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Newspaper headlines around the world in 2008 asked whether the world’s economies were heading for another “Great Depression.” Long-past economic history suddenly captured the attention of economists, journalists, and others. But what was this event and why—even though it occurred the best part of a century ago—does it still hold such a prominent place in our economic memories?
In the early 1930s, instead of benefiting from economic growth and improved standards of living, people witnessed a huge decline in the level of economic activity. There was great economic hardship: large numbers of families struggled to obtain even basic food and shelter. Some sense of the desperation during these times can be found in oral histories. Here, for example, is one person’s story of what it was like trying to find a job:
I’d get up at five in the morning and head for the waterfront. Outside the Spreckles Sugar Refinery, outside the gates, there would be a thousand men. You know dang well there’s only three or four jobs. The guy would come out with two little Pinkerton cops: ‘I need two guys for the bull gang. Two guys to go into the hole.’ A thousand men would fight like a pack of Alaskan dogs to get through there. Only four of us would get through. I was too young a punk.See Studs Terkel, Hard Times: An Oral History of the Great Depression (New York: Pantheon Books, 1970), 30.
The personal suffering is less apparent in the figure below, but this picture does reveal the extraordinary nature of those times. It shows real gross domestic product (real GDP) in the United States from 1890 to 1939. Three things stand out. First, the level of economic activity grew substantially during this half century. This is normal: economies typically grow over the long haul, becoming more productive and producing more output. Second, although the level of US economic activity grew substantially over this half century, there were many ups and downs in the economy during the late 19th century and early 20th century. Third—and most important for our purposes—the period from 1929 to 1937 stands out from the rest. This was not a minor blip in economic activity; the US economy suffered a collapse that persisted for many years. At the same time, unemployment climbed to a staggering 25 percent in 1933—one out of four people was unemployed—compared to a rate of only 3.2 percent in 1929.
Figure 22.1 US Real GDP, 1890–1939
Real GDP increased considerably between 1890 and 1939, but the Great Depression of the early 1930s is a striking exception.
Source: Data from “What Was the U.S. GDP Then?,” Measuring Worth, accessed August 22, 2011, http://www.measuringworth.org/datasets/usgdp/result.php.
The United States was not the only country to experience such hard economic times in this period. Many other countries, such as the United Kingdom, Canada, France, Germany, and Italy also saw their economic progress reversed for a period of years. The Great Depression, as this economic cataclysm came to be called, was a shock to the economists of the day. Prior to that time, most economists thought that, though economies might grow fast in some years and decline slightly in others, prolonged unemployment and underutilization of resources was impossible. The Great Depression proved this view to be erroneous and eventually led to a fundamental change in the way in which economists thought about the aggregate economy. The idea that the economy was naturally stable was replaced with a view that severe economic downturns could recur at any time.
Along with this change in thinking about the economy came a change in attitudes toward macroeconomic policy: economists began to believe that the government could play an active role to help stabilize the economy, perhaps by increasing government spending in bad times. Prior to the Great Depression, nobody even thought that the government should try to keep the economy stable. Both Democrats and Republicans in the 1932 election advocated less government spending because government revenues had fallen. Yet, by the end of the 1930s, the United States and other countries had adopted the view that active policy measures were useful or even essential for the proper functioning of economies.
Three-fourths of a century later, these events are part of economic history. Few people still alive experienced those terrible years directly, yet the time remains part of our collective memory. Above all, we need to know what went wrong if we hope to ensure that such punishing times do not come again. Indeed, the world economy recently suffered the most severe recession since the 1930s, and it is unclear at the time of this writing how long or how bad the current crisis will be. The insights of the economists who explained the Great Depression are still at the heart of today’s discussions of economic policy. Understanding what happened to the economy in the 1930s is more than an exercise in economic history; it is essential for understanding modern macroeconomics. We want to know—
What caused the Great Depression?
