Coolidge Prosperity and the Great Depression

Abstract

The Great Depression of the United States from 1929 to 1933 was the longest, deepest and most extensive depression in the 20th century. This economic crisis affected the entire capitalist world. At first, it gave a false impression of American prosperity. The average industrial production index for the United States was only 67 in 1921; however, it increased to 110 in July 1928 and 126 in June 1929. At that time, economists, government leaders and people all believed in their bright future. The American financial sector, however, collapsed on October 24, 1929, and the stock fell from its peak to its depths overnight. The price dropped too quickly to keep up with the stock market's automatic display, shattering the aspirations of countless Americans to lead happy lives. The fundamental conflict in the capitalist system—between the socialization of production and private ownership of capitalist means of production—is what led to the Great Depression. Along with causing widespread, long-term unemployment, it also changed social norms, toppled the established order, aided the rise of the Nazis and the Fascists, and ultimately sparked the start of the Second World War. The purpose of this paper is to remind people of the history of the Great Depression and help avoid the risks that China may face in the process of economic development.