Have you ever maxed out your credit card buying essential oils on Instagram, then realized you also need to pay rent? That’s basically what happened to the entire global economy in 1929, except instead of essential oils, it was stocks, and instead of Instagram, it was Wall Street, and instead of just you crying into your avocado toast, it was millions of people starving. It was called the Great Depression, though there was nothing particularly “great” about it.
What Actually Happened?
On October 29, 1929, a day now called “Black Tuesday” (not to be confused with “Black Friday,” when people trample each other for discounted televisions), the American stock market collapsed.
But this financial disaster didn’t just appear out of nowhere. It was brewing for years in the toxic masculinity petri dish that was 1920s financial capitalism. Before the crash, Americans were buying stocks like they were toilet paper during a pandemic. Everyone was investing money they didn’t have, borrowing from banks to buy more stocks, thinking they’d definitely make it back because stocks only ever go up, don’t they? Turns out, they don’t. The whole thing was unsustainable.
Banks had been lending money to anyone with a pulse, farmers were growing so many crops that the prices collapsed, and factories were making more stuff than people could buy. It was like preparing a massive Sunday roast for two people – there’s going to be a lot of leftovers, and they’re going to go bad.
The Human Cost (Which Is Never Factored Into GDP)
The stories from this period would make even the most heartless hedge fund manager pause their avocado toast mid-bite. Consider the “Dust Bowl” of the 1930s, when over-farming combined with drought turned America’s heartland into something resembling Mars but with more despair. Families in Oklahoma and Texas watched as literal walls of dust swallowed their farms whole. One survivor recalled: “The impact is like a shovel full of fine sand flung against the face.” People died of “dust pneumonia,” which is exactly what it sounds like and exactly as pleasant.
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Black Americans, already dealing with Jim Crow laws and systematic exclusion from economic opportunities, faced unemployment rates approaching 50% in some cities. As one Harlem resident put it: “The Depression? We didn’t call it that. We called it life.”
Women, meanwhile, often became the sole breadwinners when their husbands lost jobs. In coal mining communities, wives would walk miles along railroad tracks collecting fallen coal to heat their homes. One Pennsylvania woman recalled: “I used to get up at four in the morning and walk three miles to the tracks. The men would chase us away, but we came back. We had to.” This is what economists call “unpaid labor” and what normal people call “doing whatever it takes not to freeze to death.”
What Did We Learn?
After the crash, banks failed. People who had put their life savings in banks suddenly found that their money had vanished, like socks in a washing machine. Unemployment reached 25% in America, which means one in four people were standing around with nothing to do except contemplate why the economy is like a rollercoaster that occasionally goes off the rails.
The Depression spread around the world like a bad rumor. In Germany, the economic chaos helped a man with a tiny mustache and enormous anger issues rise to power, which, as history students know, didn’t exactly work out well for anyone.
The Great Depression taught us several important lessons, which we promptly forgot and then had to learn all over again in 2008. These include:
- Maybe don’t let banks do whatever they want.
- When everyone is making money too easily, something is probably wrong.
- The economy needs rules, like a toddler needs boundaries.
President Franklin D. Roosevelt responded with his “New Deal,” which was basically the government saying, “Fine, I’ll do it myself” and creating jobs building roads, bridges, and dams. It’s like when your flatmate never does the washing up, so you just do it yourself while sighing loudly.
The Legacy
The Great Depression changed how we think about economics forever. Before, people thought the economy was like the weather – you just had to wait for it to get better. After, they realized the economy is more like a garden – if you don’t tend to it, weeds take over and everything dies
It led to the creation of things we now take for granted, like bank deposit insurance, Social Security, and unemployment benefits – all the safety nets we need because capitalism, while brilliant at creating wealth, is about as stable as a chocolate teapot.
So next time you’re standing in a queue at the job center or watching bankers get massive bonuses despite crashing the economy, remember: it could be worse. At least we’re not eating dirt and selling apples on street corners. That’s progress, of a sort. And if there’s one thing humans are good at, it’s celebrating small victories while ignoring the massive underlying problems – a bit like putting a plaster on a broken leg and calling it medical care.
And that’s the Great Depression – not just a time when everyone was sad, but when the entire world’s economy went on an extended gap year. It is a reminder that everything you have can be gone tomorrow.
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