Depressionand the Rise of Fascism
Aglobal phenomenon, the Great Depression was a major economic downturncontrary to other economic crises that were experienced before. Pasteconomic downturns were confined to specific regions or in a handfulof nations. Asia, Africa, Europe, Australia, North America and SouthAmerica regions suffered from the major economic collapse. There wasa large percentage in the fall of international trade as countriestried to save their industries through the rise of tariffs onimported products. As the depression persisted, unemployment crisiswas evident all over the world. The deepening of the depression hadfar-reaching political consequences as some countries turned tomilitary dictatorship (Tankard75).The military dictatorship was imminent in Central American nationssuch as Argentina. Industrialized Western nations sharply cut backthe purchase of raw materials as well as other commodities. Pricesdropped sharply on various products such as cotton, coffee, tin, andrubber. As a result of the collapse of agricultural commodity pricesand raw materials, there was social unrest which led to militarydictatorships promising to maintain order.
Themain aspects in the Great Depression
Thegreat depression led to responses from various countries. Fascism andmilitarism were evident in Italy, Japan, and Germany (Haywood368).Adolph Hitler through the Nazi party made a promise to restore theGerman economy and also rebuild the military. Hitler outlawed unionsand restructured the German industry into cartels. Massive militaryrearmament was instituted reducing the high unemployment. Fascism wascharacterized by nationalists, one-party-rule, supreme leaders andracists (Nazism).
Therise in power by Joseph Stalin in the Soviet Union led toindustrialization and mass collectivism. It was a case of a plannedeconomy. Peasants were forced onto collective farms. The communistparty nationalized the private property of the many peasants in thenation. Stalin had control over the arts with an emphasis on thesciences and social realism. Political assassinations were carriedout with peasants being exiled in what was referred to as GreatPurges.
WelfareCapitalism was exercised by France, Great Britain and Canada. Thegovernment assumed the responsibility to distribute wealth and powerfairly. The government also provided security against unemployment,bankruptcy, and destitution.
Impactof the Great Depression
Manycountries succumbed to the pressures of the Great Depression. TheUnited States was the center of the trade as many countries hadestablished trade ties with the region. Trading with America wasstopped and this was a major shock to various countries. Thus, theGreat Depression infiltrated to other nations. Another major reasonwas the US being a major lender to these countries. Loans advancedwere called back and the wave of the Great Depression was felt acrossEurope. The spread was also catalyzed through the acceptance of theGold Standard. Nations around the world were involved in a fixedcurrency exchange.
Impactin the American Economy
TheGreat Depression became the deepest and longest-lasting downturn inthe economic history of Europe (the Western Industrialized world).The crash of the stock market led to the onset of the GreatDepression in the United States. The Wall Street was sent into apanic with millions of investors being wiped out. The next severalyears saw a drop in consumer spending while investments dropped. Theindustrial output declined steeply. Levels of unemployment roseevidenced by employee layoffs by failing companies. The lucky few whoremained employed had to bear with low wages. The buyer purchasingpower decreased tremendously with many falling into debt. Most of thecitizens were compelled to buy on credit and eventually fell intodebt. In effect repossessions and foreclosures increased. The GreatDepression reached its nadir in 1933.. The banks in the country hadcollapsed, nearly half of them. The incumbent president at the timeFranklin D. Roosevelt put relief and reform measures to lessen toeffects. However, the economy did not turn around fully until after1939.
Impacton the Stock Market in the US
TheAmerican economy experienced an ordinary recession in 1929. Unsoldgoods started to pile up, and the consumer spending droppedtremendously. Production was slowed from the effects, and eventually,stock prices rose. The stock market crash happened in 1929. Investors dumped shares en masse leading to a crisis in the stockexchange market. The situation caused the bursting of the stockmarket bubble. There was a record of 12.9 million shares traded in aday, the "Black Thursday." The following week, the "BlackTuesday" was experienced and 16 million shares were traded.Millions of shares were worthless leading to a wipe out of investorswho had bought the stocks earlier (Ziebarth 90).
TheGreat Depression saw Canada experience a rise in the unemploymentrate to 19 %. A lot of teachers were forced out of their work. Thegovernment was unable to pay them.
Nationsin the Continent had strong trade ties with the United States. Theyhad depended so much on the American trade and thus were greatlyaffected. One notable example was Brazil that suffered to a greatextent from the devaluation of coffee, its major trading commodity atthe time. Chile was declared the worst and most affected country bythe League of Nations. It suffered heavy economic losses.
Europealso experienced significant effects of the Great Depression withvarious countries dealing with differentiated impacts. In theNetherlands, depression began later and was more gradual compared toother nations but lasted a bit longer. Netherlands refused to dropthe Standard of its Gold and thus catalyzing the impact. Germany alsoexperienced some impact to the extent that it started invading theneighboring nations. Dictatorship regimes found their way in Germany,Italy, and Japan. Mussolini led the dictatorial regime in Italy whileAdolph Hitler ruled Germany at the time (Haywood 366).
Unemploymentreached the rates of 13.5% in the areas of Midland and Southwest.However, the rise of unemployment in the areas did not last long. Themost hit areas were the Northern parts where depression was felt from1934 to 1935.
Theonset of depression happened in 1931. However, the damage was muchless as a result of high self-sufficiency.
TheAsian continent was less hit by the depression. There were quickinterventions and efficient measures to mitigate the impact. Forinstance, Japan implemented the set policies, and as a result, othernations used the strategies. China had powerful interventions as thegovernment had distanced itself from the people`s economy.
MeasurableIndicators of Economic Change
TheGreat depression led to economic shocks that were indicated in thegeneral economy. The rise of unemployment levels was widelyexperienced, and the sudden rise impoverished the economy. Shareprices dropped tremendously weakening the power of investors whopulled out of the business. Another key indicator was the change ofprices in the consumables which resulted from the rise in demand. Anincrease in inflation and interest rates were other indicators inwhich their unfavorable trend weakens the economy.
Lessonsfrom the Great Depression
Economistsand policy makers have used the possible causes of the economicdownturn to come up with various mitigation strategies to shieldeconomies from a recession. The global economy is regulated to someextent by global bodies such as the Word Bank and InternationalMonetary Fund. Individual nations have also come up with policies toregulate their stock markets and the export-import market. Fiscalpolicies are set to review interest rates that in turn are applied tothe operations of financial institutions. Commodity prices are thusregulated and in event controlling the levels of production. Throughkey economic indicators, the countries can analyze the state of theeconomy and take effective measures (Tankard75).Economic blocks, for instance, the European Union have emerged tostipulate various trade policies and ensure favorable tradingenvironment between the nations.
Onthe use of technology, countries have ensured the maximization ofinventions to reduce risks such as food shortage and other threatsthat may weaken the economy. The countries have also enhancedtechnology use to diversify investments and improve the economicstatus of the residents. The move is to ensure unemployment isreduced and also a strategy to reduce dependency on foreign loans(Tankard74).
Haywood,Geoffrey. "Mussolini And The Rise Of Fascism". Mod.Italy 14.03(2009): 366-368. Web. 8 Oct. 2016.
Tankard,Keith. "The Effects Of The “Great Depression” Of The Late19Th Century On East London 1873–1887". SouthAfrican Journal of Economic History 6.2(2011): 72-88. Web. 8 Oct. 2016.
Ziebarth,Nicolas L. "Identifying The Effects Of Bank Failures From ANatural Experiment In Mississippi During The GreatDepression". AmericanEconomic Journal: Macroeconomics 5.1(2013): 81-101. Web. 8 Oct. 2016.