Economist Stephen Davies suggests that we are, and that the current recession - or whatever it is - look more like the Long Depression of 1873 - 1879, than the Great Depression of the 1930s. This matters because our policy responses as of yet has assumed that the factors driving the current economy are similar to those of the 1930, but these responses might be the wrong ones.
Here's his rationale: What we are going through is a prolonged global contraction driven by the disruptions caused by ongoing consequences of shifts in technology, not a sharp decline in economic activity driven by a lack of liquidity (capital). The same shifts were occurring in the late 19th Century. New technologies replaced the old and the disruptions caused very real pain on those not able to adjust, but ultimately benefited those who could, as well as the country as a whole:
. . . the 30 to 40 years after 1870 saw the advent of technologies that
would define modern life, including electricity, the internal-combustion
engine, the telephone, the diesel engine, and the modern petroleum
industry.
As a result, the official figures are seriously misleading. While
nominal wages stagnated or declined, real living standards increased
because of the falling cost of products. Output increased, but this is
not captured unless one applies a GDP inflator to account for the
increasing value of money. So the Long Depression of the 1870s and 1880s
was not a simple story of economic standstill.
So what happened? Essentially a set of innovations in technology and
business organization made in the later eighteenth and early nineteenth
centuries had exhausted their potential to raise productivity and growth
by the 1860s. This, combined with mistaken policies, had led to
malinvestment and a significant buildup of debt by the early 1870s in
both Europe and the United States.
What followed, Irving Fisher argued, was a crisis brought about by
the realization that many investments were not going to pay enough and
the consequent need for sustained “deleveraging” (paying back or writing
off of debt). At the same time there was a burst of technological and
organizational innovation. This increased productivity and created many
new products but also led to large adjustments as older industries and
forms of employment shrank, prompting a large movement of labor. This
took some time, so the costs of the transition in human terms were
significant.
