The stock market crash of 1929, which marked the beginning of the Great Depression of the United States, came directly from wild speculation which collapsed and brought the whole economy down with it. But, as John Galbraith says in his study of that event {The Great Crash}, behind that speculation was the fact that "the economy was fundamentally unsound." He points to very unhealthy corporate and banking structures, an unsound foreign trade, much economic misinformation, and the "bad distribution of income" {the highest 5 percent of the population received about one-third of all personal income}. A socialist critic would go further and say that the capitalist system was by its nature unsound: a system driven by the one overriding motive of corporate profit and therefore unstable, unpredictable, and blind to human needs. The result of all that: permanent depression for many of its people, and periodic crises for almost everybody. Capitalism, despite its attempts at self-reform, its organization for better control, was still in 1929 a sick and undependable system. After the crash, the economy was stunned, barely moving. Over five thousand banks closed and huge numbers of businesses, unable to get money, closed too. Those that continued laid off employees and cut the wages of those who remained, again and again.
( Howard Zinn )
[ A People's History of the ]
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