Capitalism And The Great Depression

Reed’s book, Great Myths of the Great Depression, attempts to argue that the stock market crash of 1929 was merely a normal economic occurrence. Instead, it was government policies enacted in response that exacerbated and prolonged the economic effects of the crash. In effect, Reed’s thesis flips the conventional view on its head: instead of being the cause, free-market capitalism would have naturally solved the issues that led to the Great Depression. Conversely, government intervention was a cause of, rather than a solution to, the economic hardships that resulted.

Never had the flaws of capitalism been so evident or as devastating as during the decade that followed the outbreak of the Great Depression in 1929. All across the Euro-American heartland of capitalist world, this vaunted economy system seemed to unravel. For the rich it meant contracting stock prices that wiped out paper fortunes almost overnight. On that day that the American stock market initially crashed (October 24, 1929), eleven Wall Street finances committed suicide, some by jumping out of skyscrapers. Banks closed and many more people lost their life savings. Investment dried up, world trade dropped by 62 percent within a few years and businesses contracted when they were unable to sell their products. For ordinary

Perhaps the definition of failure has changed as in the last century capitalism has created wealth like nothing done previously in human history. At the same time, socialism has spent the last century subjecting millions of innocent people to tyranny and poverty. But somehow, its tenets live on in the millennial of the world’s richest countries. And what has followed is an arbitrary connection between the free enterprise system and declining rates of economic and social phenomena. So with the charges against capitalism more severe than ever before, we may as well present the facts.

James Tobin had once stated, “The miserable failures of capitalist economies in the Great Depression were root causes of worldwide social and political disasters” (James Tobin Quotes). America has yet to face the dark ages of failing economy when the stock market crashed in the days of October 1929. From a child to a dying old man, everyone’s lifestyles were changed dramatically by the events of this period, the Great Depression. The Great Depression resulted from a combination of both domestic and worldwide conditions. The depression had afflicted every inch it passed by. Every nation, especially the United States, now have to find a way out.

In American history, the Great Depression ranks second as the longest and most severe crisis ever experienced only dislodged from the first position by the Civil War. The Great Depression marked a period of economic downturn that resulted in severe declines in output, acute deflation, financial insecurity and severe unemployment rates. This was a sharp contrast from the early 1920’s when the country was experiencing a period of tremendous economic growth and prosperity. The Great Depression was brought about by a number of factors that included the declining consumer demand, a natural slowdown in the cycle of business, misguided government policies, panics within the financial markets and environmental disasters among others. Everyone felt the effects of the Great Depression on every part of the country, rural or urban. From the rich to the poor, the young to the old, white Americans to African Americans, no one was spared from the devastating effects of the depression. The experience of millions Americans suffering as a result of the Great Depression paint a clear picture on how serious the crisis was. Many Americans believed that it was the government’s role to alleviate them from the suffering and also offer relief aid to curb hunger and starvation. Letters sent to President Franklin D. Roosevelt and Mrs. Roosevelt with photographs taken by photographers of the Farm Security Administration (FSA) show and tell the social experiences of many Americans during that period.

When we look back through history we can find many opportunities to learn the lessons of economic theory but The Great Depression is a particularly relevant historical event when discussing economics. It is a defining event in the history of America as politics and economics intertwined, transforming the role of the federal government in the economy. Due to the length, severity and global effects an entire decade is known as the Great Depression. Theories continue to be debated on how or why the Depression took place and the reasons for its eventual end however, what most will agree on is that “The Great Depression (1929-39) was the deepest and longest-lasting economic downturn in the history of the Western industrialized world” (History.com Staff, 2009).

The United States economy has never been as great nor as equal as it was during the late 1940s-1970s, a period commonly known as the Great Compression. It is extremely ironic that the United States economy boomed and strived after only a few years succeeding the Great Depression. One may ask what stirred this dramatic change from a damaged economy to one that was striving and strong in so little time. To answer this question, one must look closely at the history of the United States economy. To be more specific, one must take a close look at how damaged the economy was during the Great Depression and how much the New Deal and other political and social factors impacted society to ultimately create the Great Compression.

In chapter 21, the Great Depression greatly affected the migrant families and local farmers. Mold of cruelty is a metaphor describing the harsh living condition that the migrant workers received from the landowners. In California, the local landowners didn’t want the migrants to take over “their land” so they armed themselves in order to prevent any uprising and threatening actions that will threaten their superiority. They felt they had a right to treat the migrants bad because they were the first to claimed the land. This treatment could be linked to WWII as the Nazi discriminated the Jews in Germany and in the United States, some people are still discriminating that immigrants the moved to the United States. Although, the men that were armed

There was a steel mill company created in the 1900 in Gary by a president of the United States name Elbert H. Gary it was named after him. The steel started getting popular because everyone nationwide was using it to build railroads and homes. There three things they used to make steel such as iron ore, limestone, and coals. There was variety of coals that was used but the only one they use was called coke they had to burn a fuel that turned into coke. In order for them to make it, they had to make the coke burn at an extremely high temperature so they can produce it to melt big quantity of limestone and iron ore.

