Boom or Bust: What can we learn about the Great Recession from 1925?

The Subsidized Mineowner-Poor Beggar! From "The Trade Union Unity" Magazine (1925). The similarity between this caricature drawing in the 1925 magazine and the effigy of a banker, wearing a sign around his neck which reads, "Eat the bankers," which appeared outside The Bank of England on April 1st 2009 as crowds gathered to protest at the start of the G20 Summit in London, is suggestive of a similarity in social sentiment between 1925 and 2009.

The Subsidized Mineowner-Poor Beggar! From "The Trade Union Unity" Magazine (1925)

The headlines in The Cansobreeze and Guysboro County Advocate, a rural newspaper in Nova Scotia, from June 20th 1925 appear to have some useful lessons for us as the country faces what has now been dubbed as The Great Recession, the most difficult economic crisis since The Great Depression, (1929-mid 1930s.)

Glancing through the news of the 1920’s you might imagine that we would be turning back the clock. Apparently not so; if you look more closely at the column headlines in the newspaper here and see what issues preoccupied the columnists, the electorate and the politicians. A snapshot in time, the 1925 Cansobreeze newspaper was for me, until this year, an amusing relic of the past, a source of anecdotal information about life in rural Nova Scotia. Scanning through my photo files on my laptop I came across some of the photos I had taken of the newspaper last year for a different project. Back then I seem to remember, I was unaware of what would soon show itself to be a close similarity between our current news media of today and the headlines in the old newspapers from 1925 when the political campaign for the provincial government elections in Nova Scotia was in full steam.

The CansoBreeze and Guysboro County Advocate
The Cansobreeze andGuysboro County Advocate

 

With 43 years of Liberal government in Nova Scotia, the Liberal party under pressure from the Conservatives was warning the Guysborough electorate in June 1925 not to be carried away with the catchwords, “Time for a change.” So while the Conservative party was citing misappropriation of public funds for the need for an independent audit of Provincial finances in its party manifesto, the headlines in The Cansobreeze and Guysboro County Advocate (June 20th 1925), read, “Justice for Nova Scotia: Are YOU satisfied with the present state of affairs in Nova Scotia?” The Liberal party, on the other hand, were citing their achievements over 43 continuous years of provincial government. 

None of this would have made quite such an impact on me had I not glanced at the 1925 article on “Some of the political Issues,” from The Cansobreeze and Guysboro County Advocate which provides some of the numbers for the then Liberal Armstrong government spending: “The Armstrong government has gone wild with extravagancies, have paid piles of money to Road Contractors which cannot be accounted for, have added more to Nova Scotia’s debt in the last seven years than her total debt had amounted to in her whole lifetime up to then…have increased our burden of debt for approximately $13,000,000 in 1917 to nearly $55,000,000 today…and yet they refuse to grant the ratepayer and electors an independent audit of their accounts.”

As one of the major proposals for spending ourselves out of this current recession, infrastructure spending, it would seem, has become the mantra for all political parties. The Nova Scotia Provincial Conservative Party is now planning massive road construction spending as is the Provincial Labour government of Ontario. Unfortunately the coffers in both provinces are already bare. Now trying to get some fix on the historical context, I spoke to my mother on the issue. For her, the year 1926 was noteworthy. Two years before she was born, the year 1926 was etched in the collective consciousness of her father’s generation as the year of The 1926 General Strike in the United Kingdom. The general strike was precipitated by the strife in the coal mining industry. As the British mineowners announced their intention to reduce miner’s wages and increase working hours based on a strategy of getting more for less, opposition united under the Trades Union Congrss, TUC. Led by the coal miners and other TUC workers, the 1926 Great March united workers from John o’ Groats in the north of Scotland to Landsend in the south of England as the TUC workers converged on London. “Not a penny off the pay, not a second on the day,” was the mantra in 1926 for the TUC workers.

The caricature of “the subsidized mineowner,” which appeared in Trade Union Unity Magazine (1925) is not unlike the effigies of bankers being portrayed in the  news, (CTV News April 1st 2009 ): G20 protesters were carrying a similar effigy dressed in top hat and a button hole, with the words, “Eat the Bankers” hung around his neck. While in 1926 the Mine owners wanted to normalisep rofits even though these were times of economic instability, today it appears that role is being taken up by the Banking industry.

The bailout of the banking industry by governments and the subsequent payout of large bonuses to banking executives despite the fact that these bailouts were made with tax payers’ money has given rise to an unprecedented outpouring of angry sentiment across the world. A move against the wealthy at the G20 Summit (April 1st
2009) is apparent as France and Germany crackdown against tax havens which allow the wealthy to avoid paying a fair share of tax particularly in a climate of economic hardship.

If we look at the sheer transfer of wealth in the current economic crisis from the middle classes to the wealthy it would appear to be unprecedented in our life time; while homeowner’s are facing the loss of their homes through foreclosure and the loss of their pensions through the collapse of their investment savings, the wealthy continue to be in a position of advantage to capitalize on the misfortunes of the many.

The deepening global financial crisis is expected to become the worst financial crisis since World War Two. It is the impact on the world’s poor which is building
into what is being described by aid agencies as a “humanitarian catastrophe,” which is most troubling.

“Ruined countries strike out,” says activist Bob Geldorf at the Excel Centre in London, during the G20 Summit, (BBC World News April 2nd 2009). The impending humanitarian crisis is beginning to sound the alarm bells of hunger and the potential for massive social unrest.

Leave a Reply