Buhran, Kuzey Amerika ve Avrupay merkez almasna ramen, dnyann geri kalannda da zellikle de sanayilemi lkelerde ykc etkiler yaratmtr. Bu kentlerde bir isizler ve evsizler ordusu yaratmtr. Talebin beklenmedik dzeyde dmesi nedeniyle madencilik alan buhrann en fazla etkilendii sektrlerden biri olmutur. Ancak bunlarn genelinde yer alan ortak birka sebebi yle sralayabiliriz : Birincisi; Amerikada irili ufakl pek ok irket varken 1. Dnya Savann getirdii zorluklar karsnda irketler birlemek zorunda kalm ve tekeller oluturmulardr. Bu da tek bir holdingin bile iflasnn ekonomiyi sarsmaya yeteceini gsteriyordu.

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Shelves: history , economics Even though he said that he would eventually get to talk about the causes of the great depression I have to admit that for much of this book I thought we would be just getting a series of increasingly horrible stories about the crash.

But this turned out to be an infinitely better book than I anticipated. There are quotable quotes If there must be madness something may be said for having it on a heroic scale. Or This is the rite of the meeting which is called not to do business but to do no Even though he said that he would eventually get to talk about the causes of the great depression I have to admit that for much of this book I thought we would be just getting a series of increasingly horrible stories about the crash.

There is the dismantling of myths, particularly the myth of the streets of New York piled high with the crumpled corpses of financiers who had thrown themselves from the still gaping windows of the twentieth floor. In fact, Galbraith has a table of suicides and shows that there was virtually no change in the suicide rate in the US or in New York in particular in this year at all and even that the suicide rate was higher in some of the months before the crash than in October.

Like alcoholics and gamblers, broken speculators are supposed to have a propensity for self destruction. At a time when broken speculators were plentiful, the newspapers and the public may have simply supplied the corollary. Urban myths like this always amaze me — but we have been raised to believe that these stories — like the Greek Myths — have somehow grown from a kernel of truth. It is nice to have confirmed once again that the human imagination is not so limited.

I only know bits and pieces about the Stock Market, but I did find his explanation for why, in times of a crash, bad stocks chaise out of the market good stocks very interesting.

Say you are a prudent investor and have borrowed a thousand dollars to buy stocks. You decide that you are going to be clever and rather than spend all of your thousand on risky stocks, because that would be just like gambolling you will instead buy five hundred dollars worth of first rate, blue ribbon stocks and with the other five hundred dollars you will buy high risk stocks which you expect to provide huge returns.

But all of a sudden things turn bad. Everyone knows the problem with this stock and will assiduously keep away from it. But now your creditors smell blood in the water and start circling to try to get their money back. This then forces down the value of blue ribbon stock. So, bad stock, in a round about way, forces good stock to lose value. Perhaps economics is the last bastion of mysticism. Galbraith repeatedly makes the point that those in the know had already guessed early in the year that the bubble was set to burst.

Those in government and acting as financial regulators had two much less than optimum choices to make — they could put a pin in the bubble and burst it immediately, or they could wait around for it to burst of its own accord. The point is that bursting the bubble might well have been the best thing to do, saving the market from further overheating.

The problem with doing this, even if your intention was to stop further hardship, is that it will be clear to everyone that you were the person that caused the bubble to burst. So, the temptation is to allow the bubble to burst of its own accord, even if this makes matters a thousand times worse.

That way it can seem like an act of God, rather than of the regulating bodies and therefore they might just get re-elected. It is a sobering idea. Or my favourite, that the market needed a bit of a rest after working so hard in the twenties that it needed to have the thirties off altogether. It is clear that for capitalism to continue to grow it needs ever expanding markets.

But the US at the time was actually doing everything in its power to contract its markets. It had become a creditor nation to Europe after the first world war, it increased tariffs and thereby denied other countries a means of repaying debt owed to the US in a way that might encourage them to buy more US goods and most interesting, despite a 40 odd per cent increase in productivity of labour, wages barely increased at all.

As Marx pointed out nearly a century before Galbraith, under capitalism, and for the first time in human history, we have crisis due to producing too much, rather than too little. The wholesale destruction of capital due to the depression that followed the crash was necessary not because there was no one who wanted what could have been produced by this capital, but because there was no profit to be made from producing it. And greed was the key determining feature that decided there would be no market — stopping pay increases for workers through a decade of growth and thereby directing the wealth of society disproportionately towards the rich only meant they would use it to further speculate on the stock market — which only made the situation worse for everyone.

It is what causes men who know that things are going quite wrong to say that things are fundamentally sound. This is an important book to read now and always.


The Great Crash of 1929



Parma Senior High School Alumni


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