Hostname: page-component-78c5997874-j824f Total loading time: 0 Render date: 2024-11-18T04:17:20.375Z Has data issue: false hasContentIssue false
  • English
  • Français

Socialism and Wages in the Recovery from the Great Depression in the United States and Germany

Published online by Cambridge University Press:  03 March 2009

Peter Temin
Peter Temin
Affiliation:
The author is Professor of Economics, Massachusetts Institute of Technology, Cambridge, MA 02139.
Get access Rights & Permissions [Opens in a new window]

Abstract

The sustained unemployment in the United States during the recovery from the Great Depression has proved difficult to explain, as has the rapid elimination of unemployment in Germany. I argue that employment in the United States was restricted by high wages, which government policy raised above the level of efficiency wages. Socialist control and military expansion by the Nazis reduced unemployment, but also held down consumption.

Type
Papers Presented at the Forty-Ninth Annual Meeting of the Economic History Association
Information
The Journal of Economic History , Volume 50 , Issue 2 , June 1990 , pp. 297 - 307
Copyright
Copyright © The Economic History Association 1990

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

1 Temin, Peter, Lessons from the Great Depression (Cambridge, MA, 1989), chap. 3Google Scholar; Lange, Oscar and Taylor, Fred M., On the Economic Theory of Socialism (New York, 1964; 1st edn. 1938), p. 74.Google Scholar

2 Grossman, Sanford J. and Hart, Oliver D., “The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration,” Journal of Political Economy, 94 (08 1986), pp. 691–719.CrossRefGoogle Scholar

3 Stolper, Gustav, Häuser, Karl, and Borchardt, Knut, The German Economy, 1870 to the Present (New York, 1967), pp. 106–17.Google Scholar

4 Hayes, Peter, Industry and Ideology: IG Farben in the Nazi Era (New York, 1987), p. 73.Google Scholar

5 Hardach, Karl, The Political Economy of Germany in the Twentieth Century (Berkeley, 1980).Google Scholar

6 Overy, R. J., The Nazi Economic Recovery, 1932–1938 (London, 1982), p. 34.CrossRefGoogle Scholar

7 Ibid., p. 37; Hardach, The Political Economy of Germany, pp. 71–72.

8 James, Harold, The German Slump: Politics and Economics, 1924–1936 (Oxford, 1986), pp. 355–57.Google Scholar

9 Overy, The Nazi Economic Recovery, p. 35Google Scholar; Maier, Charles S., In Search of Stability (New York, 1987), p. 98n, calculated from the same data as Overy that net private fixed investment was essentially zero through 1936. The rise in private investment was primarily inventory accumulation.Google Scholar

10 Hardach, The Political Economy of Germany, p. 66.Google Scholar

11 Overy, R. J., “Cars, Roads, and Economic Recovery in Germany, 1932–1938,” Economic History Review, 28 (08. 1975), pp. 466–83Google Scholar; Spenceley, G. F. F., “R. J. Overy and the Motorisierung: A Comment,” Economic History Review, 32 (02 1979), pp. 100–6CrossRefGoogle Scholar; Overy, R. J., “The German Motorisierung and Rearmament: A Reply,” Economic History Review, 32 (02 1979), pp. 107–12.CrossRefGoogle Scholar

12 Temin, Peter and Wigmore, Barrie, “The End of One Big Deflation,” Explorations in Economic History (forthcoming, 1990).Google Scholar

13 Bry, Gerhard, Wages in Germany (Princeton, 1960), p. 362Google Scholar; U.S. Bureau of the Census, Historical Statistics of the United States, Colonial Times to 1970 (Washington, 1975), pp. 164, 169.Google Scholar

14 Mitchell, Brian R., European Historical Statistics, 1750–1975 (New York, 1980), p. 178Google Scholar; U.S. Bureau of the Census, Historical Statistics of the United States, p. 135.Google Scholar

15 Ferguson, Thomas, “From Normalcy to New Deal: Industrial Structure, Party Competition and American Public Policy in the Great Depression,” International Organizations, 38 (Winter 1984), pp. 41–94.CrossRefGoogle Scholar

16 Jensen, Richard D., “The Causes and Cures of Unemployment in the Great Depression,” Journal of Interdisciplinary History, 19 (Spring 1989), pp. 553–84.CrossRefGoogle Scholar

17 Shapiro, Carl and Stiglitz, Joseph, “Equilibrium Unemployment as a Discipline Device,” American Economic Review, 74 (06 1984), pp. 433–44Google Scholar; Katz, Lawrence F., “Efficiency Wage Theories,” in NBER Macroeconomics Annual, 1986, Fischer, Stanley, ed. (Cambridge, 1986).Google Scholar

18 Weitzman, Martin L., “A Theory of Wage Dispersion and Job Market Segmentation,” Quarterly Journal of Economics, 54 (02 1989), pp. 121–37.CrossRefGoogle Scholar

19 Blanchard, Olivier J. and Summers, Lawrence H., “Hysteresis and the European Unemployment Problem,” NBER Macroeconomics Annual, 1986.Google Scholar

20 Keyssar, Alexander, Out of Work (Cambridge, 1986), p. 221.Google Scholar

21 James, Harold, “What is Keynesian about Deficit Financing? The Case of Interwar Germany,” paper presented to the All-UC Conference in Economic History, 04, 1989.Google Scholar

22 Blanchard, Olivier J., “Reaganomics,” Economic Policy (10. 1987), pp. 17–56.Google Scholar

23 Hayes, Industry and Ideology.Google Scholar

24 Loveman, Gary W. and Tilly, Chris, “Good Jobs or Bad Jobs: What Does the Evidence Say?” New England Economic Review (01.–02. 1988), pp. 46–65.Google Scholar

25 Harrison, Mark, “Resource Mobilization for World War II: The U.S.A., U.K., U.S.S.R., and Germany, 1938–1945,” Economic History Review, 41 (05 1988), pp. 171–92.Google Scholar

26 Neal, Larry, “The Economics and Finance of Bilateral Clearing Agreements: Germany, 1934–8,” Economic History Review, 32 (08. 1979), pp. 391–404.CrossRefGoogle Scholar

27 Stolper, Häuser, and Borchardt, The German Economy, p. 131.Google Scholar

28 Guillebaud, C. W., The Economic Recovery of Germany from 1933 to the Incorporation of Austria in March 1938 (London, 1939)Google Scholar; Zaleski, Eugene, Stalinist Planning for Economic Growth, 1933–1952 (Chapel Hill, 1980).CrossRefGoogle Scholar

29 Ellman, Michael, “Did the Agricultural Surplus Provide the Resources for the Increase in Investment in the USSR During the First Five Year Plan?,” Economic Journal, 85 (12. 1975), pp. 844–63.CrossRefGoogle Scholar

30 James, The German Slump, p. 417.Google Scholar

31 Hewett, Ed A., Reforming the Soviet Economy: Equality versus Efficiency (Washington, 1988).Google Scholar

32 Deutschland-Berichte der Sozialdemokratishen Partei Deutschlands (1937)Google Scholar; Boelcke, Willi A., Die deutsche Wirtshaft, 1930–1945 (Düsseldorf, 1983), pp. 253–59.Google Scholar