Book Around the Corner

The Great Depression. American. 1927-1932 by Paul Claudel. Original French title: La Crise.

Disclaimer: This is a billet (a chronicle) not an academic paper and I’m not an economist, just a reader.

As mentioned in my previous post about American paintings in the 1930s and literature, I bought a non-fiction book entitled La Crise. Amérique 1927-1932 by Paul Claudel.

Claudel (1868-1955) is known as a poet, a playwright. He was also a fervent Catholic and even tried to be a monk. He was the man who put his sister Camille in an asylum because she did not quite fit the image he had of what his sister should be. He didn’t want other people to know his sister had psychiatric issues. She spent 30 years there and he only came to visit a dozen times. How Christian of him. I love Camille Claudel’s sculptures and I’m not overly fond of Catholic thinking. I tried to give Claudel a chance by attending one of his plays, Partage de Midi and it’s one of my most painful memories in a theatre. I was bored to death. So, Paul Claudel as a man and as a writer doesn’t interest me much. But this book is by Claudel the ambassador of France in Washington from 1927 to 1933 and it’s an excerpt of the letters he sent to Aristide Briand, Minister of Foreign Affairs at the time.

In these memos, Claudel analyses the economic and political situation of the USA. Lots of memos are centered on economic issues. Some report political speeches by the president of the USA or decode the trends in America’s politics. Some memos were prepared by his staff, the economist E. Monick. Claudel was in Washington at the end of the Coolidge administration (1923-1929) and during the Hoover administration. The book ends in December 1932, before the administration of FD Roosevelt.

Claudel describes the economic growth of the years 1925-1928 and explains that the signs of the Great Depression were already there but masked by a general euphoria and a raise in speculation on the financial markets. I know that comparing is not reasoning but it’s difficult to put aside thoughts of the 2008 crisis and the last 7 years when you read Claudel’s notes.

These years are the beginning of a new era. More machines in factories mean mass production and high investment of advertising to sell all the products made in these factories. To facilitate consumption, instalment selling is widely promoted. At the time, there is no word in French for what we now call crédit à la consommation and Claudel uses the English word instalment. New industries thrive at the time, like the car industry and new products turn old markets upside down. Claudel writes that the fridge killed the old ice industry. The artificial silk for pantyhose disturbs the market of cotton stockings. It’s not called disruption but it looks like it.

Many jobs in factories disappear because machines replace workers. Claudel refers to this as technological unemployment. He explains how these blue collars start working in the service industry, mostly in services around cars (selling and maintaining) or in restaurants and hotels. But not all of them manage their reconversion in something else and Claudel muses that the adaptation of the workers to the new economy is at stake and not easy to tackle.

The rationalisation of production opens the road to the rationalisation of distribution. It’s the beginning of chain stores, started to gain on buying power and to decrease distribution costs.

After the Black Friday, Claudel dissects the reasons of the crash and the madness around borrowing money to buy securities in the hope to sell them with capital gain. The value of shares quoted on the market had nothing to do with the intrinsic value of the company they belonged to. The financial markets went crazy and Claudel depicts the beginning of investment trusts that seem to be the ancestors of investment funds. Claudel deplores the power of banks in the economy but states that Bankers are at the heart of the modern economic system. (Le banquier est la pièce centrale du système économique moderne)

At the beginning the Great Depression, Claudel repeatedly points out that Hoover remains unwisely optimistic about the consequences of the crisis. He sounds too mild and unable to rule the country.

The Hoover administration invests massively in the Farm Board to pilot the prices of wheat and other agricultural products. It doesn’t have the desired effects but the administration persists. I always wonder why prices of agricultural products are structurally too low for farmers to live upon their land.

Today, the EU subsidizes agriculture. What does it mean for our civilization that we are ready to pay a lot of money for phones but won’t pay the people who grow our food a decent price for their production?

Claudel also describes a natural tendency of America to retreat and close their borders.

Claudel explains how the Tariff ie the customs duty implemented by the American administration to protect their economy is actually detrimental to their business. And this statement still rings true.

Thought provoking, eh?

Claudel also describes the way of making politics. Lobbying was born in the lobby of the capitol building. In October 1929, the old lobbyist Joe Grundy brags about financing the last presidential election with his $500 000 dollar donation. That’s a huge sum for the time. Sounds like financing politics is not a new hobby for businessmen.

Again, comparing is not reasoning. I’m not saying that the current state of the world is similar to that time. I’m just saying that we always think that what we’re living is unique. Turning back to history gives us some perspective. I found this book eye-opening even if some sections with numbers about growths and full of production figures were a little dry at times. I would have liked more memos about the effect of the Great Depression on the American people.

I’ll end this post with this last quote because it brings hope and we’re going to need a lot of hope to turn the page of 2016.

That’s something the 44^th president of the United States could have quoted.