Yesterday
I contrasted the attitudes of people in 1929 with their attitudes
today, on the precipice of another Great Depression. I said that I
believe racism, religious hatred and the distrust between economic
classes was more pronounced and more overt in affluent nations in 1929
than it is today, and that while economic disparity is just as great,
our use of technology and automation to gut future generations' share
of resources to meet the needs of today's mass of humanity means that
both rich and poor are relatively better off now than they were in 1929.
Here is the picture Pierre Berton, in his exhaustive study The Great Depression,
painted of the way the Canadian people, their governments and corporate
management behaved in response to the decade-long crisis seventy years
ago:
- "The historian of the future, when he writes about
Canada and the Great Depression, will comment upon the remarkable
ineptitude of public men when faced with this emergency. He will write
of the obstinate refusal of governments to face realities; of their
pitiful and tragic tactics of 'passing the buck'; and of their childish
expectation that providence, or some external power, would come to
their rescue and save them from the consequences of their refusal to
look into the future, forsee events that loomed black in the sky, and
take steps to mitigate the fury of the storm. The condemnation will be
measured by the extent of the power that was not used and the
responsibility that was denied." -- Winnipeg Free Press, 1933
- The
police (by brutality) and the press (by anti-communist fear-mongering)
supported the corporatist establishment in suppressing any popular
opposition or demonstration against the established order.
- Any
idea that the state had any responsibility for the welfare of citizens
was anathema -- that was simply not the role of government.
- Predictions
of unprecedented prosperity were ubiquitous among politicians,
economists and business leaders in 1929; throughout the 1930s, despite
evidence to the contrary, they consistently insisted the Depression was
just a minor adjustment, that it would not last, that worst was over
and that the outlook for the next year was positive. The stock market
collapse actually occurred in five stages over two months, in between
which brokers claimed the 'adjustment' was over and encouraged people
to borrow and buy more while prices were 'unnaturally low'.
- The government had been spending and lowering taxes, and driving interest rates up.
- Throughout
the Depression, racism and anti-Semitism were rampant, while
contraception and divorce were illegal. The Liberal Prime Minister (in
power in 1929 and re-elected in 1935) was a big fan of Mussolini, and
the Conservative Prime Minister (in power 1930-35) was a big fan of
Hitler until 1939.
- When the Depression hit, throwing millions
into the streets, the 'problem' perceived by the politicians was not
public misery and poverty but rather 'rabble' and 'rabble-rousing' --
their response was to strictly enforce vagrancy laws (which essentially
made poverty a crime), villainize 'hobos and transients' jumping
rail-cars to seek work, and pass laws making associations "deemed to be
advocating violence" (including the Communist party) illegal. Prison
populations soared, with many of the prisoners 'political'. Torture of
prisoners on the rack was regularly employed to extract confessions and
stifle dissent.
- The Depression hit the West so hard that
farmers had to walk (gas was prohibitively expensive) 20 miles to find
brackish water to bring back for drinking and washing (wash-water was
saved and recycled), and lived on nothing but stewed rabbit and boiled
Russian thistle (the only plant still growing on the Prairies); cows
were sold and horses set free due to lack of feed. Most farms had phone
service cut off and many had their farms foreclosed and were evicted.
Despite this, the government steadfastly refused to intervene, saying
it was up to local governments.
- Schools closed as money to pay
teachers (and for coal for heating) ran out; the teachers tried to keep
them going without wages but with no social assistance had to give up
and seek other work. Many social service organizations, including the
Red Cross, went bankrupt and ceased operating as private donations
dried up (they received no government support) and demands on their
resources soared.
- Unemployment rates soared steadily from 2% in
1929 to about 36% in 1932. At the time, there was in most communities
only one doctor per 16,000 people dealing with soaring malnutrition and
other Depression illnesses.
- As the Depression deepened,
xenophobia set in and thousands of foreigners new to the country were
deported at the sole discretion of officials.
- In response to
the rising civil unrest, the unemployed were sent to remote slave work
camps run by the army, where they were paid 20 cents per day. If they
tried to leave they were arrested as vagrants. Contingency plans were
made to use the military to suppress riots. Surprisingly, few riots
occurred and many of them were provoked by ideological government
officials or overzealous police.
