Australian History

Essay by PaperNerd ContributorUniversity, Master's September 2001

download word file, 6 pages 3.0

Nature: Also called the depression or slump of 1929, the economic slump in North America, Europe and other industrialised areas of the world began in 1929 and lasted until around 1939. It was the longest and most severe depression ever experiences by the industrialised Western World. The depression affected all areas of life, socially, economically and politically and had far reaching consequences and effects that were felt well into the future of the world's rehabilitation.

Origin The Great Depression, as such began with the catastrophic collapse of stock market prices on the New York Stock Exchange in October 1929. During the next 3 years stock prices continued to fall drastically in an action know as the "˜downward spiral' in economic activity, and by late 1932 stock prices had fallen by over 20% of their 1929 values. There were several "˜causes' of the great depression: 1. Unequal Distribution of Wealth and Income Despite rising wages overall, income distribution was extremely unequal.

Gaps in income had actually increased since the 1890s. The 1% of the population at the very top of the pyramid had incomes 650% greater than those 11% of Americans at the bottom of the pyramid. The tremendous concentration of wealth in the hands of the few meant that the American economy was dependent on high investment or luxury spending of the rich. However, both high spending and high investment are very susceptible to fluctuations in the economy; they are much less stable than people's expenses on daily necessities like food, clothing, and shelter. Therefore, when the market crashed and the economy tumbled, both big spending and big investment collapsed.

2. Unequal Distribution of Corporate Power From the late 1870s on, there had been an ongoing movement of consolidations and mergers. During World War I, many would-be competitors were merged...

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