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The Great Depression as Historical Problem Author(s): Michael A. Bernstein Source: Magazine of History, Vol. 16, No.

1, The Great Depression (Fall, 2001), pp. 3-10 Published by: Organization of American Historians Stable URL: Accessed: 17/04/2010 16:52
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From the Editor/Historiography



Depression Problem

as Historical


A. Bernstein


is now the


over the most history.


half-century severe and To this day,


the Great

Depression crisis

of in

rates of the fifties and sixties obscured

dissolved for the moment any fears of

the prewar debates

to hard times.


protracted there exists

economic no

a return

American ment about

its causes, its consequences. was

although Those

there who

tends at the

to be time

agree general some consensus argued that the

regarding depression

Yet far from being resolved, the concerns and misgivings of the depression and war years simply faded from view. It has by now long been fashionable to claim that "Keynes is dead," and few
economists who struggled choose to engage with the ideas of an older events generation when to understand devastating at a time


of a profound


in the mecha

nisms of capitalism were only briefly heard. After World War II, their views appeared hysterical and exaggerated, as the industri alized nations sustained dramatic rates of growth and as the economics profession became increasingly preoccupied with the
development of Keynesian theory. As a result, the economic

orthodox theories and remedies no longer sufficed. Indeed, the vast majority of contemporary economists have grown decidedly
hostile focus have on to arguments the short the concerning run or on structural, the Great policy failure. Depression In this and that respect, do not they

slump of the interwar period came to be viewed as a policy problem rather than the outgrowth of fundamental tendencies of capital
ism. The be repeated presumption owing to was the that the Great Depression could of never increasing sophistication was economic





tives more characteristic

to situate the Great

of the work of their forebears who sought

that lost Great an

analysis and policy formulation.

monplace The that erratic the business cycle of performance

Indeed, the belief became

"tamed" and economy "obsolete." during the American


a historical within framework Depression or more. so several decades spanned By doing, they have not some causes of of the appreciation simply possible

performance this reason approaches,

itself, but also of the subsequent

of that the American I seek, through you economy a reassessment of the insight since


It is for

mid-century. of these

1980s and more recent challenges associated with globalization have made this notion itself obsolete. Entirely new 1970s and
varieties government exceptional Revolution" prominence In this ber that of economic cannot circumstances. has been shaken, thinking alter have levels Indeed, and of emerged, real output asserting except in the that the under

to persuade


analytical by an understand

ing of "The Great Depression

as Historical


confidence a new



"Keynesian come


in economic climate the postwar

thought. opinion, for Keynesian it is important economics to remem emerged and

of economic optimism

at a time

of dramatic


in the world


in the Literature Trends in the The older literature concerning the Great Depression United States may be broadly classified into three categories. One set argued that the severity and length of the downturn was the direct result of the collapse of financial markets that began in 1929. Such work emphasized the causes of the 1929 crash and those factors that amplified its impact. Another school of thought concluded that the economic calamity of the 1930s was the direct result of poorly formulated and politically distorted actions under taken by the government. A third set of research took a broader
OAH Magazine of History Fall 2001 3

concomitant prosperity in the United States. Such hope had been absent in the decade of the Great Depression, and even during the
war years there had been apprehension that a return to depression


come close on the heels of victory. But the high growth


the Editor

some writers (such as Irving created by the Treaty of Versailles, Fisher and Lionel Robbins) argued that the depression was the


for those challenge of us who teach about this profound economic is to find crisis substantive ways to link the of years and of the with social the in










ture of the twenties. The principal irritant consisted of a dangerous circle of obligations and risks, epitomized by the Dawes Plan of 1924, in which the United States lent funds to Great Britain, France, and Germany, at the same time the Allies depended on German reparations to liquidate their American debts. By 1928 American banks were already quite wary of the situation, but their
predictable ments, merely response, made cutting the back on worse. loans to European govern situation

trade and

the demise

of the gold standard

make reparations

in international
payments in


that Germany

gold created a net gold flow

veritable ments explosion thereby of credit. in the emerged

into the United

Extremely twenties, and

once the

that led to a
arrange came, crash




economics interwar personal experience contemporaries.

