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By the beginning of the First World War, the United States was the largest industrial country, accounting for more than 35% of production. Thanks to the developed agriculture, infrastructure, extremely favorable natural and economic conditions, proximity to the inexhaustible markets of the South American continent and a quite advantageous distance from the conflicting Europe, the USA already not only provided itself with all necessary things, but also seriously pressed their competitors by making an application for world leadership.
However, in October 1929, a crisis broke out on the New York Stock Exchange went down in history as the Great Depression.
It began in the USA and then embraced other areas. The world experienced three waves of inflation. The first embraced households of a number of agrarian nations. The second led England in September 1931 to abolish the gold standard of the pound sterling, and its dominions, India, Brazil, Argentina and Scandinavian territories. In spring of 1933, in connection with the departure from a gold standard of the United States, a third wave rose.
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As a result, the currencies of 56 states depreciated. Officially crisis ends in 1940, but the US power was able to recover from the Second World War.
The Great Depression was synchronous and comprehensive. Its name was due to an emotional condition in which community being. Humans really plunged into a state of depressive numbness. The causes of it remain a subject of ongoing discussions about the role of government policy and activity of a private business. From the view of economic theory, it came about because of an overproduction of commodities and a deficiency of currency for their purchase.
Since cash was tied to gold, and the amount of this substance is restricted, there was a deficit of funds as a demand for items. Further along a chain, the “domino principle” worked: deflation, bankruptcies of enterprises, unemployment, barring duties on imported wares, a decreasing in consumer demand and living standard.
By its nature and origin, a world economic crisis of the early 30's was cyclical. However, its exceptional destructive power was thanks to the fact that new long-term factors joined an action of a traditional mechanism. The main one was a common breakdown of capitalistic ideology. Accelerated by the First World War, the establishment of state-monopoly capitalism entailed a rapid enhance in a concentration of production and capital.
On this basis, tremendous strengthening of the monopolies and their role in the economic life occurred, which made it impossible to restore pre-war relations even after a liquidation of the military mechanism for state regulation of household. In the midst of a crisis of the early 1930s, negative consequences of anarchy were fully manifested.
Essential changes introduced in other areas of life. In the social sphere, it is necessary to note the increased activity of workers who began to fight for better living conditions and social benefits. In the field of international relations, a collapse of the Versailles-Washington system of postwar settlement started. The theoretical and practical search for new means and methods of combating the crisis became more active. A dominant vector of such looking for was strengthening of state intervention in the economy.
Thus, the uniqueness of the Great Depression due to the action of all the above factors was expressed in a rare combination of a number of features like its extraordinary depth, duration, and a general nature. This was an original phenomenon impacted all spheres and determined for the next years a lot of world trends.
Great Depression Essay Introduction. (2018, May 18). Retrieved from https://studymoose.com/great-depression-essay-introduction-essay
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