World-System (1900-1950) World In Depression

In a prior post ( here ), I took a  Systems Theory  perspective to defining the  Great Depression . From that perspective, there really wasn't a Great Depression, as such, but rather an  Economic Bubble  that started with  World War I  ( WWI ) and ended when the Bubble was popped by the  Stock Market Crash of 1929 . This leaves open the question of what caused the Bubble, a topic I address in this post. The  Economic Bubble  of the  Roaring Twenties  was caused by forces in the US. The primary forces were the usual culprits: Unemployment-Business Conditions and the Stock Market Crash. The Bubble would have been eliminated by linking the US to the World System. In this post, I look in more detail at what caused the Bubble and how the Bubble could have been prevented. Notes WE20 Measurement Model W5 = (0.7043Q-0.599N-0.355XREAL)   W6 = (0.2178Q+0.537N-0.7976L) USGD Model W Input Preventing the crash would have involved ...

  In a prior post ( here ), I took a Systems Theory perspective to defining the Great Depression . From that perspective (Path A   here ), there really wasn't a Great Depression, as such, but rather an Economic Bubble that started with World War I ( WWI ) and ended when the Bubble was popped by the Stock Market Crash of 1929 .  From Another perspective ( Path  B   here ) something bad did (or did not) happen that created a massive economic collapse.  Path  B  is the conventional explanation which led to a vast literature (see the Notes below) driven by Monetary Theory , Keynesian Theory and other perspectives ( Systems Theory  is not one of the conventional perspectives ) .  In this post, I look at  Path  B  more carefully. I eliminate the two dominant historical controllers in the  US_E20 Model  ( US2 and US3 ) to show that, without them, there was no Crash. The biggest shock to US1 is from US3 which invo...

  Our current approach to Economic Policy is based on our understanding of the  Great Depression . Google Gemini notes that: I will argue that, as a major Economic System Failure , we have mostly not studied the period from the perspective of Systems Theory , starting with the definition (the graphic above provides a concise summary of our misconceptions). The Great Depression has been studied so much that the definition might seem obvious. Here's Google AI's statement: Hidden in the definition are a number of assumptions about economic performance during the Early 20th Century. I'll dig into these issues in this post. The graphic at the beginning of this post shows US GNP for the period 1900 to 1950. First, imagine that you were standing at the start of the 20th Century before WWI . What would you have predicted? Could you have predicted  WWI ? Here's Google AI's statement: For the moment, assume you could not predict WWI and were using data from 1900-1915. No...

  I had wanted to study the Great Depression as a graduate student at the University of Wisconsin-Madison in the late 1970's. My pitch was that the Great Depression was a "Systemic Event" and therefore should be studied from the perspective of Systems Theory . I received two responses: (1)  Systems Theory  had a "bad reputation" in the Social Sciences and (2) the    Great Depression  was a topic reserved for elder statesmen in Economics and was not appropriate for a graduate student. I went on to apply  Systems Theory   to Late Nineteenth Century Development in Germany and emphasized the systemic issue of Stability . Today, I am at the end of my career, I'm still interested in the Great Depression and I don't need anyone's approval to study it. What I have found is that there is really no consistent theory of Great Depressions and that Systems Theory in the Social Sciences is, unfortunately, poorly defined (it is clearly defined in Environm...

  The Great Depression in Latin America The Monroe Doctrin e

   The  Kondratiev Wave  is an important element of  World-Systems Theory . The graphic above is taken from  Andreas Goldschmidt  and gives historical specifics for technological cycles. Goldschmidt's formulation allows for the idea to be tested (one of the models I always test), is partially consistent with economic Growth theory (particularly if we do not assume a functional form for exogenous disembodied technological change in the  Solow-Swan Model ) and I can present some examples. The Iranian Economy prior to 1979  and associated  Tech Bubble .