# Economics question: Great Depression and Unemployment **URL:** \ **Category:** Factual Questions\ **Created:** [March 8, 2010, 11:44pm UTC](https://boards.straightdope.com/t/economics-question-great-depression-and-unemployment/531782 "2010-03-08T23:44:39Z")\ **Posts on this page:** 11\ **Page:** 2
**Author:** ![Exapno\_Mapcase](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/exapno_mapcase/32/1051_2.png) [@Exapno\_Mapcase](https://boards.straightdope.com/u/Exapno_Mapcase)\ **Post date:** [March 9, 2010, 2:57am UTC](https://boards.straightdope.com/t/economics-question-great-depression-and-unemployment/531782/21 "2010-03-09T02:57:11Z")
I don’t have Lords of Finance at hand at the moment, but I remember it giving some extremely high unemployment figures for various eastern European countries. ---
**Author:** ![Tom\_Tildrum](https://avatars.discourse-cdn.com/v4/letter/t/e95f7d/32.png) [@Tom\_Tildrum](https://boards.straightdope.com/u/Tom_Tildrum)\ **Post date:** [March 9, 2010, 5:06am UTC](https://boards.straightdope.com/t/economics-question-great-depression-and-unemployment/531782/22 "2010-03-09T05:06:18Z")
Perhaps worth noting too the monetary side of things: the Fed’s tight monetary policy during this period helped to stifle business investment and hence choked off job recovery. ---
**Author:** ![Captain\_Amazing](https://avatars.discourse-cdn.com/v4/letter/c/6de8d8/32.png) [@Captain\_Amazing](https://boards.straightdope.com/u/Captain_Amazing)\ **Post date:** [March 9, 2010, 5:09am UTC](https://boards.straightdope.com/t/economics-question-great-depression-and-unemployment/531782/23 "2010-03-09T05:09:58Z")
That’s possible. The authors just looked at Australia, Belgium, Canada, Denmark, France, Germany, the Netherlands, Norway, Sweden, the UK, and the US. ---
**Author:** ![ralph124c](https://avatars.discourse-cdn.com/v4/letter/r/8797f3/32.png) [@ralph124c](https://boards.straightdope.com/u/ralph124c)\ **Post date:** [March 9, 2010, 4:15pm UTC](https://boards.straightdope.com/t/economics-question-great-depression-and-unemployment/531782/24 "2010-03-09T16:15:40Z")
I think the 1930’s depression was much worse than any previous-especially in the USA. The reason for this was that, previous to 1930, most people had a family farm to fall back on. By the 1930’s, a huge number of people had abandoned their farms, and moved to the cities (to take industrial jobs). When the plants closed down, there was nowhere to go (a small number of laid-off factory workers made an attempt to go back to the land-subsistence farming would at least keep you alive). ---
**Author:** ![puddleglum](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/puddleglum/32/137_2.png) [@puddleglum](https://boards.straightdope.com/u/puddleglum)\ **Post date:** [March 9, 2010, 6:31pm UTC](https://boards.straightdope.com/t/economics-question-great-depression-and-unemployment/531782/25 "2010-03-09T18:31:54Z")
The Great Depression was caused by a tightening of the money supply by about one third that caused deflation. Because wages are sticky deflation causes unemployment. The unemployment eventually causes wages to fall and employment then goes up again. Hoover thought that low wages and unemployment were causing the Depression instead of being a symptom, so he tried to keep wages up and unemployment down. From a paper in the national bureau of economics research journal by Prof. Ohanion: > [@](#): > > In November, 1929, Hoover met with the leaders of the major industrial firms in manufacturing, utilities, and transportation at the White House. Hoover presented his program for raising wages and work-sharing to avoid firm-labor conflict that he anticipated would arise. Hoover informed industry that they were to bear the cost of a recession by securing from them an agreement to maintain or raise nominal wage rates, and to engage in work-sharing. In return, he secured an agreement from labor to not strike and to not demand further wage increases. This program is clearly consistent with Hoover’s preferences for fostering high real wages, supporting unions, and reducing the workweek…President Hoover asked industry to maintain or increase current wages, as this would help keep the industrial peace: "…to maintain social order and industrial peace…a fundamental view (is) that wages should be maintained for the present…that the available work should be spread by shortening the work week…the industrial representatives expressed major agreement…the same afternoon I conferred with the outstanding labor leaders and secured their adherence to the program…this required the patriotic withdrawal of some wage demands.. Also at the same time the Smoot-Hawley tariffs caused large increases in the amount of farm labor unemployment. As to other countries experience of the Depression, most countries went off the gold standard before the US did. How fast the countries changed their monetary policy is a much better variable in determining how fast they came out of the depression than employment policy is. ---
