Grande dépression
- Sommaire:
- 1 Grande dépression
- 2 The causes of the economic crisis
- 2.1 Explanation by speculation
- 2.2 Monetary explanation
- 2.3 Explanation for the under-
- 2.4 Explanation by the economic cycle
- 2.5 Moral and sociological explanations
- 2.6 The absence of a power capable of imposing a cooperative game
- 2.7 The transformation of the U.S. recession in global depression
- 2.7.1 The questioning of the inactivity of the U.S. government
- 2.7.2 The questioning of the reactions of the Central Bank
- 2.7.3 The questioning of protectionism
- 2.7.4 The arraignment of competitive devaluations
- 3 The causes of the economic crisis
- 3.1 Explanation by speculation
- 3.2 Monetary explanation
- 3.3 Explanation for the under-
- 3.4 Explanation by the economic cycle
- 3.5 Moral and sociological explanations
- 3.6 The absence of a power capable of imposing a cooperative game
- 3.7 The transformation of the U.S. recession in global depression
- 3.7.1 The questioning of the inactivity of the U.S. government
- 3.7.2 The questioning of the reactions of the Central Bank
- 3.7.3 The questioning of protectionism
- 3.7.4 The arraignment of competitive devaluations
Grande dépression
Manic-depressive is defined by specific disorders of mood (mania, depression) cyclic, and the presence of predisposing factors or hereditary.
The patient who first experienced headaches, fatigue, disinterest for everything, and lost sleep, still prostrate, staring.
Anxiety is variable, sometimes major, it creates a state of psychomotor agitation, suicide risk, which is never negligible, becomes very important.
During an attack of acute mania, the manic (this word in psychiatry is not the same meaning as in everyday language) shows an excess of imagination, a lot of talk delights in cock-and-l’âne the associations of images and sounds. We see in him the constant leak of ideas.
Willingly theater, he is suddenly overflowing with joy and without cause for anger. He lost all sense of restraint and self-control.
There is a dynamic disorder, a frenzy that wanders in all directions and leads to a complete disintegration of the personality of the patient.
The Great Depression, also called crisis of 1929, is the period of world history that goes from 1929 crash in the United States until the Second World War.It is the largest economic depression of the century, which was accompanied by significant deflation and unemployment soared.
The causes of the economic crisis
Economic thinking has subsequently focused in part on the immediate causes of the crisis and others share the reasons for the transformation of the recession into a depression. But the innumerable writings on the crisis of 1929 failed to draw a generally accepted explanation for its occurrence.
The literature devoted to it are most often descriptive, perhaps normative, rarely explanatory, like those that are limited to an explanation, eg based on excessive speculation as The Great Depression (1934) Lionel Robbins The economic crisis or 1929 (1955) by John Kenneth Galbraith.
Besides, every school of economic thought has drawn the cover for his general theses. The explanation by over-concentration of wealth at the time backed by Marxist and Keynesian economists, does not explain the surge of 1928-1929 or the details of the crisis.The monetary explanation, in the version supported by Milton Friedman and Anna Schwartz in A Monetary History of the United States (1963), will also be considered partial, however, the latest version advanced by the French economist Jacques Rueff in The Monetary fished the West (1971) broadly covers the period before the crisis and explains most of the symptoms noted .. Finally, the economic historian Charles Kindlebergerestime need to use several factors to explain the crisis.
Explanation by speculation
The origin of the crisis would be the stock market frenzy and irresponsibility of bankers who lent to speculators without restraint. Poorly regulated banking activity has led either to finance the real economy but unhealthy speculation.
Rising stock market was inherently unsustainable. When the stock fell, bank loans have been repaid, panic set in and the rush to the banks caused the blockage of the monetary and financial system. 8,000 banks will go bankrupt from 1929 to 1934.The economy, private credit, has suddenly stopped.
This theory goes by very quickly on the international aspects, while the 1929 crisis was global. Why indeed a crisis of speculation has it developed to that date and only the United States? JK Galbraith, who was the main bearer of these ideas in his book Crisis of 1929, would in some rather ironic attitude that truly descriptive and explanatory.
