Depressions and Recessions

Hi Dr. Wolff. I was hoping you might answer a question I had regarding the poverty that is concomitant with recession and depressions. My question is really quite simple: where does all the sudden and new poverty come from in a recession/depression? I find it strange since the raw materials of the economy have gone nowhere. There is no crop failure and yet there are food shortages. The goods, services, and raw materials of the economy don't simply vanish and yet, apparently, all the money does and hence availability to these goods and services. It appears as though depressions aren't even real features of the material world, but rather our economic system. I was hoping you might explain what exactly is going on, how do we get this apparent contradiction in the scarcity of money but not of goods and if our capitalist system is partially or entirely to blame.

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  • Isabel Sydow
    commented 2017-01-06 10:33:34 -0500
    Entirely. Definitely entirely to blame.
  • Isabel Sydow
    tagged this with good 2017-01-06 10:33:34 -0500
  • Tom
    published this page in Ask Prof. Wolff 2017-01-05 02:59:23 -0500