The Great Depression was a severe worldwide economic depression In economics, a depression is a sustained, long-term downturn in economic activity in one or more economies. It is a more severe downturn than a recession, which is seen by economists as part of a normal business cycle in the decade preceding World War II Albania · Australia · Austria · Azerbaijan · Belarus · Belgium · Brazil · Bulgaria · Burma · Cambodia · Canada · Ceylon (Sri Lanka) · Channel Islands · China · Czechoslovakia · Denmark · Dutch East Indies · Egypt · Estonia · Finland · France · Germany · Gibraltar · Greece · Greenland · Hong Kong · Hungary · Iceland ·. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s.[1] It was the longest, most widespread, and deepest depression of the 20th century. In the 21st century, the Great Depression is commonly used as an example of how far the world's economy can decline.[2]. The depression originated in the U.S., starting with the fall in stock prices that began around September 4, 1929 and became worldwide news with the stock market crash The Wall Street Crash of 1929 , also known as the Great Crash, and the Stock Market Crash of 1929, was the most devastating stock market crash in the history of the United States, taking into consideration the full extent and duration of its fallout. The crash began a 10-year economic slump that affected all the Western industrialized countries of October 29, 1929 (known as Black Tuesday The Wall Street Crash of 1929 , also known as the Great Crash, and the Stock Market Crash of 1929, was the most devastating stock market crash in the history of the United States, taking into consideration the full extent and duration of its fallout. The crash began a 10-year economic slump that affected all the Western industrialized countries). From there, it quickly spread to almost every country in the world.[1]
The Great Depression had devastating effects in virtually every country, rich and poor. Personal income income received by persons from all sources. It includes income received from participation in production as well as from government and business transfer payments. It is the sum of compensation of employees , supplements to wages and salaries, proprietors' income with inventory valuation adjustment (IVA) and capital consumption adjustment (CCAdj),, tax revenue, profits and prices dropped. while international trade plunged by ½ to ⅔. Unemployment in the U.S. rose to 25%, and in some countries rose as high as 33%.[3] Cities all around the world Throughout the industrial world, cities in the Great Depression were hit hard, beginning in 1929 and lasting through most of the 1930s. Worst hit were ports and cities dependent on heavy industry, such as steel and automobiles. Service-oriented cities were less hurt. Political centers such as Washington, D.C., London and Berlin flourished during were hit hard, especially those dependent on heavy industry Heavy industry does not have a single fixed meaning as compared to light industry. It can mean production of products which are either heavy in weight or in the processes leading to their production. In general, it is a popular term used within the name of many Japanese and Korean firms, meaning 'construction' for big projects. Example projects. Construction was virtually halted in many countries. Farming Agriculture is the production of food and goods through farming. Agriculture was the key development that led to the rise of human civilization, with the husbandry of domesticated animals and plants creating food surpluses that enabled the development of more densely populated and stratified societies. The study of agriculture is known as and rural areas suffered as crop prices fell by approximately 60%.[4][5][6] Facing plummeting demand with few alternate sources of jobs, areas dependent on primary sector industries The primary sector of the economy involves changing natural resources into primary products. Most products from this sector are considered raw materials for other industries. Major businesses in this sector include agriculture, agribusiness, fishing, forestry and all mining and quarrying industries such as cash cropping The term is used to differentiate from subsistence crops, which are those fed to the producer's own livestock or grown as food for the producer's family. In earlier times cash crops were usually only a small part of a farm's total yield, while today, especially in the developed countries, almost all crops are mainly grown for cash. In non-, mining Mining is the extraction of valuable minerals or other geological materials from the earth, usually from an ore body, vein or seam. Materials recovered by mining include base metals, precious metals, iron, uranium, coal, diamonds, limestone, oil shale, rock salt and potash. Any material that cannot be grown through agricultural processes, or and logging Logging is the process in which certain trees are cut down by a lumberjack or machine, such as the feller buncher, for forest management and timber suffered the most.[7]
Some economies started to recover by the mid-1930s. However, in many countries the negative effects of the Great Depression lasted until the start of World War II.[8]
Contents |
Start of the Great Depression
