In the world's general perception, the last century of the capitalist world Great Depression incident responsible for the previous generation of "understand the king" Hoover, before the sudden cliff-like decline, the United States is indulging in the "eternal prosperity" dream, the gross domestic product soared from 86.2 billion US dollars in 1920 to 104.4 billion US dollars in 1929, the city is a prosperous scene, because of the coinciding with the period of Coolidge as the president of the United States (1923-1929), so it is called "Coolidge prosperity".
Curiously, however, the prestigious President Coolidge announced in 1028 that he would not participate in the presidential election, and the Great Depression that engulfed the 1930s was followed.
Future generations can examine this era in many ways from the perspective of God, but no one can deny the prosperity that once existed objectively.
At the end of the last century, the authorities of american academia selected one hundred of the best novels in the long river of English literature in the past century, "The Great Gatsby" ranked second, this novella set in the American high society in the twenties of the last century, adapted and put on the screen no less than the "Shooting Eagle Trilogy", leaving aside the uneven plot, each version is trying to restore the "most colorful era in history" in the eyes of Americans in terms of scenes:
▲ Stills of "The Great Gatsby" 1
The brightly lit city that never sleeps, the deafening jazz music, the busy streets, the drunken dinner parties, the luxurious and dazzling upstarts and magnates, the bright and green world is full of brightly dressed men and women, everything is like heaven.
From 1919 to 1929, labor productivity grew at an average rate of 5.44% per year, industrial production capacity crushed the top three Europeans (common americans and French), and the proportion of industrial production in the capitalist world reached 48.5%, and President Coolidge claimed that the American people had reached "a state of happiness rare in human history."
▲ Stills of "The Great Gatsby" 2
At the same time, due to ford's initiative to raise wages, the income and purchasing power of ordinary people have also risen greatly, refrigerators, washing machines, and electric irons have rapidly spread to thousands of households, and telephones have gradually been promoted. By 1925, there were 30 million cars on the road in the United States, an average of one for every six people, compared to 100 in Britain.
Anyway, with the exception of television, the internet, and cell phones, when we reach this level, almost a century is almost over.
President Coolidge, who was dubbed "prosperous," was naturally the "first hero," and as a conservative Republican who embraced classical liberalism, Koch implemented a policy of so-called laissez-faire during his tenure.
"Property rights and individual rights are the same thing". --Coolidge, "Believe in Massachusetts"
The so-called individual rights, that is, the "absolute freedom" that no one can interfere with, the corresponding property rights are capital and the market, and they also have the right not to accept any interference. Koch advocated letting the free market operate on its own, arguing that the less government intervention in the private economy such as prices, production, consumption, and distribution of products would make the economy more efficient.
Of course, this is also the case, the so-called "small government, big market" economic policy is essentially complete laissez-faire (laissez-faire), that is, the general term "let him go, let him do, let him go", so as to release the vitality of capital to the greatest extent.
The second important reason is naturally the blessing of the First World War, the geographical barriers in the Atlantic Ocean keep them away from the war, and wartime Europe can't wait to use the gold looted by hundreds of years of colonization to frantically purchase all the materials produced on the American continent to carry out the mass beating to the end, and after the war, it is inseparable from the care of the old brother.
▲The American factory that was working overtime at that time
Before the war, the United States owed a total of six billion dollars to the European countries, and the post-war European Allies owed a total of one hundred and thirty-three hundred and eight million dollars to the United States, which translates to today's figure by at least three zeros.
By 1924, the United States held half of the world's gold reserves, the financial center was moved from Britain to the United States, and bald eagles have since completed the original accumulation from debt to full of pots, providing strong funds for the renewal of production equipment, expansion of production scale and rapid development of production, thus laying the foundation for prosperity.
The progress of the productive forces was also crucial, and the US monopoly bourgeoisie carried out the "rationalization of industrial production", that is, the technological revolution, which was carried out after the war to renew production equipment (fixed capital), expand the scale of production and increase the labor intensity of workers. As well as strengthening scientific research in the industrial sector to increase productivity, extract more surplus value, seek more profits, and accelerate economic development.
The most representative of the movement is the Taylor system, the former of which was the 1880s and 1890s engineer Frederick W. Taylor began to study the scientific management of the factory, and the ford system, which refers to the use of assembly line operations or assembly line operation technology.
The electrical industry became the second most important industrial sector in the United States, rising from 600 million kWh to 117 billion kWh in a decade, which also provided superior conditions for the development of other electricity-based industries, and American industry turned to electrification in the 1920s.
