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Long Depression
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{{short description|Worldwide economic recession from 1873 to 1879}}{{distinguish|text=long-term depression, a neurophysiological process in the brain}}{{Use mdy dates|date=September 2011}}The Long Depression was a worldwide price and economic recession, beginning in 1873 and running either through March 1879, or 1896, depending on the metrics used.The Long Depression â the First Great Depression (America’s Economic History. Posted Jul 16, 2015 by Martin Armstrong) It was most severe in Europe and the United States, which had been experiencing strong economic growth fueled by the Second Industrial Revolution in the decade following the American Civil War. The episode was labeled the “Great Depression” at the time, and it held that designation until the Great Depression of the 1930s. Though it marked a period of general deflation and a general contraction, it did not have the severe economic retrogression of the Great Depression.JOURNAL, Political and Social Consequences of the Great Depression of 1873â1896 in Central Europe, Rosenberg, Hans, The Economic History Review, 13, 13, 1943, 58â73, 2590515, 1/2, Blackwell Publishing, 10.1111/j.1468-0289.1943.tb01613.x, Great Britain was the hardest hit; during this period it lost some of its large industrial lead over the economies of continental Europe.JOURNAL, The Great Depression in Britain, 1873â1896: A Reappraisal, Musson, A. E., The Journal of Economic History, 19, 2, 1959, 199â228, 2114975, Cambridge University Press, 10.1017/S0022050700109994, 154705117, While it was occurring, the view was prominent that British economy had been in continuous depression from 1873 to as late as 1896 and some texts refer to the period as the Great Depression of 1873â1896, with financial and manufacturing losses reinforced by a long recession in the agricultural sector.BOOK, Business cycles and depressions: an encyclopedia, David, Glasner, David Glasner, Thomas F., Cooley, 1997, New York, Garland Publishing, 0-8240-0944-4, 148â149, Capie, Forrest, Wood, Geoffrey, Great Depression of 1873â1896,archive.org/details/businesscyclesde00glas/page/148, - the content below is remote from Wikipedia
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Background
The period preceding the depression was dominated by several major military conflicts and a period of economic expansion. In Europe, the end of the Franco-Prussian War yielded a new political order in Germany, and the £200 million indemnity imposed on France led to an inflationary investment boom in Germany and Central Europe.Glasner and Cooley, Business cycles and depressions : an encyclopedia p. 149 New technologies in industry such as the Bessemer converter were being rapidly applied; railroads were booming.Glasner and Cooley, Business cycles and depressions : an encyclopedia p. 132. In the United States, the end of the Civil War and a brief post-war recession (1865â1867) gave way to an investment boom, focused especially on railroads on public lands in the Western United States â an expansion funded largely by foreign investors.Michael Edelstein, “The determinants of UK investment abroad, 1870â1913: the US case.” Journal of Economic History 34.4 (1974): 980â1007.Causes of the crisis
File:Panic of 1873 bank run.jpg|thumb|300px|Run on the Fourth National Bank, No. 20 Nassau Street, New York City, 1873. From Frank Leslie’s Illustrated Newspaper, October 4, 1873.]]In 1873, during a decline in the value of silver{{snd}}exacerbated by the end of the German Empire’s production of thaler coins{{snd}}the US government passed the Coinage Act of 1873 in April. This essentially ended the bimetallic standard of the United States, forcing it for the first time onto a pure gold standard. This measure, referred to by its opponents as “the Crime of 1873” and the topic of William Jennings Bryan’s Cross of Gold speech in 1896, forced a contraction of the money supply in the United States. It also drove down silver prices further, even as new silver mines were being established in Nevada, which stimulated mining investment but increased supply as demand was falling.BOOK, Loomis, Noel M., 1968, Wells Fargo, pp. 219â220, 224â225. Silver miners arrived at US mints, unaware of the ban on production of silver coins, only to find their product no longer welcome. By September, the US economy was in a crisis, deflation causing banking panics and destabilizing business investment, climaxing in the Panic of 1873.