Monetary explanation
The Austrian School of Economics argues that it is rampant money creation in the 1920s by the fledgling Federal Reserve System, which led to an inflationary bubble inevitably doomed to collapse. According to Ludwig von Mises, ‘the fatal collapse was the result of pressures to lower the interest rate through credit expansion.His explanation is institutional as that which will be later developed by Jacques Rueff, but it is almost exclusively focused on the existence of a central bank (the followers of the Austrian school strongly criticize the actions of central banks and some advocate their abolition).
Monetarists, represented by Milton Friedman denounced the restrictive monetary policy implemented by the Federal Reserve of the United States since 1928, leading to a shortage of funds. This error is the cause of the crisis. The Fed should instead have provided liquidity to the banking system: the rising cost of credit has forced the speculators to withdraw their savings, which resulted in the collapse of nearly 5,000 banks in the United States. This would be an excess of monetary control would be at the origin of the crisis.
The economist Jacques Rueff sees the origin of the difficulties in establishing a system of Gold Exchange Standard by the conference of Genoa in the early 1920s.In the system of the gold standard, any deficit balance of payments causes a release of gold and a proportional restriction of credit. This effect will be stabilizing and a return to equilibrium. In a system of gold exchange standard in which a preferred currency may be retained as a reserve currency, the privileged country, where the balance is in deficit, saw its currency back home and provide a basis through the credit multiplier to new credits that increase deficits. The Gold Exchange Standard therefore tends to increase without limit the country’s debt privileged. In the case of the United States before 1929 the total debt began to climb faster and faster until it exceeds 370% of GDP. The marginal efficiency of capital has fallen. Speculation has replaced industrial investment. The stock market experienced a dramatic expansion qu’intenable. Ultimately it is the whole pyramid of debt that collapsed, the more quickly and violently that she was taller.As the pyramid had its roots in the global financial imbalances, the world has been achieved and the international economic circuits were electrocuted causing the stampede may have known. This explanation in his book The Monetary Sin of the West will be in explaining the difficulties of another system Gold Exchange Standard, the Bretton Woods institutions and the crisis of 1974 and the subsequent period of stagflation. Some economists even see the current method of double pyramid of debts to the source of the economic crisis of 2008-2009.
Explanation for the under-
The United States after a period of strong growth since the pre-war difficulties have accumulated wealth in the world (Europe is ruined) and this wealth was not fairly distributed in society despite theories such as Fordism . The concentration of wealth has reduced the consumption possibilities that allow the production apparatus.John Maynard Keynes gave some security to this explanation by saying that the rich spend proportionally less than the poor. A concentration of wealth and cause a balance of underemployment. This vision does not explain the mechanics of runaway 1928-1929 or the details of the crisis itself and particularly its international dimensions.
This is obviously the thesis of Marxist theories of Marx resume of over-accumulation of capital and the falling rate of profit that are the source of the multiple crises in the capitalist system: the over-accumulation of capital leads to overproduction of capital goods relative to consumer goods. The crisis of 1929 is seen as ‘final’ by the Marxists. However, the Soviet economist Nikolai Kondratiev argued that this crisis was only circumstantial and cyclical, and therefore capitalism would resume its expansion after the crisis. This theory considered ‘pro-capitalist’ by the Soviet regime to Kondratiev worth being shot by Stalin during the Great Purges.
A similar explanation is that the ‘theoreticians of regulation ‘who believe that developed economies have been destabilized by the progress of scientific management. Taylorism has enabled a dramatic increase in production: Robert Boyer has calculated that the per capita production has increased in France by 6% per annum between 1920 and 1960. In contrast, real wages grew by only 2% per year in France over the same period, which explains the appearance of a situation of oversupply and the outbreak of the crisis. Malthusian theses are marginal.
