Gespräch mit Prof. Glen H. Elder von der University of North Carolina, Chapel Hill

The Great Depression was a worldwide phenomenon that started in the USA on Black Thursday in 1929 and lasted for more than ten years. Today political and financial experts still argue if we have already overcome the crisis which began in 2008 and has lasted for about two years now. Is it too early to draw a comparison between these two periods in history?

I think it is. Absolutely. When I am asked to say something about this, I find it is simply not possible. I could not have told the full story on the depression cohorts until the men and women had reached forty because many of them turned their lives around. There were experiences that gave their lives new direction.

You can think about it this way: No phase of life is a life, it is part of it. Clearly the early years are formative. Those who “lost” their fathers in this period of the 1930s had more of a struggle, but many of them were able to do so in effective ways. When teachers claim that a young person is not going to make anything of himself that teacher is saying something that can only be said much later in life. We don’t know about the future and the possibilities that might be there.

In fact, if we look at what these young people were able to accomplish in life, there is not much difference at ages 40 and 50 between the younger boys (born 1928/29) and the older ones (born 1920/21), although one might recognize a hidden injury inside the younger boys. But in most cases, they have learned to manage and to make the best of life.

Comparing the Great Depression and the recession today where do you see the main difference?

Well, one difference with the earlier Depression generations is that they did not have a level of living like we do today. And, they were not living beyond their means in extraordinary excess like we have in recent years. When we think of the level of living in the late 20s, it was closer to hard times. Institutional protections (welfare state provisions) were not in place.

Today if one doesn’t have the money,  it is possible to charge purchases to  a credit card and live like someone at another level of income. I think institutions and banks have encouraged people to take out bigger loans and to buy houses they could not afford. Today, our challenge is to return to a point where we are living within our means. A major restructuring is needed, both of our social institutions and our own psyche.

Is the credit card system one of the reasons why the financial crisis of today does not hit as hard and as many families than it did in the 1930s because it is simply a lot more difficult to go bankrupt for an individual?

Easy access to credit for buying houses and cars dulled the senses as to what consumers could afford. Consequently, they were at risk of being far over-extended or heavily in debt. The financial crisis made it impossible to pay the debt. Bankruptcies soared.

Fortunately we are in a process of going back to regulations and some discipline in this area. However, we have to go back a long way. In the 1980s and 1990s when the number of bankruptcy cases increased advertisement would often take the position: If you do not have money that is okay. You can come in and drive off in a car and put nothing down.

Credit cards have functioned as a sort of cushion, but they are by no means a good support system. Because basically they lower one into a cyclical process of becoming more and more in debt and never really being able to get out. Although it is easier now to declare bankruptcy, the pain prior generations went through is not there.

We have undergone quite a change in notions that past generations would pass down to us: You can have this if you have the money to pay for it. But before the crisis, there were few constraints on consumption because one could get it on credit and credit was so easy.

Which families have been hit hardest?

As I say in “Children of the Great Depression” (1974/1999), when a lower income family loses a job that event profoundly changes their level of income and circumstances. For a middle income to a high income family, the loss is more of a station in life. It is a different kind of thing. It requires middle class families to cut back, to pull back to learn how to live on their means. For lower income families it comes closer to level of living essentials. So today we have families who have to go to the food bank or use various means that are available to keep them going. This resembles the families in Berkeley in the 1930s who went to the Welfare Society to get something to eat.

Supposedly the effects of the crisis are different in the USA, Germany and the UK – partly due to the social welfare systems and intervening political measures.

The USA learned a great deal of what it needed to do to support families during the 1930s but the contemporary support system is much less developed than we see in Germany. That is why it would be interesting to compare the effect of an economic crisis on families and youth in the three countries – Germany, Great Britain, and the United States.

As a colleague of mine put it: children don’t live in society, they live in a context, they live in a community, a neighbourhood. With our research and investigations we are basically taking seriously that notion of their own family, neighbourhood and community in these differing societies. There are notable differences in countries with respect to economic and social systems. In Germany, for example, we have the East-West–difference as well as North-South. Attention to such variations enables us to place young people in a context where they are making decisions about their future. 

Do we know the exact figures of families suffering from economic hardship right now in the States as a result of the recession?