the collapse of the banking system was quick excessive credit and speculation, coupled with
network, Another immediate caused the Great of of the the crash Depression. short-run on consumer approach wealth version effects

to follow. Thus a weak banking

concerned and spending. the

severity of the downturn, itwas argued, resulted in a drastic in credit. devaluation of consumer wealth and a loss of confidence The resulting decreases in purchasing power left the economy saddled with excess capacity and inadequate demand. The
None ing. Because of these the short-run business arguments confidence were thesis convinc completely was it was subjective,

virtually impossible to evaluate in the light of historical evidence. There was also the objection that notions like these mistook effect for
cause; pessimism Later to analyze in a long-run the slump, the the economic and panic, circumstances rather than of the being thirties caused may by such excessive have generated feelings. credit too and boldly

economists argument rather than

perspective context.


attempted that

the the

depression origins of

speculation from real

It suggested


the rejected frequently on the grounds it abstracted that events in interwar the monetary




for its unparalleled length the events of 1929.

and severity predated


Indeed, business cycle indicators turned down before the stock market crashed. Indices of industrial production started to fall by
the summer of 1929, and a softness in construction activity was


The Stock Market Crash as Cause short-run analyses of the Great Depression
They focused on the immediate causes

apparent shared a com

and impacts that market, "cause

in 1928. Such critics as John Kenneth

and the effect reverse. run from the the economy never Had economy

to been the




of the New York Stock Market collapse of 1929, and they asserted of wealth and disruption of the that the resulting devaluation the intensity of the crisis. The "business banking system explained confidence" thesis was perhaps the best example of this school of thought. collapse,
pessimistic confidence

tally sound in 1929 the effect of the great stock market crash and the loss the shock to confidence might have been small... of spending by those who were caught in the market might soon
have worn off."

that caused the It held that regardless of the mechanisms the dramatic slide of the stock market created intensely
expectations was so severe in the business and unexpected community. that The a dramatic shock panic to

the evidence did and spending hypothesis, not provide compelling proof. The dramatic decline in consump tion expenditures after 1929 may have been due to the stock As for the wealth
market debacle; it may have arisen once expectations had been

took hold,
A more



and thereby a full recovery.

of the short-run argument



dampened outgrowth

by the events after 1929; or it may have been an trend in construction of a declining activity and in
during the twenties. But even recent investiga

the question of why financial markets col directly confronted to distortions and institutional the political lapsed. Looking


tions have been

incapable of unambiguously


a large

4 OAH Magazine of History

Fall 2001


the Editor

we cannot

of the decline
say for sure

in spending. We
why it happened.

can speak of a drop, but

Policy Errors as Cause Another the Great Depression approach to understanding evaluated the extent to which the slump was the result of system to this school of thought, inadequate atic policy errors. According information, and political pressures distorted theory, misleading the policy-making process. Such investigators asMelvin Brockie, Kenneth Roose, and Sumner Slichter maintained that from 1932
onward the American economy showed great potential for recov

in the crash of 1929 was less important than certain developments that had deleterious interwar the economy impacts throughout period. Some authors (for example, Seymour Harris and Paul Sweezy) argued that during the 1920s the distribution of national
income overall became propensity the skewed, increasingly lowering economy's to consume. as Charles such Others,

ery, only to be set back profoundly by the 1936 recession. They asserted that the New Deal's Industrial Codes raised labor costs
and material input prices, thus negating whatever monetary

fo Kindleberger, W. Arthur Lewis, and Vladimir Timoshenko, cused on a shift in the terms of trade between primary products and manufactured of the goods, due to the uneven development nations. in terms and industrial This the of agricultural change a in created credit crisis world markets trade, they argued, during the bad crop yields of 1929 and 1930. At the same time that
agricultural economies were losing revenue because of poor har

ideology of the Roosevelt to the downturn by Administration have further contributed may the confidence of the business community. Not jeopardizing several labeled the downturn of 1936 investigators surprisingly, 1937 the "Roosevelt Recession." It was not solely criticisms of actual government policy in which these writers indulged to explain the depression's unusual
severity. In some cases they also criticized the government for not


existed. The



vests and declining world demand, the developed economies were contracting credit for the developing nations and imposing mas sive trade restrictions such as America's Hawley-Smoot Tariff of 1930. As the agricultural nations went into a slump, the industri alized countries (most notably the United States) lost a major market

for their output. Hence,

and more severe.

the downturn

of 1929 became

Industrial organization
Means most prominent

among them)

