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Canada the Great Depression 1929-39 a Marxist analysis

Marxist Analysis · 2026-05-13

Core Argument

The article argues that the Great Depression of 1929–39 was not an accident of financial speculation or policy error, but the inevitable expression of capitalism's internal contradictions — specifically the crisis of overproduction that Marx identified as the root of every capitalist slump. The central thesis is that neither laissez-faire orthodoxy nor Keynesian state intervention (the New Deal) could resolve the underlying crisis; both failed because neither addressed the fundamental question of who owns the means of production. The Depression was only ended by the Second World War — a resolution that cost 55 million lives and brought humanity to the brink of nuclear annihilation. The article insists that the current crisis, triggered by COVID-19 but prepared by decades of overaccumulation and fictitious capital, is a new depression in the making, and that the same lesson applies: capitalism cannot be reformed out of crisis, only abolished.

Theoretical Grounding

The analysis is rooted in classical Marxist crisis theory, drawing directly on Marx's law of the tendency of the rate of profit to fall and the concept of overproduction as the ultimate cause of crises. It deploys the category of fictitious capital — Marx's term for capital that exists only as a claim on future surplus value, with no basis in actual production — to explain the 1920s stock market bubble, including the pyramid of investment trusts that Galbraith described. The article also draws on Trotsky's analysis of the New Deal as the "mirror image of fascism" — both being methods for saving capitalism, distinguished only by the relative wealth of the imperialist nation able to afford reformist sops. The theoretical framework is explicitly that of the Trotskyist tradition: the critique of Stalinism's "Third Period" ultra-leftism (the theory of social fascism, the refusal of united fronts, the splitting of trade unions) is central to explaining why the revolutionary potential of the 1930s was squandered. The article also invokes Ted Grant's analysis of the post-war boom as a temporary and contradictory stabilisation that would inevitably prepare a new depression.

Conjunctural Relevance

The article is explicitly written for the present moment — June 2020 — and frames the COVID-19 pandemic as the trigger that has exposed long-prepared underlying contradictions. It draws direct parallels between 1929 and 2020: the return of inequality to 1920s levels (the top 0.1% in the USA amassing 25% of all wealth in 1929, a figure that had returned to similar heights in the recent period); the explosion of fictitious capital and margin lending; the failure of "socialism for the rich, capitalism for the poor" after 2008; and the resurgence of protectionism under Trump. The article notes that within two months of the pandemic, most countries had reached Depression-era levels of unemployment. It connects the 1930s struggles — the On-to-Ottawa Trek, the Regina Riot, the Flint sit-down strike — to the 2020 uprisings following the murder of George Floyd, arguing that Minneapolis, site of the 1934 Teamsters' strike, is again writing working-class history. The article positions the International Marxist Tendency (now the Revolutionary Communist International) as the inheritor of this tradition, with the advantage of having learned from the defeats of the 1930s without the burden of Stalinist degeneration.

Where the Argument Continues

The article is part of a broader corpus of Marxist analysis of capitalist crises. It explicitly references Ted Grant's essay Will There Be a Slump? as the theoretical foundation for understanding the post-war boom and its inevitable reversal. The argument about the New Deal's failure connects to Trotsky's writings on the New Deal and to Maurice Spector's contemporary analysis of the 1937 recession. The critique of Stalinist "Third Period" policy is developed at greater length in the Marxist tradition's treatment of the Communist International, and the analysis of the CCF's reformism points toward the broader Marxist critique of social democracy and labour parties. The article's treatment of the Relief Camp Workers' Union and the On-to-Ottawa Trek is a case study in the broader question of how revolutionaries should organise the unemployed and link their struggles to those of employed workers — a question taken up in other IDOM articles on transitional demands and the united front. The argument that "no historical analogy is absolute" signals that the current conjuncture requires fresh analysis, not mechanical application of 1930s templates.

Connections

  • Trotsky, Leon — The New Deal: Mirror Image of Fascism (the article's key theoretical reference on reformism)
  • Grant, Ted — Will There Be a Slump? (the analysis of the post-war boom's contradictions)
  • Lenin, V.I. — "Left-Wing" Communism: An Infantile Disorder (the critique of ultra-left sectarianism and the necessity of working within reactionary unions)
  • Galbraith, John Kenneth — The Great Crash (the empirical account of 1929 speculation, cited approvingly for its description of fictitious capital)
  • Spector, Maurice — contemporary analysis of the New Deal's failure (cited on the 1937 recession)
  • Marx, Karl — Capital (the theory of overproduction and fictitious capital)
  • Berton, Pierre — The Great Depression (the human history of the period in Canada)
  • IDOM articles on the current conjuncture, the transitional programme, and the critique of "Green New Deal" proposals
  • Against the Stream episodes on the 1930s and on the current crisis

Key Quotes

  1. "Marx explained that in the final analysis, the cause of every capitalist crisis is overproduction."

  2. "Trotsky explained that the New Deal was the mirror image of fascism: 'Two methods for saving historically doomed capitalism are today vying with each other in the world arena – fascism and the New Deal.'"

  3. "A program which wishes to maintain the foundations of capitalism untouched cannot offer a way out of the crisis… Mr. Roosevelt desires to ameliorate the situation of the toilers in so far as it is necessary to save the capitalist system. I see the only way out through liquidating it once and for all." — Trotsky, quoted in the article

  4. "The short-lived New Deal recovery proved an illusion. The Roosevelt Administration spent $20,000,000,000 trying to pull capitalism up by its bootstraps… The fact of the matter is that there never was any recovery in the sense of an expansion of capital. There was a restoration of profits and a temporary stabilization at a lower level." — Maurice Spector, quoted in the article

  5. "It was not the New Deal that ended the Great Depression, it was the Second World War. Initially, debt-fuelled war production gave a stimulus to industry while the unemployed were given a regular paycheque in the army."

  6. "We have the clean banner of socialist revolution, and the ideas of Marxism to offer a way out to the workers of the world. In ideas we have the overwhelming advantage over our forebears of being able to learn from their victories and learn from their mistakes. We stand on the shoulders of giants."