The Great Depression

The label “The Great Depression” applies largely to world-wide economic conditions after the Great War. France and Russia were badly damaged by the war (and both Russia and the Ottoman Empire continued to experience wartime conditions for several years after the Armistice). Germany was economically devastated and was further stifled by required reparation payments to France and Great Britain. Inflation in Germany was so bad after the way that Germany money was—literally—less valuable than the paper on which it was printed. The British Empire also required time to recover from the cost of the war in lives, dire medical conditions, industries that had been converted to wartime production, and disrupted transportation of raw materials and goods around the world.

The United States’ economy was booming from the economic benefits of a world war. Food, cotton, and many other products had been very profitable during the war and immediately after. But in the 1920s, customers did not always exist for American productivity; food and cotton and manufactured supplies began to pile up in warehouses. The problem worsened as European economies recovered from the war. Surpluses grew, prices fell, and jobs began to be cut. Powerful flooding further aggravated agricultural concerns in 1927. The historic Stock Market Crash of October 1929 was merely the final dramatic symptom of a Depression that had already begun. The banks that collapsed due to the stock market crash were already teetering on the edge of failure. In many parts of the country, the stock market crash was not even front-page news.

But economic depression was not the only kind of depression that the world faced in the 1920s. The Great War undercut everything that Europeans and North Americans had been saying about science and technology since the Enlightenment. Victorian optimism about an improving world was crushed by the War. Supposedly the most civilized and educated leaders had caused the war and had failed to stop it once it started. Science and technology had been used to cause and increase suffering. Optimism about solutions to all the world’s problems had been misplaced. Survivors of the Great War lacked the hope and encouragement that their parents and grandparents had invested in the future.

Some elements of this depression began during the Victorian Age. Cameras made naturalistic painting unnecessary, so painters began to experiment in abstract art, such as impressionism.  After the war, further adventures in art were explored, such as expressionism and cubism. All of these reflected, to a degree, rejection of the schools of art that had dominated European culture since the Renaissance. Likewise, in music, the change began during the Victorian Age. Especially in France, which lost a brief war to Germany in 1870, rejection of German music led to a new style of music which was also called impressionism. After the war, more jarring forms of music emerged, discordant and irregular in rhythm. Pessimism and absurdism began to emerge in literature and theater after the war. Writers like Hemingway and Fitzgerald described the darker side of life, while other writers went to greater extremes to reflect their depression, turning away from the confident optimism that prevailed from the Enlightenment through the Victorian Age.

Science contributed to the depression. For several generations, it had seemed that science had achieved all its major discoveries; it appeared that science would now simply define its procedures, making knowledge more complete and more reliable with each new generation. Einstein’s theories of relativity changed all that. Suddenly it was seen that Euclid’s geometry and Newton’s physics only apply to the world we move through in our common experience. The rules are not the same at the very large or at the very small. Subatomic particles follow rules that seem to defy everything we thought we know about the real world. In biology, the prevailing theory of evolution presented men and women as nothing more than animals which were a little more successful than other kinds of animals. Now Sigmund Freud added to the recipe for darkness, arguing that strange and mysterious things are happening in our minds beyond the thoughts of which we were already aware.

In all this doubt and uncertainty—but especially in the turmoil of the economic Depression—large numbers of people put their trust in the power and authority of politicians and government to provide answers. Out of this misplaced trust came totalitarian governments—political powers that exercised control over vast portions of citizens’ lives. Modern technology made this kind of control more possible than ever before. Governments began by controlling communication—newspapers, magazines, books, radio broadcasts, and other way people shared thoughts and ideas. The same governments also controlled education. Stalin and the Communist Party gained that kind of power in the Soviet Union, followed by Mussolini and the Fascist Party in Italy, and Hitler and the Nazi Party in Germany. In each of these countries, competing political parties were outlawed. Disagreeing with the government was not allowed. A person who spoke a contrary idea might be jailed as a criminal, or might be hospitalized as mentally ill (only released when that person was “cured” and agreed with the government), or might simply disappear. The government announced its economic successes, and no one was in a position to contradict those announcements. Even after the Second World War, an entire generations of historians continued to report that under the Fascists the trains ran on time. Finally, researchers took the trouble to fact-check that claim and to prove it false.

People from the United States visited the Soviet Union. They saw the new factories, they read the government reports, and they met no one who dared to seem unhappy with the new system. Therefore, they returned to the United States saying, “I have seen the future, and it works!” A Communist Party grew in the United States during the Depression, while other citizens advocated other forms of socialism. The Republicans in power seemed unable to help American citizens, especially when a devastating drought struck the central farmlands of the country in 1930 and 1931. Despairing voters turned to Franklin Roosevelt and the Democratic Party, hoping that the promises of a New Deal could be kept.

