"GREAT CRASH: 1929, THE" (JOHN KENNETH GALBRAITH).   Term Paper ID:20722 Click to get this paper

Essay Subject: Critical review of work on stock market collapse & possibility of repeat crash.... More...

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Paper Abstract: Critical review of work on stock market collapse & possibility of repeat crash. Paper Introduction: John Kenneth Galbraith, in The Great Crash: 1929, writes that his book has limitations: "The task of this book . . . is only to tell what happened in 1929. It is not to tell whether or when the misfortunes of 1929 will recur" (190). In the same passage, however, Galbraith makes clear the moral lesson of 1929 and of his book: "It is that very specific and personal misfortune awaits those who presume to believe that the future is revealed to them" (190). However, after having set forth these limitations, Galbraith goes on to speculate on the future: . . . The chances for a recurrence of a speculative orgy are rather good. No one can doubt that the American people remain susceptible to the speculative mood---to the conviction that enterprise can be attended by unlimited rewards in which they, Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. He makes clear that those conditions could not recur,primarily because of the lessons of 1929 and the changes wrought ineconomic institutions as a response to those lessons. In the same passage, however, Galbraith makes clear themoral lesson of 1929 and of his book: "It is that very specific andpersonal misfortune awaits those who presume to believe that the future isrevealed to them" (19 ). . Herecognizes that their failings were human failings, and that if we were inthe same circumstances it is difficult to say without a doubt what we woulddo. . Therefore, he demonstrates the connections between 1929and the time in which he wrote the book. . However, after having set forth these limitations,Galbraith goes on to speculate on the future: . . Even if such crashesdo occur, they will likely never do the damage the 1929 crash did: A new adventure in stock market speculation sometime in the future followed by another collapse would not have the same effect on the economy as in 1929. . At the sametime, he obviously dies not want only to write a book about the distant andirrelevant past. . Financial capacity and political perspicacity are inversely correlated. got violently worse. The problem with many such academic experts, especiallywhen they are writing a book critical of earlier figures who made the kindof terrible errors of judgment made by leading figures in the l92 s, isthat they write with a harsh, cynical and/or smug superiority. The leaders of the time in politics and economics---as well asthe common man and woman---simply did not want to see the writing on thewall with respect to the economic weaknesses and extravagances of the time.They saw what they wanted to see, which was the growing profit they and thecountry were reaping and, apparently, would continue to reap withoutcessation. On other occasions--- in 1924 and 1927 and of late in 1949---the economy has undergone similar recession. He is able to aperspective which allows him, for example, to compare the 1929 crash withother crashes. The worst was reasonably recognizable as such. Reality intruded with the crash and the Depression. Thereare, however, a hundred reasons why a government will determine not to usethem" (191). is only to tell whathappened in 1929. Galbraith shows in his book that individuals and groups in everysector of society, and at every level of government, were culpable in thecrash. Long-run salvation by men of business has never been highly regarded if it means disturbance of orderly life and convenience. . So inaction will be advocated in the present even though it means deep trouble in the future. . Galbraith's book is valuable for two main reasons. Galbraith is well-qualified to make such analyses and speculations.He has been a professor of economics at Harvard for many years, and haswritten a number of other acclaimed books, including The Affluent Societyand American Capitalism. There can be no question . Galbraith writes that in a "boom" period in which wealth isincreasing for participants---individual and corporate---in the stockmarket, the government will be hesitant to put those safeguards intoaction: "The government preventatives and controls are ready. Galbraith is a respected representative of thecapitalist system, so that his position prevents him from being utterlyobjective in his analysis of the classical failure of that system in l929.He analyzes the stock market crash not as if it were a natural andinevitable part of the capitalist system, but as if it were an aberrationwhich could have been prevented with a dose of realism and honesty in theyears leading up to the crash. Human beings are still greedy, and stock marketspeculators are especially prone to that particular vice. The politicianswho have the power to put safeguards into action are hesitant to do sobecause such action could forestall economic expansion which would helptheir political careers. . This is what we need really to understand (111; 179). Instead of analyzing this connection, however, Galbraith