No event as massive as the Great Depression occurs because of a single, or even several, realities. Given the nature of the economy as affecting all aspects of the government, commerce, and the society, what happens is an exponential effect. In this instance, however, it is possible to identify primary factors plunging the nation into a severe crisis that would have impact for long years. To begin with, and ironically, prosperity underscored the onset of the Depression. The early decades of the 20th century were marked by the force of the Industrial Revolution, which in turn greatly influenced the entire society.
As manufacturing and wealth became centralized in the great cities, whole populations migrated from the agricultural regions to meet the needs of industry and take advantage of the unprecedented opportunity. At the same time, however, external factors were playing into the collapse, such as Europe’s difficulty in recovering from the first World War and debt was a massive problem (SAHO, 2017). Then, there is no escaping the reality that the Depression itself was amplified by virtue of the 1929 stock market crash, in that the sheer idea of the economy failing triggered panic, and misguided reactions worsening the situation. Consequently, it is reasonable to consider that the aftermath of the war, the ensuing panic, and a rise in industry so radical, wealth became enormously unequal, all combined to create the event as a whole.
The above notwithstanding, the noted explosion of commerce had an impact all its own, and one reflecting the effects when wealth is so unevenly distributed. As profits grew for those in power, so too did working Americans seek to enjoy the advantages of commercial success, and this class became more and more in debt. The division between the wealthy and the working class then grew far wider, just as the former engaged in speculations and financial practices the economy could not support. The impending awareness of this as disastrous exploded when investors panicked and the market could not sustain the desperate attempts to sell stocks on October 24 of that year (SAHO, 2017). What ensued was a national emergency lasting years, and one worse than any other economic crisis by virtue of the universal consequences. Through the early 1930s, job loss accelerated to the point where one quarter of the work force was unemployed, just as those working were paid less (SAHO, 2017). As this developed, deprivation led to other social ills, and a spirit of hopelessness eventually defined the country. As devastating as was the recession of 2008, believed by many to have been a Depression, the effects were not as drastic, and did not require the drastic solutions created by Roosevelt and the New Deal.
Today, there is good reason to be concerned about a similar crisis coming. Apart from the controversies surrounding the current administration, in terms of foreign trade and tariffs as questionably in practice, there is the similar factor of inequality of wealth, if not to a greater degree. As has been widely documented, corporations are enjoying unprecedented opportunities to increase profits through deregulation and tax policies, and this is not generating job growth or expansion. Then, there remains the conflict regarding minimum wages, as well as governmental efforts to oppose unionization. Arguably, the nation is more plutocratic than it was prior to the Crash of 1929, and this alone indicates a likely collapse. Beyond anything else, the immense and expanding gap between a wealthy elite and the working class population supporting it is leading to a crisis, just as the recent and extreme fluctuations in the stock market suggest the same type of panic that precipitated the Great Depression.
- South African History Online (SAHO). (2017). What was the Great Depression and why did it
start in the USA? Retrieved from
https://www.sahistory.org.za/article/what-was-great-depression-and-why-did-it-start-usa
