Great depression was global economic effect that took place in the 20th century. This scenario was due to world’s economy failing. The failure was brought by the drop of prices at the major stock markets which mainly commenced at the America’s Wall Street. The situation is said to have been the worst economic crunch the world has ever gone through! In fact depression is an excessive form of recession, in which economic turn around for a better situation is almost nil. This devastating condition is said to have started in 1929 and ended in 1940’s; just periods preceding the Second World War. The length of recovery is said to have ended differently in different countries. Why do I say this? Some countries like the Great Britain’s economy are viewed to have recovered faster than the Germany’s. The differences came along with the governments’ different policy adoptions.
Why Economic Crunch in America Affects the Other World’s Economic Players
It is said that ‘when America sneezes, other countries of the world reciprocate.’ To the lay person, this word seems not to have any meaningful impact. Real economic analysts actually know what they mean by this phrase. Of course this is due to their in-depth exposure to the monetary and economic issues. America is the super custodian of the world’s security hence putting it at the centre of holding the world’s delicate and crucial items. America has ensured its major contribution to the world’s economy through its role in investing in most of the economic valuable sectors globally. This style has made the economies of most states to be in a precarious position whenever America’s economy is threatened!
The above reason occasioned the kind economic problem experienced in this case. Such a situation is characterized by massive job cuts; meaning serious unemployment. It also leads to high inflation rates whereby the monetary value falls as individual price of commodities shoot to abnormal rates. Demand for needed items normally fall at such periods of time.
The Effects on Great Britain
The economic doldrums experienced by the Great Britain during that time was both swift and devastating. The employment rate reached its lowest ebb as the acquisition of various necessities proved difficult! This was due to prices of items sky rocketing, eventually leading to low demands for the same commodities. Actually, the magnitude of job cuts was equated to have been double the initial number by 1930. The domestic exports at the same had been found to hit a half times the previous amount. The currency stature also had faced challenges in regard to its value; which had fallen considerably. It was whole time total mess which mesmerized both the public and the United Kingdom’s governments!
Another impact of this situation was the way the ordinary people themselves sought to address the menace. It triggered public anger. The jobless groups thronged the lanes of Downing Streets as the hungry ones demonstrated their frustration with the government over this problem in the main city of London. This was evident in 1932, when the largest hunger match was conducted. Notwithstanding, about thirty percent of the Glaswegians had become jobless by 1933 and this could have among the propelling factors to taking such an action.
Among the remedies adopted by the government in order to alleviate this obstacle was sending about two hundred thousand jobless people to the work camps set up deliberately by the government. This exercise went on until end 1939. The government also took responsibility upon themselves to expand agricultural activity. This was mainly to help in affirming the economic diversity needed for its turn around. Emphasis was also put in motor and electrical goods industry. With the mentioned improvements, the government was also driving at raising the level of low income earners to the mass middle income category. The events majorly took place in the less industrial south of England and middle lands.
Depression on Germany
Just as Great Britain, Germany was among the major casualties of the great depression. The country which had earlier depended on the aid of USA for reconstruction was really affected when the funding was cut. Germany at the same period was facing leadership challenges. The head of the government by then, Adolf Hitler was a dictator whose obstinate and couth behavior landed the world into a fiercer and sophisticated Second World War than the initial one. Some of the impacts of this condition in Germany included job cuts by thirty percent (30%) towards 1933. This scenario also gave rise to communist groups and anti-capitalists Nazi fellows. Another result of the great depression is that it took longer than that of Great Britain to recover.
The reason to this trend can be attributed to the anti-reformist government. The Adolf Hitler’s government had adopted the totalitarian rule when it took the reigns of power. The ‘Lausanne Conference’ which was held in 1932 suspended the repayment of the war reparations by Germany. Record has it that Germany had already paid part of it and by adopting such controversial policy, had to draw a wedge between the country and her owed commercial partners. These are the weird and extreme power games that almost took Germany to the brink of collapse! It surely made the State to take a slow path to recovery for the worst economic depression ever experienced in the world.