We begin by looking at some facts about the Great Depression and the boom that preceded it. Our goal is to see if we can develop a good explanation of these facts. The most fundamental defining feature of the Great Depression was the large and sustained decrease in real GDP. In the figure below, which shows the circular flow of income, reminds us that real GDP measures both production and spending.
Figure 22.2 The Circular Flow of Income
GDP measures the production of an economy and total income in an economy. We can use the terms production, income, spending, and GDP interchangeably.
It follows that during the Great Depression, both output and spending decreased. Perhaps it is the case that production in the economy declined for some reason, and spending decreased as a consequence. Or perhaps spending declined for some reason, and production decreased as a consequence. We examine two approaches to the Great Depression, based on these ideas. One sees the root cause of the Great Depression as a decline in the productive capabilities of the economy, meaning that firms—for some reason—were unable to produce as much as they had before. This then led to decreased spending. The other approach sees the root cause of the Great Depression as a decline in spending, meaning that households and firms—for some reason—decided that they wanted to purchase fewer goods and services. This then led to decreased production.
We look at each explanation in turn. We investigate which inputs contributed the most to the decrease in output and also look at what happened to the different components of spending. This more careful look at the data helps us to evaluate the two competing theories of the Great Depression. We conclude by examining the implications for economic policy and considering what policies were actually conducted at the time of the Great Depression.
Kwa habari zaidi juu ya chanzo cha kitabu hiki, au kwa nini inapatikana kwa bure, tafadhali angalia ukurasa wa nyumbani wa mradi. Unaweza kutazama au kupakua vitabu vingine huko. Ili kupakua faili ya.zip yenye kitabu hiki kwa ajili ya matumizi ya nje ya mtandao, bonyeza hapa. "Mwaka 2008 gazeti la The Economist liliripoti kwamba ""kiwango cha uchumi cha dunia kilikuwa kimeongezeka kwa kasi sana, na kwa ghafula uchumi wa dunia ulikabiliwa na matatizo makubwa.""" Lakini tukio hili lilikuwa nini na kwa nini - ingawa lilitokea sehemu bora ya karne iliyopita - bado lina nafasi muhimu sana katika kumbukumbu zetu za kiuchumi? Katika miaka ya 1930 badala ya kufanikiwa kutokana na ukuaji wa kiuchumi na kuboresha viwango vya maisha, watu waliona kupungua kwa kiwango cha shughuli za kiuchumi. Kulikuwa na ugumu mkubwa wa kiuchumi: idadi kubwa ya familia zilijitahidi kupata hata chakula cha msingi na makao. Hisia fulani ya kukata tamaa wakati huo yaweza kupatikana katika historia za mdomo. Hapa, kwa mfano, ni hadithi ya mtu mmoja ya jinsi ilivyokuwa kujaribu kupata kazi: Ningetaka kuamka saa tano asubuhi na kichwa kwa ajili ya pwani. Kwenye uwanja wa Spreckels Sugar Refinery, kuna watu wengi ambao wanafanya kazi katika viwanda vya sukari. Unajua dang vizuri kuna tu tatu au nne kazi. Mtu huyo