To What Extent Was The Great Depression Dbq

The Great Depression Was Inevitable

As is known to all, the Great Depression impressed Americans deeply. Because it is one of the worst time periods for Americans in American history. Some comments says that it was the longest, deepest, and most widespread depression of the 20th century.

October 29, 1929 was called “Black Thursday” by people, not only the whole economic system of America entirely fell apart, but also the economy crisis spread all over the world, especially for fragile economy in Europe that had relied severely on American loans.

The horrible phenomenon in America was that the booming stock market crashed, there was no business houses open their doors, factories shut down, banks also closed down because of the loss of savings, and farm income decreased at least 50% and so on.

In the beginning, the economic crisis just broke out in America. But at last, its range extended as far as the whole world, especially all the capitalist countries. Without doubt, the Great Depression is the most serious economic crisis in American history. But why did

such a thing happen? And was it inevitable?
In my opinion, it’s inevitable rather than occasional. There are some reasons to support my viewpoint.
The root of the Great Depression is the basic contradiction of capitalism system. And the basic contradiction between the socialization of production and the private ownership of the means of production. After the two industrial revolutions, capitalistic society’s productivity developed faster than before, and the division of labor in society also became more definite and specific. And this kind of production phenomenon required that every product department must cooperate together well. Finally, the socialization of production appeared. In addition, in capitalist countries, some monopolization capitalists owned a great deal of capital and means of production, and they just wanted to get more and more profits and money so that they expanded reproduction constantly, which broke the balance of production and then caused the cutthroat competition. At last, the contradiction of every social production departments was sharpened, and the economic crisis broke out.
And the direct reason is the contradiction between support and demand in the market. Of course, we also can change a kind of statement about the direct reason. What people could know well at that time is the contradiction between production and sale. Due to production was much higher than demand, a lot of products were unmarketable. But why did such a thing happen? First of all, a few monopolistic groups almost controlled the whole national economic lifeline. On one hand, capitalists got more and more profits, and became richer and richer. On the other hand, the poor became poorer and poorer. At the end, it leaded to the national income disparity, and the wide disparity between rich and poor was more and more obvious. And this phenomenon limited the increase of consumers’ real purchasing power, and leaded to the small domestic market.
The third reason is that installment plan and bank credit resulted in the mock boom. And the mock boom slid inflation and unemployment over. in fact, the illusory market didn’t mean the increase of social actual consumption ability, and it was just the change of consumption pattern. Seriously, it could make capitalists blindly expand production, and lead to that contradiction between production and market become sharper day in and day out.
The fourth reason is the limitless speculation in the stock market. During that period of time, plenty of Americans were addicted to the speculation in the stock market. It seemed that speculation was the short cut to become rich. Moreover, the banks were also happy to loan money to people. And people spent all their money on speculation, which brought about the highest stock prices. But actually, this kind of action resulted in the unstable financial market system and the collapse of currency and credit management system.
The fifth reason is the First World War which ended in 1918. The war brought changes that lasted the fighting had ended. During the war, American government and troops needed more corn and livestock to support their lives and wars. So farmers had worked hard to produce more food, a part of food was used to sale to people, and extra food helped to feed the American armies. After the war ended, farmers still produced more food, but there was not as much need as the time of wars for American food. Then farmers had to reduce the prices of food. When prices are lowered, many farmers could have no money to repay their loan to the banks. At last, the banks could not continue any longer without those repayments, so the banks collapsed. At the same time, people who had invested their money in those banks, and also lost their money.
The last reason is that American president Herbert Hoover insisted on “laissez-faire” capitalism from beginning to end.

“Laissez-faire” is an economic system in which transactions between private parties are free from instrusive government restrictions, tariffs, and subsidies, with only enough regulations to protect property rights. The phrase laissez-faire is French and literally means “let (them) do”, but it broadly implies “let it be”, “let them do as they will”, or “leave it alone.” Many people say that the major reason why the economic crisis broke out is “laissez-faire.” But in my opinion, the major reason is not the “laissez-faire” capitalism but Hoover, because Hoover didn’t know that he should abandon the “laissez-faire” capitalism in time and then change the “laissez-faire” capitalism to a new policy. At the end, his insistence resulted in the collapse of the whole American economic

system.
In a word, the Great Depression was inevitable.