HISTORIOGRAPHY OF THE WALL STREET CRASH AND THE GREAT DEPRESSION

1. HISTORIOGRAPHY OF THE WALL STREET CRASH AND THE GREAT DEPRESSION

2. Learning Objectives • Continue to develop understanding of the reasons for the Wall Street Crash and the Great Depression • All students will learn about Keynesian and Monetarist historiography of the Great Depression and the Wall Street Crash • Some students learn about additional explanations such as those of Bernstein, Kindelberger and Kennedy

3. Learning Outcomes • I will know more about the Wall Street Crash and the Great Depression • I can explain the monetarist explanation of the Wall Street Crash and the Great Depression • I can explain other interpretations of the reasons for the Wall Street Crash and the Great Depression

4. 1. Causes of the Great Depression-the Keynesian View • Keynes argued that the government could stimulate the economy by spending money • Public works projects • Taxation • By spending money the government can create jobs; workers with jobs created by the government spend money; this creates more jobs and so on

5. 2. Causes of the Great Depression-the Monetarists • The key monetarist is Milton Friedman • Monetarists argue control of the money supply is important • Failure to control the supply of money in the economy can create economic depression • You are head of a bank • You have one million dollars-how likely are you to loan money? • You each have a trillion dollars-how likely are you to loan money?

6. Historiography of the Great Depression EXTENSION: 1. COMPLETE SOURCES 7-9 2. IF YOU FINISH WRITE A PARAGRAPH ON THE HISTORIAN YOU MOST AGREE WITH 3. WRITE A PARAGRAPH ON WHAT YOU HAVE LEARNED IN TODAY’S LESSON • Read the sources and use the table to make notes on the different historians and economists explanations for the Great Depression and the Wall Street Crash

7. “The Depression, they claimed, was a result of a drastic contraction of the currency” The Depression was caused by a failure to control the supply of money-Fed blamed MONETARIST The government did not intervene and spend enough money KEYNSIAN “The New Deal never ended the Depression because it did not spend enough” “If nothing else had happened there would have been a depression because of the severe monetary contraction” MONETARIST The Depression was caused by monetary contraction Government did not spend enough money to stop the Depression “lack of demand was not offset in the early years of the Depression by any compensatory spending” KEYNSIAN “the Federal Reserve Board in Washington came to dominate monetary policy, with disastrous results” Federal Reserve was to blame with its monetary policy MONETARIST The timing of the collapse meant there were no industries to provide new jobs “the timing of the collapse” OTHER “The world economic system was unstable unless some country stablised it” The USA failed to provide a world economic lead-it could have devalued OTHER “American banks were rotten” American banks were unregulated and were to blame OTHER

8. Who am I? I am one of the original monetarists. In my book, The Monetary History of the United States, I argued that it was a lack of money in the system that led to the Wall Street Crash and the Great Depression. I blamed the Federal Reserve for this ANSWER: MILTON FRIEDMAN

9. Who am I? In my book ‘Did Monetary Forces cause the Great Depression’ I argued that the Great Depression was caused by the governments failure to spend money to create demand in the economy ANSWER: PETER TEMIN

10. Who am I? In my book ‘The New Deal: The Depression Years’ I argued that the Great Depression was caused by mal-distribution of income and flaws in the banking system. The government should have spent money but didn’t. ANSWER: ANTHONY BADGER

11. Who am I? I argued the problem was timing. In 1929, the car industry was no longer creating new jobs and new industries like aviation were not growing fast enough. ANSWER: MICHAEL BERNSTEIN

12. Who am I? I argued the issue was the failure of the USA to become the world economic leader in my book ‘The World Depression’ ANSWER: CHARLES KINDELBERGER

13. Who am I? The problem was the banks-there were far too many and they weren’t regulated. Banks did not have enough money-they were undercapitalised ANSWER: DAVID KENNEDY

14. Reflection