(Adolf Berle and Gardiner

sought an explanation of

that the private sector moved too doing enough. They maintained in in the mid 1930s raising prices. As a result, by 1937 quickly consumers increasingly resisted higher prices as they sought to liquidate
maintain to consume

the large debt

their savings subsequently policies

incurred earlier
times. and were a fell,

in the decade
The average took hold. but

and to

in the the depression in the trend toward imperfect competition American economy of the early twentieth century. After the crash of 1929, prices became increasingly inflexible, due to the concen trated structure of American industry and the impact of labor

in uncertain


recession the solution,






(such as the creation

to Investigate

of the Temporary
the Concentration

of Eco


nomic Power) was too little, too late, and was often inspired more
by political than economic concerns.

was essentially an the Great Depression was of failures outgrowth policy problematic at best. To be sure, one could with the benefit of hindsight engage in some forceful criticism of economic policy during the 1930s. But it seems a futile The notion that
exercise. After all, in many respects the Roosevelt Administration

(especially the Board of Governors of the Federal Reserve System) did what many of its predecessors had done in the face of a cyclical
downturn. One must ask, therefore, how government officials

suddenly became
question remains:

so inept in the interwar period. Moreover,

why were traditional policies that had


ingly worked

in the past and that represented

generations of economists

a theoretical
so per



in the 1930s? What in the structure and had changed in of the interwar period that national the economy operation made orthodox economic and theory policy inadequate?
Long-Run Factors as Cause


literature that focused on long-run factors in the Ameri can depression was distinctive in holding that the stock market The







Photograph (Courtesy

by Dorothea Lange for the Farm Security of the Franklin D. Roosevelt Presidential

1930s. store, Administration. Library.)

OAH Magazine of History

Fall 2001


the Editor

annually averaged only a bit over 5 percent. A fall in export de mand, then, could not have played
a major role in worsening or pro

longing the Great Depression. Theories of Economic Stagnation Continued research on theGreat Depression necessarily relied upon the work of Joseph Schumpeter on
cyclical processes inmodern econo

mies. Schumpeter held that the in

terwar three period major was cycles an era in which ac of economic

States (and tivity reached Europe) coincidentally their nadir. These cycles were 1 ) the Kondratieffy a wave of fifty or more
years associated with the introduc

in the United

tion and dispersion of major inven tions; 2) the Juglar y a wave of

approximately ten years' duration

that appeared to be linked with population movements; and 3) the

in front of fire." Belle Glade, 1941. Florida, February "Negro laborers sitting around of the Library of Congress, Post Wolcott. LC-USF34-057095-D.) by Marion (Courtesy Photograph Kitchm, a wave of about forty months'

length that had the appearance of a

typical inventory cycle. efforts were par Schumpeter's

unions. On

the one side, these "sticky prices" further limited the

purchasing power of consumers. On the other,


by those of Simon
and the Richard existence

Easterlin. of waves

and, more
Kuznets of some

recently, Moses
was fifteen successful to twenty in


in the capital goods sector, noncompetitive pricing predominated were to less meaning producers buy new plants and equip willing ment. Price inflexibility thus inhibited the recovery of both final product demand and investment demand.
There were several weaknesses in these theories. Those au


thors who


on an increasingly




did not marshal


to make

years in length. These periodic swings, according to Abramovitz, demonstrated that in the United States and other industrialized and early twenti countries, "development during the nineteenth eth centuries took the form of a series of surges in the growth of output and in capital and labor resources followed by periods of retarded growth." Significantly, "each period of retardation in the
rate of growth of output... culminated in a protracted depression

nor did they specify precisely how such factors came to life in the interwar economy. While Berle and Means claimed to have demon strated a relative price inflexibility in concentrated economic sectors during the 1930s, their critics were unconvinced. Given that the aggregate price level fell by one-third in the early thirties, they argued, how inflexible could the general price system have been? The "sticky prices" thesis also relied on an assumption of perfect competition in all markets other than those where the imperfections existed. If this assumption were relaxed, the thesis did not hold. The terms of trade argument similarly had a major flaw. The
major weaknesses in the American economy of the interwar

or in a period of stagnation inwhich business cycle recoveries were disappointing, failing to lift the economy to a condition of full or doing so only transiently." The specific behav employment ioral mechanisms that could account for the Kuznets phenom in the United States in the enon (and its precise manifestation were focus of continued debate. It is in the 1930s) necessarily
this context that we can understand the large literature on "secular In economic stagnation." general, maturity, stagnation as it was theorists sometimes agreed that stagnation, involved or a "de


period were domestic, and the collapse of demand on the part of agricultural nations was not highly relevant. During the 1920s,
exports as a share of the nation's gross national product had

crease of the rate of growth of heavy industries and of building [and] the slowing down of the rate of growth of the total activity... of quantity production, of employment, and usually of population.

