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本篇paper代写- The Great Depression讨论了大萧条。在20世纪30年代，美国被大萧条卷席，严重影响了该国的经济发展。美国在20年代的繁荣，主要归因于自然资源充裕，工农业生产增长，技术进步，劳动生产率提高，消费扩大和对外贸易兴旺。然而，许多美国人的贫困处境和国民经济之间存在某些薄弱环节，导致了大萧条的爆发。尽管如此，直到二十年代末，大多数美国人还盲目乐观地相信繁荣仍将继续下去。但事实却是金融业崩溃，美国进入了长达10年的经济大萧条时期。本篇paper代写由51due代写平台整理，供大家参考阅读。

Introduction

In the 1930s, the United States was being swept by the great depression, which was a huge impact to the United States compared with the other countries that suffered from it simultaneously (Peter Temin). Since the middle of the nineteen century, the liberal economic thought has been developing continuously and the economy of the United States was in a false prosperity. The economy of the United States developed rapidly into unprecedented prosperity in the 1930s, placing a decisive role in the world (Alford B.W.)

Behind the prosperity of the economy, latent crisis were found in the growth of the economy in the United States. The great impact of the great depression could not be ignored and the impact of the great depression was far more profound than any recession in history.

The phenomenon of the great depression is a valuable research issue. The research paper will analyze the reason why the great depression would happen in the United States concerning the economic environment and illustrate the impact and phenomenon of the great depression both economically and politically.

The Causes of the Great Depression

The United States seems to be really in prosperity in the summer of 1929-- the overall stock market rapidly rose and all the people seemed to gain benefits and earn money from it(Studs Terkel, 2001). It boosted the economy of the United States and the money gained from the stock market was being consumed in the American economy. There were, however, potential problems hidden in the prosperity, impeding the future economic growth under such environment.

First and foremost, the unequal income between the rich and poor was a serious problem. The consumption capacity of individuals has not risen significantly, because the average wage of workers in the 10 years since 1920s has remained unchanged (Cristina D. Romer, 1993). Only 10% of people in the United States invested in the stock market, leading to a widening gap between the rich and the poor. Data has been shown that about people who own the highest earnings than others amounted for approximately five percent at the period of depression, and their income occupied a third of the personal income among the society (Galbraith& John Kenneth 2009). An economy with a large gap between the rich and the poor largely depend on two aspects. On the one hand, the only way for the rich to get more money is to invest in existing companies, new industries, etc. One the other hand, there was no need for the rich to buy extra ordinary commodities instead of the luxury products that met their needs (Galbraith, John Kenneth, 1954). High levels of investment as well as the commodities with high prices that being bought could stimulate the economy, while difficult it may be for those who could not easily reach this goal, because it was prohibitively costly for some individuals. Such controversy indicates that it was too difficult to depend on the rich to boost the economy. Unreasonable investment without satisfying the need of the consumption capacity does not make sense, which also led to the reality that the actual economic growth in the United States is slow.

Furthermore, Galbraith and John Kenneth have pointed out in their articles that productions were exceeding the consumption demand during this period. The widening gap between the rich and the poor in the capitalist society will inevitably lead to the contradiction between social production and consumption, which was not conducive to the healthy development of social economy. Production and consumption of the society must be balanced, and in this way can the social economy run smoothly. National income expenditure could be divided into two respects. One is used to invest in production and the other is for consumption. In the industrial society, the consumption of industrial products accounts for a large proportion of the total social consumption, but the number of consumption volume for each people was limited. The government was likely to made some wrong decisions or predictions towards the need of the market and individuals. In 1929, the over-confident of government caused the so-called inventory recession (Cristina D. Romer, 1993).

