The fashion for calling our current economic climate a “second Great Depression” or the second Great Depression or, following the DotComish naming of community organizer/grizzly bear wrestler John Robb, D2, is more evidence of the fundamental lameness of American LegacyThinkâ„¢.
The vacuum of imagination revealed in American naming of current events is staggering. Take the initial name of this crisis: “global financial crisis”. That name is little more than lexicographic inertia left over from the “global” naming fad of the 1990s: “globalization”, “global war on terror”, “global climate change”, “global village”, and other such rubbish. Compare this to the vivid nineteenth century genius for retrospective naming of historical episodes revealed in names like the “Hundred Years War“, “Pilgrimage of Grace“, or “Rough Wooing“.
Even the most commonly advanced alternative to “global financial crisis” is lame: “great recession”. Recession is a gray word; it’s more accounting identity than description. It’s no more exciting than its gray dawn. Imagine: somewhere deep in the bowels of the sinister National Bureau of Economic Research, an econometrician checks off a few boxes in a spreadsheet and finds with barely concealed glee that gross domestic product has declined for two consecutive quarters.
This glee is why econometricians have been a barely tolerated and often persecuted minority of the population throughout history.
If we insist on retelling history as a series of sequels, and that is the habit of this decadent age, then we are currently living through the third Great Depression. The first episode of economic contraction called the Great Depression by its contemporaries was the period of economic contraction from the Panic of 1873 to c.1896. Some historians, if they believe in it, now call this period the “Long Depression” to distance it from its more vivid sequels. This follows the logic used to name Batman Returns, Batman Begins, and The Dark Knight. However, the Long Depression is too vague. We should call this period Great Depression I or D1.
D2 is easy: Great Depression II was the definitive macroeconomic collapse, lasting from 1929 to c. 1944. This would leave the current economic unravelling we’re living through Great Depression III or D3.
History without hip catchy abbreviations may be cursed to decay into a dreary march of endless retreads. Unconscious human masochism may have made us like D2 so much that we decided to make a sequel. Human experience may be cursed to occur first as tragedy, second as farce, and third as a whimper.
Then we have the abortive Panic of 1907 and the depression of 1920-21. The difference is that the economic collapse was arrested by the prompt and appropriate action by people who knew (or stumbled into) the right response. In 1907, JP Morgan put all the bankers into his library, locked the door and waited until a solution was found. In 1920, Harding and Coolidge were elected and their policies, basically the withdrawal of government from the market economy, promptly led to recovery.
Serious economic mistakes were involved in the Panic of 1873, including a deflation and the bull market in railroad bonds that became a bubble. I think we can attribute the 1932 depression and the depression of 2011 to ham handed behavior by an administration that was overly ideological and had little sense of economic forces. Both destroyed business confidence by arbitrary regulation.
Was D1 a period of rapid productivity growth, like D2 was?
I like to call the fall of 2008, the Panic of 2008.
Lex if 1876 — 1896 was a depression, it was also a time of incredible invention.
1876
Alexander Graham Bell patents the telephone.
Nicolaus August Otto invents the first practical four-stroke internal combustion engine.
1877
Thomas Edison invents the phonograph.
1878
Sir Joseph Wilson Swan invents a practical and longer-lasting electic lightbulb.
1884
George Eastman patents paper-strip photographic film.
H. de Chardonnet invents rayon.
Charles Parson patents the steam turbine.
1885
Hiram Maxim invents the machine gun.
Karl Benz invents the first practical automobile to be powered by an internal-combustion engine.
Gottlieb Daimler invents the first gas-engined motorcycle.
1886
Josephine Cochrane invents the dishwasher.
Gottlieb Daimler builds the world’s first four-wheeled motor vehicle.
1887
German, Heinrich Hertz creates and detects radio waves.
Rowell Hodge patents barbed wire.
1888
Charles Martin Hall opens the first large-scale aluminium production plant in Pittsburgh
John Boyd Dunlop patents a commercially successful pneumatic tire.
Nikola Tesla invents the AC motor and transformer.
1892
Rudolf Diesel invents the diesel-fueled internal combustion engine.
Sir James Dewar invents the Dewar flask or vacuum flask.
I think it fair to say that the technology that drove industry up to 1950 was invented then.
“the vivid nineteenth century genius for retrospective naming of historical episodes”: the War of the Roses was another (Sir Walter Scott, allegedly).
How about “The Renaissance” – when was that named?
Inasmuch that the current economic conditions were caused by progressives, I call this era, the Great Progression.
Meade has an essay that describes the current world wide crisis as the final stage of the progressive social order that became powerful in the late 19th and early 20th centuries. While I may disagree with some of his analysis, this seems basically correct.
All around the world, the entitlement state is approaching a point of collapse, as the IOU’s written by past social theorists and their political acolytes come due.
It is not a depression or recession in the typical sense of a phase or cycle in the economic/political system that must be endured until it can work itself out. I believe we are facing a much more fundamental situation—the model for our social and economic structure has run its course and must be greatly revised if we are to continue as a functioning national entity.
We have seen the collapse and disintegration of the imperial model at the close of WW1, and the defeat and disintegration of the more threatening totalitarian/collectivist models as a result of WW2 and the Cold War. This is the next stage, as the statist/technocratic progressive state reaches its maturity, and all the IOU’s written over the last century of social legislation, economic regulation, and, recently, environmental costs, come due.
The solution, as it has always been, is for the concept of individual rights and liberties, and the strict limitation of the powers of the state, to take charge of the intellectual and moral landscape.
The movement toward such a formulation has only just begun, much to the consternation and enmity of the acolytes of the statist model. This process will be a long, complex, and not always peaceful, march through the various structures of our society to reduce political power and increase individual autonomy in all the many ares of life in which the opposite has been occurring for much of the past century.
While it may be grueling and frustrating work, nothing is more important to our national life or essential to the maintenance of our position in the world.
The period in American history following Andrew Jackson’s closure of the Second Bank of the United States was also a long depression.
While the current Federal Reserve system is not without its faults and shortcomings, killing it as Ron Paul seems to advocate would replicated Jackson’s error in removing a useful financial institution and also percipiate a further economic contraction.
I would be interested in proposals as how to replace or improve the Fed. So far, I’ve seen or heard nothing realistic.
I’m sure historians 300 years from now will find a fitting name for our current ordeal. For us, however, it is not history yet.