John Kenneth Galbraith's The Great Crash: 1929

John Kenneth Galbraith, in The Great Crash: 1929, writes that his book has limitations: "The task of this book . . . is only to tell what happened in 1929. It is not to tell whether or when the misfortunes of 1929 will recur" (190). In the same passage, however, Galbraith makes clear the moral lesson of 1929 and of his book: "It is that very specific and personal misfortune awaits those who presume to believe that the future is revealed to them" (190). However, after having set forth these limitations, Galbraith goes on to speculate on the future:

. . . The chances for a recurrence of a speculative orgy are rather good. No one can doubt that the American people remain susceptible to the speculative mood---to the conviction that enterprise can be attended by unlimited rewards in which they, individually, were meant to share (191).

As we have seen, other stock crashes have occurred, the most serious being the one in the greed-ridden Reagan-Bush era, which seems to confirm Galbraith's speculation that blind self-interest on a national scale is at the heart of such crashes.

Galbraith is well-qualified to make such analyses and speculations. He has been a professor of economics at Harvard for many years, and has written a number of other acclaimed books, including The Affluent Society and American Capitalism. In addition, Galbraith has served in the government domestically

and overseas, the latter as Ambassador to India.

Galbraith wrote this book twenty-five years after the

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h is not a doomsayer. Even if such crashes do occur, they will likely never do the damage the 1929 crash did: A new adventure in stock market speculation sometime in the future followed by another collapse would not have the same effect on the economy as in 1929. . . . There can be no question . . . that many of the points of extreme weakness exposed in 1929 have since been significantly strengthened (192). What makes his warnings about future danger convincing is just such reasonable analyses. He points out that the conditions of 1929 were special and extraordinary. He makes clear that those conditions could not recur, primarily because of the lessons of 1929 and the changes wrought in economic institutions as a response to those lessons. At the same time, he points out that human nature is not altered radically, if at all, by changes in institutions. Human beings are still greedy, and stock market speculators are especially prone to that particular vice. The politicians who have the power to put safeguards into action are hesitant to do so because such action could forestall economic expansion which would help their political careers. In other words, economic safeguards are in place, but they depend for their implementation a

Category: Economics - J