Explanation by the economic cycle
In this view, the crisis is just one more episode in the economic cycle of ten years. It would have taken his appearance of depression as a result of adverse reactions from the U.S. Federal government (wait, ‘the recovery is around the corner’) or the new central bank, the FED that would restrict credit where it should open the floodgates.Others in the same approach as Kondratieff cycle will assume that the crisis has been particularly long and violent movements by the effect of long periods of innovation. Innovation would have dried up while electrification and railway were the engine of growth before they would finally stop. However, observers believe rather modern period as having been rich in innovation: fixed telephony, wireless, very beginning of television, automotive, aviation, household appliances, advertising, management ideas, etc..
Moral and sociological explanations
Among many texts that focus on ‘mistakes’, the expiation of sins in the event of misfortune is a classic of mankind since the beginning of time include that of the economist Lionel Robbins his book The Great Depression 1929-1934, Payot, 1935. The crisis was inevitable because of the excesses committed in the previous period:
After the excess must come and purge if necessary and should be allowed to proceed unhindered.The crisis comes stabilize the economic situation and allow it to start again on a sounder footing. The faster the complete purging, the faster the recovery.
The absence of a power capable of imposing a cooperative game
This is the thesis of Charles Kindleberger, an author who holds the monetarist analysis for erroneous because too focused on monetary policy in the United States and neglecting important elements such as: the role of speculation in securities, setting in later work of the Glass-Steagall Act, the inability of the United States to behave as a creditor nation, the disintegration of Europe after the First World War. More broadly, the author refuses to enter into the controversy of the 1970s between monetarists and Keynesians who provide for him, two uni-causal explanations: the first thought that a ‘lack of growth in money supply has caused a decline of expenditure, ‘the latter an’ independent and autonomous reduction of expenditure has resulted in a decrease in money supply. ‘What will the interest is to answer the question why the initial impulse has been contained by either the automatic forces (gold standard) or through mechanisms of political decision.
For him if the initial impetus has been maintained this reflects the ‘strong latent instability of the system’ due to many factors, both financial and monetary or in the real economy. His main thesis, inspired by game theory, is that without a country leader who can set rules, enforce them and possibly take more than its share of burdens, countries prefer to adopt non-cooperative solutions that Ede short term that eventually everyone suffers. For proponents of this view would later be known as the theory of hegemonic stability, if the crisis of 1929 caused a depression so long and so hard is that Britain was no longer able to to assume his former role as leader and the U.S. would not even meet their responsibilities including:
The transformation of the U.S. recession in global depression
The length and severity of the crisis that will ruin many families, the development of a vast unemployment, bankruptcy of thousands of banks and that of tens of thousands of businesses has led to question how political economy were conducted. Certainties that emerged may have suggested that a crisis like 1929 is no longer possible today because now ‘we knew’.
The questioning of the inactivity of the U.S. government
The charge of cowardice and blindness is well proved by the affirmation of the President of the Stock Exchange on Wall Street who stated the following in September 1929: ‘Many people do not understand that it is quite apparent finishes economic cycles as we have known. As for me, I am convinced of the essential and fundamental soundness of American prosperity. ‘
Then constantly repeated the idea that prosperity was ’round the corner’And explained that they did nothing has been systematically involved. Criticism of Keynes from his book will explain that when a major balance of underemployment was installed, only government investment can return to full employment. These ideas were not those the days when we rather expected a drop in prices and wage conditions for recovery.
The questioning of the reactions of the Central Bank
As indicated by the arguments outlined above, monetarists believe that the Fed had it wrong before the crisis. This large central bank will continue to act setback after the outbreak of the crisis. Many authors such as Ben Bernanke, current Fed chairman, who will make his university thesis on the subject, it should consider supplying massive banks-central bank money instead of holding the line Orthodox proposing less laxity rather than a flood of credits.This thought has become a creed that Alan Greenspan and Ben Bernanke have implemented with determination during their presidency of the Fed every American crisis since the crash of October 1987.
The questioning of protectionism
Protectionist measures (eg, Hawley-Smoot Tariff Act) led to an increase in tariffs on imports to protect local producers (endangered by international competition). In response to this policy, other countries increased to turn their tariffs, putting in very bad shape U.S. companies that had relied on exports. This led to a series of increases in customs duties that fragmentation in the global economy. In a more general major empires, British and French, fell back on themselves and not seek more international trade has become too dangerous because of global currency.