6 OAH Magazine of History

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the Editor

It [also involved] the rising relative importance of consumer goods." However, they differed in emphasis, falling into two defined groups: those who focused on the decline of new broadly
technologies and those who were more concerned with the shrink


for an

the utilization

of excess





in concentrated industries is intensified inflexibility an and this has important impact on the during depressions, Price
response to be sible. so of firms to economic fluctuations. price to sales. Firms' reduction raise For prices a given revenues seems tend unfea to jeopardized may for in a slump that even incentives be the reduction in

age of investment outlets as the rate of population growth fell. Followers of this second school held that as population growth in housing, clothing, fell off, and as major markets food, and
services consequently contracted, outlets for new investment


in order industry,



quickly limited. Both variants of stagnation

concerning economic

therefore, theory had limitations.

maturity and

the impact of a decline

to which the industry

in the growth rate will depend

is concentrated. In a sector

For one,







growth conflated population with effective demand. As one critic put it: "[i]t is sometimes maintained that the increase in
population anticipate in this ing a context encourages broadening is not investment market. the increase in the What because the entrepreneurs however, in purchas does not is important, but paupers

the squeezing out of competitors is relatively easy, large declines in demand will result in the reduction of profit margins for
firm as prices are cut. By contrast, in a concentrated market,

profit margins will tend to be inelastic in the face of lowered demand. At the macroeconomic level the implications of inelastic
profit margins are most profound. In these circumstances, price

in population number of




reductions do not compensate

and thus companies tend

for declines

in the rate of growth,

rate of capacity utiliza


the market."

to reduce

Much like the population theory, the variant of stagnation that focused on the decline of technological theory change em
bodied many inconsistencies and questionable assertions. Propo

tion. Reductions
national income

in capacity utilization
but also increases

imply not only declines

in unemployment. In



of underutilized
to undertake any


firms will



nents of this school claimed that the lower rate of technological innovation (said to be a primary cause of the economy's inability to recover from the depression) derived from the state of techno logical knowledge at the time, yet they offered little justification of this position. A further objection to the technology argument
was work were apparent contained always of to some an the their motor of economic forms of cars, of the implicit capital-using argument and stagnation assumption type, foundered. for given but theorists that if themselves. new Their innovations were (in earlier to



cess is thereby established wherein a decline in the rate of growth, by generating reductions in the rate of capacity utilization, will lead to a further decline in the rate of expansion as net investment is reduced. Individual firms, by believing that decreases in their
own merely investment intensify will the alleviate problem their own burden of excess The capacity, greater the economy-wide.

innovations investment during in later and

capital-saving, railroads, stages newer

Heavy example) way technique

housing, may have

growth investment

periods informa

in managerial

tion processing. These

very large amounts of

latter innovations may not have absorbed

investment expenditure at all. While they

proportion of the nation's industry that is highly concentrated, the greater the tendency for a cyclical downturn to develop into a progressive (and seemingly endless) decline. A further consequence of the existence of highly concentrated sectors in the national economy is the impact it has on demand. The higher profit margins secured by large firms are indicative of
an increasingly skewed distribution of output that, when com

may have
their task of

improved the organization

on spending recovery. would not

and efficiency of production,

have been adequate to the

bined with
their revenues,

the reluctance

of firms to invest (or otherwise

a rising aggregate marginal





save. Declining
capacity when a the intervention penetration

slump of of


is combined with
potential government is therefore greatly

rising excess
barring or spending, lessened.


for recovery,

The Work of Josef Steindl Itwas the Austrian economist Josef Steindl who provided
most sophisticated version of the economy maturity idea.