Roosevelt and the Democrats believed that some problems are so big that only the government is big enough to solve them. New Deal programs included several government ages that hired workers—building schools and parks and armories, paving roads, digging ditches, and contributing in other ways to the infrastructure. Artists were hired to paint murals in government buildings, especially post offices. Writers were hired to interview the last surviving former slaves, to record the memories of pioneers, and to pen travelogues of the various states. Women were gathered to sew and to learn how to can fruits and vegetables. Meanwhile, Social Security was created—collecting a tax from workers and their employers to pay other people (mainly the disabled and the elderly) not to work. Farmers were paid not to plant crops. Lands seized for tax default were offered to homeless farm families under generous programs that helped them to reestablish themselves on the land.

Historians debate whether the New Deal ended the Depression or prolonged it. Since the Second World War ended the economic struggle of the Depression (as well as some New Deal programs), a clear conclusion about the value of the New Deal cannot be found. But Roosevelt and the New Deal Democrats did not seek or establish a totalitarian state. They did not outlaw the Republican Party, or even the Communist Party. Instead, Roosevelt spoke in favor of four freedoms: “Freedom of Speech, Freedom of Worship, Freedom from Want, and Freedom from Fear.” Even while expanding government’s presence and power in the lives of its people, the New Deal continued to focus on freedom for American citizens. J.

Socialism, capitalism, and racism: part two–one hundred years of unequal freedom

In the 1840s, French political philosopher Alexis de Tocqueville foresaw difficulties the United States would face dealing with a population of Africans surrounded by a dominant culture of Europeans. De Tocqueville did not prophesy the Civil War, but he realized that slavery would end in North America. He warned that the African population would not be easily assimilated into the European culture of the United States, anticipating that conflict between the two populations was inevitable.

With the election of Abraham Lincoln as President in 1860, some southern states seceded and formed a Confederacy. Northern states answered Lincoln’s call to go to war to preserve the Union. The Confederate states seceded to preserve their practice of slavery, as their own documents from the time reveal. Northern states went to war, not to free the slaves, but to keep the country united; even Lincoln said that he would accept the continuing presence of slavery if it would keep the nation undivided. His Emancipation Proclamation did not free all the slaves—only the slaves held in the rebellious Confederate states. Only the thirteenth amendment to the Constitution ended slavery in the entire country, and that amendment was not passed until after the Civil War had ended.

Although the purchase and sale of slaves had operated until capitalistic practices, southern plantation owners perpetuated an economy that predated the rise of capitalism. After the war, they attempted to continue a feudal economy, treating the freed slaves as serfs who lived on white-owned land as sharecroppers and tenant farmers, leaving the white property owners in control of the political and social structure of the southern states. Northern reformers attempted to bring capitalism and equality to the south. They brought railroads, factories, and banks to the south. They established schools for black children and adults. They set up political systems that allowed black adults to vote, and some blacks were elected to positions in the local, county, and state governments. When this time of Reconstruction ended, the white power structure in the south reasserted their power. They instituted voting practices that kept black citizens away from the polls and prevented black candidates from being nominated. They reduced or eliminated black access to education. They used lynchings, race riots, and other crimes to terrorize the black population, keeping them under control of the same wealthy whites who had previously owned slaves.

National law, built upon the premise that all people are created equal and have certain human rights, allowed for the development of “separate but equal” benefits for white and black citizens. Schools were permitted to function, but taxes collected from white families funded schools for white children and taxes collected from black students funded schools for black children, perpetuating the poverty of black citizens and the predominance of white citizens. Businesses, medical care, and even train and bus transportation were segregated. Sometimes enforcement of the law bordered on the comic: a museum planation in Arkansas has preserved a doctor’s office which had separate entrances and separate waiting rooms for white and black patients but only a single room for treatment of all patients.

Many black workers traveled north, hoping for better opportunities in the big cities. Already those cities had traditions of separate neighborhoods for separate cultures—German, Swedish, Irish, Italian, Polish, and so on. Soon black neighborhoods were created, complete with black schools, black churches, and black businesses. Segregation, “separate but equal,” was as real in the north as it was in the south.

Would socialism have provided greater equality for white and black citizens at the end of the nineteenth century and beginning of the twentieth century? Definitely not. Every step in that direction continued to separate white and black, giving greater benefits to the white. White labor unions, among other expectations, were intended to keep factories from replacing white workers with black workers. Roosevelt’s New Deal provided much more help to white workers and families than to black. One reason for the disparity was that local direction of government programs always fell into the hands of the same powerful families that had managed the economy before the war and after Reconstruction. They had no intention of offering true equality to their black neighbors under any economic theory.

