Great Myths of the Great Depression!

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www.fee.org/articles/great-myths-of-the-great-depression/ Many volumes have been written about the Great Depression of 1929-1941 and its impact on the lives …

A Job at Ford’s episode 1 (60 min.) Just before the advent of the Great Depression, Henry Ford controlled the most important company in the most important in…
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31 Responses to “Great Myths of the Great Depression!”

  1. Steve Oconnor

    The Tariff and Prosperity

    The effect of the tariff upon prosperity in general is highly exaggerated? in the popular mind. Political parties have indulged in so much partisan propaganda pro and con the tariff that the bearing of the tariff upon prosperity has been greatly overemphasized. An economic view of the facts finds prosperity or depression due to more fundamental economic conditions.

  2. Steve Oconnor

    The tariff cannot stop prosperity when fundamental conditions are favorable, nor can it create prosperity when fundamental conditions are unfavorable. The tariff cannot stop depression when fundamental conditions are causing it, nor can it create depression when fundamental conditions are tending to wipe it out. The fundamental conditions in these cases? are the economic forces which are described elsewhere under the heading of the business cycle.

  3. Steve Oconnor

    No tariff, no matter how high, can severely injure the industry of the United States. The basic movements? of prosperity and depression move rough-shod over tariff walls, and in large measure go their way regardless of or in spite of the tariff rather than because of it.

    Lionel D. Edie
    Economics: Principles and Problems
    Thomas Y. Crowely Company, 1928, Seventh Printing, October, 1928
    p. 697

  4. Steve Oconnor

    The United States had an? even larger tariff increase after WW I than during Smoot-Hawley and our economy did not go into a depression – we had the roaring 1920s’:

    YEAR…FREE AND DUTIABLE TARIFF RATE
    1918…..5.79
    1919…..6.20
    1920…..6.38

    1921….11.44
    1922….14.68
    1923….15.18

    From 1920 to 1923 the tariff rate increased from 6.38% to 15.18% – that is an increase of 138% .

    The Smoot-Hawley increase from 13.5% in 1929 to 19.8% in 1933 is only a 46.6% increase.

  5. Steve Oconnor

    “In emphasizing the 59.1 percent figure, scholars overlook an important factor. First, Congress did not enact such a high average tariff in 1930. Price declines during the depression produced that result. Like predecessor tariffs, Smoot-Hawley relied on a combination of specific and? ad valorem duties. Nearly half of dutiable imports carried specific rates — meaning a fixed amount per quantity, such as 20 cents per pound.

  6. Steve Oconnor

    When prices plunged during the Great Depression, the percentage equivalent of such specific duties soared. A 20 cent duty on an item valued at $1.00 effectively became? a 40 percent duty if the good’s price fell to 50 cents per unit.

    According to the U.S. Tariff Commission (USTC), 48.6 percent of dutiable imports in 1930-31 entered at specific duty rates. With specific duties the average ad valorem equivalent ratcheted upward.

  7. Steve Oconnor

    Had 1929 price levels endured, the USTC calculated that the Smoot-Hawley rate on dutiable items would have averaged 41.6 percent — certainly? not a prohibitive tariff by historical standards. Indeed, in fifty-one out of ninety-four years, from 1821 to 1914, the average rate on dutiable imports exceeded that amount.”

    Alfred E. Eckes, Jr.
    Opening America’s Market, The University of North Carolina Press, 1995
    p. 107-108

  8. Steve Oconnor

    Thereafter there were depressions in 1819-1820, 1825-1826, 1836-1837, and the early 1840’s, and in 1847-1848 there was a great crash. That period? became known as the “hungry forties.”…..

    Laissez faire proved to be no cure for business cycles and depressions.”

    Richard A. Lester, Duke University
    Economics Of Labor, 1941
    p. 50-66

  9. Steve Oconnor

    England had become, to quote Disraeli,”Two nations: between whom there is no intercourse and no sympathy; who are as ignorant of each other’s habits, thoughts, and feelings, as if they were dwellers in different zones,? or inhabitants of different planets;….THE RICH AND THE POOR.”. . . . In 1814 a crises, accompanied by an avalanche of commercial failures, shook the English market.

  10. Steve Oconnor

    According to a writer in 1820, real wages (wages reckoned in? commodities) had fallen 33 percent from 1760 to 1820….

    It was from 1795 to 1835 that the problem of pauperism reached its most extreme and acute form, and that the term “labouring poor” became such a common expression.”….

