A Great Leap Forward

A Great Leap Forward: 1930s Depression and US Economic Growth (2012) is a work of economic history by American academic Alexander J. Field, who argues, contrary to received wisdom, that the prosperity of America’s post-war decades was generated not by World War II or the New Deal, but by the productivity gains made during the Depression of the 1930s.

Field begins with a startling statistic. During the Depression years, 1929-1941, the output of the US economy increased by 40%. Where did this growth come from? Field shows that there was almost no increase in private-sector investment or man-hours worked during the same period. Instead, the growth was generated almost in its entirety by advances in technology and organization.

Field makes a bold claim, seeking to overturn the conventional narrative that sees the years of the Depression as “lost years,” redeemed only by the massive government spending of the wartime economy and the New Deal. Field argues that it was the economy’s increase in output during the Depression years which secured American victory in World War II and laid the foundations for a further two decades of prosperity.



To advance this argument, Field must first explain how generations of economic historians have managed to overlook the productivity growth of the 1920s. He argues that the Depression’s high figures of unemployment, and other indicators that point to economic stagnation, have caused scholars to overlook what he calls “silent” indicators of economic potential. These indicators are remarkable. Field shows that the advances in productivity made during the 1930s are significantly greater than those made in any other American era, from the Gilded Age to the contemporary information technology revolution.

A second question is where this growth came from. Here, too, is a reason the era’s economic advances have been overlooked. Where most eras of massive productivity growth are fueled by a single technology and/or infrastructure improvement (for example the railroads in the case of the Gilded Age), the productivity growth of the 1930s came from no one game-changing technology. Instead, it was achieved by a wide range of changes, happening concurrently.

The second part of Field’s book examines these changes, painting a picture of the extraordinary progress that was taking place despite apparent economic stagnation. Henry Ford’s assembly lines first began producing cars in 1913, but it was in the 1930s that the assembly line took off as a universal technology for production, and it was also in the 1930s that the car became a widely-used technology. Electrification also grew exponentially during the era.



A host of smaller innovations contributed too. The first single-wing plane, the DC-3, made commercial aviation viable for the first time. Television made its debut at the 1939 World’s Fair. Nylon was invented in 1940, and 63 million pairs of nylon stockings had been sold by 1941. Cars were refined by a series of inventions, including heaters, radios, power steering, automatic transmissions, and front-wheel drive.

Meanwhile, a range of products invented in the 1920s first came to widespread use in the 1930s. For example, less than 3% of households had refrigerators in 1929: by 1941, that figure was 44%.

Just as important as these technological innovations were massive infrastructure projects. The US route system was built during the Depression, and the country’s top engineers worked on the project. Power grids and piped water were rolled out across vast areas. The advances in structural engineering achieved during this period laid the groundwork for projects like the Golden Gate Bridge and the Boulder Dam.



Lastly, these changes were supplemented by improvements at the organizational level. Treaties were implemented to permit more freight interchange on the railroads, hugely increasing the efficiency of railroad distribution. However, this paled in comparison to the rise of truck transportation as a means of moving goods, facilitated by the new route system and improvements in truck technology.

Field argues that much of this change took place not just despite the Depression but because of it. The economic collapse of 1929-33 constituted a clearing of the decks. The thousands of factories that closed during that time were replaced by factories using modern production methods.

Economic historians have traditionally argued that the wartime influx of government spending kickstarted the US economy. Field re-examines the figures to argue that, in fact, as most of this capital could not be spent on consumer goods, it served to put a brake on productivity in the years immediately following the War. Meanwhile, wartime spending was not responsible for productivity growth. Rather, it merely made full use of the industrial and infrastructure capacity which had been laid down during the 1930s.



In the final third of his book, Field discusses the data from which his conclusions are drawn. He argues that expansion during the 1930s has historically been under-appreciated due to scholars’ persistence on examining the census period 1930-1940 rather than the business cycle 1929-1942.

He concludes with some reflections on what his finding might mean for our own time. He points out that the apparent productivity gains offered by information technology have so far not produced significant increases in GDP. He also argues that the post-2008 recession is unlikely to yield an increase in productivity unless it is followed by the kind of investment which closed out the Depression.