The Panic of 1873 has been described as “the first truly international crisis”. {{pn|date=January 2022}} The optimism that had been driving booming stock prices in central Europe had reached a fever pitch, and fears of a bubble culminated in a panic in Vienna beginning in April 1873. The collapse of the Vienna Stock Exchange began on May 8, 1873, and continued until May 10, when the exchange was closed; when it was reopened three days later, the panic seemed to have faded, and appeared confined to Austria-Hungary.{{pn|date=January 2022}} Financial panic arrived in the Americas only months later on Black Thursday, September 18, 1873, after the failure of the banking house of Jay Cooke and Company over the Northern Pacific Railway. The Northern Pacific railway had been given {{convert|40|e6acre|km2}} of public land in the Western United States and Cooke sought $100,000,000 in capital for the company; the bank failed when the bond issue proved unsalable, and was shortly followed by several other major banks. The New York Stock Exchange closed for ten days on September 20.{{pn|date=January 2022}}The financial contagion then returned to Europe, provoking a second panic in Vienna and further failures in continental Europe before receding. France, which had been experiencing deflation in the years preceding the crash, was spared financial calamity for the moment, as was Britain.{{pn|date=January 2022}}Some{{who?|date=January 2022}} have argued the depression was rooted in the 1870 Franco-Prussian War that devastated the French economy and, under the Treaty of Frankfurt, forced that country to make large war reparations payments to Germany. The primary cause of the price depression in the United States was the tight monetary policy that the United States followed to get back to the gold standard after the Civil War. The U.S. government was taking money out of circulation to achieve this goal, therefore there was less available money to facilitate trade. Because of this monetary policy the price of silver started to fall causing considerable losses of asset values; by most accounts, after 1879 production was growing, thus further putting downward pressure on prices due to increased industrial productivity, trade and competition.In the US the speculative nature of financing due to both the greenback, which was paper currency issued to pay for the Civil War and rampant fraud in the building of the Union Pacific Railway up to 1869 culminated in the Crédit Mobilier scandal. Railway overbuilding and weak markets collapsed the bubble in 1873. Both the Union Pacific and the Northern Pacific lines were central to the collapse; another railway bubble was the Railway Mania in the United Kingdom.Because of the Panic of 1873, governments depegged their currencies, to save money. The demonetization of silver by European and North American governments in the early 1870s was certainly a contributing factor. The US Coinage Act of 1873 was met with great opposition by farmers and miners, as silver was seen as more of a monetary benefit to rural areas than to banks in big cities. In addition, there were US citizens who advocated the continuance of government-issued fiat money (United States Notes) to avoid deflation and promote exports. The western US states were outraged{{snd}}Nevada, Colorado, and Idaho were huge silver producers with productive mines, and for a few years mining abated. Resumption of silver dollar coinage was authorized by the BlandâAllison Act of 1878. The resumption of the US government buying silver was enacted in 1890 with the Sherman Silver Purchase Act.Monetarists believe that the 1873 depression was caused by shortages of gold that undermined the gold standard, and that the 1848 California Gold Rush, 1886 Witwatersrand Gold Rush in South Africa and the 1896â99 Klondike Gold Rush helped alleviate such crises. Other analyses have pointed to developmental surges (see Kondratiev wave), theorizing that the Second Industrial Revolution was causing large shifts in the economies of many states, imposing transition costs, which may also have played a role in causing the depression.Course of the depression