Besides, economic growth was too dependent on the stock market. Compared to the investment in technological innovation, many companies were more willing to put money into the lending market, so the capitals would flow into the stock market at the end. Money faded away from the real economy, flowing into the stock market, which laid the basis for future American corporate failures and the great depression (Galbraith, John Kenneth, 1954). Most of the consumptions were from the profits of the stock market, and most of the investments were gathered in the stock market. Once the stock market crashes under such condition, the recession is unavoidable.

What is more, the structures of many banks and companies were unreasonable. In the discussion of the events that occurred during the depression, we are inclined to put a series of bank failures in a very important position. Relevant data shows that approximately 9755 banks went bankrupt due to financial difficulties in just 4 years, accounting for 1/3 of the number of banks in America (Scott B. Sumner, 2015). Coupled with the active liquidation, mergers and acquisitions, the number of commercial banks has been reduced by over a third. The first banking crisis since the end of 1930 was marked by a wave of bank failures probably due to poor lending and investment. The banking system tried to satisfy the demand of depositors as a whole only through the multiplier contraction effect of the deposit. In this case, regardless of the quality of assets held by banks, a bank run, which is a phenomenon that many customers of bank withdraw their cashes from the bank due to the financial crisis or relevant influences about the panic simultaneously, caused by any reasons to a certain extent was not unreasonable(Studs Terkel, 2001). Banks had to resort to certain measures such as selling assets in the market, which will inevitably lead to the decline in the market value of these assets as well as the devaluation of other assets held by banks. It was the decline of the value of the assets held by banks that has become the most important cause of capital damage, especially the decline in the market value of the bond portfolio, rather than the default of a particular loan or bond, which led to the occurrence of the bank failure. The banks were so vulnerable that they could not able to confront with the depression and it would be likely to bring a family to ruin when bank failure occurs (T.H. Watkins, 1998). The new structures adopted by the companies such as the holding companies or the investment trusts, showing that external reasons like bankruptcy or default on the bonds would have great impact on such companies, which makes it very risky to survive.

Last but not least, laissez-faire doctrine and relevant economic policies adopted by the United States for a long time were one of the integral parts that contributed to the great depression (Scott B. Sumner, 2015). Laissez-faire policy is the traditional economic thought of capitalism since the industrial revolution, having a profound influence on the development of capitalism. Those who hold the belief of Laissez-faire policy tend to perceive that the market mechanism is an "invisible hand", which automatically regulates economic activities, thus inefficiency and waste would occur under the government interferences. Before the economic crisis, the U.S. government has regarded laissez-faire policy as the mainstream ideology of economic development to adjust economic activities, and take relevant economic policies. For instance, the government strictly controlled currency issuing amount, adhered to the principle of maintaining a basic fiscal balance between revenue and expenditures (Scott B. Sumner, 2015). Faced with the crisis of failing and broke, banks and companies were void of practical measures from the government and so does the people who were unemployed (T.H. Watkins, 1998). This kind of liberalism economic thought contributed to the crisis of economy step by step, triggering the great depression to certain extent. In the face of the economic crisis, the president of the United States Hoover still adhered to the traditional laissez-faire doctrine, opposing government intervention.

The impact of the great depression

Many countries in the world such as the United States, German, Japan, Chile suffered from the great depression almost simultaneously in 1930s, which generated huge impacts on their lives especially in the field of economy revealed by the index of   industrial production every year and the distribution rate change (Cristina D. Romer 1993). These crises are a clear manifestation of signal of a international phenomenon, but it could be more convincing if it was said to be a national phenomenon for the United States, for the phenomenon and situation was very unique and more extreme in the United States compared with the history before. When discussing about the great depression, vast multitudes of individuals would like to shift the concentration from the world economy to the downturn of the United States’ economy, therefore the great depression resembles an American phenomenon.