However, the greatness of the novel "The Great Gatsby" is that it is not a work of praise, but depicts the disillusionment of a standard "American Dream", in which people revel in the life of a drunken fan in the face of unprecedented prosperity, and once again mistakenly believe that prosperity will last forever, but this is not the case.
▲ Stills from "The Great Gatsby"
On the one hand, the proportion of the national economy and the distribution of income are out of balance, the agricultural economic crisis runs through the entire period of prosperity, and incidents such as dumping and destroying agricultural products are not uncommon; the distribution of income is extremely unbalanced, and the improvement of consumption capacity is only a symptom, not only cars, but also furniture, radios, refrigerators, washing machines, record players, and pianos are also paid in installments; the rich and the poor are polarized, and more than half of the company's wealth is in the hands of two hundred companies, and these companies are under the control of a few hundred people.
In short, the overall ability of the United States to withstand the economic crisis at that time was very poor, and it was easy to cause a chain reaction.
If even the shoe shiners were buying stocks, I wouldn't want to stay in it anymore. --Old Kennedy
Excessive speculation, on the other hand, has long since lit up red lights. The Dow Jones Industrial Stock Index has been rising for weeks, the U.S. stock market is like a pig on the cusp, and the bull market seems to be endless, enough to make people lose their minds. Of course smart people are not without, Roger, a statistician on Wall Street. Babson has repeatedly emphasized that the stock market will collapse sooner or later, but it is only regarded as a joke, and even the bursting of the Florida real estate bubble in 1927 has not attracted enough attention from society.
For the capitalist world of a hundred years ago, the economic crisis ratio was still punctual, and the United States had erupted in 825, 1837, 1847, 1857, 1866, 1873, 1882, 1890, 1900, 1907 and 1920-21.
According to textbooks, the financial crisis refers to the crisis of overproduction that capitalism periodically erupts in the process of production, that is, things cannot be sold.
But excess is relative, not that people don't need it, but that they can't afford it or can't use it.
Marx once said that "if there is more than 300% profit, they (capitalists) can trample on all human laws", which was too incomprehensible at the time to be appropriate now. Since profit is the only pursuit of capitalists, whether it is discount promotion, destruction or mold in the warehouse, it is the best option after weighing the pros and cons, not the moral gap, which is the mystery behind the large-scale dumping and destruction of agricultural products, but there will certainly be no smashing cars, after all, industrial products are not so easy to deteriorate.
The only way to solve the problem is the market, but whether it is a war or an overseas colony, the market will eventually be saturated, the increase in wages is also a symptom rather than a cure, and Europe, which has a strong foundation, cannot be weak forever, so the more prosperous the economy, the more profound the hidden crisis, as evidenced by the subsequent Great Depression.
▲ A financial nuclear bomb to transfer risk and harvest wealth
As for why it is not common today, it is because Western countries have moved their alternative basic industries to Developing Countries such as China, printing money for procurement on the one hand, and on the other hand, they have opened a game of playing financial harvesters.
In fact, not everyone is afraid of the economic crisis, when the crisis occurs, not only the people are deeply affected, a large number of enterprises have also gone bankrupt, but there will always be surviving, they are not easy to kill their opponents through free competition in ordinary years, but after the crisis, it is just in time, the emergence of a large number of mergers and acquisitions makes the production and capital concentration continue to concentrate, until the formation of monopolies.
In layman's terms, it is to cut one's own people's leeks.
In the "roaring twenties", as a result of the alternating effects of industrial upsurge and economic crisis, the concentration of capital and production was greatly accelerated, monopoly organizations increased dramatically, soon spreading to the main industrial sectors, and combining with bank monopolies to form finance capital and financial oligarchies, and establishing a dominant position in the major capitalist countries.
▲ The U.S. House of Representatives under the control of a consortium
The United States also established the rule of financial capital and formed eight major consortiums and 60 families, including Morgan, Rockefeller, Kuhn Loeb, Mellon, DuPont, Chicago, Cleveland, and Boston. Even more frightening, they began to infiltrate politics, trying to manipulate the government through bribery, sponsorship and cooperation, controlling the entire political life of the country and determining the country's domestic and foreign policies.
So, what kind of person do you think they will need? President Coolidge gave the most "perfect" answer.
Born on an ordinary farm in Plymouth, Virginia, President Coolidge grew up in the habit of hard work and frugality, and in addition to being slightly stingy, his integrity, taciturn and conservative character have always been recognized by American society, and soon after his election, he freed the government from previous scandals and restored credibility.
