The great crash, 1929

by John Kenneth Galbraith

Hardcover, 1961

Status

Available

Publication

Boston, Houghton Mifflin, 1961.

Description

America's foremost economist examines the boom-and-bust that led to the stock market crash of 1929. Economic writings are rarely notable for their entertainment value, but this widely admired best-seller is the exception. Galbraith's light touch makes his expert analysis of America's greatest financial disaster a surprisingly engaging listen for anyone.

Media reviews

Almost 80 years ago, a financial crisis led directly to an economic catastrophe. The Great Crash 1929 sets out the five routes by which one became the other. Not all have direct parallels today, but some do. All these years later, Galbraith's book is still essential reading.

User reviews

LibraryThing member dougwood57
Galbraith wrote The Great Crash in 1954 and he notes in his introduction that every time it was about to go out-of-print a new speculative mania would come along and a new printing would issue. One expects that the 2008 version must be in the works.

Galbraith writes for the general audience, which means he not only leaves out most of the arcane details, but he also writes in an engaging style. Galbraith's view is that the great speculative boom that preceded the Great Crash was fueled by not by easy credit, but rather by a mindset that ignored risk and assumed that the market would go ever upwards - in short, a mania. The leverage that helped raise the market to unknown heights, particularly buying on the margin, also built in the means for the sudden collapse. Once the market nosed over, margin calls went out, some were met, many were not, and the market tumbled faster and farther. Galbraith demonstrates that many leaders held onto a `boundless optimism' long after any rational support for such a view had disappeared.

Galbraith's main focus is on the market speculation and its collapse, but he also takes the view that the stock market collapse did in fact contribute greatly to the cause of the Great Depression. Galbraith asserts that the economy was not in strong shape before the stock market collapse. He likens the Great Crash to `typhoon which blew out of lower Manhattan'. The crash in the market struck the rich especially hard and because wealth was so concentrated the subsequent shrinkage in spending and investment by the rich caused serious damage to the economy. While we have significant safeguards in place today that did not exist in the 1930's, we also once again have a concentration of income and wealth eerily comparable to the pre-depression era.

Highest recommendation. Well-written, well-argued, and timely (once again). Readers may also appreciate Galbraith's equally readable A Short History of Financial Euphoria (Whittle)
… (more)
LibraryThing member jwood652
John Kenneth Galbraith does a good job of explaining the causes of the 1929 stock market crash and its repercussions. Financial matters always confuse me, so unfortunately, I still don't have a clear understanding but that isn't his fault. The gist of it seems to be that there was irresponsible behavior by the banks as well as investors and refusal to acknowledge the problem. Although there were suicides, the rate wasn't really that much higher than it had been before that. Although there are many safeguards that weren't there in 1929, the cautionary note is that there needs to be controls of the financial community and more proactive action taken. Saying everything is fine doesn't make it true.… (more)
LibraryThing member BrendaRT20
Unbelievable similarity to recent events. This book should be on the reading list for school kids. Everyone should read it.
LibraryThing member jordanjones
A well thought-through explication of some of the causes of the great stock market crash of 1929. Galbraith approaches the subject with wit, and a wry take on the short-term thinking with which humanity will always struggle. Of course, there are interesting parallels to more recent experiences, such as the 2001 and 2008 stock market tumbles: All three were characterized by "irrational exuberance," to quote Greenspan, a self-defeating prophecy that "this time, things are different, this time, investing is a sure bet," "housing always goes up," "the Internet (the radio) is a game-changer": pick your slogan.

One thing I appreciate in Galbraith's book, in addition to his treating the subject with some measure of humor, is his avoidance of pat, easy, and overly simplistic answers about what caused the great crash. In the end, he doesn't really know, but says that some measure of each of the following played a part: the monetary imbalance with world economies (with the US being such a huge lender during this period), as well as the sheer intensity of the speculative frenzy, the incredible leverage (90% margins anyone), the lack of a safety net for banking, and the refusal of the government to step in to stabilize markets.
… (more)
LibraryThing member carterchristian1
Excellent, very readable version of the Crash with additional chapters touching briefly on the Depression itself. The author credits Winston Churchill, with starting the problem by putting England back on the gold standard. It was republished in 1987 after the Stock Market fall with a chapters comparing the times to the 1929 Crash.… (more)
LibraryThing member neurodrew
This is a very interesting, brief account of the stock market excesses that led to the great crash in 1929. He makes the point that speculators are betting only on the price rising, not on any intrinsic value of the stock, and details all of the very highly leveraged stock funds that were sold as equities, and contributed to the crash. A very acerbic wit, and very entertaining, as well.… (more)
LibraryThing member kukulaj
As delightful a book as it could be, given the gloomy subject. Galbraith's wry humor sparkles and makes the book a pleasure to read.

Everyone knows the plot, but Galbraith fills in some nice details. The suicide rate in New York increased by the smallest amount - the legendary mass suicides have no real basis in fact. This is a good book from which to learn the elements of finance - Galbraith explains the terms and concepts, like margin and leverage and shorting - and of course the events he describes provide a wealth of examples.

There is a nice discussion of the connection between the stock market crash and the depression that followed. Galbraith doesn't settle on any particular theory, but just sketches out the most likely suspects.

It's a quick fun read on an essential subject.
… (more)
LibraryThing member jintster
Not really sure to make of this short, sharp book. I enjoyed Galbraith's dry with but finished it not that much the wiser about the causes of the Great Crash. Effectively, he says it was just a typical bubble exacerbated creatly by the overuse of leverage.

A quick read, not hugely educations but very well-written. I'm pretty sure this is the only economic history book which has ever made me laugh out load.… (more)
LibraryThing member breic
Short and interesting story, focused on the stock market boom and crash. He tries to understand the reasons for both, but maybe there are not enough comparisons to other speculative booms for his explanations to be fully convincing. Interesting, nonetheless. Galbraith crams in a lot of atmosphere. He is also very opinionated and judgmental, which is fun to read. It is a bit frustrating that he describes stock price movements all in dollars, instead of in percentage point changes—without the denominator, it's hard to know the significance of a change.… (more)
LibraryThing member dasam
Sad to see how much Galbraith's prediction came true: that collective amnesia could eventually lead to another boom and bust almost as bad as the 1929 crash.
LibraryThing member addunn3
An interesting overview of the Crash, written in the 50s.

Language

Barcode

3333
Page: 0.2116 seconds