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Enlarge textEighty-one years after the Great Depression, Mark Jones asks if we've learnt anything from the most significant economic disaster of the 20th Century.
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This September marks 81 years since the world was rocked by the infamous 1929 stock market crash. Back then, the American public was completely consumed by stock market fever, greed, and the pursuit of easy money.
It was widely held that the prosperity and excesses of the Roaring Twenties would last forever, and it was against anyone's interest to argue otherwise.
Dissenters who predicted a market crash were systematically ignored and ridiculed.
But as September 1929 approached the slide began and nothing could stop it. The rout officially began in earnest on October 29 - Black Tuesday. Mass panic
gripped the markets, stockbrokers couldn't keep up with sell orders and the world watched in horror as the NYSE plunged for week after dismal week. Some
US$30 billion in losses were racked up in those first weeks, more than the US had spent on WWI.
The Dow Jones shed more than 50
per cent of its value and kept declining. Mythology about stockbrokers jumping en masse from buildings began to circulate, in part driven by the
public's desire for revenge.
This was, by almost any measure, the modern world's greatest economic and social catastrophe. Millions of Americans were forced into poverty. But it wasn't just the Americans who suffered. US President Herbert Hoover's flawed decision to recall loans made to Germany spread North
America's domestic problems right across Europe, which was still recovering from the war. It was also argued that Germany's ensuing economic crisis caused
the suffering population to rush into the arms of power-hungry Adolf Hitler. And the rest, as they say, is history.
Back to the present, and what an interesting coincidence that September 16 marks the two year anniversary of the 2008 stock market crash, also located
on American soil. Experts tried to reassure us that this crash was nowhere near as bad 1929 - as if that somehow mattered to the millions of people who
were devastated by losses.
And that's the sting. Human tragedy is the inescapable story of both 1929 and our present day. I was almost haunted by the eeire silent, black and
white images contained in the documentary. I've always loved black and white stills from this era, particularly old photos of Australian
cities. Well-dressed people out on the town in coats, suits and formal dresses remind me of my late Grandmother. These people seemed to have a
great sense of dignity and self-determination.
But this documentary with its disturbing, yet fascinating array of archive images has shattered that ideal. That said, some of the images circulating at the
time were apparently government propaganda, such as Dorothea Lange's famous Migrant Mother.
All the same, you can't dismiss the tragedy of Hooverville communities, as they were euphemistically named in dishonour of their president. These
shanties sprang up in New York's Central Park and across the nation. Middle-class Americans were stripped of dignity as they were forced to sell their
homes, evicted from rental accommodation and left stranded on city streets surrounded by furniture.
It's important to remember that what ensued was a decade-long process of difficult recovery, despite the best efforts of President Franklin D.
Roosevelt who swept into office in November 1932. This recovery was aided by Roosevelt's social welfare and state-funded infrastructure projects - a
new idea at the time - and growth truly returned with the military build up for WWII. But there were no quick fixes, no instant solutions as
millions of people endured grinding years of destitution and drudgery.
The question for America in 2010 is: how much longer before it enters a new era of prosperity? Like it or not, it's a global question. Roosevelt's
legacy was called the 'New Deal', and experts in this documentary argue we need a new deal for today. Sure, we're more wealthier now than prior to
1929, but we've failed to equitably share the fruits of this wealth.
And the bigger question is what have we, the wealthy West, learnt from our market crash history? Sure, we have lots of regulation now. But these 'checks and balances' failed in 2008 as once again institutionalised greed trumped the rational processes we otherwise expect from a modern society
that remembers history.
Here we have capitalism's true dilemma. Without steady growth in consumption the economy contracts and falls into crisis. On the other hand,
rampant growth left unchecked ignites a passion for excess that's ultimately destructive. What guarantees long-term balance between the extremes?
Economists and academics have useful answers and theories. But if we take greed as the common human driver it's difficult to avoid the conclusion that
after 81 years everything's different, but scarily still the same.
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Comments (9)
Correct me if I am wrong, but did the program's voiceover claim that Hitlers Germany "invaded" Austria in 1938, surely this is a gross misrepresentation of the facts. The "Anschluss" with Austria was casualty free and greeted enthusiastically by the majority of Austrians who fell under Hitler's spell, Jews, Gypsies and Trade Unionists did not fare so well in the aftermath.
25 Sep 2010 17:34 AEST
From: North Queensland
Great Depression?
