… how much longer would the Great Depression have lasted before the US economy began to grow dramatically again, and what do you think would the lasting impact have been on the economy 70 years later? No this isn’t a homework assignment. Feel free to speculate to your heart’s content.
Wow. I thought about an answer for several minutes before concluding that you may have asked a nearly unanswerable questions. WWII changed the global course of history in so many ways, even incidental ones, that a world without it - let’s say Germany never militarized and slowly rebuilt itself as a non-threatening power, and Japan either stayed home or didn’t get so voracious that the western world cared about its conquests - would be a very, very different one indeed.
My haziest guess would be that with the great drought over, the midwest and farm states would return to economic health, there would have been some population flow back into the area, and technological growth would have been more erratic - maybe we would have gotten Dymaxion houses, flying cars of some sort and other extensions of 1930s tech, but generally less of it all.
In general, the social, economic and technological flow would be more steady from the 1920s through maybe the 1970s, by which time I think some of the advances driven by war efforts and postwar thinking would have arrived - transistors, advanced plastics, aircraft advances etc.
But beyond that… it’s as speculative as such thinking could be. Too many variables all tangled up with each other. Pick an end and pull…
I was trying to wrap my head around what would have happened in the US had WWII not generated all of that economic activity. Let’s ignore what was happening in the rest of world for a moment (I know that’s ludicrous but indulge me). Would the Great Depression have dragged on for another 10, 20 or 30 years in some form or another, or was the worst of it over by then and things were starting to pick up independent of the war effort?
So it’s 1940, and there is no great war on the horizon. Are things starting to improve economically for the US, or are we still looking at mass unemployment and tough times for the average American?
Nuclear weapons would have been discovered eventually, and, without Hiroshima and Nagasaki as examples, might have been used much more widely…
But, as for the economy, I think it would slowly have grown, both in the U.S. and worldwide. We’d have clawed our way back to prosperity, with some government involvement and much non-government involvement.
Something like the modern Federal Reserve system would have been put in place to keep another depression from happening. The gold standard would have been discarded.
Personally, I believe a “Great War” was inevitable. If it wasn’t Germany, it could have been Italy, or France, or Russia, or even the U.S. If not in 1940, then in 1960 or 1980. Blitzkrieg warfare is just too good a tool; someone would have used it.
My mom and dad grew up poor in the dust bowel of the 30’s and according to them the depression was over by 1940. Still they were living in a world that was gearing up for war so there was an effect. If Germany had only pointed it’s war machine towards Russia and Japan turned it’s attention to China and Asia we may very well be looking at very different world today one where Japan and Germany were economic powerhouses of a different nature.
Why, the New Deal would have certainly cured all of our economic woes.
Just needed more time. And more intervention.
Stringbean: Sarcasm? Why? The New Deal was working…slowly. In due course, the economy would have grown back to full strength. The New Deal accelerated the process…a little.
Yeah, if your leg was cut off, and all you have is a Band-Aid…you use the Band-Aid. It slows the bleeding…a little.
New Deal programs kept a lot of people going. People may have had make-work jobs, but they had jobs. A lot of people would have been much worse off without these programs.
The New Deal was working and the economy was recovering. You can make a good argument that World War II was just a new form of the same principle - a big government spending project that got the economy moving again. The government just switched from spending ten billion dollars a year on public work projects to spending fifty billion dollars a year on national defense projects.
This is correct. The war economy sped up the economic recovery, but we would have gotten there. It takes a long time to rebound from that sort of hit. Look at the aftermath of the recession of 2008. While things are better now, economists back then were predicting it would be at least ten years to full recovery, and that seems to be on track. If it hadn’t been for the bailouts and the stimulus package from the government, things would have gotten much, much worse very quickly.
John Maynard Keynes famously implied (probably hyperbolically) that the Great Depression would last for 400 years.
As
[quoted by George Will]
(http://www.washingtonpost.com/wp-dyn/content/article/2008/11/28/AR2008112802370.html) (a more-or-less randomly chosen cite, out of many that Google found):
(Keynes was actually commenting on his economic theory, which held that an economy could fall into a state of very low activity and become stable there, contradicting the widely accepted theory of the day which held that to be impossible.)
I’ve heard that argument before. A nasty potential scenario being that nuclear weapons are invented, a good sized arsenal of them is built up by several nations, and only then does war break out between two or more nuclear powers and there’s a full scale nuclear exchange because there’s not the same fear of them that Hiroshima and Nagasaki created.
I think that probably what would happen technologically is a slower advancement in some ways in the short run, but faster advancement in the long run. Wars do spur technological advancement in some ways in the long run, but they hurt it in others. They kill the people who would otherwise make those advancements, impoverish nations so they can’t afford new technology, draw funding and expertise into more short ranged research with narrower applications, get a great deal of knowledge declared secret and so on.
Interesting thread but all speculation of course. One thing that is not generally realized is that there was a second depression in 1937. What happened was the “adults” prevailed on Roosevelt to try to balance the budget. When he did that, the second dip happened. Without the economic activity occasioned by the start of the war in 1939, it is not clear that the depression would have been lifting in 1940. During the war, the budget went out the window and the depression ended. At the end of the war the accumulated debt was something like 125% of the GNP. Then very high taxes were brought in (the maximum rate was 91%) and between paying of the debt and the growth of the GNP, that ratio was brought way down (I think to around 40%, although I could be wrong) and general growth of the economy was sustained until the 1980s. At that point, things changed and all productivity gains went to the top 3% (see the current Cecil column).
What all this means to me is that Keynes was right. Run deficit budgets in bad times and surpluses in good times. Keynes was channeling the biblical Joseph and I call myself a Josephian, economically.
On another topic, I don’t think atom bombs would have come without war. It took a massive effort, not to mention expense, and would not have happened without wartime necessity. Atomic power? Maybe, but not for a long time.
I think without WWII, there’s a good chance the European colonial empires would still be in existence.
Very little would be different. International borders in Europe are now pretty much the same place they were before the war, and each of those countries has developed their economies commensurate with their potential. Globally, colonialism would still have come to an end when the time was ripe.
Losing the war seems to have done very little to impede the development of Germany and Japan, which went ahead and became great economic successes anyway, and did so very quickly.
It’s impossible to prove or disprove this assertion.
I’m pretty sure that without the devastation in Europe, the subjugation of Japan, and the abandonment of colonialism (to the extent that WWII caused or hastened that), the American Century would never have happened - without that enormous global vacuum, the U.S. couldn’t have maintained the economic growth that fueled its expansion into damn near everything.
A butterfly fluttering may make next year’s storm veer in a different direction. W.W. II was more than a butterfly flutter! – guesses about an alternative universe would be difficult.
However, OP’s underlying premise seems to be that the U.S. economy had not recovered before going to war in late 1941. That is contrary to the facts of the U.S. economy trend during 1920-1940.Look at a longer time-line if you prefer. The huge U.S. war effort did lead to a boom, of course, but the idea that FDR’s economic policies were unsuccessful before 1941 is just partisan nonsense.
Um, BS. I think there is no question that FDR’s policies had mixed results (and some were failures) but that the general effort of economic support after the collapse of the private sector was a boon to both individuals and the country as a whole.
It is only neocon revisionism that says otherwise, in attempting to prop up their current platform of eliminating social and individual support in favor of choices that benefit corporate and wealthy individuals.
Whichever side you choose, it is not “impossible to prove” in the sense that the OP’s question is impossible to answer.
I’ve always wondered how over populated Europe would be without the WWs’ herd thinning.
Best typo of the week. 