Lecture 7 - The Depression and the Economic Crisis of Meaning

Lecture 7 - The Depression and the Economic Crisis of Meaning

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Introduction: The Depression and the Economic Crisis of Meaning -unemployed man plays this symbolic role. Symbolizes the failure of the promise that if you work really hard as an individual you can become wealthy. Thought it would produce unlimited wealth. People lost faith in capitalist system and also lost faith in the liberal economic policies that had claimed to manage that capitalist system. Fundamental core: laissez-faire. Individuals working hard is what makes the economy work. People lose faith in these principles. Gov. is just sitting back and watching this happen. Framework has fallen apart. Encouraged people to turn to alternative systems. Linked to the economic crisis of liberalism. Capitalist economic system suffered most. II) Origins of the Depression-dramatic transforming event: what deaths came to symbolize: powerful psychological impact. One of key elements of the magnitude of crisis: no one saw it coming. How does that depression appear out of nowhere? A) 1920s: A “Return to Normalcy”? very few observers that things had gone back to normal after the war. By 1929: 23 million private cars on the roads in the U.S. sense of wealth enhanced by loose system of credit. Was really easy to borrow money to pursue whatever economic goals you had. Lavish expenditure in the 1920s. confidence in financial system symbolized by return to the gold standard. Had been set up earlier as a stabilizing factor for the international trading system (in early 1900s). B) Hidden Weaknesses: 1) War Debt-Germany had to pay to Britain and France by Versailles Treaty. Other side: Britain and France borrowed huge amounts of money from the U.S. Depended on U.S. capital: weak link is American financial system. By 1928: had given billion dollars into European economy to prop it up. 2) Crisis in Old Industries-that had made the European economy the masters of the universe in the 19 th century. This was the coal, iron, and textile industries. Post-WWI: long term crisis: other non-European competitors in these industries: Japan and India increasingly. Electrical technology replaced coal as a new energy source as well. 3) Crisis in Agriculture-prices for wheat, corn, soybeans, coffee reached an all- time low because the new technology that was increasing yields and productivity (price falls). Hitting the colonial world. -price of something goes down: you cant buy as many industrial goods. When coal Indus. In England gets smaller: these coal miners are no longer able to buy as many goods in the store. Have a shrinking consumer market even before you get to the depression. 60% of families before depression were living in poverty. Constriction was reversing the post- WWI pattern of growth. -era of abundance to a new constricted economy. Big question: why doesn't anybody see
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 6

Lecture 7 - The Depression and the Economic Crisis of Meaning

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online