The Great Depression is probably one of the most misunderstood events in American history. It is routinely cited, as proof that unregulated capitalism is not the best in the world, and that only a massive welfare state, huge amounts of economic regulation, and other Interventions can save capitalism from itself. Among the many myths surrounding the Great Depression are that Herbert Hoover was a laissez faire president and that FDR brought us out of the depression. What caused the Great Depression? To get a handle on that, it's necessary to look at previous depressions and compare. The Great Depression was by no means the first depression this country ever had, but it was clearly the worst. What made it different than the rest? At the time

The Great Depression in America is often believed to have ended when the Japanese attacked Pearl Harbour and the US entered WWII in December 1941. However, while an exact end date is a matter of debate, it’s obvious the end of the Great Depression correlates somewhat with the beginning of the war, leading many to believe WWII must have ended the Great Depression and triggered the economic recovery of the United States. Many historians believe that the government and military spending restimulated the economy, and the employment needed as a result of the war meant the economic recovery of the United States was a result of WWII. However, throughout history, people have learnt that correlation isn’t enough to argue causation and generally one event rarely triggers such a major economic recovery. This suggests other factors also played a role in ending the Great Depression. Some also argue that war cannot be argued as a means to economic recovery because wars destroy wealth and give a false sense of how the economy is fairing. During the 1930s, Franklin D. Roosevelt’s New Deal laid the foundation for economic recovery and the federal government began taking a much larger role in decision making for the nation. In 1939, when WWII began, Americans certainly began to enjoy prosperity, with many pulled out of poverty and in 1941, when they themselves entered the war, prosperity increased further. By the end of the war, the American economy had indeed recovered, and they became the

and drove slowly through the sizzling countryside. Not a soul in sight. It was like a funeral. The houses were closed up tight, the blinds drawn, the windows and doors closed…” (Marrin 55).

It was a time during the 1920’s that for many people still brings back memories of American people who were convinced that all desire was lost. The essence of economics was altered by the Depression, not just for the American people, but for the world as well. But just what was the Great Depression? A long and severe recession in an economy or market. The Depression originated in the United States and spread across the industrialized world, production and prices of goods fell to groundbreaking lows as unemployment and human suffering shot sky-high. The Great Stock Market Crash of October 1929 was an occasion that happened that was essentially the first indication of the setback of the world. The occasions paving the way to the stock exchange accident was that an excess of individuals purchased an excess of stocks with an excessive amount of cash that they didn't have. Stock costs fell, and for some individuals, it was the beginning of the Great Depression.

Crisis than begins to arise, as Rick Wolff’s expresses his writing in “Capitalism Hits the Fan” as class stereotypes are dealt with the process of formulating policies. A time of intense difficulties in the working class, as Wolff speaks about the “economic roots, and its effects in manufacturing, services, and, to be sure, finance” (Wolff, pg.108). Wolff’s essay continues by stating the changes occurred in 1970 with the American working class, as “real wages stopped going up” (Wolff, pg.108) with the replacement off machines. Americans were then in an odd situation with no other choice than to accept their faith by continuing to work without raised wages, especially with damages of foreign sales wages in the competition. Capitalism was a large part of the issue towards class stereotypes, as the expansion of production and efficiency allowed financiers to keep the wages the same, along with increased profits with the creation of computers. The Increased profits which leaded to the ruling class to have a particular belief that “instead of paying your workers a wage, you’re going to lend them the money so they have to pay it back to you! With interest” (Wolff, pg.110). Wolff explains the whole problem as the crisis of capitalism, as his writing proved the class stereotypes struggles with the economic disaster that we live in.

Capitalism is when the rich gets richer and the poor gets poorer. Capitalism has mercy on no one. Each individual lives in a society where the mass crowd complain about how the big business are buying the smaller ones but just doesn’t grasp the idea that all this is happening because of the consumers themselves. Within a system just as there is pros there are also cons, cons that are costly in the end. One of the biggest cons that capitalism promote is wealth inequality. Wealth can be inherited, so some people can be rich just due to luck of their ancestors. The others that are not so lucky has to work hard for their earnings. So this becomes a problem because not only does it promotes wealth inequality, it also promotes inequality of opportunity. Capitalist societies are failing to create both equality of outcomes and equality of opportunities. Example of this is the Great depression which lasted from 1929 to the beginning of World War II, profoundly shook the world’s confidence in the capitalist system. The crisis began with the crash of the New York stock market and resulted in widespread economic damage throughout the world, including bank failures, massive unemployment, and bankruptcies. According to the article Capitalism it states, “In addition, the suffering that resulted from the Great Depression highlighted the vulnerability of the labor force. In the United States, 25 percent of workers lost their jobs, and bank failures wiped out many people’s life savings.”