Great Depression Warning: You are not logged in. Your IP address will be publicly visible if you make any edits. If you log in or create an account, your edits will be attributed to your username, along with other benefits.Anti-spam check. Do not fill this in! === Turning point and recovery === [[File:GDP depression.svg|thumb|upright=1.8|The overall course of the Depression in the United States, as reflected in per-capita GDP (average income per person) shown in constant year 2000 dollars, plus some of the key events of the period. Dotted red line = long-term trend 1920–1970.<ref name=":0">Per-capita GDP data from [https://www.measuringworth.org/usgdp/ MeasuringWorth: What Was the U.S. GDP Then?] {{Webarchive|url=https://web.archive.org/web/20100904025051/http://www.measuringworth.org/usgdp/|date=September 4, 2010}}</ref>]] In most countries of the world, recovery from the Great Depression began in 1933.<ref name="Britannica" /> In the U.S., recovery began in early 1933,<ref name="Britannica" /> but the U.S. did not return to 1929 GNP for over a decade and still had an unemployment rate of about 15% in 1940, albeit down from the high of 25% in 1933. There is no consensus among economists regarding the motive force for the U.S. economic expansion that continued through most of the [[Franklin D. Roosevelt#Presidency (1933–1945)|Roosevelt years]] (and the 1937 recession that interrupted it). The common view among most economists is that Roosevelt's [[New Deal]] policies either caused or accelerated the recovery, although his policies were never aggressive enough to bring the economy completely out of recession. Some economists have also called attention to the positive effects from expectations of [[reflation]] and rising nominal interest rates that Roosevelt's words and actions portended.<ref>Gauti B. Eggertsson, "Great Expectations and the End of the Depression", ''American Economic Review'' 98, No. 4 (September 2008): 1476–1516</ref><ref>"Was the New Deal Contractionary?" [[Federal Reserve Bank of New York]] Staff Report 264, October 2006, [https://www.newyorkfed.org/research/staff_reports/sr264.html Gauti B. Eggertsson] {{Webarchive|url=https://web.archive.org/web/20220212162504/https://www.newyorkfed.org/research/staff_reports/sr264.html|date=February 12, 2022}}</ref> It was the rollback of those same reflationary policies that led to the interruption of a recession beginning in late 1937.<ref>"The Mistake of 1937: A General Equilibrium Analysis", ''Monetary and Economic Studies'' 24, No. S-1 (December 2006), [https://www.imes.boj.or.jp/english/publication/mes/2006/abst/me24-s1-8.html Boj.or.jp] {{Webarchive|url=https://web.archive.org/web/20150811112759/https://www.imes.boj.or.jp/english/publication/mes/2006/abst/me24-s1-8.html|date=August 11, 2015}}</ref><ref>{{cite journal |last1=Eggertsson |first1=Gauti B. |title=A Reply to Steven Horwitz's Commentary on 'Great Expectations and the End of the Great Depression' |url=https://econjwatch.org/articles/a-reply-to-steven-horwitz-s-commentary-on-great-expectations-and-the-end-of-the-depression- |url-status=live |journal=Econ Journal Watch |volume=7 |issue=3 |pages=197–204 |archive-url=https://web.archive.org/web/20220215053116/https://econjwatch.org/articles/a-reply-to-steven-horwitz-s-commentary-on-great-expectations-and-the-end-of-the-depression- |archive-date=February 15, 2022 |access-date=February 18, 2022}}</ref> One contributing policy that reversed reflation was the [[Banking Act of 1935]], which effectively raised reserve requirements, causing a monetary contraction that helped to thwart the recovery.<ref>Steven Horwitz, "Unfortunately Unfamiliar with Robert Higgs and Others: A Rejoinder to Gauti Eggertsson on the 1930s", ''Econ Journal Watch'' 8(1), 2, January 2011. [https://econjwatch.org/articles/unfortunately-unfamiliar-with-robert-higgs-and-others-a-rejoinder-to-gauti-eggertsson-on-the-1930s] {{Webarchive|url=https://web.archive.org/web/20220215053127/https://econjwatch.org/articles/unfortunately-unfamiliar-with-robert-higgs-and-others-a-rejoinder-to-gauti-eggertsson-on-the-1930s|date=February 15, 2022}}</ref> GDP returned to its upward trend in 1938.