The prospect of passage of the tariff bill in 1928 set off the speculative stock market boom. By 1928 Senator Reed Smoot, with the support of Hoover, proposed restricting access to the U.S. Eventually, aggregate income failed to keep pace with productivity, not because profits rose substantially, but because wages failed to rise. This brought conditions of “oversupply,” initially hidden by labor hoarding. The electrification of the assembly line in the 1920s (a process led by the Ford Motor Company) substantially raised productivity and led to an era of mass production.
The electrification of industry (“the most important process innovation in this century”), because it set the process in motion, is actually the villain of the piece. The chain of logic is clearly defined but long. The treatment of the period thus fits within the basic approach economic historians such as Michael Bernstein ( The Great Depression: Delayed Recovery and Economic Change, 1929-1939, Cambridge University Press, 1987) and, more recently, Rick Szostak ( Technological Innovation and the Great Depression, Westview Press, 1995) have taken. The fundamental argument is that productivity-enhancing structural changes in industry in the 1920s set the stage for the events that were to follow. There is much that is outrageous, along with occasional insights that warrant further study. In fact, this is a highly idiosyncratic treatment that explores a number of events of the ‘teens, 20s, and 30s.
At least he didn’t claim to have written “the” definitive account. Hausman, Department of Economics, College of William and Mary.īeaudreau asserts boldly on the first page of his book that his purpose is to “provide a definitive account of the Great Depression and the events leading up to this cataclysmic event” (p. Beaudreau, Mass Production, the Stock Market Crash, and the Great Depression: The Macroeconomics of Electrification.
Mass Production, the Stock Market Crash, and the Great Depression: The Macroeconomics of Electrification Author(s):īernard C.
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