---
title: "What failure of classical economics did the Great Depression highlight?"  
description: "What failure of classical economics did the Great Depression highlight?"  
author: "Howard fuller"  
published: 2018-10-28  
canonical: https://answers.mindstick.com/qa/51450/what-failure-of-classical-economics-did-the-great-depression-highlight  
category: "history, politics & society"  
tags: ["usa history"]  
reading_time: 2 minutes  

---

# What failure of classical economics did the Great Depression highlight?

What [failure](https://yourviews.mindstick.com/audio/1250/why-failure-is-the-first-step-to-growth) of classical [economics](https://answers.mindstick.com/qa/112888/who-was-the-first-woman-to-win-a-nobel-prize-in-economics) did the Great Depression highlight?\
\
\

## Answers

### Answer by Stuti Gupta

Mainstream economics was undermined by the **[Great Depression](https://en.wikipedia.org/wiki/Great_Depression)**, which put the question on the industry's ability to control the industry.

The Great Depression was a significant **global financial crash** that began in the United States in the 1930s and lasted until 1945. All around the globe, the Great Depression began in 1929 and continued till the 1930s; in many nations. It was the twentieth decade's worst, longest, and most extensive slump. The Great Depression is a well-known illustration of how rapidly the world [economy](https://answers.mindstick.com/qa/51426/how-was-america-s-role-in-the-world-economy-affected-by-the-cotton-gin) may deteriorate. \
![What failure of classical economics did the Great Depression highlight?](https://answers.mindstick.com/questionanswer/fe8f9149-f4d9-4520-bc20-1afdf6f0ac38/images/c7f3af65-124b-48bd-9f44-180fe7ad8c1a.jpeg)\
\
After 1929, the **standard financial notion** that the administration should not meddle in the [industry](https://answers.mindstick.com/qa/62209/golden-revolution-is-related-to-which-industry) was questioned. As a result of businesses going down in droves, the 1929 **financial crash led to depression, bankruptcies, and massive unemployment**. \
In 1936, [John Maynard Keynes](https://en.wikipedia.org/wiki/John_Maynard_Keynes) released '**General Theory**,' a booklet in which he called for some [government](https://answers.mindstick.com/qa/94237/which-form-of-the-government-has-division-of-powers-and-independent-judiciary-as-the-important-characteristics) action to boost demand. A few of the major ways to accomplish that aim was to redistribute income from the rich to the underprivileged. \
\
![What failure of classical economics did the Great Depression highlight?](https://answers.mindstick.com/questionanswer/fe8f9149-f4d9-4520-bc20-1afdf6f0ac38/images/d7dab19e-ef20-4f6d-90d5-6aa556ee529e.jpeg)\
\
**Keynesian solutions** were used in the business after WWII since the 1929 collapse had **damaged [social](https://answers.mindstick.com/qa/94008/what-is-your-approach-to-social-media-content-writing) liberalism.** The economic system was supposed to cause uncertainty, and that the administration might stimulate economic growth. \


---

Original Source: https://answers.mindstick.com/qa/51450/what-failure-of-classical-economics-did-the-great-depression-highlight

Copyright © MindStick Software Pvt. Ltd. This Markdown version is provided for developers, AI systems, and offline reading.