The Great Crash of 1929

John Kenneth Galbraith's The Great Crash: 1929

John Kenneth Galbraith's book The Great Crash: 1929 claims that the depression of 1929 was a direct result of the miscalculations of the financial analysts and the other brokers which caused the crash of the stocks. He states that these actors of the economic field had a direct involvement in the stock market and had become too greedy to actually see what was happening to the market around them-too greedy to actually fear the recuperation's of what was easily predictable as the downfall.

The Great Crash of 1929 was one which shook the very foundations of the economic theories that were prevalent in the past and forced the society to realize that there was something fundamentally wrong when our basic concepts were proven so drastically wrong. John Kenneth Galbraith like many other economists remains fascinated with the Crash of 1929. As an economist of contemporary times he wrote a study of the Great Crash of 1929, and in it ridiculed the predictions presented by many scholars of 'an end to the era of boom and bust'. Today, Gailbraith is more than 90 years old and yet remains wizened to a point that as a Harvard professor his opinion counts in more than just his home. Gailbraith compared the contemporary markets to that of the past and suggested that the economists were merely busy in "another exercise in speculative optimism." He predicted that this high would soon cause another recession mirroring the 1929 one we saw in the past. In his book we find remarkable similarities of our situation with the economic situation of the past and we are then forced to accept his condemnation of the capitalistic structure of economics. He wrote in The Crash of 1929, "...To speak out against madness may be to ruin those who have succumbed to it. So the wise in Wall Street are nearly always silent. The foolish thus have the field to themselves. None rebukes them." (page 27)

With these words he lays the foundations for his critique of the economic condition of the past and present. He suggests that the financial analysts are so consumed with their own profits and loss that they would rather suffer en mass than accept that there is something inherently wrong with the system that they are promoting.

John Kenneth Galbraith's The Great Crash, 1929 is then a book that presents the mistakes of the past so that the people of toady are able to understand the situation that they find themselves in. He writes that we are merely bemusing ourselves if we suggest that the peak of our economy that we have will never fall. That he claims is what the gurus of the past said.

Galbraith wrote again "On the whole, the great stock market crash can be much more readily explained that the depression that followed it. And among the problems involved in assessing the causes of depression none is more intractable than the responsibility to be assigned to the stock market crash. Economics still does not allow final answers on these matters. But, as usual, something can be said." (page 188)

He relates clearly that though the Economists can predict the depression that followed they were unwilling to understand it. Had they been thinking rationally they would have realized that the high strung figures that were being rationalized on Wall Street were a mere mirage and bespoke of the fall to come. Galbraith wrote the book as an answer to the highly speculated question, "What caused the Great Depression?" His concluding thoughts then are, that though other factors might have caused or prolonged the depression, but the leading role was related to the crash itself. "There seems little question that in 1929, modifying a famous cliche, the economy was fundamentally unsound. This is a circumstance of first-rate importance... " (page 197)