Dow Jones Industrial The Dow Jones Industrial Average, also referred to as the Industrial Average, the Dow Jones, the Dow 30, or simply the Dow, is one of several stock market indices created by Wall Street Journal editor and Dow Jones & Company co-founder Charles Dow. The average is named after Dow and one of his business associates, statistician Edward Jones. It, 1928-1930 See also: Timeline of the Great DepressionEconomic historians usually attribute the start of the Great Depression to the sudden devastating collapse of US stock market prices on October 29, 1929, known as Black Tuesday The Wall Street Crash of 1929 , also known as the Great Crash, and the Stock Market Crash of 1929, was the most devastating stock market crash in the history of the United States, taking into consideration the full extent and duration of its fallout. The crash began a 10-year economic slump that affected all the Western industrialized countries.[1] However, some dispute this conclusion, and see the stock crash as a symptom, rather than a cause of the Great Depression.[3][9] Even after the Wall Street Crash of 1929 The Wall Street Crash of 1929 , also known as the Great Crash, and the Stock Market Crash of 1929, was the most devastating stock market crash in the history of the United States, taking into consideration the full extent and duration of its fallout. The crash began a 10-year economic slump that affected all the Western industrialized countries, optimism The Oxford English Dictionary defines optimism as having "hopefulness and confidence about the future or successful outcome of something; a tendency to take a favourable or hopeful view." The word is originally derived from the Latin optimum, meaning "best." Being optimistic, in the typical sense of the word, ultimately means persisted for some time; John D. Rockefeller John Davison Rockefeller was an American oil magnate. Rockefeller revolutionized the petroleum industry and defined the structure of modern philanthropy. In 1870, he founded the Standard Oil Company and aggressively ran it until he officially retired in 1897. Standard Oil began as an Ohio partnership formed by John D. Rockefeller, his brother said that "These are days when many are discouraged. In the 93 years of my life, depressions have come and gone. Prosperity has always returned and will again."[10] In fact, the stock market turned upward in early 1930, returning to early 1929 levels by April. This was still almost 30% below the peak of September 1929.[11] Together, government and business actually spent more in the first half of 1930 than in the corresponding period of the previous year. On the other hand, consumers, many of whom had suffered severe losses in the stock market the previous year, cut back their expenditures by ten percent. Likewise, beginning in the summer of 1930, a severe drought ravaged the agricultural heartland of the USA.
By mid-1930, interest rates had dropped to low levels. But expected deflation In economics, deflation is a decrease in the general price level of goods and services. Deflation occurs when the annual inflation rate falls below zero percent , resulting in an increase in the real value of money – allowing one to buy more goods with the same amount of money. This should not be confused with disinflation, a slow-down in the and the continuing reluctance of people to borrow meant that consumer spending and investment were depressed.[12] By May 1930, automobile sales had declined to below the levels of 1928. Prices in general began to decline, although wages held steady in 1930; but then a deflationary spiral In economics, deflation is a decrease in the general price level of goods and services. Deflation occurs when the annual inflation rate falls below zero percent , resulting in an increase in the real value of money – allowing one to buy more goods with the same amount of money. This should not be confused with disinflation, a slow-down in the started in 1931. Conditions were worse in farming areas, where commodity prices plunged, and in mining and logging areas, where unemployment was high and there were few other jobs. The decline in the US economy The economy of the United States is the world's largest nominal economy. Its nominal GDP was estimated at $14.2 trillion in 2009, which is about three times that of the world's second largest national economy, Japan. Its GDP by PPP is almost twice that of the second largest, China. The U.S. economy maintains a very high level of output per person was the factor that pulled down most other countries at first, then internal weaknesses or strengths in each country made conditions worse or better. Frantic attempts to shore up the economies of individual nations through protectionist Protectionism is the economic policy of restraining trade between states, through methods such as tariffs on imported goods, restrictive quotas, and a variety of other government regulations designed to discourage imports, and prevent foreign take-over of domestic markets and companies. This policy is closely aligned with anti-globalization, and policies, such as the 1930 U.S. Smoot–Hawley Tariff Act and retaliatory tariffs in other countries, exacerbated the collapse in global trade. By late 1930, a steady decline in the world economy had set, which did not reach bottom until 1933.
