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The Panic of 1819, subtitled Reactions and Policies, is Murray Rothbard's 1962 work about what he identifies as the first great economic crisis of the United States. The 209 page book is based on his doctoral dissertation which he wrote for his Ph.D. in economics at Columbia University during the mid-1950s.[1]



During the 19th century it was believed that the Panic originated within the economic system itself, since the event could not be readily attributed to any specific government blunder or disaster as had previous crises.

Rothbard suggests instead that the Panic of 1819 grew largely out of the changes wrought by the War of 1812 on the still-fledgling republic, and by the postwar boom that followed. The outbreak of war stifled foreign trade and spurred the growth of domestic manufacturing, which mushroomed to fill the gap left by declining imports and also served to satisfy the nation's appetite for war goods.

The war also brought a rash of paper money, as the government borrowed heavily to finance the war. The credit expansion also led to rising prices, as economic theory from the Austrian School—which includes Rothbard—would predict.

Austrian theory also predicts the bust that must inevitably follow the non-specie-based credit expansion. Rothbard lays out the events of both bust and boom.[2]

Rothbard comments

From a 1990 interview with Rothbard in the Austrian Economics Newsletter:

AEN: How was your dissertation, The Panic of 1819, received?

MNR: Very well. In fact, much better than any other of my books. Maybe that's because I didn't analyze the causes. I only wrote about how people wanted to cure it. I could have done much more work on it, and there is still more to say, but I am pleased with it. Plus, it remains the only book on the subject.[3]

Table of contents

  • Preface
  • I. The Panic and its Genesis: Fluctuations in American Business, 1815-21
  • II. Direct Relief of Debtors
  • III. State Proposals and Actions for Monetary Expansion
  • IV. Proposals for National Monetary Expansion
  • V. Restricting Bank Credit: Proposals and Actions
  • VI. The Movement for a Protective Tariff
  • VII. Conclusion
  • Appendix A: Minor Remedies Proposed
  • Appendix B: Chronology of Relief Legislation
  • Bibliography
  • Index

Full text

Publishing history

  • New York: AMS Press, 1973. ISBN 0-404-51605-X.


  1. ^ David Gordon. "Murray N. Rothbard". Ludwig von Mises Institute. July 30, 2005.  
  2. ^ Christopher Mayer. "Panic of 1819--and 2002". Ludwig von Mises Institute. July 15, 2002.  
  3. ^ "The Science of Liberty: An Interview with Murray N. Rothbard". Ludwig von Mises Institute. Summer 1990.  

Further reading

External links



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