<ref name=":0" /> A revisionist view among some economists holds that the New Deal prolonged the Great Depression, as they argue that [[National Industrial Recovery Act of 1933]] and [[National Labor Relations Act of 1935]] restricted competition and established price fixing.<ref>{{Cite journal |last1=Hannsgen |first1=Greg |last2=Papadimitriou |first2=Dimitri |date=2010 |title=Did the New Deal Prolong or Worsen the Great Depression? |url=https://www.jstor.org/stable/40722622 |journal=Challenge |volume=53 |issue=1 |pages=63–86 |doi=10.2753/0577-5132530103 |jstor=40722622 |s2cid=153490746 |issn=0577-5132}}</ref> [[John Maynard Keynes]] did not think that the New Deal under Roosevelt single-handedly ended the Great Depression: "It is, it seems, politically impossible for a capitalistic democracy to organize expenditure on the scale necessary to make the grand experiments which would prove my case—except in war conditions."<ref>Quoted by P. Renshaw. ''Journal of Contemporary History''. 1999 vol. 34 (3). pp. 377–364</ref> According to [[Christina Romer]], the money supply growth caused by huge international gold inflows was a crucial source of the recovery of the United States economy, and that the economy showed little sign of self-correction. The gold inflows were partly due to [[Executive Order 6102|devaluation of the U.S. dollar]] and partly due to deterioration of the political situation in Europe.<ref>{{Cite journal |last=Romer |first=Christina D. |date=December 1992 |title=What Ended the Great Depression |url=https://elsa.berkeley.edu/~cromer/What%20Ended%20the%20Great%20Depression.pdf |url-status=dead |journal=Journal of Economic History |volume=52 |issue=4 |pages=757–84 |citeseerx=10.1.1.207.844 |doi=10.1017/S002205070001189X |archive-url=https://web.archive.org/web/20130117093624/https://elsa.berkeley.edu/~cromer/What%20Ended%20the%20Great%20Depression.pdf |archive-date=January 17, 2013 |quote=monetary development were crucial to the recovery implies that self-correction played little role in the growth of real output}}</ref> In their book, ''[[A Monetary History of the United States]]'', [[Milton Friedman]] and [[Anna J. Schwartz]] also attributed the recovery to monetary factors, and contended that it was much slowed by poor management of money by the [[Federal Reserve System]]. [[Chairman of the Federal Reserve]] (2006–2014) [[Ben Bernanke]] agreed that monetary factors played important roles both in the worldwide economic decline and eventual recovery.<ref>Ben Bernanke. ''Essays on the Great Depression''. Princeton University Press. {{ISBN|978-0-691-01698-6}}. p. 7</ref> Bernanke also saw a strong role for institutional factors, particularly the rebuilding and restructuring of the financial system,<ref>Ben S. Bernanke, "Nonmonetary Effects of the Financial Crisis in the Propaga-tion of the Great Depression", ''The American Economic Review 73'', No. 3 (June 1983): 257–276, available from the St. Louis Federal Reserve Bank collection at [https://fraser.stlouisfed.org/scribd/?item_id=2348&filepath=/docs/publications/aer/aer_1983_bernanke_nonmonetary_effects.pdf Stlouisfed.org] {{Webarchive|url=https://web.archive.org/web/20160305072448/https://fraser.stlouisfed.org/scribd/?item_id=2348&filepath=%2Fdocs%2Fpublications%2Faer%2Faer_1983_bernanke_nonmonetary_effects.pdf|date=March 5, 2016}}</ref> and pointed out that the Depression should be examined in an international perspective.<ref>{{cite journal |last=Bernanke |first=Ben S. |date=February 1995 |title=The Macroeconomics of the Great Depression: A Comparative Approach |url=https://fraser.stlouisfed.org/scribd/?item_id=2399&filepath=/docs/meltzer/bermac95.pdf |url-status=live |journal=Journal of Money, Credit and Banking |publisher=Fraser.stlouisfed.org |volume=27 |issue=1 |pages=1–28 |doi=10.2307/2077848 |jstor=2077848 |archive-url=https://web.archive.org/web/20160304201917/https://fraser.stlouisfed.org/scribd/?item_id=2399&filepath=%2Fdocs%2Fmeltzer%2Fbermac95.pdf |archive-date=March 4, 2016 |access-date=October 16, 2014}}</ref> ==== Role of women and household economics ==== Women's primary role was as housewives; without a steady flow of family income, their work became much harder in dealing with food and clothing and medical care. Birthrates fell everywhere, as children were postponed until families could financially support them. The average birthrate for 14 major countries fell 12% from 19.3 births per thousand population in 1930, to 17.0 in 1935.