Name: 大蕭條。美國曆史速成班第33期 (The Great Depression: Crash Course US History #33)
Uploaded: 2025-01-26T21:01:20.000Z
Duration: 14 min 27 s

Hi, I'm John Green, this is Crash Course U.S. history and Herbert Hoover's here,

which is never a good sign. Today we're gonna return to two of my favorite topics: economics and inaccurate naming conventions.

未來進行式

That's right, we're gonna be talking about the Great Depression,

which was only great if you enjoy, like, being a hobo or selling pencils.

Now some of you might get a bit frustrated today,

because there's no real consensus about the Great Depression,

and simple, declarative statements about it really say much more about you than they do about history.

Why are you looking at me, Mr Green? I didn't say anything. I thought it.

Because, Me From the Past, you always want things to fit into this simplistic narrative:

she loves me, she loves me not, the Great Depression was caused by x or was caused by y.

Many people tell you that the Great Depression started with the stock market crash in October 1929,

but a) that isn't true and b) it leads people to mistake correlation with cause.

What we think of as the Great Depression did begin AFTER the stock market crash, but not because of it.

Like, as we saw last week, the underlying

economic conditions in the U.S. before the stock market crash

weren't all moonshine and rainbows. The 1920s featured large-scale domestic consumption of relatively new consumer products,

which was good for American industry. But much of this consumption was fueled by credit and installment buying

which, it turned out, was totally unsustainable.

The thing about credit is that it works fine unless and until economic uncertainty increases

at which point POW. That's a technical historian term, by the way.

Meanwhile, the agricultural sector suffered throughout the 1920s and farm prices kept dropping for two reasons.

First, American farms had expanded enormously during World War I to provide food for all those soldiers,

and second, the expansion led many farmers to mechanize their operations.

As you'll know if you've ever bought a tractor, that mechanization was expensive,

and so many farmers went into debt to finance their expansion.

And then a combination of overproduction and low prices meant that often their farms were foreclosed upon.

And other signs of economic weakness appeared throughout the decade.

Like by 1925, the growth of car manufacturing slowed, along with residential construction.

And, worst of all was what noted left wing radical Herbert Hoover

labeled "an orgy of mad speculation" in the stock markets that began in 1927.

By the way I'm kidding about him being a left wing radical. Just look at him.

"By 1929, commercial bankers were in the unusual position of loaning more money for stock market

and real estate investments than for commercial ventures."[1]

I wonder if we would ever find ourselves in that position again. Oh, right, we did in 2008.

Anyway, it's tempting to see the stock market crash as the cause of the depression,

possibly because it turns American economic history into morality play,

but the truth is that the stock market crash and the depression were not the same thing.

A lot of rich people lost money in the market, but what made the Great Depression the Great Depression

was massive unemployment and accompanying hardship, and this didn't actually begin until, like, 1930 or 1931.

The end of 1929 was actually okay. Unless you were a farmer, or a stockbroker obviously.

So what did actually cause the Depression?

Well that's a big question and it's one that economists have struggled with ever since.

They want to find out so they can keep it from ever happening again. No pressure, economists.

Only 3% of Americans actually owned stock, and the markets recovered a lot of their value by 1930,

although they did then go down again because, you know, there was a depression on.

And even though big banks and corporations were buying a lot of stock,

much of it was with borrowed money, known as margin buying,

and all of that still was not nearly a big enough iceberg to sink the world's economy.

But if I had to name a single cause of the Great Depression, it might be America's weak banking system.

Although the Federal Reserve system had been created in 1913,

the vast majority of America's banks were small, individual institutions

that had to rely on their own resources. When there was a panic and depositors rushed to take the money out of the bank

-- like they do in the obscure arthouse movie Mary Poppins -- the bank went under if it didn't have enough money on reserve.

So in 1930, a wave of bank failures began in Louisville that then spread to Indiana,

Illinois, Missouri, and eventually Arkansas and North Carolina.

As depositors lined up to take their money out before the banks went belly up,

banks called in loans and sold assets. Ultimately this meant that credit froze up,

which was what really destroyed the economy. A frozen credit system meant that less money was in circulation,

and that led to deflation. Now you're probably thinking, "Big deal,

deflation, can't be as bad as inflation right?" No. Deflation is much worse,

as anyone who has ever slept on an air mattress knows.

When prices drop, businesses cut costs, mainly by laying off workers.

These workers then can't buy anything, so inventories continue to build up, and prices drop further.

Banks weren't lending money, so employers couldn't borrow it to make payroll to pay their workers

and more and more businesses went bankrupt leaving more and more workers unable to purchase the goods and services

So if we have to lay the blame for the Great Depression on someone, we can blame the banks,

which isn't completely wrong, and it gives us a chance to shake our fists at Andrew Jackson

whose distrust of central banking got us into this mess in the first place.

That's probably too simple, but the Federal Reserve does deserve a good chunk of the blame for not rescuing the banks

and not infusing money into the economy to combat this deflationary cycle.

Thanks, Thoughtbubble. So, economics fans out there might be saying,

"Why didn't the Hoover administration engage in some good old fashioned Keynesian pump priming?"

The thinking there is that if governments do large-scale economic stimulus and a bunch of infrastructure projects,

it can kind of create a bottom that stops the deflationary cycle.

And that does often work, but unfortunately the Hoover Administration did not have a TARDIS.

John Maynard Keynes' great work The General Theory of Employment, Interest and Money (he wasn't very good at titles)

wasn't published until 1936, when the Depression was well under way.

Venturing into the green nightmare of not-America for a moment, Herbert Hoover offered a global explanation

in his memoirs for the global phenomenon that was the Great Depression.

He claimed that its primary cause was World War One. And to be fair, the war did set the stage for a global economic disaster

because of the web of debts and reparations that it created.

Like, under the Versailles Treaty, Germany had to pay $33 billion in reparations mostly to France and Britain,

which it couldn't pay without borrowing money from ... American banks.

In addition the U.S. itself was owed $10 billion by Britain and France,

some of which those countries paid back with German reparations.

But then once American credit dried up, as it did in the wake of the stock market crash and the American bank failures,

the economies of Germany, France, and Britain also fell off a cliff.

And then with the largest non-U.S. industrial economies in total turmoil, fewer people abroad

could buy American products, or French wine, or Brazilian coffee,

and world trade came to a halt. And then when what the world really needed was more trade,

America responded by raising tariffs to their highest levels ever with the Hawley Smoot tariff,

The idea of the high tariff was to protect American industry,

but since Europe responded with their own high tariffs,

that just meant that there were fewer buyers for American goods, less trade, fewer sales, and ultimately fewer jobs.

So what did Hoover do? Not enough. It's important to remember that the American government is not just the President.