angetoka na polisi wawili wadogo wa Pinkerton: 'Ninahitaji watu wawili kwa ajili ya genge la ng'ombe. Watu wawili kwenda ndani ya shimo. <unk> Watu elfu moja vita kupambana kama kundi la mbwa Alaska kupata kupitia huko. Ni watu wanne tu ambao wangeweza kuvuka. "Kama vile ilivyoandikwa katika kitabu cha Studs Terkel, ""Hard Times: An Oral History of the Great Depression"" (New York: Pantheon Books, 1970)." Mateso ya kibinafsi hayaonekani sana katika picha iliyo hapa chini, lakini picha hii inaonyesha jinsi nyakati hizo zilivyokuwa za ajabu. Hii inaonyesha jumla ya pato la ndani (GDP) katika miaka ya 1890 hadi 1939. Kuna mambo matatu yanayostahili kuangaliwa. Kwanza, kiwango cha shughuli za kiuchumi kiliongezeka sana katika kipindi hicho cha nusu karne. Hii ni kawaida: uchumi kwa kawaida kukua juu ya muda mrefu, kuwa zaidi ya uzalishaji na kuzalisha pato zaidi. Kwa upande mwingine, ingawa kiwango cha shughuli za kiuchumi nchini Marekani kilikua sana katika nusu karne hii, kulikuwa na mapinduzi mengi katika uchumi mwishoni mwa karne ya 19 na mapema karne ya 20. Tatu, na muhimu zaidi kwa madhumuni yetu, kipindi cha 1929 hadi 1937 kinatoka kwa wengine. Hii haikuwa ni kipande kidogo cha shughuli za kiuchumi; uchumi wa Marekani ulipatwa na kuanguka ambayo iliendelea kwa miaka mingi. Wakati huo huo, ukosefu wa kazi uliongezeka hadi asilimia 25 mwaka 1933 - mtu mmoja kati ya wanne alikuwa na ajira - ikilinganishwa na kiwango cha asilimia 3.2 tu mwaka 1929. Pato la Taifa la Marekani (PIB) la kweli, 1890-1939 Pato la Taifa la kweli, (PIB) la kweli, liliongezeka sana kati ya 1890 na 1939, lakini Mshuko Mkubwa wa Kiuchumi wa mapema 1930 ni ubaguzi mkubwa. "Kutoka kwa ""What Was the U.S. GDP Then?,"" Measuring Worth, August 22, 2011, http: www.measuringworth.org.uk.html" Marekani haikuwa nchi pekee iliyopitia nyakati ngumu za kiuchumi katika kipindi hicho. Nchi nyingine nyingi, kama vile Uingereza, Kanada, Ufaransa, Ujerumani, na Italia pia ziliona maendeleo yao ya kiuchumi yakibadilika kwa muda wa miaka. Mshuko Mkubwa wa Kiuchumi, kama vile msiba huo wa kiuchumi ulivyoitwa, uliwaogopesha wataalamu wa uchumi wa wakati huo. Kabla ya wakati huo, wataalamu wengi wa uchumi walifikiri kwamba ingawa uchumi ungeweza kukua haraka katika miaka fulani na kupungua kidogo katika miaka mingine, ukosefu wa ajira wa muda mrefu na matumizi madogo ya rasilimali haingewezekana. Mshuko Mkubwa wa Kiuchumi ulithibitisha kuwa maoni haya yalikuwa ya makosa na hatimaye yalisababisha mabadiliko ya msingi katika njia ambayo wachumi walidhani juu ya uchumi wa jumla. Wazo la kwamba uchumi ulikuwa thabiti kiasili lilibadilishwa na maoni ya kwamba kushuka kwa uchumi kali kwaweza kutokea tena wakati wowote. Pamoja na mabadiliko haya katika kufikiri juu ya uchumi, kulikuwa na mabadiliko katika mitazamo kuelekea sera ya uchumi wa jumla: wachumi walianza kuamini kwamba serikali inaweza kucheza jukumu la kazi kusaidia kuimarisha uchumi, labda kwa kuongeza matumizi ya serikali katika nyakati mbaya. Kabla ya Mshuko Mkubwa wa Kiuchumi, hakuna mtu hata aliyefikiri kwamba serikali inapaswa kujaribu kudumisha uchumi thabiti. Katika uchaguzi wa mwaka 1932, wanademokrasia na