The Great Depression of the thirties tested the foundations of and trust in the capitalist system. In popular thought, the stock market crash of 1929 is viewed as the cause of the depression. Though the chaos in financial markets was a contributing cause, other economic factors affected the length and severity of the Great Depression. One factor noted by Michael A. Bernstein (1987), professor of history at the University of California in San Diego, was a major shift in patterns of consumption during the twenties and thirties and the subsequent problem of shifting investment from mature to growing industries. The specific problems of economic stagnation and high unemployment of the thirties can be traced to this problem. This article describes how the disruption in financial markets hindered the flow of capital into the new growth industries of the thirties, thus prolonging the depression. It then analyzes similarities between the Great Depression and recent economic events.
© 1989 by the Board of Student Publications, University of Northern Iowa
Pearson, Kevin E.
"Getting to the Bottom of the Great Depression,"
Draftings In: Vol. 4:
2, Article 4.
Available at: https://scholarworks.uni.edu/draftings/vol4/iss2/4