For Jacques Sapir, this explanation does not: he says that ‘the collapse of international trade has causes other than protectionism.’ He noted that ‘domestic production of major industrial countries […] declining faster than international trade is not shrinking. If this decline had been the cause of depression that countries have known, should have seen the reverse. ‘Moreover,’ if the share of merchandise exports in gross domestic product (GDP) increased from 9.8% to 6.2% for major Western industrialized countries from 1929 to 1938 she was far away, on the eve of the crisis to be at its highest level, namely 12.9% in 1913. ‘
The arraignment of competitive devaluations
Regardless of the issue of protectionism, the explosion of the international monetary system established at the conference in Genoa led to redefinitions of the gold values of major currencies and a series of devaluations that distort the terms of international trade and cause disorders all markets of goods and international services.
We find that these four challenges to the policies in the 1930s are the basis of current policies:swelling of liquidity by the central bank, rejecting protectionism, refusal (verbal acceptance but de facto) of competitive devaluations, activism of state through massive stimulus plans.
The causes of the economic crisis
Economic thinking has subsequently focused in part on the immediate causes of the crisis and others share the reasons for the transformation of the recession into a depression. But the innumerable writings on the crisis of 1929 failed to draw a generally accepted explanation for its occurrence.
The literature devoted to it are most often descriptive, perhaps normative, rarely explanatory, like those that are limited to an explanation, eg based on excessive speculation as The Great Depression (1934) Lionel Robbins The economic crisis or 1929 (1955) by John Kenneth Galbraith.
Besides, every school of economic thought has drawn the cover for his general theses.The explanation by over-concentration of wealth at the time backed by Marxist and Keynesian economists, does not explain the surge of 1928-1929 or the details of the crisis. The monetary explanation, in the version supported by Milton Friedman and Anna Schwartz in A Monetary History of the United States (1963), will also be considered partial, however, the latest version advanced by the French economist Jacques Rueff in The Monetary fished the West (1971) broadly covers the period before the crisis and explains most of the symptoms noted .. Finally, the economic historian Charles Kindlebergerestime need to use several factors to explain the crisis.
Explanation by speculation
The origin of the crisis would be the stock market frenzy and irresponsibility of bankers who lent to speculators without restraint. Poorly regulated banking activity has led either to finance the real economy but unhealthy speculation.
Rising stock market was inherently unsustainable.When the stock fell, bank loans have been repaid, panic set in and the rush to the banks caused the blockage of the monetary and financial system. 8,000 banks will go bankrupt from 1929 to 1934. The economy, private credit, has suddenly stopped.
This theory goes by very quickly on the international aspects, while the 1929 crisis was global. Why indeed a crisis of speculation has it developed to that date and only the United States? JK Galbraith, who was the main bearer of these ideas in his book Crisis of 1929, would in some rather ironic attitude that truly descriptive and explanatory.
Monetary explanation
The Austrian School of Economics argues that it is rampant money creation in the 1920s by the fledgling Federal Reserve System, which led to an inflationary bubble inevitably doomed to collapse. According to Ludwig von Mises ‘the collapse was the result of fatal pressures to lower the interest rate through credit expansion. His explanation is institutional as that which will be later developed by Jacques Rueff, but it is almost exclusively focused on the existence of a central bank (the followers of the Austrian school strongly criticize the actions of central banks and some advocate their abolition).
Monetarists, represented by Milton Friedman denounced the restrictive monetary policy implemented by the Federal Reserve of the United States since 1928, leading to a shortage of funds. This error is the cause of the crisis. The Fed should instead have provided liquidity to the banking system: the rising cost of credit has forced the speculators to withdraw their savings, which resulted in the collapse of nearly 5,000 banks in the United States. This would be an excess of monetary control would be at the origin of the crisis.
