GM to agree to negotiate with them. And now the governor was saying to do it.

And at 2.30 in the morning on February 11th, GM and the United Auto Workers reach a deal. It fits on a single page. Basically, GM agrees to negotiate with the union, and the union agrees to end the strike. Governor Frank Murphy goes in front of the newsreel cameras with people from the company and people from the union. Well, the strike has ended. Thanks to these good men who are about me here. I trust it will mean...

A new mutual atmosphere of goodwill and good faith between employer and employee. Goodwill and good faith is maybe pushing it. The GM deal sets off this wave of strikes around the country. Industry after industry gets unionized. In just a few years, this big central swath of the economy is transformed.

Jacob Goldstein and myself from an episode that first aired in 2015. After the break, we'll talk about the labor transformation in America and what happened to that Flint, Michigan spirit. ♪

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Make an impact on your child's learning. Get IXL now. And NPR listeners can get an exclusive 20% off IXL membership when they sign up today at ixl.com slash NPR. Summer school back in session. Let's bring back in our professor, Sharon Murphy. You ready? Yeah, let's do this.

So our story of the big autoworkers strike is dramatic, but it's also the beginning of this sort of golden age for American unions, right? Going into World War II and coming out of World War II, industry is booming in the United States. And they, for the first time, have the right to unionize and bargain with those corporations. By the time we get to the 1950s, about one in three Americans are part of a world.

So this is really important for the country. And we do see real wages increase. Yes. The impact of unions is unmistakable. Wages go up, conditions improve, and this really...

reverberates throughout the economy. So even if you're not unionized, because of the strength of those unions, that helps wages across the board. And so we do see this is our heyday of the middle class, and that is partially the result of strong unions during the period. Of course, after the 1950s, union membership starts to decline. I think the percentage of workers today in unions is around 10%. So what happened?

So we have a number of pieces of legislation that get passed by more conservative congresses to roll back some of those protections that had been put in. And that's combined with as the economy is shifting to what types of jobs people have. We're moving away from those industrial jobs that were so central to many of these unions.

Also, different states start passing laws to make unionization more difficult. It does seem like unions may never again be as strong as in the 1950s. But I will say that many people during the Great Depression said that workers would never recover. Unions would never recover. So there's one thing we've learned in summer school. Stick with the past and never predict the future. Well, except for this one thing.

Next week is our graduation episode, and you, the listener, will get a chance at becoming a Planet Money Master of History. We'll reveal our online quiz, and if you pass, you'll get a lovely virtual diploma suitable for framing after you print it out, of course.

Sharon, let's review the concepts that might be on that test. First up, a little French. Laissez faire. Laissez faire. As little government involvement in the economy as possible. French for sort of let it be. Let it be. Leave it alone. Leave it alone. But we're not going to leave it alone because we have our next concept, fiat currency. Fiat currency. Fiat currency.

Currency that is backed by nothing but your faith in your government. This is starting to get philosophical. So we'll end with Keynesian economics from John Maynard Keynes. Keynesian economics. The idea that the government can and should step in to flatten out the economy.

boom and bust cycles of the economy. To spend when we are in recessions or depressions and to, I think the quote was, take away the punch bowl when things are getting too crazy at the park. Exactly.

Next week, the end of history. Or at least the end of our history course. We will have to hightail it to finish everything in one episode. We'll have the last 50 years of economics compressed into eight minutes. And we'll have a very special graduation ceremony featuring the greatest graduation speakers of all time. We'll have Adam Smith...

Karl Marx, John Maynard Keynes, and more, all showing up to offer advice to you. The graduate of Planet Money Summer School 2024. That I'm going to have to listen to. Sharon Murphy for Providence College, thank you so much for being here with us. Thanks for having me. It was great.

Don't forget to check out our TikTok version of Summer School. It takes one big idea from each episode and then through the magic of wigs and funny hats and green screens makes it sing. You can search Planet Money on TikTok or Instagram. Audrey Dilling produces Planet Money Summer School. Devin Beller is our project manager. Sophia Shukina fact-checked this episode. And Alex Goldmark is our editor and executive producer. James Willits is our engineer.

I'm Robert Smith. This is NPR. Thanks for listening. This message comes from NPR sponsor Merrill. Whatever your financial goals are, you want a straightforward path there. But the real world doesn't usually work that way. Merrill understands that.

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