exogenous foreign markets,





is central to Steindl's
in industrial structure

thesis is the concept of long-term

that make the economy as a

surprisingly, he did so in part by explicitly situating the Great in the United States within a long-term development Depression framework. His work linked economic stagnation directly with the behavior of capitalist the enterprise, thereby avoiding
mechanistic qualities of many of the stagnation arguments as


version toward ment and

as their
of the



to external
was that



less capable both of recovering from cyclical instability and of generating continued growth. He assumed the emergence of oligopolistic market structure to be inherent in the process of capitalist development, because of capitalism's tendencies toward the development of large-scale manufacturing techniques and
financial concentration. Economic maturity and the threat of


in capitalist inherent concentration, capital develop over led to a lethargic attitude toward time, competition investment. the emergence of concentrated Specifically,

stagnation result because the growing incidence of "[oligopoly of funds by shifting profits to those brings about amaldistribution
industries which are reluctant to use them." In order to escape

OAH Magazine

of History

Fall 2001


the Editor

Stagnation, tive sectors

must be redistributed capital or new industries.


to more



industry with
as a whole. The weaknesses

in Steindl's

to the shifting

of course,

of the


Indeed, Roosevelt's forcefully


some members of during the Great Depression, "Brain Trust," such as Rexford Tugwell, argued for the imposition of an "undistributed profits tax" to
accumulation of corporate surpluses. The incen

do not,

the importance
Great Depression

of his contribution
in particular, and

to an understanding

of the

of mature



tive of the tax, it was claimed, would lead firms to issue more or investment of their surpluses in the form of productive of capital resources dividends. As a result, the mobilization
would be more efficient and more likely to generate recovery.

general. That importance derives from the fact that Steindl at tempted to situate the decade of the thirties within a larger historical framework. In this context, he could view the Great Depression as the outcome of an interaction between cyclical forces dating from 1929
and more. tendencies In short, of long-run he was thus a spanning development half-century able to understand the Great Depression or

profits tax

in the Revenue
proved to be one




the undistributed
and contro

the most


as a historical problem. The U.S. Economy Since the Great Depression Steindl had, of course, focused his work on the interwar economic crisis of the 1930s. His central theses regarding maturity
and stagnation in advanced capitalist economies seemed particu

versial pieces of legislation it was repealed in 1938.

Interestingly tween stagnation enough, and

to emerge
there exists

from the New Deal,

no clear relationship industry



in American


the Great Depression.

structure, firms in investigators an industry Yet,

By applying a static conception

have as as the tended primary to focus on the of determinant in my own

of market
number a sector's some of


I discovered


highly decade, while



industries were relatively vibrant during the others appeared virtually moribund. Clearly, the
market structure was a frail reed upon


larly compelling when viewed in terms of the long-run historical experience of the Great Depression. Yet both the postwar record, at least in the case of the United States, and some of the theoreti cal lacunae in his earlier claims, led Steindl to modify some of the the 1976 republication of his arguments of his 1952 book. With Maturity and Stagnation in American Capitalism, Steindl allowed that technical innovation, product development, public spend initiatives might provide the ing, and research and development
means tremely to escape from that investment most inertia. Even so, he was ex concerned accumulation strategies in mature


or not

based his

theory. Whether
several issues

a given

the number

is to of


of firms or the extent

do with the industry's

of capital

in the economy's

issues having


the durability

of its output,

and the relative maturity


nations would focus on military-industrial activity and war itself. Using both public and private invest ment funds for other purposes, while obviously desir able, would be "exceedingly hard" given "the workings institutions." of political The wisdom (not tomention
1976 veys observations the more becomes recent evolution

the prescience)
as soon of American

of Steindl's
as one capitalism. sur



on the one

in the latter half of the twentieth

side, confirmed many of Steindl's

suppositions regarding expansion in advanced industrial states. On the other, it demonstrated both the unique and abiding flexibility of capitalism in the face of contradic
tory tendencies toward underutilization, and the impor


of political
to be history

and social
superfluous. reveals the

In all conceptual


respects, and

con im

economists temporary


portance of what Steindl had to saywhen he first examined the crisis of the 1930s. But it also reminds us of the and human agency in unyielding impacts of contingency
economic performance over time.


Photograph Congress,

Mayfield, Kentucky, refugees." Evans. by Walker (Courtesy LC-USF34-008217-D.)

