Friday, April 15, 2011
The Great Depression's Silver Lining
We’ve all heard the old chestnut that if your neighbor is unemployed, we’re in a recession; if you’re unemployed, we’re in a depression. Trite as that is, it drives home the point that no matter what the economists say, economics is a personal matter, and we filter the big picture through the lens of our own experience.
I was reminded of that earlier this week when I went up to Santa Clara University to interview Alexander J. Field, a professor of economics who has written a somewhat revisionist book, A Great Leap Forward: 1930s Depression and U.S. Economic Growth. (It’s published by Yale University Press and available at Amazon.com.)
Field’s central argument, and it’s pretty convincing, is that the Depression years were paradoxically a time of great economic suffering and great technological and organizational innovation. He contends, in fact, that the 1930s were the most technologically progressive decade of the twentieth century because the advances occurred in so many areas.
Consider just a few: The invention of television, which made its debut at the 1939-40 World’s Fair in New York; dramatic gains in aviation; the development of a national infrastructure, including roads, bridges and tunnels (we haven’t built a large suspension bridge in this country since Verrazano Narrows in 1964). Within that decade, movies went from being black and white, stagey productions with scratchy sound to lavish, Technicolor productions like Gone With the Wind and The Wizard of Oz. Automobiles went from being primitive, boxy rattletraps to streamlined machines with radios, heaters, V-8 engines and automatic transmissions.
Despite the common impression that no one was spending money back then, there was a strong market for the new technology. In 1929, only 3 percent of American households had a refrigerator; by 1941, 44 percent did. When nylon was created in the late 1930s, 63 million pairs of stockings were sold in the first year.
A late friend of mine, who grew up in the Depression years, told me on more than one occasion that if you had a job in those times (and in the worst of them, three quarters of the people did) you were all right because everything was cheap. Field says the economic data support that, and during the 1930s real wages went up for most people who had jobs.
Plenty of businesses were doing well. Newspapers and magazines were thriving; the number of scientists employed in corporate R&D quadrupled between 1929 and 1941; radio created lots of good jobs and wealth in the upper echelons. Where you were mattered, too. Hollywood was a boomtown for most of the decade, and so were the towns near major construction projects.
In 1938, when Shasta Dam was being built, the nearby county seat of Redding had 8,000 people and three daily newspapers. The John P. Scripps newspaper group, for which I later worked, moved in to start a fourth, The Record. It was profitable within months and is the newspaper that survives in that area today. That illustrates another point: Depression or no, people were starting businesses when they saw an opportunity.
Sometimes prosperity struck unexpectedly. Leonard Bernstein’s father invested heavily in a beauty-supply business just before the 1929 stock market crash. He figured he was ruined, but it turned out that no matter how tough times were, women set aside a bit of money to get their hair done. By the end of the 1930s, he was a wealthy man.
Economic misery was the big story of the Great Depression, but, as Field reminds us, the big story isn’t the whole story. It makes you wonder what revisionist historians will be writing about today’s economy 75 years from now.