The economist Jacques Rueff sees the origin of the difficulties in establishing a system of Gold Exchange Standard by the conference of Genoa in the early 1920s. In the system of the gold standard, any deficit balance of payments causes a release of gold and a proportional restriction of credit. This effect will be stabilizing and a return to equilibrium. In a system of gold exchange standard in which a preferred currency may be retained as a reserve currency, the privileged country, where the balance is in deficit, saw its currency back home and provide a basis through the credit multiplier to new credits that increase deficits. The Gold Exchange Standard therefore tends to increase without limit the country’s debt privileged. In the case of the United States before 1929 the total debt began to climb faster and faster until it exceeds 370% of GDP. The marginal efficiency of capital has fallen. Speculation has replaced industrial investment. The stock market experienced a dramatic expansion qu’intenable.Ultimately it is the whole pyramid of debt that collapsed, the more quickly and violently that she was taller. As the pyramid had its roots in the global financial imbalances, the world has been achieved and the international economic circuits were electrocuted causing the stampede may have known. This explanation in his book The Monetary Sin of the West will be in explaining the difficulties of another system Gold Exchange Standard, the Bretton Woods institutions and the crisis of 1974 and the subsequent period of stagflation. Some economists even see the current method of double pyramid of debts to the source of the economic crisis of 2008-2009.
Explanation for the under-
The United States after a period of strong growth since the pre-war difficulties have accumulated wealth in the world (Europe is ruined) and this wealth was not fairly distributed in society despite theories such as Fordism . The concentration of wealth has reduced the consumption possibilities that allow the production apparatus.John Maynard Keynes gave some security to this explanation by saying that the rich spend proportionally less than the poor. A concentration of wealth and cause a balance of underemployment. This vision does not explain the mechanics of runaway 1928-1929 or the details of the crisis itself and particularly its international dimensions.
This is obviously the thesis of Marxist theories of Marx resume of over-accumulation of capital and the falling rate of profit that are the source of the multiple crises in the capitalist system: the over-accumulation of capital leads to overproduction of capital goods relative to consumer goods. The crisis of 1929 is seen as ‘final’ by the Marxists. However, the Soviet economist Nikolai Kondratiev argued that this crisis was only circumstantial and cyclical, and therefore capitalism would resume its expansion after the crisis. This theory considered ‘pro-capitalist’ by the Soviet regime to Kondratiev worth being shot by Stalin during the Great Purges.
A similar explanation is that the ‘theoreticians of regulation ‘who believe that developed economies have been destabilized by the progress of scientific management. Taylorism has enabled a dramatic increase in production: Robert Boyer has calculated that the per capita production has increased in France by 6% per annum between 1920 and 1960. In contrast, real wages grew by only 2% per year in France over the same period, which explains the appearance of a situation of oversupply and the outbreak of the crisis. Malthusian theses are marginal.
Explanation by the economic cycle
In this view, the crisis is just one more episode in the economic cycle of ten years. It would have taken his appearance of depression as a result of adverse reactions from the U.S. Federal government (wait, ‘the recovery is around the corner’) or the new central bank, the FED that would restrict credit where it should open the floodgates.Others in the same approach as Kondratieff cycle will assume that the crisis has been particularly long and violent movements by the effect of long periods of innovation. Innovation would have dried up while electrification and railway were the engine of growth before they would finally stop. However, observers believe rather modern period as having been rich in innovation: fixed telephony, wireless, very beginning of television, automotive, aviation, household appliances, advertising, management ideas, etc..
Moral and sociological explanations
Among many texts that focus on ‘mistakes’, the expiation of sins in the event of misfortune is a classic of mankind since the beginning of time include that of the economist Lionel Robbins his book The Great Depression 1929-1934, Payot, 1935. The crisis was inevitable because of the excesses committed in the previous period:
After the excess must come and purge if necessary and should be allowed to proceed unhindered.The crisis comes stabilize the economic situation and allow it to start again on a sounder footing. The faster the complete purging, the faster the recovery.
