Question

What was the liquidationist theory in the early 20^th century?

Answer 1

The individuals basically believed that economic agents should be forced to re-arrange their spending proclivities and alter their alleged profligate use of resources. If it took mass bankruptcies to produce this result and wipe the slate clean so that everyone could have a fresh start. The liquidationists viewed the events of the depression as an economic penance for the speculative excesses of the 1920s. Thus , the Depression was the price that was being paid for the misdeeds of the previous decades. This is perhaps best exemplified in the quotation of Treasury secretary Andrew Mellon , "iquidate labor, liquidate stocks , liquidate the farmers and liquidate real estate."