The Great Depression in the United States

On October 24, 1929 (black Thursday) there was a stock market crash in New York, which led to a prolonged period of deflation. The crisis quickly moved the entire U.S. economy, European and other world areas. One of its most immediate consequences was the collapse of international payments system. The economic meltdown of 1929 has attracted the attention of historians and economists have not done any other time in the economic history of capitalism. The debate over the origins of the crisis is prolonged, in fact, until the eighties, revived by the need to give a reasoned explanation of the crisis in decades. Marxists, monetarists and Keynesians have tried to give an explanation of this episode that actually corresponded to a long period, which runs from 1929 to 1939. (Temin, pp. 121-145)

The 1929 crash had clear precedents in Europe and U.S. In 1927 the fall of the stock market of Germany came, in 1928 this was repeated in Britain, and in February 1929 in France. The spectacular nature of the collapse of the New York Stock Exchange should not overshadow, however, other kinds of demonstrations that realize the difficult situation that was going through capitalism. (Romer pp. 597-624)

In December 1928, the powerful steel industry Rhine-Westphalia had bankruptcy and triggered a severe recession in Germany. The signs that preceded the collapse in the U.S. were mixed. On the one hand, the stock market experienced a feverish activity, with strong profits and a sustained increase in stock prices. Moreover, in Europe and the U.S. economy it came unmistakable signs: the collapse of the building (due largely to slower migration), the weakness of the industrial production index also gave clear signals of an impending recession. (Kindleberger Pp. 1929-1939)

Deflation, falling production, the accumulation of stocks, massive unemployment, contraction of world trade and the breaking of international payments system marked the situation in most advanced capitalist countries. Unemployment was over 12 million U.S., seven million in Germany and three million in Britain. Industrial production fell between 1929 and 1932 by 38 percent globally and 50 percent in the U.S. Galbraith ("The crash of 29” , 1955) distinguishes between the crash itself and what he calls the" Great Crisis ", the latter period that lasts until 1939.

The explanations of the causes of the crisis are varied and complex, but agree on the combination of economic and social factors, which, in turn, were influenced each other. (Iritani pp. 45-59)

Currency blocs were formed, led by the USA, France and Britain. This crisis also marked the end of illusion about capitalism's ability to regulate itself, giving way, in various forms, to direct and massive intervention of the state in economic reproduction processes.

Causes of the Great Depression

There have been many positions taken by experts in the development of scenarios that lead to establishing causes of the Great Depression of the thirties. Marxist economic theory has emphasized the analysis of large capitalist crisis blamed on lack of coordination between production ...