Like the later Great Depression, the Long Depression affected different countries at different times, at different rates, and some countries accomplished rapid growth over certain periods. Globally, however, the 1870s, 1880s, and 1890s were a period of falling price levels and rates of economic growth significantly below the periods preceding and following.Between 1870 and 1890, iron production in the five largest producing countries more than doubled, from 11 million tons to 23 million tons, steel production increased twentyfold (half a million tons to 11 million tons), and railroad development boomed.BOOK, The Age of Empire (1875â1914), Eric Hobsbawm, Vintage Books, New York, 1989, 0-679-72175-4, 35,archive.org/details/ageofempire1875100hobs_0/page/35, Eric Hobsbawm, But at the same time, prices in several markets collapsed{{snd}}the price of grain in 1894 was only a third what it had been in 1867,BOOK, The Age of Empire (1875â1914), Eric Hobsbawm, Vintage Books, New York, 1989, 0-679-72175-4, 36,archive.org/details/ageofempire1875100hobs_0/page/36, and the price of cotton fell by nearly 50 percent in just the five years from 1872 to 1877,BOOK, (Reconstruction: America’s Unfinished Revolution - 1863-1877, Reconstruction: America’s unfinished revolution), 1863â1877, Eric Foner, HarperCollins, 2002, 0-06-093716-5, 535, imposing great hardship on farmers and planters. This collapse provoked protectionism in many countries, such as France, Germany, and the United States, while triggering mass emigration from other countries such as Italy, Spain, Austria-Hungary, and Russia.BOOK, The Age of Empire (1875â1914), Eric Hobsbawm, Vintage Books, New York, 1989, 0-679-72175-4, 37,archive.org/details/ageofempire1875100hobs_0/page/37, Similarly, while the production of iron doubled between the 1870s and 1890s, the price of iron halved.Many countries experienced significantly lower growth rates relative to what they had experienced earlier in the 19th century and to what they experienced afterwards:{| class=“wikitable” style="margin:1em auto;”German Empire|name=Germany}}| 4.3| 2.9| 4.1 |
United Kingdom of Great Britain and Ireland|name=Great Britain}}| 3.0| 1.7| 2.0 |
United States|1873}}| 6.2| 4.7| 5.3 |
French Third Republic|name=France}}| 1.7| 1.3| 2.5 |
Kingdom of Italy|name=Italy}}|| 0.9| 3.0 |
Sweden}}|| 3.1| 3.5 |
Russian Empire|name=Russia}}| 10.5| 11.2 | 12.7 | 14.4 | 22.9 | 23.2 | 21.1 |
French Third Republic|name=France}}| 8.5 | 10.3 | 11.8 | 13.3 | 16.8 | 17.3 | 19.7 |
United Kingdom of Great Britain and Ireland|name=Great Britain}}| 8.2 | 10.4 | 12.5 | 16.0| 19.6 | 23.5 | 29.4 |
German Empire|name=Germany}}| 7.2 | 8.3 | 10.3 | 12.7 | 16.6 | 19.9 | 26.4 |
Austria-Hungary}}| 7.2 | 8.3 | 9.1 | 9.9 | 11.3 | 12.2 | 15.3 |
Kingdom of Italy|name=Italy}}| 5.5| 5.9| 6.6| 7.4| 8.2| 8.7| 9.4 |
Austria-Hungary
The global economic crisis first erupted in Austria-Hungary, where in May 1873 the Vienna Stock Exchange crashed. In Hungary, the panic of 1873 terminated a mania of railroad-building.Chile
In the late 1870s the economic situation in Chile deteriorated. Chilean wheat exports were outcompeted by production in Canada, Russia and Argentina and Chilean copper was largely replaced in international markets by copper from the United States and Spain.Historia contemporánea de Chile III. La economÃa: mercados empresarios y trabajadores. 2002. Gabriel Salazar and Julio Pinto. pp. 25â29. Income from silver mining in Chile also dropped. AnÃbal Pinto, president of Chile in 1878, expressed his concerns the following way:{{cquote|If a new mining discovery or some novelty of that sort does not come to improve the actual situation, the crisis that has long been felt, will worsen|author=AnÃbal Pinto, president of Chile, 1878.}}This “mining discovery” came, according to historians Gabriel Salazar and Julio Pinto, into existence through the conquest of Bolivian and Peruvian lands in the War of the Pacific. It has been argued that economic situation and the view of new wealth in the nitrate was the true reason for the Chilean elite to go into war with its neighbors.Another response to the economic crisis, according to Jorge Pinto RodrÃguez, was the new pulse of conquest of indigenous lands that took place in AraucanÃa in the 1880s.Salazar & Pinto 2002, pp. 25â29.{{Citation| last = Pinto RodrÃguez| first = Jorge| author-link = Jorge Pinto RodrÃguez| title = Crisis económica y expansión territorial : la ocupación de la AraucanÃa en la segunda mitad del siglo XIX| journal = Estudios Sociales| volume = 72| year = 1992}}France
