The Great Depression: Causes and Effects

The Great Depression: An Overview

The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in 1930 after the passage of the Smoot-Hawley Tariff bill (June 17), and lasted until the late 1930s or early 1940s. It was the longest, most widespread, and deepest depression of the 20th century.

In the 21st century, the Great Depression is commonly used as an example of how far the world's economy can decline.

Origins and Timing

The depression originated in the U.S., after the fall in stock prices that began around September 4, 1929 and became worldwide news with the stock market crash of October 29, 1929 (known as Black Tuesday).

Economic and Social Impact

The Great Depression had devastating effects in countries rich and poor. Personal income, tax revenue, profits, and prices dropped, while international trade plunged by more than 50%, due in large part to the Smoot-Hawley Tariff. Unemployment in the U.S. rose to 25%, and in some countries rose as high as 33%.

Effects on Industries and Farming

Cities all around the world were hit hard, especially those dependent on heavy industry. Construction was virtually halted in many countries. Farming and rural areas suffered as crop prices fell by approximately 60%. Facing plummeting demand with few alternate sources of jobs, areas dependent on primary sector industries such as cash cropping, mining, and logging suffered the most.

Path to Recovery

Some economies started to recover by the mid-1930s. In many countries, the negative effects of the Great Depression lasted until the start of World War II.

Cultural Legacy: Literature

The Great Depression has been the subject of much writing, as authors have sought to evaluate an era that caused financial as well as emotional trauma. Perhaps the most noteworthy and famous novel written on the subject is The Grapes of Wrath, published in 1939 and written by John Steinbeck, who was awarded both the Nobel Prize for Literature and the Pulitzer Prize for the work. The novel focuses on a poor family of sharecroppers who are forced from their home as drought, economic hardship, and changes in the agricultural industry occur during the Great Depression. Steinbeck's Of Mice and Men is another important novel about a journey during the Great Depression. Additionally, Harper Lee's To Kill a Mockingbird is set during the Great Depression. Margaret Atwood's Booker Prize-winning The Blind Assassin is likewise set in the Great Depression, centering on a privileged socialite's love affair with a Marxist revolutionary.