Economic indicators
Change in economic indicators 1929-32[13]
| USA | Britain | France | Germany | |
| Industrial production | -46% | -23 | -24 | -41 |
| Wholesale prices | -32% | -33 | -34 | -29 |
| Foreign trade | -70% | -60 | -54 | -61 |
| Unemployment | +607% | +129 | +214 | +232 |
Causes
Crowd gathering on Wall Street Wall Street is a street in Lower Manhattan, New York City, New York, USA. It runs east from Broadway to South Street on the East River, through the historical center of the Financial District. It is the first permanent home of the New York Stock Exchange, the world's largest stock exchange by market capitalization of its listed companies. Over after the 1929 crash The Wall Street Crash of 1929 , also known as the Great Crash, and the Stock Market Crash of 1929, was the most devastating stock market crash in the history of the United States, taking into consideration the full extent and duration of its fallout. The crash began a 10-year economic slump that affected all the Western industrialized countries. Main article: Causes of the Great Depression The causes of the Great Depression are still a matter of active debate among economists, and is part of the larger debate about economic crises, although the popular belief is that the Great Depression was caused by the crash of the stock market. The specific economic events that took place during the Great Depression have been studied thoroughly:There were multiple causes for the first downturn in 1929. These include the structural weaknesses and specific events that turned it into a major depression and the manner in which the downturn spread from country to country. In relation to the 1929 downturn, historians emphasize structural factors like massive bank failures and the stock market crash. In contrast, economists (such as Barry Eichengreen Barry Eichengreen is an American economist who holds the title of George C. Pardee and Helen N. Pardee Professor of Economics and Political Science at the University of California, Berkeley, where he has taught since 1987. Eichengreen's mother is Lucille Eichengreen, Milton Friedman Milton Friedman was an American economist, statistician, and a recipient of the Nobel Memorial Prize in Economics. Among scholars, he is best known for his theoretical and empirical research, especially consumption analysis, monetary history and theory, and for his demonstration of the complexity of stabilization policy. He was an economic advisor and Peter Temin Dr. Peter Temin is a widely cited economist and economic historian, currently Elisha Gray II Professor of Economics, MIT and former head of the Economics Department. Dr. Temin graduated with highest honors from Swarthmore College in 1959 before earning his Ph.D. at MIT in 1964. Beginning in the 1960s and early 1970s he published on American) point to monetary factors such as actions by the US Federal Reserve The Federal Reserve System is the central banking system of the United States. It was created in 1913 with the enactment of the Federal Reserve Act, and was largely a response to a series of financial panics, particularly a severe panic in 1907. Over time, the roles and responsibilities of the Federal Reserve System have expanded and its structure that contracted the money supply, as well as Britain's decision to return to the Gold Standard The gold standard is a monetary system in which the standard economic unit of account is a fixed weight of gold. There are distinct kinds of gold standard. First, the gold specie standard is a system in which the monetary unit is associated with circulating gold coins, or with the unit of value defined in terms of one particular circulating gold at pre-World War I parities (US$4.86:£1).
Recessions and business cycles The term business cycle refers to economy-wide fluctuations in production or economic activity over several months or years. These fluctuations occur around a long-term growth trend, and typically involve shifts over time between periods of relatively rapid economic growth (expansion or boom), and periods of relative stagnation or decline ( are thought to be a normal part of living in a world of inexact balances between supply and demand Supply and demand is an economic model of price determination in a market. It concludes that in a competitive market, price will function to equalize the quantity demanded by consumers, and the quantity supplied by producers, resulting in an economic equilibrium of price and quantity. What turns a normal recession or 'ordinary' business cycle into an actual depression is a subject of much debate and concern. Scholars have not agreed on the exact causes and their relative importance. Moreover, the search for causes is closely connected to the issue of avoiding future depressions.
Thus, the personal political and policy viewpoints of scholars greatly colors their analysis of historic events occurring eight decades ago. An even larger question is whether the Great Depression was primarily a failure on the part of free markets A free market is a market without economic intervention and regulation by government except to enforce ownership and contracts. It is the opposite of a controlled market, where the government regulates how goods, services and labor are used, priced, or distributed. Advocates of a free market traditionally consider the term to imply that the means or, alternately, a failure of government efforts to regulate interest rates An interest rate is the rate at which interest is paid by a borrower for the use of money that they borrow from a lender. For example, a small company borrows capital from a bank to buy new assets for their business, and in return the lender receives interest at a predetermined interest rate for deferring the use of funds and instead lending it to, curtail widespread bank failures, and control the money supply. Those who believe in a larger economic role for the state believe that it was primarily a failure of free markets, while those who believe in a smaller role for the state believe that it was primarily a failure of government that compounded the problem.
Current theories may be broadly classified into two main points of view and several heterodox points of view. First, there are demand-driven theories, most importantly Keynesian economics Keynesian economics is a macroeconomic theory based on the ideas of 20th century British economist John Maynard Keynes. Keynesian economics argues that private sector decisions sometimes lead to inefficient macroeconomic outcomes and therefore advocates active policy responses by the public sector, including monetary policy actions by the central, but also including those who point to the breakdown of international trade, and Institutional economists Institutional economics, known by some as institutionalist political economy, focuses on understanding the role of the evolutionary process and the role of institutions in shaping economic behaviour. Its original focus lay in Thorstein Veblen's instinct-oriented dichotomy between technology on the one side and the "ceremonial" sphere of who point to underconsumption In underconsumption theory in economics, recessions and stagnation arise due to inadequate consumer demand relative to the amount produced. The theory has been replaced since the 1930s by Keynesian economics and the theory of aggregate demand, both of which were influenced by underconsumption and over-investment (causing an economic bubble An economic bubble is “trade in high volumes at prices that are considerably at variance with intrinsic values”. (Another way to describe it is: trade in products or assets with inflated values.)), malfeasance The expressions misfeasance and nonfeasance, and occasionally malfeasance, are used in English law with reference to the discharge of public obligations existing by common law, custom or statute by bankers and industrialists, or incompetence by government officials. The consensus viewpoint is that there was a large-scale loss of confidence that led to a sudden reduction in consumption and investment spending. Once panic and deflation set in, many people believed they could make more money by keeping clear of the markets as prices dropped lower and a given amount of money bought ever more goods, exacerbating the drop in demand.