During this “separate but equal” era, some American blacks found ways to succeed. Black labor unions were developed for industrial and for agricultural workers. Black businesses, following the principles of capitalism, brought services to black communities and wealth to black entrepreneurs in both north and south. Black banks, black insurance companies, and black social organizations grew. Black schools, including institutions of higher education, improved. Although many schools for blacks limited their education to vocational training, others offered broader education. Black writers and poets, black musicians, and black historians and philosophers all gained an audience among both black and white Americans.

During these years, the United States did not meet its high standards of “liberty and justice for all.” Life was unfair for black citizens, native Americans, and immigrants from Europe and Asia; poverty persisted among populations of every culture and nationality. Prejudice and discrimination were widely practiced against blacks, Chinese, eastern Europeans, Catholics, and Jews. Capitalism was not the problem; socialism would not have solved the divisions and inequalities of American society. But in the later half of the twentieth century, new ideas and new approaches would make greater efforts to provide Civil Rights to all citizens of the United States. J.

Social Security

For as long as I can recall, every candidate for federal office has spoken about the need to rescue Social Security. I remember one Presidential debate, at least twenty years ago, in which one of the candidates referred to two unrelated opinion polls. One had asked young adult Americans whether they believed Social Security would still exist when they were ready to retire. The other had asked a similar demographic whether they believed that space aliens were visiting the Earth in UFOs. The result of the comparison was that more Americans believed in space aliens on UFOs than believed in Social Security.

Social Security was part of the New Deal enacted by Congress under President Franklin Roosevelt. Contrary to its name and to popular perceptions of the program, Social Security is a tax on working people used to pay other people—mostly the elderly and the disabled—not to work. The goal of the program, when it was created in 1935, was to open jobs for more workers and reduce unemployment by giving incentives to certain workers to leave the work force.

In 1935, the median average lifespan of Americans was seventy years. Today it is more than eighty years. This means that, when Social Security began, roughly half of the Americans who retired at age sixty-five could be expected to draw from the program for five years or less. Now, given better nutrition and health care than existed in the 1930s, more than half the Americans who retire at age sixty-five will draw from the program for fifteen years or more. No wonder many Americans doubt that Social Security can survive for another generation!

In 1935, each working American was taxed two percent of his or her income, but only up to $3000; money earned above that amount was untaxed. The tax was further hidden by requiring employers to match employee contributions, making the apparent tax only one percent. Today, the tax (including Medicare, which was added in the 1960s) is 15.3%, although it still seems less because employers are still matching employee contributions, making the tax appear to be less than eight percent (except for people who are self-employed). The ceiling of taxable income has risen from $3000 to $137,700.

Employment rates, salaries, longevity figures, and other numbers vary from year to year. Each year projections are offered to guess how long Social Security can continue to fund disabled and retired persons given current numbers. The dire prospect of running out of money for Social Security usually projects only a few more years of survival for the program, but somehow Social Security has continued to remain solvent even as some of the early years for its projected failure have passed.

The easiest way to keep a balance in Social Security are to raise the tax rate and to reduce the benefits paid. Neither of those options are popular in today’s political climate. Other questions can be addressed that might also help preserve Social Security as a government program for the foreseeable future:

  • Why place a ceiling on taxed earnings for Social Security? This practice causes Social Security to be more of a burden on low-income and middle-class taxpayers than on the wealthy. Removing the ceiling would generate more income for Social Security without adding any costs to the program.
  • Social Security earnings have never been taxed, but many recipients of Social Security are drawing more total income from various retirement programs and investments than the average American worker can earn. Replacing the ceiling on taxed earnings with an income above which Social Security is subject to withholding tax would generate income for the government without harming the average disabled or retired recipient of Social Security.
  • Retirement age needs to be reconsidered. Retirement at sixty-five (and early retirement at sixty-two) removes productive workers from their jobs while stressing the Social Security system. I plan to work full-time until I am seventy; I think most people my age are capable of doing the same. (Both my parents and all four of my grandparents lived into their eighties—two of the six into their nineties.)
  • Understand that Social Security never promised to provide a sustainable living income for retirees. Social Security is meant to supplement other investment and retirement income. Unlike life, liberty, and the pursuit of happiness, Social Security is not a God-given right. Social Security is a government program of taxation and payment of benefits which can be adjusted by the government whenever it chooses (remembering that the members of government are subject to replacement by the voters whenever they make and enforce unpopular laws).
  • Understand that currently Social Security is generating more government income than it is costing government expense. Predictions of the collapse of Social Security always depend upon extending current trends. Adjustments made over the years have sustained Social Security well beyond earlier forecasts of shortfalls. Continued adjustments will be more significant than any massive overhaul of the system.

In short, candidates for political office often threaten the end of Social Security as a way of scaring voters. Real assessments of the program show no need for worry or fear. Like other panics over illnesses, environmental changes, technological failures, and political confrontations, news of the collapse of Social Security is largely exaggerated and used to manipulate public opinion. J.