  11. Steve Oconnor

    crawling on all fours, would? drag a car or tub of 300 or 400 pounds of coal by chain attached to a leather band around their waists.The well-known French economist, J. B. Say, from his travels in England in 1815, declared that a worker with a family, despite efforts often of a heroic character, could earn no more than three quarters, and sometimes only one half, the sum needed to support his family.

  12. Steve Oconnor

    Children, who in rush seasons worked 18 hours a day with only four? hours for sleeping, often fell asleep at meals “with the victuals in their mouths.”…..

    Working weeks from 72 to 108 hours for children tended to deform their bodies and legs and made workers old at 40. To force child laborers to perform their stint, foremen sometimes strapped them. Children of six, seven, and eight years of age worked in coal mines where, for 12 or 14 hours a day, girls in their teens. . . .

  13. Steve Oconnor

    and nearly one half of the? female employees were under 18 years of age. In woolen, silk, and flax mills, 70 percent of all “operatives” in 1839 were women. A census of 1841 showed that 27 percent of the workers in British mines (coal, iron, tin, etc.) were under 20 years of age, although only 3 or 4 percent were females.The normal working day for women and children as well as men was from 12 to 14 hours for six days a week, and at rush seasons factories sometimes ran day and night on one shift.

  14. Steve Oconnor

    Under the early factory system in England, the employment of women and children was the foundation of certain branches? of industry. Three independent estimates for the years 1833, 1835, and 1839 indicate that almost half of the factory workers in England were children under the age of 18 years of age — one quarter of the workers in the cotton mills were under 14 years of age. About 55 percent of all factory employees in the 1830’s were women . . .

  15. Steve Oconnor

    Before long Parliament was forced to pass a new set of labor laws called Factory Acts in order eliminate the most glaring evils and abuses that developed under this “natural order” of laissez faire.
    An understanding of this epoch in economic history is so important for a student of? labor, as well as for advocates of the individualistic ideal who oppose labor organization and legislation.

  16. Steve Oconnor

    So firmly were the people of England convinced of these economic superstitions that they repealed all laws safeguarding the workers, restricting the spread of factories, and limiting the rise of capitalism.
    From bitter experience, however, the English soon learned the limitations of markets as? final arbitrators of economic matters.

  17. Steve Oconnor

    The leading men of the? time argued that the market forces of demand and supply should have free reign to work their magic. They thoroughly believed that complete freedom for individual initiative and self-interest would result in the greatest social good, and they were convinced that any government interference or labor legislation would be both vicious and futile, because it would run counter to “natural law”.

  18. Steve Oconnor

    That free markets alone will not? bring about the economic millennium is evident from the experience of England and France during the first half of the nineteenth century, when the doctrine of laissez faire was tried and found wanting. The period from 1810 to 1840 stands out in European history as the epoch during which there was the least amount of government intervention in economic affairs.

  19. Hugo Chavez

    Did you not read the comments or watch? the video?

  20. Mas0o0n

    Any? sources?

  21. soapbxprod

    “Trade is ultimately a two-way street- if foreigners cannot? sell their goods here, then they cannot earn the dollars they need to buy here. Or to put it another way, governments cannot shut off imports without simultaneously shutting off exports.” BRAVO!

  22. soapbxprod

    The Law of the Jungle? A Hobbesian? State of Nature? Oh please. Hayek and Von Mises and Friedman all advocated Rule of Law against Fraud, Theft, and Violence.

  23. soapbxprod

    The? Treasury Secretary is usually the former head of Goldman Sachs… or Andrew Mellon. You haven’t taken it to the next step. The Government and the Banks are in a Conspiracy.

  24. soapbxprod

    All? you seem to do is hurl insults. You have no objective argument.

  25. soapbxprod

    I’m guessing that? you get a check every week from the Government.

  26. onceANexile

    you couldnt give me a new ford, and i be an old ford? man….

  27. orgekiller

    when the cops in detroit tells the public not to come into the city because the law can’t protect them,that’s when you? know a city is a shit-hole!

  28. opl500

    No birth control, no TV, no vidya games. And? no porn. What would YOU do?

  29. n2488

    y? did they keep making a shit load of kids

  30. n2488

    these peeps didn’t have? gardens or seeds

  31. LeonEvans

    Humans need Food and Shelter for survival.

    You don’t need a JOB for Food. You need soil and garden to create your own food instead of sitting on your rear on? the streets.

    Don’t blame others. Grab some seeds and find a place you can grow your garden! That is REAL WORK.