mentions itin passion, and even then only indirectly, in the last lines of the book: . Here, at least equally with communism, lies the threat to capitalism. . In other words, economic safeguards are in place,but they depend for their implementation at least in part on frail andflawed human beings. Second, it describes the 1929 crash in a historical context whichallows us to take steps to prevent such a crash from ever happening again.Galbraith warns us that we are not justified in believing that we are todayimmune to the recurrence of such a disaster simply because we haveinstituted various safeguards in the stock market and in other economicelements of society. I agree with Galbraith on most points. . The singular feature of the great crash of 1929 was that the worst continued to worsen. At the same time, hepoints out that human nature is not altered radically, if at all, bychanges in institutions. The author's straightforward and lively style is an important part ofthe success of the book. No one can doubt that the American people remain susceptible to the speculative mood---to the conviction that enterprise can be attended by unlimited rewards in which they, individually, were meant to share (191). Galbraith makes clear that greed was at the root of the 1929 crash,but another basic human and social flaw contributing mightily to the crashwas denial. The Great Crash: 1929. A Marxist, on the other hand, or any analystnot so entrenched in capitalism, would likely focus on the inherentconnections between the stock market crash of 1929 and the economic systemof which it was an integral element. Galbraith wrote this book twenty-five years after the crash itself,which gives him the great advantage of long-term hindsight. This is the unique feature of the 1929 experience. . There were a few individuals who warned of imminent disaster, buttheir voices were cries in the wilderness of capitalist greed. First, itilluminates the causes and consequences of the 1929 crash in anentertaining style which is at the same time grounded in solid data andanalysis. The chances for a recurrence of a speculative orgy are rather good. . that many of the points of extreme weakness exposed in 1929 have since been significantly strengthened (192). . The samesort of voices cried in the Reagan-Bush era, but the crash of that eraoccurred nevertheless, because greed overrode economic wisdom. BibliographyGalbraith, John Kenneth. . It is what causes men who know that things are going quite wrong to say that things are fundamentally sound (195). What makes his warnings about future danger convincing is just suchreasonable analyses. Galbraith's work is important, then, not only because he paints afull, well-reasoned, and accessible picture of the crash itself, but alsobecause he sets forth a strong warning that other crashes could occur againif we become too complacent and greedy. . Galbraith writes that previous crises in the stockmarket were different from l929, and relates the crash with the recessionof the period: A common feature of all these earlier troubles was that having happened they were over. It is not to tell whether or when the misfortunes of 1929will recur" (19 ). . John Kenneth Galbraith, in The Great Crash: 1929, writes that hisbook has limitations: "The task of this book . He points out that the conditions of 1929 were specialand extraordinary. But, unlike these other occasions, in 1929 the recession continued and . As we have seen, other stock crashes have occurred, the most seriousbeing the one in the greed-ridden Reagan-Bush era, which seems to confirmGalbraith's speculation that blind self-interest on a national scale is atthe heart of such crashes. Galbraith is successful in achieving the goals he sets for himself.He intends to describe how the 1929 crash came about, and what itsconsequences were, and he does so clearly and comprehensively. In that specific analysis, Galbraith destroys one of themany myths associated with the l929 crash, namely that it was a quick crashwhich was quickly over. . It is clear that Galbraith is a learned man, aneconomic scholar, and that he has applied his learning in insightful waysto the 1929 crash. New York: Time, l961.----------------------- 7 At the same time, Galbraith is not a doomsayer. As a result, he comes up with thereasonable warnings he presents with respect to future stock market andeconomic crises. Most of these reasons, says Galbraith, are political. Therehave since been safeguards put into place in the market itself whichautomatically go into force if a crash appears to be possible. Galbraithrecognizes the seriousness of his subject, and he is certainly critical ofcertain leaders of the l92 s, but he does not set himself above them. In addition, Galbraith has served in thegovernment domesticallyand overseas, the latter as Ambassador to India. For that reason, Galbraith argues that the stockmarket, and the economy overall, insofar as that economy is affected by thestock market, remain vulnerable to great upheaval, if not on the level ofthe 1929 crash. It is unfortunate, however,that he does not examine the connections between the 1929 crash andcapitalism as a whole. . . . . If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.