In the first place, the New York Stock Exchange crashed in October 24, 1929 (Alford B.W.E. 1996), which known as Black Tuesday in the history, falling into disarray. It was the biggest stock market collapse of all time given by the extent as well as duration. Stock index fell to 40.56 from to the highest point of 363 in July, 1932, which declined more than 90%, the most in the history (Murray N. Rothbard, 2000). The impacts on the stock market and the economic situation were dramatic. The most frightening thing is that the collapse of the trigger and the terrible economic policy led to ten years of the great depression. The United States was in unprecedented prosperity after experiencing the First World War. People in the United States, however, did not perceive the potential crisis of the collapse of the stock in their lives. As a matter of fact, there were controversies existing in the society, such as income inequality, improper ownership structure, unreasonable bank structure, deteriorating balance of payment. The crash of the New York Stock Exchange was not only the symbol of the start of the great depression, but a spark that see off the depression. Stock prices fell sharply, exerting great influences on the whole world. The decreasing of the price went beyond people’s mind, and they wishes to reverse the trend, but the truth is that the disaster lasted for a long time.

Furthermore, the great depression in the United States brought about the financial crisis in 1931. The crisis lasted nearly five years, during which industrial production of the capitalist countries declined sharply, a large number of enterprises went bankrupt. And the number of unemployed rate surged, which was as high as more than 30% (Peter Temin 1993). As a matter of fact, it was the worst financial crisis in the history all over the world. The deficit that the government and numerous banks have suffered from has put huge pressure on the gold standard, which also spread to other countries, turning into an international panic (Peter Temin 1993). Many banks went bankrupt and individuals lost all properties. The commodity market was shrinking rapidly, intensifying the tariff war as well as the trade war. For instance, the United States increased the average rate of taxable imports to 53.2% in 1930, during which the volume of the world trade dropped surprisingly for the first time along with the other measurement taken by other countries all over the world so as to resolve the recession (Murray N. Rothbard, 2000).

Last but not least, according to the paper written by Alford,B.W.E, economic drawbacks stimulated political problems. The great depression has profoundly changed the politics of the United States. When the crisis went on to the fourth years, the Republican government was still unable to come up with appropriate and practical ways to reverse the situation. Although the government promised to stave off the economic disaster, most measures showed their careless and dishonest managements, adding sense of instabilities to American people. Unemployment and the declining trade still existed for a long time and the whole country was disruptive (T.H. Watkins, 1998). The economic policy of the government in this period has been denounced on many sides. In this way, Republicans lost a majority since 1860. Since Franklin D.Roosevelt won the 1932 election with an overwhelming majority, the Democratic Party began to control the White House for nearly 40 years from 1933 to 1968 (Scott B. Sumner, 2015). It was not until President Roosevelt came to power that he changed his previous government's improper ways, and he truly played a significant role in regulating economic operation. In his inaugural address, Franklin D.Roosevelt said to all the people that the only thing they had to fear was fear itself rather than the depression, so as to reassure the public and seek support of the people (Franklin D. Roosevelt, 1933). In order to end the serious situation as soon as possible, he carried out a series of policies, known as New Deal, focusing on the nucleus of relief, recovery and reform. He announced to implement expansionary fiscal policy and increased government spending as well as public utility expenditure. Although some people thought that his expansionary fiscal policy was not enough to save the United States, there was no denying that the policy took by Roosevelt drove demand, reduced unemployment rate and alleviated crisis (Scott B. Sumner, 2015). New Deal contributed to strengthened government interferences for the economy, adjusting relation of production under the premise of maintaining the capitalist system of the United States and expanding the influence of federal government on the national economy.

 European countries generally implemented social democracy and planned economy after World War II and the relationship between the United States and the Europe has change (Murray N. Rothbard, 2000). Many Americans began to hold a belief due to the great depression that a completely free market without government intervention would not guarantee a stable situation and healthy economic growth (Studs Terkel, 2001). Many of the individuals who participated in the policy-making of new deal argued that the experience of the US government's intervention in the economy could be applied to the post-war reconstruction of the economy of Europe. At the same time, the economic crisis of 1929 has also proved that the tariff and trade protectionism were harmful to the economy, which has strengthened the demand for economic integration of Europe and free trade. The Marshall Plan occurred under such demand and situation, aiming to help America's European allies recover from the devastation of the Second World War and to restrain the further expansion of the Communist forces in Europe. The trade relationship between the United States and Western Europe created by the Marshall plan consolidated and promoted the North Atlantic alliance and continued until the end of the Cold War.