- Marriage and birth rates both plummeted by 25%.
- Fascist
parties were legal and protected by the police. As early as 1933 the
Swastika was seen at public events, public singing of anti-Semitic
songs could be heard, and nationalist groups advocating abolition of
local governments and a one-party national government were drawing
large crowds.
- Although socialist parties sprang up, especially
in the hard-hit West, they achieved limited popularity. The people,
brainwashed that socialism was just communism lite, instead preferred
right-wing autocrats with populist or law and order platforms, electing
governments that were essentially fascist in both Alberta and Quebec
which stifled the press, effectively nationalized the banks, and seized
property of 'suspected communists' (including, conveniently, many Jews).
- Business
executives did very well during the Depression, as costs plummeted.
Labourers who were paid 50 cents an hour in 1929 were now working 80
hour weeks in sweatshops for 5 cents an hour. Complaints about hours,
wages or working conditions resulted in firing and blacklisting
(corporations shared lists of names of 'uncooperative' workers). Big
retailers exploited the situation to squeeze manufacturers that did not
employ such tactics. Meanwhile the salaries of executives did not
change at all.
- In rural areas, with clothing too expensive,
most children wore cloth grain and flour sacks for clothing, and, if
their schools were still open, often took turns going to school and
sharing clothing.
- The situation in cities was only marginally
better. When a Windsor steno-bookkeeper's employer folded in 1934 and
she went to Hamilton seeking work, she wrote to the Prime Minister: "My
clothing had become very shabby. Many prospective employers just
glanced at my attire and shook their heads. I cut down my food and a
poor but respectable room at $1/week. First I ate three very light
meals per day, then two and then one. During the past two weeks I have
eaten only toast and drunk a cup of tea every second day. As a result
of this deprivation I am so very nervous and through this very
nervousness I was ruled out of a class [of job applicants] yesterday.
Today at an examination I was told 'you are so awfully shabby I could
never have you in my office'. That almost broke my heart. I know no one
here and the loneliness is hard to bear, but, oh, sir, the thought of
starvation is driving me mad! The stamp that carries this letter will
represent the last three cents I have in the world yet before I will
stoop down to dishonour my family, my character or my God, I will drown
myself in the Lake." Prime Minister Bennett apparently did not bother
to reply.
- By 1935 the situation was so desperate that a large
group of unemployed Western Canadian men decided to make the trek to
the capital, Ottawa, to try to meet with Bennett personally. The
picture above shows how they made the trek, helped by citizens and
low-level railway workers in the towns they passed through. The railway
was blockaded by government order in Regina, and a rally to decide on
next action was brutally disrupted by the RCMP, using truncheons and
tear gas, leading to what was called the Regina Riot.
- By this
time a massive migration of Western farmers North from the drought- and
locust-stricken areas was underway. Farms were left unlocked to allow
other farmers to use them overnight on their journey.
- By 1937,
when a second stock market crash occurred, a pro-fascist government had
been elected in Ontario, supported by the Toronto Globe & Mail
which asserted that "most communists are Jews". It failed to bring
about a one-party provincial government "united against communism" (two
years later the Globe would launch a fascist Leadership League, calling
for the abolition of provincial governments and creation of a one-party
national government -- it's growth would be interrupted by the start of
WW2).
- 1937 was the eighth consecutive year of Western drought,
and the year of the "black blizzards" when what was left of the soil
was whipped up and carried away by a long cycle of gales, and much of
the remaining machinery was rendered useless by sandstorms.
- By
1938, the government was finally realizing that their inaction was
prolonging the Depression. The slave camps had been replaced by equally
repressive farm camps, leading to a sit-in in Vancouver by half-starved
farm camp workers, isolated from families and all contact with women.
It was brutally put down, resulting in what is now called Bloody Sunday.
- Also
in 1938, Toronto's largest theatre, Massey Hall, hosted a
hugely-popular national convention of fascist organizations, guarded by
a massive police presence.