Where is the moderator? The last comment (replica Dior bags) is called spam in my world. The very, very long one before last ("there is a problem with the women in this culture") is totally irrelevant to the subject. Let me add my irrelevant comment: is it my computer or does everybody sees this apple green hard-to-read font?
18 Sep 2010 23:50 AEST
From: Sydney
1929 The Great Depression
I think that we have learned from the Great Depression. Unfortunatley we are not able to remove greed and the thought of easy money or get rich compains, just look at real estate in Australia. Business is always willing to sell you something even if it is overvalued and banks will lend you the money to buy even if you have low assets or cash. Governments and the Reserve Banks will now step in to avoid a melt down like the great depression. We may be able to avoid a total melt down but I think that as a whole society has to pay for the greed that pushes markets/real estate to bubble bursting capacity. How society pays and when we will have to wait and see.
17 Sep 2010 21:36 AEST
From: Manly
Depression 1929
There is a cyclical effect of war, plenty, depression, another war and so the circle turns. War promotes the economy like nothing else. How long after the financial breaking of USA and in turn Germany did the second World War begin??
15 Sep 2010 17:41 AEST
From: Perth WA
Greed is not good.
“…. but we've failed to equitably share the fruits of this wealth.” Some how the wealthy countries think that they have grown wealthy as a result of their own domestic labour, produce and resource products. Not so. The seeds of their wealth were sown in the loot of all the above that took place in conquests of other countries and colonies, from where laden ships ploughed the seven sees to home ports, if they survived the journeys from pirate-Navies of other countries. The sharing must therefore be more than just feel-good sentiment but because justice demands it that the wealthy countries ensure that their “aid” is given selflessly to enable the third world to become self sufficient. The following is therefore a correct question: “On the other hand, rampant growth left unchecked ignites a passion for excess that's ultimately destructive. What guarantees long-term balance between the extremes?”
15 Sep 2010 15:41 AEST
From: melbourne
september the deadly month
why every thing happens in America in September. from the history: the first car bomb rocks america in september. it had happened beside NYSE. the great depression in 1929 the 9/11 i thing so there is always a connection that Americas story revolving around September.
15 Sep 2010 15:09 AEST
From: America
Time on my hands! ~~Big fan of Mark Jones~~
A few observations: The cost to America in WW1 was less than US$30 Billion, however, what was the value of over 110,000 dead servants in such a senseless war? Hoover and global decision makers definitely executed policy based on limited experience. I wonder if there were macro-economists anywhere in the world that could have recommended a successful course? Some of the what we know today may have seemed counter intuitive back then...as a result, academician economists may have had no credibility. In chatting with my parents (both in their teens during the 30s), growing up in an agrarian Midwest (stocked with self-sufficient Germanic immigrants), the Great Depression had little impact on their circles. The GD must have been an urban phenomena and may have been worse had America not been 60%+ agricultural at that time. My hope is that the Global economy not depend on America to lift it. America lives beyond its means and to a degree is prosperous because of China/Saudi/Japan 's willingness to borrow America money. I for one am willing to cede consumption leadership to the BRIC nations. But alas, I am in the extreme minority in this attitude. Sad to say America is a culture of arrogance and excess. We live hard and die young.
14 Sep 2010 9:39 AEST
From: Surry Hills
Greed and income
Interesting study by Princeton into income, wealth and happiness: http://www.time.com/time/business/article/0,8599,2016291,00.html
13 Sep 2010 15:14 AEST
From: Katoomba NSW Australia
Greed is not Good
As the system of "private" capitalism evolves, as human population competes with the ever shrinking margins left for the natural living species the idea that greed is good, as lusted after by many people currently living on planet, may become illegal. We experienced with the "Population" debate, led by philanthropist Mr Dick Smith, how excited some of the current "elite" in our society become terribly emotional concerning the subject of amassing wealth and believing that through wealth their votes count. Until peoples elected governments, reflect more correctly the maintenance of our earth's habitat, the environmental/social/economic needs of all living species we will doom ourselves into extinction.
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About this Blog
Mark Jones is a journalist, speaker and technology strategist. He is a
former IT Editor of The Australian Financial Review and is a respected
technology expert.
Mark Jones Mark Jones is a journalist, speaker and technology strategist. He is a former IT Editor of The Australian Financial Review and is a respected technology, internet and social media expert after more than a decade of industry experience in Australia and the United States.
As director of Filtered Media, Mark has helped some of Australia's biggest companies develop technology and digital media strategies.
He is also completing theological studies at Tabor College in Sydney. Visit his website at filteredmedia.com.au, or email mark@filteredmedia.com.au.
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