This is in response to an article at Fighting in the Shade in which the author boldly claims a superior understanding of the reasons and consequences of the Great Depression which began in 1929. Here's a quote from that article:
"I suspect that most readers of these postings are not old enough to have first hand recollections of the Great Depression and fewer still have a grasp of its causes and effects."
I suggest that the author dig a little deeper into the causes and effects of that economic disaster. The following paragraph, taken from the artilce, "Causes of the Great Depression" by Paul Alexander Gusmorino 3rd : May 13, 1996, summarizes those causes pretty well.
"The Great Depression was the worst economic slump ever in U.S. history, and one which spread to virtually all of the industrialized world. The depression began in late 1929 and lasted for about a decade. Many factors played a role in bringing about the depression; however, the main cause for the Great Depression was the combination of the greatly unequal distribution of wealth throughout the 1920's, and the extensive stock market speculation that took place during the latter part that same decade. The maldistribution of wealth in the 1920's existed on many levels. Money was distributed disparately between the rich and the middle-class, between industry and agriculture within the United States, and between the U.S. and Europe. This imbalance of wealth created an unstable economy. The excessive speculation in the late 1920's kept the stock market artificially high, but eventually lead to large market crashes. These market crashes, combined with the maldistribution of wealth, caused the American economy to capsize."
I invite the author of the article at Fighting in the Shade to share his thoughts on the above.
3 comments:
Sorry Wm but your link to the referenced article is broken. I can find the paragraph you excerpted here and it appears to be an essay written by a high school sophomore which earned a grade of A+.
As you are probably aware, economics is not an exact science and there are several "schools" of economic theory. The two most prevelant schools today are those espoused by John Maynard Keynes and Karl Marx. These are what most undergraduate students in academia are taught.
The article you cite appears to be a mix of the two. It is exactly what I learned as an undergraduate at California State University, Long Beach so I am not unaware of the opinions Mr. Gusmorino posits and they are what today passes for conventional wisdom in most of the media. During later studies I was exposed to the Austrian school of economic theory as espoused by F. A. Hayek, Henry Hazlitt, Ludwig von Mises as well as the late Murray Rothbard and these writers make more sense to me.
As you say economic theory is generally a collection of educated opinions and as the old saw has it "opinions are like assholes. Everyone has at least one."
If you are interested in learning more about Austrian economic theory, you can start here. The books listed at the bottom of the page are especially useful.
Segue:
I was was born and raised during the "great depression" (which incidentally did not begin in 1929 but 1930) and have considerable anecdotal first person experience due to its impact on my family.
I am curious as to how you happened to have read my blog as the readership is rather limited. I also blog at Eternity Road.
Best wishes,
ΛΕΟΝΙΔΑΣ
Wm,
No response yet so I assume you are busy plowing through the reading list. I hope this will help you out. It is fairly short but is probably the very best.
Best regards.
ΛΕΟΝΙΔΑΣ
Wm,
Interesting exchange. Too bad you dropped the discussion as it is even more germane today. A good and short non ideological explanation of the great depression and its current manifestation is presented HERE.
Cheers
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