Buckminster Fuller in "Critical Path": A Unique Window Into The Great Depression
"Critical Path" was one of my favorite books, but because my first reading was more than 30 years ago, I don't always remember the particulars. So when I tried to recall his take on the Great Depression, I scanned as much of the chapter "Legally Piggily" as possible for this post. A word of warning! Some history buffs (and other specialists) who would pick up this book may be put off by his style, for he romps through history (and everything else) with a voice like no other and he is not easy to categorize. Perhaps that is what still makes him so interesting, to this day. For all the recollections of the Depression years, we just don't seem to have the full range in viewpoints that one would expect. Perhaps that's why earlier depressions tended to catch people off guard, for too many people had forgotten the last one when...arggh, it happened again. So I tried to round up as many "nuggets" and recollections as possible. Since there are too many quotes to post, I will summarize and paraphrase some of the elements which are central to the story he tells.
Fuller believed that swift technological evolution was responsible for the Great Crash, in the years leading up to the beginning of WWI and U.S. entry in 1917. In 1914, J.P. Morgan began purchases to help the British and their allies - an amount of goods from the U.S. equaling all the monetary bullion available to the "ins" power structure. Despite the unprecedented magnitude, it only fractionally tapped the available productivity of the U.S. Reading this I thought, how much of history would actually have been written, if nations never considered options beyond one's gold standard?
Ultimately the bills were run up, and the question became, how to pay? When Congress told J.P. Morgan that payment was no issue, he insisted it was, and a national income tax became the result. During WWI, U.S. industrial production was at $178 billion when there was $30 billion actually available. Because the debt to the U.S. was twice that of all the gold the "ins" had, all the countries involved paid their gold to the U.S. and consequently went off the gold standard. The U.S. then arranged vast trading account loans which created a boom - bust- boom sequence prior to the Great Crash.
However, prior to 1929, there was a vast amount of production capacity from WWI that was still in prime condition. What to do with it? Young people wanted autos, but the autos then were not yet being mass produced, and banks would not make loans for them. At the time, banks would accept chattel mortgages and time payments on large mobile capital goods such as trucking equipment, at least for large corporations. However, banks did support tractor-driven farm machinery. They would hold a chattel mortgage on the machinery, plus a mortgage on the farmland and all attached buildings.
There was a rough hog market in 1926, which made it difficult for many farmers to make payments on their equipment. Local banks foreclosed on delinquent farmers' mortgages and machinery, with the assumption buyers would be at the ready. Alas, no buyers were in the offing and the previous owners, now bankrupt, could not buy their farms back. Dust bowls developed as upturned, unsown soil began to blow off the farms. Of course it helps to remember that a substantial part of the population still lived on farms at that time.
In 1927 and 1928, the bigger western city banks began to foreclose on their local county banks that had financed the farm machinery sales and were forced to borrow from the former. First the little and then the larger banks found that they had foreclosed on farmhouses with no indoor toilets, many with roofs falling in, barns in poor condition, and farm machinery rusting in the open elements. Word of the bad news spread; small bank runs started, then the crash. Business dropped, unemployment rose, prices dropped and no one had money. Larger banks foreclosed on smaller ones. In early 1933, 5000 banks closed their doors.
No one paraded or protested but instead became low in spirit. When the largest banks faltered, FDR was inaugurated four months early. He immediately signed the Bank Moratorium and about a month later, Congress voted the president the ability to control all money. U.S. citizens and their government had become the "wealth resource of last recourse". In 1933, the value of what Buckminster Fuller called "land-based capitalism" plummeted.
When Congress started the investigation of the banking system, they saw how many of the mortgaged properties were all but uninhabitable. At this point government dictated the banking strategy and started refinancing of the building industry. But the so-called building industry (remember this is Fuller talking, though I definitely relate) was already 2000 years behind the arts of building ships of the sea and sky. While airplanes and ships are weight and environment considerate, there is no weight consideration to design land-anchored environment controls. Instead they are completely dependent on sewers, waterlines, electric lines, highway maintenance and controlled by prime landowners with building codes and nearly impossible legal restrictions. Suffice to say I am being reminded now, why portions of this book became hardwired into my brain.
Even though Buckminster Fuller decried the socialist decisions made at the time, he completely understood why they were necessary. But he wanted humanity to move into a state of true wealth: wealth still not possible as we continue to struggle with outdated interpretations of building product in the present. Perhaps people did not see Fuller for the proponent of freedom and prosperity that he actually was, because his idea of a different kind of wealth other than land was not unlike the philosophy of the American Indian as described by William Cronon in "Changes In the Land"(1983). For me, land wealth is important, but not primary. Whenever people see land wealth as the primary wealth attribute, they inadvertently lose land value anyway, whenever human attributes of wealth get stripped away from it. Let's do our best, not to let that happen again.