- On September 8, 1939, the Canadian
government entered WW2, and immediately created millions of jobs in the
war effort. The pay for soldiers was six and a half times what the same
men were paid a year earlier in the farm camps. Munitions factories
paid twenty times as much to labourers as nearby sweatshops. The grim
irony -- that it had taken a world war to make the government realize
that it could 'spend its way' out of the Depression by creating
employment on public works projects (as FDR had done in the US) -- was
completely lost on the governments and media of the day.
The
authors of The Fourth Turning expect that the next fourth turning --
the next cycle of stark authoritarianism -- to begin between 2010 and
2020, about eighty to ninety years after the last. The economic
fragility of massive US debt and trade deficits, the End of Oil,
ideological wars and terrorism, threats of pandemics and the spectre of
eco-collapse precipitated by global warming all add fuel to their
argument that the fourth turning is imminent, as such turnings are
generally sparked by a crisis. We certainly have plenty of candidates
to choose from for such a crisis.
So suppose we map the
behaviours and events of 1929-39 on the situation we find ourselves in
at the dawn of the 21st century. How might we expect people,
governments and corporate management to behave if the crash of the
dollar brings about another Great Depression? Will our 21st century
ingenuity, pragmatism, connectedness,
collective wisdom, resilience, and more tolerant, democratic outlook
lead us to a quick and radical
correction of the excesses that produce the coming Depression, a rapid
and relatively painless end to it, and a more humane response to the
suffering it does produce? And is this all
complicated by the fact that this time, unlike 1929, we are facing
permanent, absolute ends to the critical resources on which our society relies for its existence? Here are my guesses on these questions:
- I
think Europe, and Canada if it ousts its ideological neocon minority
government, will have both the will and financial room to invest
heavily in public infrastructure projects, and hence keep enough money
and work flowing to the vast majority of citizens to minimize the
misery of the Depression. I am much less optimistic about the
willingness of the US and UK to do this, and about the ability of the
US to do so when it has already bankrupted its treasury, so I believe
the poor and middle class in those countries are likely to suffer much
more, and for longer. Canada unfortunately has allowed its economy to
become utterly dependent on US and Asian purchases of our raw
materials, and hence is likely to face a much more severe economic
Depression than Euro-currency countries.
- Middle Eastern and
Asian economies that currently depend on US purchases and the strength
of the US dollar will fare worst of all, as they have nothing at all to
fall back on, and many of them are already living in ecological
disaster zones comparable to the Dust Bowls of the West in the 1930s. I
think it would be unrealistic to expect anything less than violent
uprisings, equally violent repression of the masses, fascist
totalitarianism and the extreme suffering that we have historically
seen in struggling nations that have no mechanisms to cope with
economic collapse: civil war, attacks on neighbouring states
conveniently blamed for the disaster (this time with nuclear weapons),
genocide, famine, and cannibalism. These will spill over into other
countries taking sides with the combatants and lead to global
repression, militarism, and authoritarianism, exactly as the Fourth Turning predicts.
- Corporatists
have already shown their stripes during the current boom: They are
unlikely to do anything that will further worsen the situation of their
'shareholders' (i.e. controlling
shareholders and senior management) beyond the collapse in share
values, and will lay off workers and write off pension plans and other
bankrupt employee benefit funds without a second thought. Just as they
did in Argentina, they will liquidate and pocket what they can, chain
the doors, and walk away from all responsibilities to others. People
without the ability to make a living for themselves will therefore be
as badly off as the 'transients' of the 1930s -- at the mercy of
opportunistic employers, reduced to virtual slavery.
- With stock
and real estate values plummeting, and (as interest rates spike) bond
markets doing almost as badly, most people, especially those with their
money tied up in US dollar denominated investments, will see their net
worth wiped out. Those with debts will see them called by financial
institutions and will probably become bankrupt, forced to cede any
assets they have. However, those who can continue to pay mortgage debts
at least for the first part of the Depression will probably keep their
homes, as banks realize they cannot get blood from a stone, and that
it's better to have people looking after these assets even if they are
not paying mortgage debts, than evicting them and leaving them to
squatters. Only those who default on mortgages early in the Depression
should expect to get foreclosed and evicted.
