ABSTRACT
Due to the time path by which the technological potential of the Second Industrial Revolution of the late nineteenth century was realized, in concert with the fact that early industrial research laboratories emphasized process over product innovation, there was an abundance of labor-saving process innovation and a lack of new product innovation in the late 1920s and early 1930s. Thus, the average propensity to consume fell. Likewise, there were limited opportunities for investment. These contractionary tendencies were exacerbated by adverse trends in population growth and income distribution. Employment fell in consumer durables due to market saturation. As well, many industries which had hoarded labor in the 1920s as productivity rose dishoarded these workers in the early 1930s. Workers who lost their jobs had no place to go due to the lack of new product technology. Entrepreneurs in such an environment could not profitably hire the unemployed at any wage above subsistence.