▲ President Coolidge's inaugural parade
However, this virtuous figure listened to the giants of the business world, posing as a "rule by doing nothing", and Curche repeatedly emphasized that "the business of Americans is to do business" and refused to use the economic power of the federal government to curb the growing prosperity.
Since it was "doing nothing", President Coolidge's first job during his tenure was to cut taxes and cut federal spending, because there were fewer and fewer places to spend money, he was indifferent to flood control and disaster relief in the 1927 Mississippi Flood, and even lacked interest in diplomacy, as a biographer later described the Coolidge administration as "small and almost invisible" as such.
This, of course, is in line with the aspirations of the American monopoly bourgeoisie, which "just doesn't want a strong leader in the White House, and they welcome his willingness to let them do whatever they want..." For only in this way can the American monopoly bourgeoisie compete freely, unleash its maximum energy and potential and make more profits.
At the same time, however, hidden dangers have also been quietly buried, and the excessive indulgence of the market, especially the weak regulation of the financial credit field, has actually encouraged disorderly free competition and left production in a blind anarchy, which did briefly promote the development and prosperity of the US economy in the 1920s, but one step further is a profound economic crisis.
Taking agriculture as an example, with the shrinking of the European agricultural market after the war, American agriculture gradually entered a period of depression, and For the long-term poverty of farmers, the bankruptcy of a large number of small and medium-sized farmers, the decline in the purchasing power of farmers, and other agricultural economic crises, Coolidge turned a blind eye, and had no intention of safeguarding the interests of farmers and ensuring their most basic livelihood.
Koch argues that "the simple and straightforward way to solve the agricultural dilemma is for the farmers themselves to return to the level of return" and that "the government has no complex relief programs, no plans to set prices, and no funds to stabilize agriculture are subject to public finance." The simple and straightforward approach is for farmers to control agriculture themselves, which is the only real source of reconstruction. ”
In 1924, Senator Charles L. Mcnary of Oregon and Representative Gilbert N. Haugen of Iowa first submitted a bill to Congress to address agricultural problems, later named the Mcnary-Haugen bill, to protect agricultural prices and the state's broad relief of agriculture.
However, in the case of the two houses of the Senate passing the bill twice, Coolidge still firmly exercised the president's veto power, arguing that "I cannot yet believe that the bill will protect the interests of the peasants, on the grounds that it is still under expert investigation and evaluation", so it dragged on indefinitely.
Objectively speaking, the agricultural crisis mentioned earlier is actually a standard "relative surplus", and although the "Bill" can safeguard the interests of farmers in a short period of time, in essence it is to raise the price of agricultural products in disguise, which will not only not regulate agricultural production and sales, but also encourage farmers to continue to expand reproduction, which is bound to bring more troublesome sequelae.
So we can't argue that there's anything wrong with Coolidge's approach, historian Burton. Folsom argued that "our 30th president's refusal to accept McNally Haugen's Farm Relief Act is the best of the good president's 50 uses of the veto." ”
But in fact, in any case, agricultural, government and industrial capitalists all have the demand to make the cake bigger together, not intolerable, there is still room for adjustment and maneuver. At that time, the US government did not have the ability, means and experience to adjust the industrial structure, and was powerless when it knew that the "Bill" was insufficient, and could only shelve the problem in repeated ridicule and quarrels until it was out of control.
▲ The billboards of the Coolidge era and the team that led the relief in the Hoover era are in perfect harmony, and perhaps the latter is really just a receiver
Perhaps Koch really foresaw the future of the United States, simply gave up the campaign under the "great situation", and successfully escaped the fate of the Sui Dynasty Emperor, and the successor Hoover promised farmers to impose tariffs on imported agricultural products in order to obtain votes, but in the process of operation, he added many industrial products together, and accidentally pressed the start button of the Great Depression, which is a typical "chaos".
Later, President Roosevelt approved the Agricultural Adjustment Act, which reduced the output of U.S. agriculture by 30% in one fell swoop, hoping to balance market supply and demand, a move that was later questioned and resisted by many people, but effectively raised the price of agricultural products.
However, Roche's "promising" did not have an immediate effect, after the "roaring twenties" the United States returned to the "lost decade", and what really pulled the United States out of the quagmire was the smoke of the Second World War, the long-lost roar of machines and the farmer's field minor key sounded again.
What no one knows is whether, if freedom continues to be laissez-faire, will the United States be able to emerge from the quagmire as before, or even not for a decade.