wa-Republican waliunga mkono kupunguza matumizi ya serikali kwa sababu mapato ya serikali yalikuwa yamepungua. Hata hivyo, kufikia mwishoni mwa miaka ya 1930, Marekani na nchi nyingine zilikuwa zimekubali maoni kwamba hatua za sera za uendeshaji zilikuwa muhimu au hata muhimu kwa utendaji sahihi wa uchumi. Karne tatu na nusu baadaye, matukio hayo ni sehemu ya historia ya kiuchumi. Ni watu wachache waliobaki walioishi waliopata uzoefu wa moja kwa moja wa miaka hiyo yenye kuogofya, lakini wakati huo unabaki kuwa sehemu ya kumbukumbu yetu ya pamoja. Zaidi ya yote, tunahitaji kujua kilichotokea ikiwa tunatumaini kuhakikisha kwamba nyakati hizo zenye adhabu hazitarudi tena. Kwa kweli, uchumi wa dunia hivi karibuni ulipatwa na mfumuko mkubwa zaidi wa uchumi tangu miaka ya 1930, na haijulikani wakati wa kuandika hii ni kwa muda gani au ni mbaya kiasi gani mgogoro wa sasa utakuwa. Maoni ya wataalamu wa uchumi ambao walielezea Mshuko Mkubwa wa Kiuchumi bado ni kiini cha majadiliano ya leo ya sera za kiuchumi. Kuelewa kile kilichotokea kwa uchumi katika miaka ya 1930 ni zaidi ya mazoezi katika historia ya kiuchumi; ni muhimu kwa kuelewa uchumi wa kisasa. Tunataka kujua ni nini kilichosababisha Mshuko Mkubwa wa Kiuchumi? Hebu tuangalie mambo fulani kuhusu ule Mshuko Mkubwa wa Kiuchumi na ukuzi uliotangulia. Lengo letu ni kuona kama tunaweza kutengeneza ufafanuzi mzuri wa mambo haya. Kipengele cha msingi zaidi cha kuamua ya Mshuko Mkubwa wa Kiuchumi ilikuwa kupungua kubwa na endelevu katika pato la jumla la nchi. Mchoro wa chini unaonyesha mtiririko wa mzunguko wa mapato, na unatuambia kwamba Pato la Taifa halisi hupima uzalishaji na matumizi. Picha ya 22.2: Mtiririko wa mzunguko wa mapato: Pato la Taifa (GDP) hupima uzalishaji wa uchumi na mapato ya jumla katika uchumi. Tunaweza kutumia maneno uzalishaji, mapato, matumizi, na Pato la Taifa kwa kubadilishana. Kwa hiyo, wakati wa Mshuko Mkubwa wa Kiuchumi, uzalishaji na matumizi yote mawili yalipungua. Labda ni kesi kwamba uzalishaji katika uchumi ulipungua kwa sababu fulani, na matumizi yalipungua kama matokeo. Au labda matumizi yalipungua kwa sababu fulani, na kwa sababu hiyo uzalishaji ukapungua. Tunachunguza njia mbili za kushughulikia Mshuko Mkubwa wa Kiuchumi, kwa kutegemea mawazo hayo. Mtu anaona sababu ya msingi ya Mshuko Mkubwa wa Kiuchumi kama kupungua kwa uwezo wa uzalishaji wa uchumi, ikimaanisha kwamba makampuni - kwa sababu fulani - hayakuweza kuzalisha kama walivyokuwa hapo awali. Hilo lilisababisha kupungua kwa matumizi. Njia nyingine inaona sababu ya msingi ya Mshuko Mkubwa wa Kiuchumi kama kupungua kwa matumizi, ikimaanisha kwamba kaya na makampuni - kwa sababu fulani - waliamua kwamba walitaka kununua bidhaa na huduma chache. Hilo lilisababisha kupungua kwa uzalishaji. Tunachunguza kila ufafanuzi kwa zamu. Kuangalia ni nini kilichopunguza zaidi katika uzalishaji na pia kuangalia ni nini kilichotokea kwa vipengele tofauti vya matumizi. Kuangalia kwa uangalifu zaidi data hizo hutusaidia kutathmini nadharia mbili zinazopingana za Mshuko Mkubwa wa Kiuchumi. Kwa hivyo, kwa kuzingatia athari za uchumi, tunapaswa kuzingatia jinsi uchumi ulivyoendelea wakati wa Mshuko Mkubwa.