**Author:** ![flodnak](https://avatars.discourse-cdn.com/v4/letter/f/838e76/32.png) [@flodnak](https://boards.straightdope.com/u/flodnak)\ **Post date:** [March 10, 2010, 12:15pm UTC](https://boards.straightdope.com/t/economics-question-great-depression-and-unemployment/531782/26 "2010-03-10T12:15:14Z")
> [@Captain\_Amazing](#): > > That’s possible. The authors just looked at Australia, Belgium, Canada, Denmark, France, Germany, the Netherlands, Norway, Sweden, the UK, and the US. …and from what I’ve been able to find out, unemployment in Norway for instance never got higher than about ten percent. (Which is still bad, particularly if your household happens to be in that ten percent.) However, a large number of people were still employed in the primary sector at that time. A farmer isn’t really unemployed if he still has his land, and a fisherman hasn’t really lost his job if he can hold on to his boat. That doesn’t mean it was at all easy for these people to keep their families fed, clothed, and housed. The economic crisis was still very real. Older Norwegians who can still remember those times just talk about the “Interwar Years” _(mellomkrigstiden)_ as a single historical period - and the whole thing was pretty bad. There are no memories of a Great Gatsby-ish Roaring Twenties around these parts. Oh, yeah, and then came the war, and that was worse. No wonder older Norskies love to talk about the Fifties so much. ---
**Author:** ![monavis](https://avatars.discourse-cdn.com/v4/letter/m/e0b2c6/32.png) [@monavis](https://boards.straightdope.com/u/monavis)\ **Post date:** [March 10, 2010, 1:29pm UTC](https://boards.straightdope.com/t/economics-question-great-depression-and-unemployment/531782/27 "2010-03-10T13:29:34Z")
I lived through the great Depression. We were a family of 10 at that time,had 14 before it was over! we moved 5 times before I was 5,we ended up living with another person’s kids as their father was in jail. WE were very crowded but we were warm. The government gave everyone some canned meat, rice, powdered eggs, powdered milk, flour, peanut butter, and navy beans. My older brothers went to CCC camps, and my Father worked digging ditches for the county to earn the rent money. We had no electricity so didn’t have those bills to pay. The house was heated with wood stoves. People lived a lot simpler life in those days so it wasn’t as hard on them as on some. Some people had taken out loans on their cattle etc. and lost all of that. Most people had lived on what they made and so wasn’t as in debt as some are now. It wasn’t a disgrace to be poor but a person was honored for being honest and hard working. One wasn’t looked up to for having a lot of riches. Honesty counted more than that. Now people look up to people like “The Donald” even though he has gone bankrupt in some businesses, and we know a business man near us who has gone bankrupt several times in the past 58 years. It is easier to eat beans when you don’t have to, than when you have to. ---
**Author:** ![JoelUpchurch](https://avatars.discourse-cdn.com/v4/letter/j/f05b48/32.png) [@JoelUpchurch](https://boards.straightdope.com/u/JoelUpchurch)\ **Post date:** [March 10, 2010, 5:45pm UTC](https://boards.straightdope.com/t/economics-question-great-depression-and-unemployment/531782/28 "2010-03-10T17:45:59Z")
> [@code\_grey](#): > > 1. there is appreciation of the value of vocational training as the route to a better life. One of the characters, the dreamer guy who eventually abandoned his wife and baby, liked to talk about how he will make something of himself by learning electronics “from books”, like via distance ed in our terms (needless to say, it’s all BS). Not that much BS. I remember my father telling me about learning Algebra from ICS for a job as an electrician in the thirties. I guess it worked, since he got a job for the railroad as an electrician. I checked and ICS still has a lot of skilled trade courses. [http://www.icslearn.co.uk/vocational-courses/construction-trade-engineering](http://www.icslearn.co.uk/vocational-courses/construction-trade-engineering) ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [March 10, 2010, 6:21pm UTC](https://boards.straightdope.com/t/economics-question-great-depression-and-unemployment/531782/29 "2010-03-10T18:21:39Z")
> [@code\_grey](#): > > the Nazi labor policy of keeping wages low and benefiting the corporations was exactly what drove the economic expansion and full employment over there. And your point is? You think that a job with low wage is worse than no job at all? Nazis were particularly popular with the younger people because they were precisely the ones who benefited from those lower paid, more plentiful jobs which wouldn’t have been there if wages and social protections were higher. Remind me how Nazi economic policy turned out in the end. ---
**Author:** ![Khendrask](https://avatars.discourse-cdn.com/v4/letter/k/3e96dc/32.png) [@Khendrask](https://boards.straightdope.com/u/Khendrask)\ **Post date:** [March 10, 2010, 6:34pm UTC](https://boards.straightdope.com/t/economics-question-great-depression-and-unemployment/531782/30 "2010-03-10T18:34:32Z")
> [@RickJay](#): > > Remind me how Nazi economic policy turned out in the end. It wasn’t all that good… > **[The Nazis and the German Economy - History Learning Site](https://www.historylearningsite.co.uk/nazi-germany/the-nazis-and-the-german-economy/)** > > Germany’s economy was in a mess when Hitler was elected Chancellor in January 1933. Hitler and Nazi propaganda had played on the population’s fear of no hope. Unemployment peaked at 6 million during the final days of the Weimar Republic – near enough... And by the end of the war, Germany was once again in a complete shambles, with currency worth virtually nothing. ---
**Author:** ![md2000](https://avatars.discourse-cdn.com/v4/letter/m/73ab20/32.png) [@md2000](https://boards.straightdope.com/u/md2000)\ **Post date:** [March 10, 2010, 6:54pm UTC](https://boards.straightdope.com/t/economics-question-great-depression-and-unemployment/531782/31 "2010-03-10T18:54:34Z")
> [@RickJay](#): > > Remind me how Nazi economic policy turned out in the end. Hmmm… They got the whole country (OK, the western 3/4) rebuilt from the ground up for free with American dollars and are now one of the dominant economies of Europe and the world? [Previous page](https://boards.straightdope.com/t/economics-question-great-depression-and-unemployment/531782.md?page=1)