<ref>W. S. Woytinsky and E. S. Woytinsky, ''World population and production: trends and outlook'' (1953) p. 148</ref> In Canada, half of Roman Catholic women defied Church teachings and used contraception to postpone births.<ref>Denyse Baillargeon, ''Making Do: Women, Family and Home in Montreal during the Great Depression'' (Wilfrid Laurier University Press, 1999), p. 159.</ref> Among the few women in the labor force, layoffs were less common in the white-collar jobs and they were typically found in light manufacturing work. However, there was a widespread demand to limit families to one paid job, so that wives might lose employment if their husband was employed.<ref>{{cite book |last=Stephenson |first=Jill |url=https://books.google.com/books?id=-rqOAwAAQBAJ&pg=PA3 |title=Women in Nazi Germany |publisher=Taylor & Francis |year=2014 |isbn=978-1-317-87607-6 |pages=3–5 |access-date=June 27, 2015 |archive-url=https://web.archive.org/web/20210816172022/https://books.google.com/books?id=-rqOAwAAQBAJ&pg=PA3 |archive-date=August 16, 2021 |url-status=live}}</ref><ref>{{cite book |author=Susan K. Foley |url=https://archive.org/details/womeninfrancesin00fole |title=Women in France Since 1789: The Meanings of Difference |publisher=Palgrave Macmillan |year=2004 |isbn=978-0-230-80214-8 |pages=[https://archive.org/details/womeninfrancesin00fole/page/186 186]–90 |author-link1=Susan Foley |url-access=registration}}</ref><ref>{{cite book |last=Srigley |first=Katrina |url=https://archive.org/details/breadwinningdaug00srig |title=Breadwinning Daughters: Young Working Women in a Depression-era City, 1929–1939 |publisher=University of Toronto Press |year=2010 |isbn=978-1-4426-1003-3 |page=[https://archive.org/details/breadwinningdaug00srig/page/135 135] |url-access=registration}}</ref> Across Britain, there was a tendency for married women to join the labor force, competing for part-time jobs especially.<ref>Jessica S. Bean, {{"'}}To help keep the home going': female labour supply in interwar London". ''Economic History Review'' (2015) 68#2 pp. 441–470.</ref><ref>Deirdre Beddoe, ''Back to Home and Duty: Women Between the Wars, 1918–1939'' (1989).</ref> In France, very slow population growth, especially in comparison to Germany continued to be a serious issue in the 1930s. Support for increasing welfare programs during the depression included a focus on women in the family. The Conseil Supérieur de la Natalité campaigned for provisions enacted in the Code de la Famille (1939) that increased state assistance to families with children and required employers to protect the jobs of fathers, even if they were immigrants.<ref>{{cite journal |last1=Camiscioli |first1=Elisa |author-link=Elisa Camiscioli |year=2001 |title=Producing Citizens, Reproducing the 'French Race': Immigration, Demography, and Pronatalism in Early Twentieth-Century France |journal=Gender & History |volume=13 |issue=3 |pages=593–621 |doi=10.1111/1468-0424.00245 |pmid=18198513 |s2cid=20333294}}</ref> In rural and small-town areas, women expanded their operation of vegetable gardens to include as much food production as possible. In the United States, agricultural organizations sponsored programs to teach housewives how to optimize their gardens and to raise poultry for meat and eggs.<ref>Ann E. McCleary, {{"'}}I Was Really Proud of Them': Canned Raspberries and Home Production During the Farm Depression". ''Augusta Historical Bulletin'' (2010), Issue 46, pp. 14–44.</ref> Rural women made [[feed sack dress]]es and other items for themselves and their families and homes from feed sacks.