1937. February of the Library of

World War II achieved in the United States, of course, what the New Deal could not?economic recovery. With rate began the start of war in Europe, the unemployment to fall so that by the time of the Japanese naval offensive

8 OAH Magazine of History

Fall 2001


at Pearl Harbor, only 7 percent of the labor force remained idle. American entry into the
war brought almost instantaneous resolution

of the persistent economic difficulties of the interwar years. Between 1939 andl944 the
national product, measured in current dollars,

increased by almost 125 percent, ultimately rising to $212 billion by 1945. Yet asWorld War II came to a close many economists and businesspeople worried about the possibility of a drop in the level of prosperity But these apprehensions and employment. to In the first year after be unwarranted. proved the war, gross national product fell less than
the postwar reduction in government spend ;;'-%^^g|||:;^

did not even reach 4 per ing; unemployment consumer cent; spending did not fall at all, and eventually rose dramatically. Although recessions mid
year or

occurred between 1945 and the most of them lasted 1970s, only about a
less, and none of them remotely ap

"A shanty Rothstein.

built of



Herrin, Illinois, January of the Library of Congress,



by Arthur


proached the severity of the Great Depres sion. During these three decades American output steadily to the Federal increased with only minor setbacks. According Reserve Board's index, manufacturing production doubled be tween 1945 and 1965, and tripled between 1945 and 1976. is hardly surprising in Such robust economic performance wartime especially when conflict is global and, with few excep ismost striking tions, kept outside of national boundaries. What about the American economic experience linked with World War II was the enduring growth and prosperity of the postwar years. and investment behavior played amajor part in this Consumption great prosperity of the late forties and fifties. As soon as Germany in the and Japan surrendered, private and foreign investment United States rose quickly. On the domestic side, reconversion was itself an investment stimulus. Modernization and deferred substantial replacement projects required deployments of funds. Profound scarcities of consumer goods, the production of which had been long postponed by wartime mobilization, necessitated efforts. and Even fear of expansion major retooling high inflation on of wartime the and wage controls brought by dismantling price move to firms and forward the date of ambitious prompted many investment On indi the both long-term projects. foreign side, viduals and governments were eager to find a refuge for capital that had been in virtual hiding during the war. Along with a jump in domestic investment, therefore, a large capital inflow began in late 1945 and early 1946.
Domestic consumption was the second major component of

income was bolstered by the rapid reduction in wartime surtaxes and excises. And the baby boom of the wartime generation in high levels of demand for signifi itself expressed economically cant items like appliances, automobiles, and housing. G.I. Bill benefits additionally served to increase the demand for housing and such things as educational services, with associated impact on
construction and other industrial sectors.



for American
years. In part

the needs

grew rapidly
of devastated

in the

could only be met by the one industrial base that had been nearly untouched by war-related destruction. Explicit policy commit ments to the rebuilding of allied and occupied territories, such as the Marshall Plan in Europe, also served to increase the foreign market for the output of American industry. American postwar prosperity and the benefits of world eco nomic leadership continued throughout most of the 1950s. But
the prosperity of the decade, while robust and impressive, never

theless weakened by 195 7. This set the stage for the arrival of a new in Washington, brand of economics (and self-con explicitly imbued with the of doctrines Keynesianism. sciously) to the From the "New Frontier" policies of John F. Kennedy, successor "Great Society" his of Johnson, agenda Lyndon of a "New Federalism" by Richard through the declaration
Nixon, intervention there ensued in the an nation's era of sustained central life. The government goal of many economic

(but not achieving


all) of the "new" economists simultaneously


postwar growth. Bridled demand and high household

to wartime generous shortages, wages of rationing, the war economy, and controls, contributed coupled to

savings due
with a dramatic the


of the early 1960s? levels of unemployment

But throughout



growth in consumer spending at war's end. The

jump in disposable

the sixties and much of the seventies (and for some even during to secure the eighties) the perceived obligation of government

OAH Magazine

of History

Fall 2001


remained century

one American of

the more economic

was not
important history.

seriously questioned
changes of twentieth


economic American specificity notwithstanding, seems to in the of half the twentieth latter century performance in many respects with the general analytical -. have conformed propositions derived from interwar economics. The ability to Historical
forestall and/or overcome tendencies toward economic stagna

