Economic Turmoil: Post-WWI Era and the Great Depression
The World Economy: 1919-1924
Economic Implications of Post-WWI
- Heavy casualties and material losses
- Disarticulation of the economies of losing countries
- Trade war compensations
- Disorganization of the monetary system
Economic Policies After the War
- Lack of cooperation in the early post-war years and protectionist policies
- The Dawes Plan to improve the economy
Economic Growth in the U.S.
- Increased production and cheaper prices
- Economic stagnation in the United Kingdom
- Serious crisis and recovery in Germany by 1925
The Stock Market and the Great Depression
Why Investors Speculated in the Stock Market
Investors preferred speculating in the stock market because stock values continued to rise, attracting new investors to the New York Stock Exchange.
The Stock Market Crash of 1929
The stock market crashed in October 1929 due to a contraction in employment and production. Banks began to reduce lending to stockbrokers.
Characteristics of the Great Depression
- The stock market crash destroyed savings and drastically reduced credit, consumption, and investment.
- Bank failures occurred as people withdrew savings, and many loans went unpaid.
- A crisis in investment demand led to industrial crisis and overwhelming unemployment rates.
- The richest country in the world lacked adequate support systems for the unemployed, leading to widespread misery.
- The agrarian crisis was accentuated by price collapses, reducing the purchasing power of rural populations, even more so than in cities.
Extension Mechanisms of the Crisis
The crisis spread through trade and finance.
Effects on the Rest of the World
All countries implemented protectionist barriers, dramatically hindering international trade. The U.S. reversed its investments in Europe, plunging the continent’s economy into crisis. Social consequences were widespread.
Responses to the Crisis in the 1930s
Comparing National Approaches
Different countries set different political and economic policies in the 1930s to stem the crisis:
- United States: Franklin D. Roosevelt launched the New Deal, a state economic intervention program with measures to combat the crisis, revive the economy, and create jobs.
- United Kingdom: Increased protectionism and trade agreements with its colonies.
- France: Launched a public works program to promote employment and working arrangements to improve the living standards of employees.
- Germany: Implemented state control of the economy, sought self-sufficiency, and encouraged public works and armaments industries to eliminate unemployment.
The Changing Role of Women
Women in the 1920s and 1930s
Compared to the past, women gained access to work in factories, offices, public services, liberal professions, and public offices. The extension of voting rights significantly increased women’s social weight.
Mass Media and Culture
The Rise of Mass Culture
The expansion of mass communication media (radio, film, comics) produced the appearance of a mass culture and an image based on the word, shaping forms of thought.