What we have is typically the unemployment rate. But unemployment is an underrepresentation of the full impact because some people are – what I would call – underemployed. They either have taken a job beneath the job they had or they were placed on a halftime basis. If we looked at the Great Depression in terms of such changes probably over 60 percent of the families were affected by them. We need to think about and include all these changes.

Would you dare give us a percentage of the number of families being affected today?

Well, the worst time in the Great Depression was 1933 with about 26 percent unemployed at a point in time. From an unemployment point of view and thinking of the economic consequences of it we can identify five states in the U.S. that are going through very hard times with unemployment up to 17 percent: California, Florida, Michigan, Illinois and Arizona.

But economic conditions vary greatly by region and type of industry. Some sectors are doing much better than others. The car industry (General Motors, Ford, etc.) nearly died a couple of years ago and now it s making money again and is re-employing people. What if government had decided not to help these companies survive?

The unemployment rate of students leaving American universities is at 9 to 10 percent. I have run into many students who have had very difficult times finding a job. What happens is basically they are bumped down. They take anything that’s available. What they are doing is holding their place until times improve. Some are treading water while others are going back to school if they can manage the cost of it. 

If you compare the unemployment rate in the US with with the one in Germany?

As you know, Germany is down to a rate of 7 percent unemployed right now. But again there are lots of regional and even local differences throughout Germany. If we look at the area around the airport of Munich, the figures are down to 2 or 3 percent.

An essential part of your theory is that children are more than passive or re-active members of a family. The older they are the more active they become. As biographical “agents” they can play an active role in handling even difficult family situations and support the families. Where do you see opportunities for today’s youth to achieve this feeling of efficacy, that they matter at an earlier stage in life?

In hard times, we do many things ourselves that we have previously paid other people to do. In the 1930s and during the war years the household became a labour intensive environment with a lot of canning and preparation of food that would ordinarily be purchased. That was very common. And children had a role to play in this household production.

I have experienced this activity with my own children when we set aside a weekend to make applesauce. This was something I enjoyed doing when I was a child and wanted to do with my children. Now they enjoy doing it with their children. What happens here is that you have something like a family factory. We are all in the kitchen telling stories. One of my grandsons reportedly said the following to his father: “I like applesauce weekend even more than Christmas!”

When children are doing something that really matters, they are likely to enjoy being part of the enterprise. A lot of people in past generations grew up with this feeling of enterprise. I think that there is no question that children who are being counted on gain a sense of confidence, efficacy and thrive. One of my sons who enjoyed working with me in the vegetable garden asked me the following question: “Do you count on me, Dad?” I replied that I sure do. Then he answered by noting: “I work best when you count on me.”

Do you see any signs of a change in youth’s consuming behaviour? Does the experience of a recession help to change the no-limits-mentality resulting in debts and loans into a lifestyle that is more orientated on sustainability which is kind of fashionable right now ?

Surveys have been done on this with college students and on how the crisis has influenced them. It is clear that a lot of students are putting aside credit cards and are changing their purchasing habits in response to the economic situation. For those who are much more on the margin, it has changed their decisions on whether they are going to spend all year in school or take a semester off and work full time. And then come back to finish up.

We need to think about what living in a consumer-oriented society does to us as people and what it does to our children. It removes activities that typically give us a sense of fulfilment and efficacy. It is true that we can buy many things but when we make them it gives us so much more gratification. This is true for gifts, too. Making a gift for someone becomes a special treat for that person.

The future is to some extent always unknowable. Do you see adaptability as the most needed skill today?

You are right, but one can be as prepared as possible to deal with it. It is kind of like what some rural families in the American Midwest experience: “We don’t know what weather is going to bring. It is always an uncertain world out there. But we get as prepared as we can. Instead of using all our resources we save some back because we know we are going to have some difficult times in the future.” Today the pace and nature of change has accelerated exponentially. We are having to adapt in a shorter period of time to new  and more challenging conditions.

Professor Elder, thank you very much for this interview!

 

Glen H. Elder, Jr. (born 1934) is Howard W. Odum Research Professor of Sociology und Psychology at the University of North Carolina at Chapel Hill. He did longitudinal research on the positive and negative effects of poverty and deprivation on the life course of children and became famous with his study” Children of the Great Depression“ which was published in 1974 and reissued in an enlarged 25th anniversary edition in 1999.

Contact
Professor Glen Elder, University of North Carolina


DJI Online / Stand: 13. Juli 2010

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