Second, there are the monetarists Monetarism is the view within monetary economics that variation in the money supply has major influences on national output in the short run and the price level over longer periods and that objectives of monetary policy are best met by targeting the growth rate of the money supply.pp. 492-97, who believe that the Great Depression started as an ordinary recession, but that significant policy mistakes by monetary authorities (especially the Federal Reserve The Federal Reserve System is the central banking system of the United States. It was created in 1913 with the enactment of the Federal Reserve Act, and was largely a response to a series of financial panics, particularly a severe panic in 1907. Over time, the roles and responsibilities of the Federal Reserve System have expanded and its structure), caused a shrinking of the money supply which greatly exacerbated the economic situation, causing a recession to descend into the Great Depression. Related to this explanation are those who point to debt deflation Debt deflation is a theory of economic cycles, which holds that recessions and depressions are due to the overall level of debt shrinking : the credit cycle is the cause of the economic cycle causing those who borrow to owe ever more in real terms.
Lastly, there are various heterodox theories Heterodox economics refers to the approaches, or schools of economic thought, that are considered outside of mainstream, that is, orthodox economics. Heterodox economics is an umbrella term used to cover various separate unorthodox approaches, schools, or traditions. These include institutional, post-Keynesian, socialist, Marxian, feminist, that downplay or reject the explanations of the Keynesians and monetarists. For example, some new classical macroeconomists New classical macroeconomics emerged as a school in macroeconomics during the 1970s. As opposed to Keynesian macroeconomics, it builds its analysis on an entirely neoclassical framework. Specifically, new classical macroeconomics emphasises the importance of rigorous foundations, in which the macroeconomic model is built in analogy to the actions have argued that various labor market policies imposed at the start caused the length and severity of the Great Depression. The Austrian school of economics The Austrian School is a heterodox school of economic thought that emphasizes the spontaneous organizing power of the price mechanism. Its name derives from the identity of its founders and early supporters, who were citizens of the old Austrian Habsburg Empire, including Carl Menger, Eugen von Böhm-Bawerk, Ludwig von Mises, and Nobel laureate focuses on the macroeconomic Macroeconomics (from Greek prefix "macr-" meaning "large" + "economics") is a branch of economics that deals with the performance, structure, behavior and decision-making of the entire economy, be that a national, regional, or the global economy. With microeconomics, macroeconomics is one of the two most general effects of money supply In economics, the money supply or money stock, is the total amount of money available in an economy at a particular point in time. There are several ways to define "money," but standard measures usually include currency in circulation and demand deposits, and how central banking A central bank, reserve bank, or monetary authority is a banking institution granted the exclusive privilege to lend a government its currency. Like a normal commercial bank, a central bank charges interest on the loans made to borrowers, primarily the government of whichever country the bank exists for, and to other commercial banks, typically as decisions can lead to over-investment (economic bubble An economic bubble is “trade in high volumes at prices that are considerably at variance with intrinsic values”. (Another way to describe it is: trade in products or assets with inflated values.)). The Marxist Marxism is a particular political philosophy, economic and sociological worldview based upon a materialist interpretation of history, a Marxist analysis of capitalism, a theory of social change, and a view of human liberation derived from the work of Karl Marx and Friedrich Engels. The three primary aspects of Marxism are: critique of political economy emphasizes the tendency of capitalism Capitalism is an economic system in which the means of production and distribution are privately owned and operated for a private profit; decisions regarding supply, demand, price, distribution, and investments are made by private actors in the market rather than by central planning; profit is distributed to owners who invest in businesses, and to create unbalanced accumulations of wealth, leading to overaccumulations of capital and a repeating cycle of devaluations through economic crises.
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Thu, 02 Sep 2010 04:20:23 GMT+00:00
MyWebTimes.com Halker has performed music history programs on Guthrie, the Great Depression and working-class protest music in the US, Canada and Europe. ...
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Our way of life is NOTHING like the 30 s I remember in the 80 s and 2001 unemployed highly degreed
Sun, 25 Oct 2009 13:30:57 PDT
Filmed on location in Berlin, Germany. September 2008. Directed by Hendrik S. Schmitt/Zeitschnitt www.sickpix.org http www.vampirefreaks.com. vids.myspace.com.
Rob Gasiewicz
Wed, 01 Sep 2010 15:50:07 GM
Stranger still, then state Senator Obama was concerned about Karl Rove distracting us from rising poverty, shrinking incomes and a mere month in an economy almost as bad as the . Great Depression. in 2002. The Bush tax cuts were passed ...