Conclusion

The great depression was a severe economic crisis originated from the United States, engulfing the entire capitalist world and affecting many countries. which was more likely to be regarded as an American phenomenon to some extent. Unequal distribution between the rich and the poor is one of the causes to be blame, which generated the contradiction between production and consumption. There were no denying facts that the blind investment during the great depression was as vulnerable as the resistance of pressure of the bank structure. During the great depression, numerous problems have been witnessed such as financial crisis, stock market crash as well as the political issues. The laissez-faire doctrine and relevant economic policies adopted by the United States and the revolution of the New Deal also could inspire the economic adjustment for the nation at this moment.

References

Peter Temin, “the Transmission of the Great Depression”, Journal of the Economic Perspectives, 30.2(1993):105-121.

The author describes current thinking about the relationship between the gold standard and the great depression and he also looks at the phenomenon of the financial crisis.

Alford B.W.E., “Britain and the World Depression”, The Journal of Finance. (1999)

The author analyzes the influences of the great depression and explains the critical importance to American’s position in the world economy..

Cristina D. Romer, the Nation in Depression, Journal of the Economic Perspectives, 1993

The author examines the ways the United States experienced during the great depression and evaluates the causes of the great depression.

Galbraith& John Kenneth, Cause and Consequence, International Journal, 2009

Authors describe the remedial measures the United States took for the great depression and reveal the cause as well as the impact of the depression.

Murray N. Rothbard, America's Great Depression, Ludwig Von Mises Institute, 2000, Print.

This book is a staple of modern economic literature and necessary for understanding a pivotal event in the United States and even world history. The author introduces the business cycle theory and show imbalances between investment and consumption given by the unreasonable monetary policy.

Galbraith, John Kenneth, The Great Crash, 1929. Boston: Houghton Mifflin. 1954, Print

The Great Crash, 1929 argues and analyzes the fact towards the Wall Street crash of 1929 in the economic history. The author believes that a good understanding of the situation in 1929 is the best safeguard against its recurrence.

Scott B. Sumner, the Midas Paradox: A New Look at the Great Depression and Economic Instability, Independent Institute, 30 Oct. 2015, Print.

In The Midas Paradox, author offers fascinating insights of how monetary policy under the gold standard got America into the Great Depression and how wage policies under the New Deal slowed the subsequent recovery. The book is deep and rich and has important lessons for today’s policymaking. He also comprehensively explains monetary and non-monetary causes of the depression.

Studs Terkel, Hard Times: An Oral History of the Great Depression, the New Press, 2001, Print

Studs Terkel recaptures the history of the Great Depression, covering many aspects from politicians, businessmen, artists, and writers, from those who grew up in the time during the depression. It is not only significant information but an important memory as well as fact, revealing how the Depression influenced the lives of people who experienced it firsthand.

T.H. Watkins, The Hungry Years: a Narrative History of the Great Depression in America, Henry Holt & Company Inc, 1998, Print

"The Hungry Years" tells the story of the Great Depression through the eyes of the people who struggle from it. It focuses on the daily lives of ordinary people in the United States and it draws on little-known oral histories, memoirs, local press, and scholarly monographs to reveal the voices of men and women in a time of extreme crisis.

Franklin D. Roosevelt, Inaugural Addresses of the Presidents of the United States, Washington, D.C.: U.S., March 4, 1933, Speech.

Roosevelt's First Inaugural Address illustrates the problems caused by the economic downturn and lists measures that could fix those problems. Roosevelt’s speech was an early outline of what would later be known as the New Deal.

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