France’s experience was somewhat unusual. Having been defeated in the Franco-Prussian War, the country was required to pay £200 million in reparations to the Germans and was already reeling when the 1873 crash occurred.ENCYCLOPEDIA, Business Cycles and Depressions: An Encyclopedia, David Glasner, Thomas F. Cooley, Taylor & Francis, 1997, 0-8240-0944-4, Crisis of 1873,archive.org/details/businesscyclesde00glas, The French adopted a policy of deliberate deflation while paying off the reparations.While the United States resumed growth for a time in the 1880s, the Paris Bourse crash of 1882 sent France careening into depression, one which “lasted longer and probably cost France more than any other in the 19th century”.BOOK, France and the Economic development of Europe (1800â1914), 0-415-19011-8, Routledge, 2000, 70â71, Rondo E. Cameron, Mark Casson, The Union Générale, a French bank, failed in 1882, prompting the French to withdraw three million pounds from the Bank of England and triggering a collapse in French stock prices.The financial crisis was compounded by diseases impacting the wine and silk industries French capital accumulation and foreign investment plummeted to the lowest levels experienced by France in the latter half of the 19th century.BOOK, France and the Economic development of Europe (1800â1914), 0-415-19011-8, Routledge, 2000, 198â199, Rondo E. Cameron, Mark Casson, After a boom in new investment banks after the end of the Franco-Prussian War, the destruction of the French banking industry wrought by the crash cast a pall over the financial sector that lasted until the dawn of the 20th century. French finances were further sunk by failing investments abroad, principally in railroads and buildings.BOOK, France and the Economic development of Europe (1800â1914), 0-415-19011-8, Routledge, 2000, 320, Rondo E. Cameron, Mark Casson, The French net national product declined over the ten years from 1882 to 1892.BOOK, France and the Economic development of Europe (1800â1914), 0-415-19011-8, Routledge, 2000, 457, Rondo E. Cameron, Mark Casson,Italy
A ten-year tariff war broke out between France and Italy after 1887, damaging Franco-Italian relations which had prospered during Italian unification. As France was Italy’s biggest investor, the liquidation of French assets in the country was especially damaging.Russia
The Russian experience was similar to the US experience{{snd}}three separate recessions, concentrated in manufacturing, occurred in the period (1874â1877, 1881â1886, and 1891â1892), separated by periods of recovery.ENCYCLOPEDIA, Business Cycles and Depressions: An Encyclopedia, David Glasner, Thomas F. Cooley, Taylor & Francis, 1997, 0-8240-0944-4, Business cycles in Russia (1700â1914),archive.org/details/businesscyclesde00glas,Great Britain
{{Self-contradictory|othersection|talksection=Contradiction re UK|date=January 2018}}{{further|Great Depression of British Agriculture}}Great Britain, which had previously experienced crises every decade since the 1820s, was initially less affected by this financial crisis, even though the Bank of England kept interest rates as high as 9 percent in the 1870s.The 1878 failure of the City of Glasgow Bank in Scotland arose through a combination of fraud and speculative investments in Australian and New Zealand companies (agriculture and mining) and in American railroads. Building on an 1870 reform, and the 1879 famine, thousands of Irish tenant farmers affected by depressed producer prices and high rents launched the Land War in 1879, which resulted in the reforming Irish Land Acts.United States
{{see also|Panic of 1873}}File:US-GNP-per-capita-1869-1918.png|thumb|300px|Real gross national product per capitaper capita{| class=“wikitable floatright”Reactions to the crisis
Protectionism
