Business in the Great Depression
It is a well-established pattern of most historical analyses of the Great Depression to approach their problem at the level of national economies, to study and compare aggregate figures for production, consumption, costs, prices and employment, to combine such a view with a discussion of capital market and money market conditions and government policies and then to proceed to chapters on the international trade situation and perhaps business cycle theory. Such descriptions remain basically macro-economic in that they fail to disaggregate the economic body any further at the level of its natural cells, the individual business units, and the men in them who take the important strategic decisions: the entrepreneurs. Of course, no sensible observer will fail to take account of the general political climate of the period with which we are concerned, the painfully slow liquidation of the First World War with its repercussions on the international monetary situation, the speculative orgy in Wall Street whose final collapse undoubtedly precipitated the ensuing general contraction of almost all assets real and monetary. But the very substance of the depression was something much less spectacular, was a prosaic decline of business everywhere, shrinking volume of agricultural and industrial production, shrinking trade and shrinking consumption of goods even at rapidly falling prices. It was a reversal in human decisions — many or few — which produced a near-collapse of almost the entire private economy in large parts of the world.
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