Understanding the Significance of the Great Depression

Only a few years ago it was an article of faith among most orthodox economists that the Great Depression of the 1930s was an unaccountable deviation from the natural course of capitalist evolution. They also thought that any further repetition of severe economic distress was inconceivable in the age of informed macroeconomic policy. Even now, establishment theorists continue to hold out against the notion that stagnation can be traced to the underlying pattern of advanced accumulation; but even the most active defenders of the status quo are no longer inclined to be entirely dismissive of the view that secular stagnation is the characteristic state of modern capitalism. Hence, the historical meaning of the Great Depression has once again become a major subject of interest, and there are signs that some of the long-forgotten legacy of criticism and debate by economic theorists of the 1930s is being rediscovered, with the sudden rebirth of open class struggle over the problem of chronic underemployment.