Robert S. McElvaine in his book The Great Depression considers the causes and effects of that terrible time in American history when American confidence was shaken and her optimism made to suffer. McElvaine does not find that there was one cause of the Great Depression but rather than it was the result of various outdated economic theories, a laissez-faire attitude on the part of the government, some of the effects of World War I, and excessive and unquestioning optimism on the part of the American people by the latter part of the 1920s.
McElvaine first notes that the industrialization of the nineteenth century took place with little government planning, and the economy continued on its way with little control into this century. The economy was growing larger and more complex in this century, but the government was still using nineteenth-century economic ideology as its base.
McElvaine next notes that international tensions and problems after the Great War contributed to the development of the problem. For one thing, the war altered economic relations among and within nations, and the United States in particular was changed from a creditor to a debtor nation:
This change obligated the country to take more responsibility for the smooth operation of the international economy and to make adjustments in its other policies, including exports and tariffs (33).
The stock market crash in 1929 was a result of these and other forces and took several weeks to complete the downward slide. the crash showed that the previous situation was over, something that many did not want to believe until it was clear that the market was not "fundamentally sound" as they had been claiming (46). The crash did not cause the depression but did contribute to it, and it was necessary that there be other problems at the same time for the crash to lead to a depression. McElvaine cites Milton Friedman that there also had to be a monetary collapse,...