ABSTRACT
Most economists would agree that we have as yet no widely accepted explanation of the Great Depression. Various theories have been put forward, and some are felt to be capable of explaining some, though far from all, of the calamitous events of the 1930s (as we will see in Chapter 2). The situation is ripe for a new approach. The purpose of this work is to proffer a technological explanation of much of the Depression experience. While Schumpeter (1939) and others, especially at the time of the Depression, have suggested that technology played a substantial role in causing the Depression, the approach pursued here is quite novel. I will detail in the next five chapters a theoretical explanation of how an abundance of labor-saving production technology coupled with a virtual absence of new product innovation could affect consumption, investment, and the functioning of the labor market in such a way that a large and sustained contraction in employment would result. I will also describe how such a technological situation could have arisen historically. In the succeeding several chapters, I will provide evidence at the industry level that these technological forces were at work, and that they were powerful enough to generate most of the observed unemployment in the 1930s.