Easterlin, Richard A. Population, Labor Force, and Long Swings in Economic Growth: The American Experience, New York: Na tional Bureau of Economic Research, 1968. Fisher, Irving. Booms and Depressions: Some First Principles. New York: Adelphi, 1932. The StockMarket Crash And After. New York: Macmillan, 1930. Galbraith, John Kenneth. The Great Crash, 1929. 3d ed. Boston: 1972. Houghton Mifflin, Harris, Seymour. Saving American Capitalism: A Liberal Economic Program. New York: Knopf, 1948. Keynes, John Maynard. The General Theory of Employment, Inter 1964. est, andMoney. New York: Harcourt, Brace andWorld, in Charles Poor. 1929-1939. The World Depression: Kindleberger, of California Press, 1973. Berkeley: University Kuznets, Simon. "Long Swings in the Growth of Population and in Related Economic Variables." Proceedings of theAmerican Philosophical Society 102 (1958): 25-52. Lewis, W. Arthur. Economic Survey, 1919-1939. Philadelphia: 1950. Blakiston, Means, Gardiner C, and Adolf A. Berle. The Modem Corporation and Private Property. New York: Harcourt, Brace andWorld, 1968. Roose, Kenneth D. The Economics of Recession and Revival: An Interpretation of 1937-1938. New Haven: Yale University Press, 1954. Schumpeter, Joseph A. Business Cycles: A Theoretical, Historical, and Statistical Analysis of the Capitalist Process. New York: 1939. McGraw-Hill, Slichter, Sumner. "The Downturn of 1937." Review of Economics and Statistics 20 (1938): 103-15. Steindl, Josef. Maturity and Stagnation in American Capitalism. 1945. Reprint, New York: Monthly Review Press, 1976. In Problems of in Capitalist Economies." "On Maturity Economic Dynamics and Planning: Essays inHonour ofMichal Kalecki, 423-32. New York: Pergamon, 1966.
"Reflections on the Present State of Economics." Banca

tion has depended upon a varied set of circumstances,

and domestic. But a continuation of such a charmed

both global
existence is

in apparently no longer possible. Josef Steindl himself noted, 1976, that "the cheerful extroverted era of [postwar] growth has
apparently come to an end." And, in words that today seem as

reasons superpowers countries and energy

as they did over

for this were "the . . . the ... and... problems the

twenty years ago, he noted

reduction in of tension tension within the

that the

between capitalist raw material,

increase emergence . . . ."

of environment,

In the midst of a return to the unstable growth of earlier of fiscal and decades, an altogether reactionary (re)orientation monetary policy has occurred. A resurgence of general equilib to cyclical phenomena rium approaches has prompted the
formupoignancy strikingly clear of when this we state reflect of contemporary upon the Great affairs are made as a Depression


and coherent



on Note consideration

this Issue: As this article amply demonstrates, of the economic history of the Great Depression
on both quantitative and aggregate data that


tend to obscure
challenge for

the human dimensions

of us who teach about

of the event.
this profound

Indeed, the


crisis is to find substantive ways inwhich to link the economics of -. the interwar years with the personal and social experience of its It is for this reason that the inspired work of the contemporaries. contributors to this special issue of the OAH Magazine of History should prove so useful to all of us in our work with students. In the-. pages that follow, readers will find visual and textual examination
of the many ways in which Americans endured, understood, and

ultimately overcame the burdens of the Great Depression. These to articles and lesson plans will assist us all in our determination
convey interwar to students era and the the singular remarkable nature of the economic of crisis the of the genera accomplishments

tion that lived through


Nazionale del Lavoro Quarterly Review 148 (1984): 3-14. of Oligopoly." Journal Sweezy, P. M. "Demand Under Conditions Political 568-73. Economy 47 (1939): of Valdimir P. World Agriculture and the Depression. Timoshenko, of Michigan Ann Arbor: University Press, 1933. United States Department of Commerce. Historical Statistics of the DC: United States: Colonial Times to 1970. Washington, Government Printing Office, 1975.

Bibliography Abramovitz, Moses. "TheNature and Significance of Kuznets Cycles." Economic Development and Cultural Change 9 (1961): 225-48. Bernstein, Michael A. The Great Depression: Delayed Recovery and 1929-J 939. New York: Cam Economic Change inAmerica, Press, 1987. bridge University Brockie, M. "Theories of the 1937-38 Crisis Economic Journal 60 (1950): 292-310. 10 OAH Magazine of History Fall 2001 and Depression."

Michael member



is a professor at the University

of history


associated San Diego.

faculty His

in economics

of California,


recent book is A Perilous Progress: Economists America (2001). Purpose in Twentieth-Century

and Public