Social and Economic Triggers of the Great Depression

Jessica Jung
Period 7
1/25/16

Causes of the Great Depression The Great Depression was the worst economic collapse in the history of the industrialized world that affected everyone from children to elders. The social values of consumerism and isolationism that impacted the way that average Americans behaved was a huge part of what caused the collapse of the global economy. The stock market crash of 1929 set off the Great Depression. Economists also blame the overproduction and underconsumption of consumer goods and food. The doubtful state of the foreign balance and the world’s economy played a role in provoking the collapse as well. The Great Depression was launched due to a chain reaction of social causes, over speculation in the stock market,

Mass production due to Henry Ford’s idea of an assembly line increased the worker output of manufactured goods by 32 percent. Manufacturers figured that they’d make more profit if more goods were produced and sold. However, even with the installment plan, there were limits on how much a person was capable of buying. Eventually, people stopped buying as much as they did when buying on credit was a new concept. As the demand for goods went down, prices also decreased. Manufacturers had overproduced, so factories began laying off an abundant number of workers. As jobs were lost, people could not afford to pay for the goods that were bought through installment plans, and their items were repossessed. The unemployment rate increased by 25%, which meant even less spending in the economy. Along with the decline of industries, farmers’ incomes fell throughout the decade. Overproduction of crops and meat strained the prices for farm products to fall. President Calvin Coolidge refused to help solve farmers’ problems. As a result, farmers had to take out loans against their homes and land, but food prices still continued to fall. Farmers ended up in debt and their families, roughly a quarter of the United States population, struggled economically. As you can see, overproduction and underconsumption of consumer goods was an immense part of causing the Great

To start with the stock market, fears of further economic woes appeared after the crash. The tragic turn of events forced the population to stop purchasing consumer goods. Consumerism came to a halt, and the underconsumption of luxury goods led to businesses failing. With America trying to save industries, tariffs were raised and strict foreign policies were put into place. The idea of isolationism that came from nativists was activated in the United States. The blocked international trade contributed in forcing some countries to economically retaliate against America’s nation. Thus, all of the causes and issues previously mentioned connect together into a flowing