The period preceding the Long Depression had been one of increasing economic internationalism, championed by efforts such as the Latin Monetary Union, many of which then were derailed or stunted by the impacts of economic uncertainty.BOOK, France and the Economic development of Europe (1800â1914), 0-415-19011-8, Routledge, 2000, 38â39, Rondo E. Cameron, Mark Casson, The extraordinary collapse of farm prices provoked a protectionist response in many nations. Rejecting the free trade policies of the Second Empire, French president Adolphe Thiers led the new Third Republic to protectionism, which led ultimately to the stringent Méline tariff in 1892.BOOK, France and the Economic development of Europe (1800â1914), 0-415-19011-8, Routledge, 2000, 39, Rondo E. Cameron, Mark Casson, Germany’s agrarian Junker aristocracy, under attack by cheap, imported grain, successfully agitated for a protective tariff in 1879 in Otto von Bismarck’s Germany over the protests of his National Liberal Party allies. In 1887, Italy and France embarked on a bitter tariff war.BOOK, France and the Economic development of Europe (1800â1914), 0-415-19011-8, Routledge, 2000, 40, Rondo E. Cameron, Mark Casson, In the United States, Benjamin Harrison won the 1888 US presidential election on a protectionist pledge.BOOK, The Reader’s companion to American history, Houghton Mifflin Harcourt, 1991, 0-395-51372-3, Eric Foner, John Arthur Garraty, Society of American Historians,archive.org/details/readerscompanion00fone, As a result of the protectionist policies enacted by the world’s major trading nations, the global merchant marine fleet posted no significant growth from 1870 to 1890 before it nearly doubled in tonnage in the prewar economic boom that followed.BOOK, The Age of Empire (1875â1914), Eric Hobsbawm, Vintage Books, New York, 1989, 0-679-72175-4, 50,archive.org/details/ageofempire1875100hobs_0/page/50, Only the United Kingdom and the Netherlands remained committed to low tariffs.Monetary responses
In 1874, a year after the 1873 crash, the United States Congress passed legislation called the Inflation Bill of 1874 designed to confront the issue of falling prices by injecting fresh greenbacks into the money supply.BOOK, (Reconstruction: America’s Unfinished Revolution - 1863-1877, Reconstruction: America’s unfinished revolution, 1863â1877), Eric Foner, HarperCollins, 2002, 0-06-093716-5, 522, Under pressure from business interests, President Ulysses S. Grant vetoed the measure. In 1878, Congress overrode President Rutherford B. Hayes’s veto to pass the Silver Purchase Act, a similar but more successful attempt to promote “easy money”.Strikes
The United States endured its first nationwide strike in 1877, the Great Railroad Strike of 1877. This led to widespread unrest and often violence in many major cities and industrial hubs including Baltimore, Philadelphia, Pittsburgh, Reading, Saint Louis, Scranton, and Shamokin.BOOK, McCabe, James Dabney, Edward Winslow Martin, The History of the Great Riots: The Strikes and Riots on the Various Railroads of the United States and in the Mining Regions Together with a Full History of the Molly Maguires, National Publishing Company,archive.org/details/historygreatrio00mccagoog, 1877,New Imperialism
The Long Depression contributed to the revival of colonialism leading to the New Imperialism period, symbolized by the scramble for Africa, as the western powers sought new markets for their surplus accumulated capital.BOOK, The Age of Empire (1875â1914), Eric Hobsbawm, Vintage Books, New York, 1989, 0-679-72175-4, 45,archive.org/details/ageofempire1875100hobs_0/page/45, According to Hannah Arendt’s The Origins of Totalitarianism (1951), the “unlimited expansion of power” followed the “unlimited expansion of capital”.BOOK, The Origins of Totalitarianism, Hannah Arendt, 1973, Houghton Mifflin Harcourt, 137, 0-15-670153-7, The Origins of Totalitarianism, Hannah Arendt, In the United States, beginning in 1878, the rebuilding, extending, and refinancing of the western railways, commensurate with the wholesale giveaway of water, timber, fish, minerals in what had previously been Indian territory, characterized a rising market. This led to the expansion of markets and industry, together with the robber barons of railroad owners, which culminated in the genteel 1880s and 1890s. The Gilded Age was the outcome for the few rich. The cycle repeated itself with the Panic of 1893, another huge market crash.Recovery
