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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: orkrious who wrote (20590)10/24/2004 5:52:48 PM
From: glenn_a  Read Replies (1) of 110194
 
Orkrious.

((were things as bad in england in the early 30's as they were in the US?))

I haven't read a lot on Great Britain's experience of the Great Depression, but the contraction in economic activity was not as great in Britain compared to the US.

Here are some figures for industrial production in the U.S. vs. Great Britain (from Paul Kennedy's "The Rise and Fall of the Great Powers"):

(1913=100)

Year........US.........GB

1927 ... 154.5 .... 96.0
1928 ... 162.8 .... 95.1
1929 ... 180.8 ... 100.3
1930 ... 148.0 .... 91.3
1931 ... 121.6 .... 82.4
1932 .... 93.7 ..... 82.5
1933 ... 111.8 .... 83.3
1934 ... 121.6 ... 100.2
1935 ... 140.3 ... 107.9
1936 ... 171.0 ... 119.1
1937 ... 185.8 ... 127.8
1938 ... 143.0 ... 117.6

A few comments on the above:

1 - As of 1927, Great Britain's total industrial output still had not reached pre-WWI levels.

2 - From 1929 to 1932, U.S. industrial production almost halved from 180.8 to 93.7. In contrast, Britain industrial production was down just shy of 20% from 100.3 to 82.5.

3 - The U.S. contraction was much more severe primarily because (i) the excesses (i.e. speculation) in the U.S. financial markets (both stock and bond) were so much more severe, (ii) the U.S. had greater industrial overcapacity than GB, and (iii) a systemically over-valued British pound in the 1920's exerted a deflationary impact (in spite of generally accommodative British monetary policy) that was absent in the U.S. In a situation similar to the U.S. and Japan and China today, the Americans pursued very inflationary monetary policy in the 1920's (see Rothbard) significantly to keep the value of the US$ down vis-a-vis the British pound, and to support the value of the pound in international exchange.

4 - Nonetheless, the Depression of the early 1930's was a worldwide phenomenon, and all nations were effected. Even though the contraction British industrial output was much less severe than that of the US, in 1933 (4 years after the peak in 1929), British industrial output has still contracted 17%.

As far as comparisons in human suffering in Great Britain in the Great Depression compared to the U.S., I don't have any information on this.

Hope this helps.

Glenn
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