THE GREAT DEPRESSION REVISITED

Transcription

1 THE GREAT DEPRESSION REVISITED

2 THE GREAT DEPRESSION REVISITED Essays on the Economics of the Thirties EDITED BY HERMAN VAN DER WEE Professor at the University of Louvain II MARTINUS NIJHOFF / THE HAGUE / 1972

3 1972 by Martinus Nijhojf, The Hague, Netherlands All rights reserved, including the right to translate or to reproduce this book or parts thereof in any form ISBN-13: e-isbn-13: : /

4 PREFACE For a quarter of a century the industrial Western world has been living in the euphoria of continuous improvements in welfare, based on economic programming, increasing integration and terms of trade which favor industrial countries and discriminate against agricultural regions. It is true that recessions have periodically recurred during these years : time and again, however, government intervention succeeded in reducing them to mere "inventory cycles". In contrast with the twenties and thirties, when economic policy in the West focused on fighting unemployment and stimulating investment, the postwar period has been characterized by a permanent concern to curb inflationary pressure, which was partly due to full-employment. The present welfare economy has given rise to a growth of the propensity to consume such that public policy has often been constrained to limit consumption and stimulate saving. In this new framework it has perhaps been forgotten that today's welfare owes much to the lessons from the past. The bitter world crisis experience of the thirties in particular has exerted a fruitful and decisive influence upon the search for means to prevent, eliminate or soften the cyclical fluctuations which the process of economic growth involves. Forty years after the outbreak of the greatest economic crisis ever, it seems useful to draw up the balancesheet of the lessons learned from it. There exists a large literature about the depression of the thirties. Before World War II in particular, when the crisis was paralyzing the world economy, much was written about this subject. At this moment, however, a new description of the facts and a reevaluation of the conclusions drawn from earlier and more recent investigations seems justified. Chronological distance allows a more exact and objective diagnosis and also provides a better understanding of the existing relationships between phenomenon, policy

5 VI PREFACE and effect in the shifting circumstances of the crisis period. The study of the depression of the thirties, moreover, is undeniably one of the topics of the day: it allows indeed fruitful comparison with the present state of monetary crisis in the world and with its related political, commercial, and financial problems. The occasion for this book was an invitation extended to us by the board of the Dutch monthly Spiegel Historiael to edit a special issue about the depression of the thirties on the occasion of its fortieth anniversary. While we were working out this assignment, it appeared that the various contributions contained important new insights, and the idea ripened to put the whole before a wider world audience. These ten studies, two of which have been completely revised since the Dutch publication, constitute the core of the book. Seven other contributions have been added to them, three of which were already published elsewhere. It was not our intention to study exhaustively the world crisis. A series of more general surveys is first presented. Then the more specific problems of the crisis are elucidated. To this end four basic themes were chosen and thoroughly examined : 1. the political aspects ofthe depression; 2. the development of some specific economic sectors throughout the thirties; 3. the economic consequences of the depression outside the United States and Western Europe; 4. some social and sociological aspects of the depression. Some of the topics selected have already been fairly thoroughly examined in various earlier publications; others have not. But all collaborators of this book have been looking for new data or new explanations. On the other hand it was not always possible to avoid duplication. The systematic approach we adopted, allowed, however, a considerable more profound analysis, and this particular advantage determined our choice of systematicy. For the creation of this book I whish to thank the Board of Editors of Spiegel Historiael and in particular Drs. H. Dijkstra and Drs. B.G.J. Elias, respectively editor and editing secretary of this periodical, and Professor W. Laqueur and E. Hearst, respectively editor and assistant editor of the Journal of Contemporary History and Jonathan Cape Ltd. Publishers. Dr. Fritz Redlich (Harvard University) and Professor Dr. A. Coppe, member of the Commission of the European Communities gave me every assistance in selecting the collaborators and I am deeply indebted to them. I also gratefully acknowledge the collaboration of Prof. P. Mathias, Prof. M.H. Watkins, Prof. H. Myant, Prof. P.H. Ramsey, Prof. W.N. Parker,

6 PREFACE A.E. Safarian; Prof. L.H. Dupriez, Miss Chr. Mora and A. Verheirstraeten. I further profited from the valuable support of the Centrum voor Eeonomisehe Studien at Leuven, of the Center's whole secretariat and in particular of MM. V. Van Eijken and G. Van Meerbeeck and of my assistants Drs. K. Veraghtert, Drs. P. Janssens and Mrs. V. Antonissen-Witvrouwen. For the translation of a series of contributions I could count on the assistance of Drs. R. Vandenplas, Mrs. R. Tavatian and her assistants and I am very grateful to them. VII De Hettinghe, August 22nd PROF. DR. HERMAN VAN DER WEE

7 ACKNOWLEDGMENTS I am greatly obliged for the permission to reprint the pieces in this book to : 1) Spiegel Historiael (Fibula-Van Dishoeck N.V., Bussum) - The essays nrs. 1,4, 5, 6, 10, 15 and 16 are an English translation of articles published in Dutch in the issue of November 1969 (vol. IV, no 11). - The essays nrs. 2 and 3 are revised versions of the text published in Dutch in the same issue of November 1969 (vol. IV, no 11). - The essay no 17 is an English translation of an article published in Dutch in the ussue of October 1969 (vol. IV, no 10). 2) The Journal of Contemporary History (Weidenfeld & Nicolson Ltd., London) : for the essays nrs. 7 and 14 (Vol. IV, no 4, 1969, p ). 3) Jonathan Cape Ltd., London: for the essay no 8 (M. Tracy, Agriculture in Western Europe, 1964, ch. 6).

8 CONTENTS PREFACE, by Herman Van Der Wee ACKNOWLEDGMENTS v VIII I. GENERAL SURVEYS ERLING A. ERICKSON: The Great Crash of October, A. COPPE, International Consequences of the Great Crisis 13 MARK EYSKENS, The Influence of the Great Depression on Economic Theory 24 II. POLITICAL ASPECTS OF THE GREAT DEPRESSION KARL ERICH BORN, Government Action against the Great Depression 45 FERNAND BAUDHUIN, Europe and the Great Crisis 59 J. NERE, The Depression and World Policy 69 LASZLO M. TIKOS, Waiting for The World Revolution: Soviet Reactions to the Great Depression 76 III. SPECIFIC ECONOMIC FACTORS IN THE GREAT DEPRESSION MICHAEL TRACY, Agriculture in the Great Depression. World Market Developments and European Protectionism 91 WAYNE D. RASMUSSEN and JANE M. PORTER, Agriculture in the Industrial Economies of the West during the Great Depression, with Special Reference to the United States 120 HANS JAEGER, Business in the Great Depression 134

9 x CONTENTS IV. ECONOMIC EFFECTS OF THE GREAT DEPRESSION OUTSIDE THE U.S.A. AND WESTERN EUROPE HEYWOOD FLEISIG, The United States and the Non-European Periphery during the Early Years of the Great Depression 145 Kozo YAMAMURA, Then Came the Great Depression. Japan's Interwar Years 182 IAN M. DRUMMOND, The British Empire Economies in the Great Depression 212 HANS RAUPACH, The Impact of the Great Depression on Eastern Europe 236 V. SOCIAL AND SOCIOLOGICAL AsPECTS OF THE GREAT DEPRESSION JAN DHONDT, Government, Labour and Trade Unions 249 R. WAGENFtiHR and W. Voss, Trade Unions and the World Economic Crisis. The Case of Germany 258 H.W. VON DER DUNK, The Depression and the Intellectuals 269 BIOGRAPHICAL NOTES ON CoNTRIBUTORS 279 INDEX 283