The Great Depression: Delayed Recovery and Economic Change in America, 1929–1939

Studies in Economic History and Policy: USA in the Twentieth Century

by Michael A. Bernstein

By examining the uneven fate of manufacturing industries during the 1930s, Michael Bernstein presents a powerful new interpretation of the Great Depression. The depth and persistence of the slump, he argues, cannot be explained by cyclical theories alone, but by the conjunction of a crisis in financial markets with a long-run transformation in the kinds of goods and services required by firms and households. By focusing on evidence from specific industries, Professor Bernstein provides a more detailed picture of what happened to the American economy in the thirties that was so different from previous downturns.

288 pages, Paperback

First published November 27, 1987

Reviews

[Frank Stein · Rating 2 out of 5]

Despite beginning with a useful and interesting survey of the history of economic theorizing about the Depression, the majority of this book is taken up with an ill-considered attempt to explain the duration of the Depression as part of a secular move away from old industries (such as textiles and coal) to new (such as automobiles and packaged food). Although the myriad of tables Bernstein provides do show that some industries grew during this dark economic period while many shrank, these divergences hardly explain the lack of overall economic growth or the persistence of unemployment during the 1930s.

In many ways this book demonstrates the classic follies of economic history as it is carried out in history departments. It shows a lack of concern with the work done by typical economists in the field, and has no overarching theoretical framework to explain its causations. In the end, Bernstein tries to resuscitate the discredited theories of Rexford Tugwell, the FDR Brain-Truster who thought the Depression was part of a "disproportionality crisis," that caused some industries to over- or under-invest in their markets. He sought a grand, government-directed, though always elusive, "balance" between all imaginable industrial sectors.

Though this is interesting as part of the intellectual tenor of the era, the ideas themselves are best left in the dustbin of history.