<ref>{{Cite web |last=Vogelsang |first=Willem |title=3. Feedsacks and the Great Depression |url=https://trc-leiden.nl/trc-digital-exhibition/index.php/for-a-few-sacks-more/item/119-3-feedsacks-and-the-great-depression |url-status=live |archive-url=https://web.archive.org/web/20210415092351/https://trc-leiden.nl/trc-digital-exhibition/index.php/for-a-few-sacks-more/item/119-3-feedsacks-and-the-great-depression |archive-date=April 15, 2021 |access-date=March 21, 2020 |website=trc-leiden.nl |language=en-gb}}</ref> In American cities, African American women quiltmakers enlarged their activities, promoted collaboration, and trained neophytes. Quilts were created for practical use from various inexpensive materials and increased social interaction for women and promoted camaraderie and personal fulfillment.<ref>{{cite journal |last1=Klassen |first1=Tari |year=2008 |title=How Depression-Era Quiltmakers Constructed Domestic Space: An Interracial Processual Study |journal=Midwestern Folklore |volume=34 |issue=2 |pages=17–47}}</ref> Oral history provides evidence for how housewives in a modern industrial city handled shortages of money and resources. Often they updated strategies their mothers used when they were growing up in poor families. Cheap foods were used, such as soups, beans and noodles. They purchased the cheapest cuts of meat—sometimes even horse meat—and recycled the [[Sunday roast]] into sandwiches and soups. They sewed and patched clothing, traded with their neighbors for outgrown items, and made do with colder homes. New furniture and appliances were postponed until better days. Many women also worked outside the home, or took boarders, did laundry for trade or cash, and did sewing for neighbors in exchange for something they could offer. Extended families used mutual aid—extra food, spare rooms, repair-work, cash loans—to help cousins and in-laws.<ref>Baillargeon, ''Making Do: Women, Family and Home in Montreal during the Great Depression'' (1999), pp. 70, 108, 136–138, 159.</ref> In Japan, official government policy was deflationary and the opposite of Keynesian spending. Consequently, the government launched a campaign across the country to induce households to reduce their consumption, focusing attention on spending by housewives.<ref>{{cite journal |last1=Metzler |first1=Mark |year=2004 |title=Woman's Place in Japan's Great Depression: Reflections on the Moral Economy of Deflation |journal=Journal of Japanese Studies |volume=30 |issue=2 |pages=315–352 |doi=10.1353/jjs.2004.0045 |s2cid=146273711}}</ref> In Germany, the government tried to reshape private household consumption under the Four-Year Plan of 1936 to achieve German economic self-sufficiency. The Nazi women's organizations, other propaganda agencies and the authorities all attempted to shape such consumption as economic self-sufficiency was needed to prepare for and to sustain the coming war. The organizations, propaganda agencies and authorities employed slogans that called up traditional values of thrift and healthy living. However, these efforts were only partly successful in changing the behavior of housewives.<ref>{{cite journal |last1=Reagin |first1=N. R. |year=2001 |title=Marktordnung and Autarkic Housekeeping: Housewives and Private Consumption under the Four-Year Plan, 1936–1939 |journal=German History |volume=19 |issue=2 |pages=162–184 |doi=10.1191/026635501678771619 |pmid=19610237}}</ref> ==== World War II and recovery ==== [[File:WomanFactory1940s.jpg|thumb|A female factory worker in 1942, [[Fort Worth, Texas]]. Women entered the workforce as men were drafted into the armed forces.]] The common view among economic historians is that the Great Depression ended with the advent of [[World War II]]. Many economists believe that government spending on the war caused or at least accelerated recovery from the Great Depression, though some consider that it did not play a very large role in the recovery, though it did help in reducing unemployment.<ref name="Britannica" /><ref name="Galbraith">Referring to the effect of World War II spending on the economy, economist [[John Kenneth Galbraith]] said, "One could not have had a better demonstration of the Keynesian ideas." {{cite video |url=https://www.pbs.org/wgbh/commandingheights/lo/story/ch_menu.html |title=Commanding Heights, see chapter 6 video or transcript |date=2002 |medium=TV documentary |publisher=[[Public Broadcasting Service|PBS]] |location=U.S. |people=[[Daniel Yergin]], William Cran (writers / producer)}}</ref><ref>{{Cite journal |last=Romer |first=Christina D. |author-link=Christina Romer |year=1992 |title=What Ended the Great Depression? |journal=Journal of Economic History |volume=52 |issue=4 |pages=757–784 |doi=10.1017/S002205070001189X |quote=fiscal policy was of little consequence even as late as 1942, suggests an interesting twist on the usual view that World War II caused, or at least accelerated, the recovery from the Great Depression.