Expert Views of The Great Depression

Historian John Kenneth Galbraith examines the economic trends of the 1920s to ascertain what forces were unleashed in that era leading to the Great Depression and to determine whether the stock market crash was inevitable, why this might be so, and how it might have been stopped, assuming that were possible. He finds a number of major trends of the time that created social tensions and economic disparities which produced the conditions leading to the crash.

He notes first that while this was a prosperous period, income was being distributed in an unequal fashion. This created a weakness in the economy, exacerbated by a number of flaws in the economy, some more open and some more subtle. A second weakness noted is what Galbraith calls "the large-scale corporate thimblerigging that was going on" (Galbraith 29), with corporations holding stocks in other corporations and with pyramid structures for different businesses. The stock market boom itself created an economic weakness as the bull market continued throughout the 1920s in a way that was inherently self-liquidating and that created such optimism that investors were extending their holdings with borrowed funds through margin accounts. Galbraith also analyzes different political leaders and what they did as well as what they might have done, and he finds that all in all, leadership failed in those years.

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Approximate Word count = 1104
Approximate Pages = 4 (250 words per page)

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