- The US New Deal
experiment of FDR, loathed as it is by neocons, will be the model for
the next Depression in all affluent nations that can afford it
(ironically, the US will not be able to afford it). It will be embraced
relatively quickly (probably two years into the Depression) because of
the broad global consensus that it worked last time. So I think much of
the inhumanity that was exhibited even in affluent nations during the
last Depression can be avoided this time around; I also believe that on
the whole we have become more tolerant of others in the last 70 years.
- I
am very concerned that, just as phone lines for most citizens were cut
off for non-payment in the last Depression, the Internet, with its
social networking, sharing, open source developments and collective
organizing capabilities, will be rendered largely inaccessible by its
sheer unaffordability when the US currency becomes essentially
worthless. The infrastructure supporting the Internet is hugely complex
and expensive to maintain, and in most countries privately owned, so if
no one can afford to pay for it, it will simply cease to operate. And
with gasoline becoming, as in the 1930s, prohibitively expensive, the
situation in the suburbs will be dire indeed, as most social activity
will revert to face-to-face, enabled by bicycles, roller blades and
shoe leather.
- Hard-copy media will have a resurgence, and we
will find ways to keep radio and television media operating. Local,
community-based media that are not IP-dependent will explode in
importance, and centralized national media will stumble -- as faraway
governments show themselves impotent to deal with local crises
(remember FEMA and New Orleans), all attention will be focused on media
that communicate local relief, organization and facilitation efforts.
- While
it would be easy to look at the response to the New Orleans disaster
and despair, the difference we will have in the Depression is that it
will occur much more gradually, allowing a lot of peer-to-peer activity
to occur, as we realize we cannot rely on government. I am optimistic
that our learned helplessness and distrust of neighbours will gradually
give way to an awareness that there is a lot we can do together to make
the Depression less cruel. This collective energy was evident in the
recent economic collapse in Argentina, and I think we will emulate it.
- And
also on a positive note, while I think entrepreneurial skills are in
terribly short supply, I think we will learn how to be entrepreneurial
by looking at entrepreneurs as local role models, and establish local
enterprises to produce and share food, water, energy, and other
essentials collectively. In the process, many of us who are currently
'helpless' because we cannot, without money from an employer, provide
for ourselves, will learn essential survival skills that will put us in
good stead to deal with the End of Oil, disease pandemics, and
disasters precipitated by global warming.
- I have no sense of
what kind of economy we will build to replace the one that the coming
Depression will shatter. I would like to believe it will be more local,
using local currency, a Gift Economy with essentials provided at little
or no cost and surpluses distributed through disintermediated networks,
and highly resilient. But the existing oligopolistic quasi-market
economy is so well established as the 'only economy that works' I think
it is just as likely we will try to rebuild that failed model.
Likewise, it is hard to say whether national governments will emerge
stronger (if they have successfully invested in infrastructure for the
benefit of most citizens) or weaker (if they cling to laissez-faire ideology and actually make the situation worse by bungling and/or neglect).
- Another
issue I am undecided upon is the degree to which the majority have a
proclivity to cede authority and responsibility to 'leaders' in a time
of crisis. History suggests that in crisis we are much better working
collectively and locally, but it also suggests that we also tend to
look for heroic leaders, grant them enormous control over our lives and
expect surprisingly little in return. We don't need to look far to see
that that is still the case. I mentioned yesterday
the idea of culture as our meta-master, the one we turn to especially
in time of great stress. Is it just human nature to defer to authority
in bad times, even when it is not in our best interest to do so? Or
have we just been so brainwashed by our culture that we lack the
self-confidence to take matters into our own hands?
I welcome
your comments on any of these questions and forecasts. We may never be
ready for such crises (it is our human nature to be reactive, and not
to do anything until we have no choice), but at least we can know what
to expect. And our response to an economic crash may help us cope
better with the additional crises that almost inevitably await our
children and grandchildren as this century progresses. |
MADE IN CANADA
trust your
instincts 
