HISTORIOGRAPHY OF THE WALL STREET CRASH AND THE GREAT DEPRESSION

Learning Objectives

• Continue to develop understanding of the reasons for the Wall Street Crash and the Great Depression

• All students will learn about Keynesian and Monetarist historiography of the Great Depression and the Wall Street Crash

• Some students learn about additional explanations such as those of Bernstein, Kindelberger and Kennedy

Learning Outcomes

• I will know more about the Wall Street Crash and the Great Depression

• I can explain the monetarist explanation of the Wall Street Crash and the Great Depression

• I can explain other interpretations of the reasons for the Wall Street Crash and the Great Depression

1. Causes of the Great Depression-the Keynesian View

• Keynes argued that the government could stimulate the economy by spending money

• Public works projects• Taxation• By spending money the government can

create jobs; workers with jobs created by the government spend money; this creates more jobs and so on

2. Causes of the Great Depression-the Monetarists

• The key monetarist is Milton Friedman• Monetarists argue control of the money supply is

important• Failure to control the supply of money in the economy

can create economic depression• You are head of a bank• You have one million dollars-how likely are you to loan

money?• You each have a trillion dollars-how likely are you to

loan money?

Historiography of the Great Depression

• Read the sources and use the table to make notes on the different historians and economists explanations for the Great Depression and the Wall Street Crash

EXTENSION: 1. COMPLETE SOURCES 7-92. IF YOU FINISH WRITE A

PARAGRAPH ON THE HISTORIAN YOU MOST AGREE

WITH3. WRITE A PARAGRAPH ON

WHAT YOU HAVE LEARNED IN TODAY’S LESSON

Historian Names Interpretation-Monetarist/Keynsian/Other

Key Quotes Summary Score (10)

FRIEDMAN AND SCHWARTZ

PETER TEMIN

JIM POWELL

ANTHONY BADGER

FRIEDMAN AND SCHWARTZ

BERNSTEIN

KINDELBERGER

KENNEDY

MONETARIST

MONETARIST

MONETARIST

KEYNSIAN

KEYNSIAN

OTHER

OTHER

OTHER

“The Depression, they claimed, was a result of a drastic contraction of the currency”

The Depression was caused by a failure to control the supply of money-Fed blamed

“The New Deal never ended the Depression because it did not spend enough”

The government did not intervene and spend enough money

“If nothing else had happened there would have been a depression because of the severe monetary contraction”

The Depression was caused by monetary contraction

“lack of demand was not offset in the early years of the Depression by any compensatory spending”

Government did not spend enough money to stop the Depression

“the Federal Reserve Board in Washington came to dominate monetary policy, with disastrous results”

Federal Reserve was to blame with its monetary policy

“the timing of the collapse”The timing of the collapse meant there were no industries to provide new jobs

“The world economic system was unstable unless some country stablised it”

The USA failed to provide a world economic lead-it could have devalued

“American banks were rotten”

American banks were unregulated and were to blame

Who am I?I am one of the original

monetarists. In my book, The Monetary History of

the United States, I argued that it was a lack of money

in the system that led to the Wall Street Crash and

the Great Depression. I blamed the Federal Reserve

for this

ANSWER: MILTON FRIEDMAN

Who am I?

In my book ‘Did Monetary Forces cause the Great Depression’ I

argued that the Great Depression was caused by the governments failure to spend money to create

demand in the economy

ANSWER: PETER TEMIN

Who am I?

In my book ‘The New Deal: The Depression Years’ I argued that

the Great Depression was caused by mal-distribution of income and flaws in the banking system. The government should have spent

money but didn’t.

ANSWER: ANTHONY BADGER

Who am I?

I argued the problem was timing. In 1929, the car industry was no

longer creating new jobs and new industries like aviation were not

growing fast enough.

ANSWER: MICHAEL BERNSTEIN

Who am I?

I argued the issue was the failure of the USA to become the world economic leader in my book ‘The

World Depression’

ANSWER: CHARLES KINDELBERGER

Who am I?

The problem was the banks-there were far too many and they

weren’t regulated. Banks did not have enough money-they were

undercapitalised

ANSWER: DAVID KENNEDY

ReflectionLearning Outcomes Red (not

achieved)Amber (working towards)

Green (achieved)

I will know more about the Wall Street Crash and the Great Depression

I can explain the monetarist explanation of the Wall Street Crash and the Great Depression

I can explain other interpretations of the reasons for the Wall Street Crash and the Great Depression