}}</ref><ref>{{Cite journal |last=Higgs |first=Robert |date=March 1, 1992 |title=Wartime Prosperity? A Reassessment of the U.S. Economy in the 1940s |journal=The Journal of Economic History |volume=52 |issue=1 |pages=41–60 |doi=10.1017/S0022050700010251 |issn=1471-6372 |s2cid=154484756}}</ref> The rearmament policies leading up to World War II helped stimulate the economies of Europe in 1937–1939. By 1937, unemployment in Britain had fallen to 1.5 million. The [[mobilization]] of manpower following the outbreak of war in 1939 ended unemployment.<ref name="Great Depression and World War II">[https://www.americaslibrary.gov/jb/wwii/jb_wwii_subj.html "Great Depression and World War II"] {{Webarchive|url=https://web.archive.org/web/20220124140816/https://www.americaslibrary.gov/jb/wwii/jb_wwii_subj.html|date=January 24, 2022}}. Library of Congress.</ref> The American mobilization for [[World War II]] at the end of 1941 moved approximately ten million people out of the civilian labor force and into the war.<ref>Selective Service System. (May 27, 2003). ''[http://www.sss.gov/induct.htm Induction Statistics. In Inductions (by year) from World War I Through the End of the Draft (1973)] {{Webarchive|url=https://web.archive.org/web/20090507211238/http://www.sss.gov/induct.htm |date=May 7, 2009 }}''. Retrieved September 8, 2013.</ref> This finally eliminated the last effects from the Great Depression and brought the U.S. unemployment rate down below 10%.<ref name="Depression & World War II">[https://www.americaslibrary.gov/cgi-bin/page.cgi/jb/wwii "Depression & WWII"] {{webarchive|url=https://web.archive.org/web/20090625204217/https://www.americaslibrary.gov/cgi-bin/page.cgi/jb/wwii|date=June 25, 2009}}. Americaslibrary.gov.</ref> World War II had a dramatic effect on many parts of the American economy.<ref name="Bloomberg">{{cite news|url=http://www.bloombergview.com/articles/2011-12-16/how-did-world-war-ii-end-the-great-depression-echoes|publisher=Bloomberg|title=How Did World War II End the Great Depression?: Echoes|author=Hyman, Louis|author-link=Louis Hyman|date=December 16, 2011|access-date=August 25, 2015|archive-date=May 3, 2016|archive-url=https://web.archive.org/web/20160503051054/http://www.bloombergview.com/articles/2011-12-16/how-did-world-war-ii-end-the-great-depression-echoes|url-status=dead}}</ref> Government-financed capital spending accounted for only 5% of the annual U.S. investment in industrial capital in 1940; by 1943, the government accounted for 67% of U.S. capital investment.<ref name="Bloomberg"/> The massive war spending doubled economic growth rates, either masking the effects of the Depression or essentially ending the Depression. Businessmen ignored the mounting [[National debt of the United States|national debt]] and heavy new taxes, redoubling their efforts for greater output to take advantage of generous government contracts.<ref>Richard J. Jensen, [https://rjensen.people.uic.edu/causes-cures.pdf "The causes and cures of unemployment in the Great Depression"] {{Webarchive|url=https://web.archive.org/web/20211102124644/https://rjensen.people.uic.edu/causes-cures.pdf|date=November 2, 2021}}. ''Journal of Interdisciplinary History'' 19.4 (1989): 553–583.</ref> Summary: Please note that all contributions to Christianpedia may be edited, altered, or removed by other contributors. If you do not want your writing to be edited mercilessly, then do not submit it here. You are also promising us that you wrote this yourself, or copied it from a public domain or similar free resource (see Christianpedia:Copyrights for details). Do not submit copyrighted work without permission! 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