I first heard the names Adam Smith and John Maynard Keynes when I was a high-school sophomore. My teacher announced, as if it were a fact as firm as any law of thermodynamics, that the Great Depression was caused by laissez-faire policies advocated by Smith, and that salvation came from the more scientifically sound ideas of Keynes—ideas expertly put into practice by Franklin Roosevelt.

"Depressions are a thing of the past," my teacher proclaimed. "Keynes taught us how to prevent them."

"Cool!" I recall thinking with as much relief as a 15-year-old can muster about such matters.

Seven years later, I graduated from college with a degree in economics. By then I'd learned that my high-school history teacher's history was bunk. The Great Depression wasn't a failure of capitalism or of the ideas of Adam Smith. Instead, it was caused chiefly by the Federal Reserve foolishly allowing the money supply to shrink by more than a third. Further, this economic downturn was prolonged by Herbert Hoover's and FDR's unprecedented economic interventions. (I learned only years afterward that Keynes wisely opposed most of these interventions.)