In the United States, the National Bureau of Economic Analysis dates the recession through March 1879. In January 1879, the United States returned to the gold standard which it had abandoned during the Civil War; according to economist Rendigs Fels, the gold standard put a floor to the deflation, and this was further boosted by especially good agricultural production in 1879.JOURNAL, American Business Cycles, 1865â79, Fels, Rendigs, The American Economic Review, 41, 3, 1951, 325â349, 1802106, American Economic Association, The view that a single recession lasted from 1873 to 1896 or 1897 is not supported by most modern reviews of the period. It has even been suggested that the trough of this business cycle may have occurred as early as 1875.JOURNAL, An Improved Annual Chronology of U.S.; Business Cycles since the 1790s, The Journal of Economic History, Davis, Joseph, 66, 1, 2006, 103â121, 10.1017/s0022050706000040, 153478495,www.nber.org/papers/w11157.pdf, In fact, from 1869 to 1879, the US economy grew at a rate of 6.8% for real net national product (NNP) and 4.5% for real NNP per capita.Rothbard (2002), 154 Real wages were flat from 1869 to 1879, while from 1879 to 1896, nominal wages rose 23% and prices fell 4.2%.Rothbard (2002), 161Explanations
Irving Fisher believed that the Panic of 1873 and the severity of the contractions which followed it could be explained by debt and deflation and that a financial panic would trigger catastrophic deleveraging in an attempt to sell assets and increase capital reserves; that selloff would trigger a collapse in asset prices and deflation, which would in turn prompt financial institutions to sell off more assets, only to further deflation and strain capital ratios. Fisher believed that had governments or private enterprise embarked on efforts to reflate financial markets, the crisis would have been less severe.ENCYCLOPEDIA, Business Cycles and Depressions: An Encyclopedia, David Glasner, Thomas F. Cooley, Taylor & Francis, 1997, 0-8240-0944-4, Debt-deflation theory,archive.org/details/businesscyclesde00glas, David Ames Wells (1890) wrote of the technological advancements during the period 1870â1890, which included the Long Depression. Wells gives an account of the changes in the world economy transitioning into the Second Industrial Revolution in which he documents changes in trade, such as triple expansion steam shipping, railroads, the effect of the international telegraph network and the opening of the Suez Canal.BOOK, Recent Economic Changes and Their Effect on Production and Distribution of Wealth and Well-Being of Society, Wells, David A.Interpretations
Most economic historians see this period as negative for the most industrial nations.{{citation needed|date=January 2012}} Many argue that most of the stagnation was caused by a monetary contraction caused by abandonment of the bimetallic standard, in favor of a new fiat gold standard, starting with the Coinage Act of 1873.{{citation needed|date=January 2012}}Other economic historians have complained about the characterization of this period as a “depression” because of conflicting economic statistics that cast doubt on this interpretation. They note it saw a relatively large expansion of industry, of railroads, of physical output, of net national product, and of real per capita income.As economists Milton Friedman and Anna J. Schwartz have noted, the decade from 1869 to 1879 saw a growth of 3 percent per year in money national product, an outstanding real national product growth of 6.8 percent per year, and a rise of 4.5 percent per year in real product per capita. Even the alleged “monetary contraction” never took place, the money supply increasing by 2.7 percent per year. From 1873 through 1878, before another spurt of monetary expansion, the total supply of bank money rose from $1.964 billion to $2.221 billion, a rise of 13.1 percent, or 2.6 percent per year. In short, it was a modest but definite rise, not a contraction.Friedman, Schwartz. A Monetary History of the United States: 1867â1960. Although per-capita nominal income declined very gradually from 