The absence of a power capable of imposing a cooperative game
This is the thesis of Charles Kindleberger, an author who holds the monetarist analysis for erroneous because too focused on monetary policy in the United States and neglecting important elements such as: the role of speculation in securities, setting in later work of the Glass-Steagall Act, the inability of the United States to behave as a creditor nation, the disintegration of Europe after the First World War. More broadly, the author refuses to enter into the controversy of the 1970s between monetarists and Keynesians who provide for him, two uni-causal explanations: the first thought that a ‘lack of growth in money supply has caused a decline of expenditure, ‘the latter an’ independent and autonomous reduction of expenditure has resulted in a decrease in money supply. ‘What will the interest is to answer the question why the initial impulse has been contained by either the automatic forces (gold standard) or through mechanisms of political decision.
For him if the initial impetus has been maintained this reflects the ‘strong latent instability of the system’ due to many factors, both financial and monetary or in the real economy. His main thesis, inspired by game theory, is that without a country leader who can set rules, enforce them and possibly take more than its share of burdens, countries prefer to adopt non-cooperative solutions that Ede short term that eventually everyone suffers. For proponents of this view would later be known as the theory of hegemonic stability, if the crisis of 1929 caused a depression so long and so hard is that Britain was no longer able to to assume his former role as leader and the U.S. would not even meet their responsibilities including:
The transformation of the U.S. recession in global depression
The length and severity of the crisis that will ruin many families, the development of a vast unemployment, bankruptcy of thousands of banks and that of tens of thousands of businesses has led to question how political economy were conducted. Certainties that emerged may have suggested that a crisis like 1929 is no longer possible today because now ‘we knew’.
The questioning of the inactivity of the U.S. government
The charge of cowardice and blindness is well proved by the affirmation of the President of the Stock Exchange on Wall Street who stated the following in September 1929: ‘Many people do not understand that it is quite apparent finishes economic cycles as we have known. As for me, I am convinced of the essential and fundamental soundness of American prosperity. ‘
Then constantly repeated the idea that prosperity was ’round the corner’And explained that they did nothing has been systematically involved. Criticism of Keynes from his book will explain that when a major balance of underemployment was installed, only government investment can return to full employment. These ideas were not those the days when we rather expected a drop in prices and wage conditions for recovery.
The questioning of the reactions of the Central Bank
As indicated by the arguments outlined above, monetarists believe that the Fed had it wrong before the crisis. This large central bank will continue to act setback after the outbreak of the crisis. Many authors such as Ben Bernanke, current Fed chairman, who will make his university thesis on the subject, it should consider supplying massive banks-central bank money instead of holding the line Orthodox proposing less laxity rather than a flood of credits.This thought has become a creed that Alan Greenspan and Ben Bernanke have implemented with determination during their presidency of the Fed every American crisis since the crash of October 1987.
The questioning of protectionism
Protectionist measures (eg, Hawley-Smoot Tariff Act) led to an increase in tariffs on imports to protect local producers (endangered by international competition). In response to this policy, other countries increased to turn their tariffs, putting in very bad shape U.S. companies that had relied on exports. This led to a series of increases in customs duties that fragmentation in the global economy. In a more general major empires, British and French, fell back on themselves and not seek more international trade has become too dangerous because of global currency.
For Jacques Sapir, this explanation does not: he says that ‘the collapse of international trade has causes other than protectionism.’ He noted that ‘domestic production of major industrial countries […] declining faster than international trade is not shrinking. If this decline had been the cause of depression that countries have known, should have seen the reverse. ‘Moreover,’ if the share of merchandise exports in gross domestic product (GDP) increased from 9.8% to 6.2% for major Western industrialized countries from 1929 to 1938 she was far away, on the eve of the crisis to be at its highest level, namely 12.9% in 1913. ‘
The arraignment of competitive devaluations
Regardless of the issue of protectionism, the explosion of the international monetary system established at the conference in Genoa led to redefinitions of the gold values of major currencies and a series of devaluations that distort the terms of international trade and cause disorders all markets of goods and international services.
We find that these four challenges to the policies in the 1930s are the basis of current policies:swelling of liquidity by the central bank, rejecting protectionism, refusal (verbal acceptance but de facto) of competitive devaluations, activism of state through massive stimulus plans.