1873 to 1879, that decline was more than offset by a gradual increase over the course of the next 17 years.Furthermore, real per capita income either stayed approximately constant (1873â1880; 1883â1885) or rose (1881â1882; 1886â1896), so the average consumer appears to have been considerably better off at the end of the “depression” than before. Studies of other countries where prices also tumbled, including the United States, Germany, France, and Italy, reported more markedly positive trends in both nominal and real per capita income figures. Profits generally were also not adversely affected by deflation, although they declined (particularly in Britain) in industries struggling against superior, foreign competition. Furthermore, some economists argue a falling general price level is not inherently harmful to an economy and cite the economic growth of the period as evidence.Murray N. Rothbard. “A History of Money and Banking in the United States: The Colonial Era to World War II” (pdf), The War of 1812 and its Aftermath, pp. 145, 153â156. As economist Murray Rothbard has stated:Unfortunately, most historians and economists are conditioned to believe that steadily and sharply falling prices must result in depression: hence their amazement at the obvious prosperity and economic growth during this era. For they have overlooked the fact that in the natural course of events, when government and the banking system do not increase the money supply very rapidly, freemarket capitalism will result in an increase of production and economic growth so great as to swamp the increase of money supply. Prices will fall, and the consequences will be not depression or stagnation, but prosperity (since costs are falling, too), economic growth, and the spread of the increased living standard to all the consumers.Accompanying the overall growth in real prosperity was a marked shift in consumption from necessities to luxuries: by 1885, “more houses were being built, twice as much tea was being consumed, and even the working classes were eating imported meat, oranges, and dairy produce in quantities unprecedented”. The change in working class incomes and tastes was symbolized by “the spectacular development of the department store and the chain store”.Prices certainly fell, but almost every other index of economic activity â output of coal and pig iron, tonnage of ships built, consumption of raw wool and cotton, import and export figures, shipping entries and clearances, railway freight clearances, joint-stock company formations, trading profits, consumption per head of wheat, meat, tea, beer, and tobacco â all of these showed an upward trend.A.E. Musson. “The Great Depression in Britain, 1873â1896: a Reappraisal”, The Journal of Economic History (1959), 19: 199â228A large part at least of the deflation commencing in the 1870s was a reflection of unprecedented advances in factor productivity. Real unit production costs for most final goods dropped steadily throughout the 19th century and especially from 1873 to 1896. At no previous time had there been an equivalent “harvest of technological advances... so general in their application and so radical in their implications”. That is why, notwithstanding the dire predictions of many eminent economists, Britain did not end up paralyzed by strikes and lockouts. Falling prices did not mean falling money wages. Instead of inspiring large numbers of workers to go on strike, falling prices were inspiring them to go shopping.George Selgin. “Less Than Zero â The Case for a Falling Price Level in a Growing Economy”, The Institute of Economic Affairs, 1997, pp. 49â53. Referenced 2011-01-15.See also
{{commons category}}- Crisis theory
- Economic history
- Equine Influenza of 1872
- Gilded Age
- Great Depression of British Agriculture (1873â1896)
- Kondratiev wave
- List of economic crises
- List of recessions in the United States
- New Imperialism
- Panic of 1873
- Panic of 1893
- Second Industrial Revolution
Footnotes
{{Reflist|2}}Further reading
- Samuel Bernstein, “American Labor in the Long Depression, 1873â1878,” Science and Society, vol. 20, no. 1 (Winter 1956), pp. 59â83. In JSTOR.
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