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12. War and Revolution (Milestones of Century)

Great Depression: capitalism unraveling

Overview

began with abrupt stock market crash in October 1929; lasted for a decade

suggested that Western capitalism was failing (like Marx predicted)

economic system unraveled all across Euro-American heartland of industrialized capitalist world

contracted stock prices that wiped out paper fortunes nearly overnight

banks closed

many lost their life savings

investment dried up

world trade dropped by 62% in a few years

businesses contracted or closed

unemployment soared

in both Germany and United States: reached 30+% by 1932

symbolized by

vacant factories

soup kitchens

bread liens

shantytowns

beggars

Beginnings: United States

experienced booming economy in 1920s

by 1930, farms and factories produced more goods than could be sold (home or abroad)

speculative stock market frenzy drove stock prices to unsustainable level

ripple effects quickly encompassed industrialized economies of Europe

intimately tied to United States through trade, debt, investment

Impacts

Economic

most affected: countries or colonies tied to exporting one or two products

colonial Southeast Asia: demand for rubber drop dramatically as automobile sales in Europe, United States halved

Gold Coast (present-day Ghana, colony of Britain): farmers who staked economic lives on cocoa badly hurt by collapse of commodity prices

Latin America: value of exports cut by half; led to widespread unemployment and social tensions

governments sought to steer their economies towards producing for the internal market (import substitution)

Mexico: revived principles of Mexican Revolution under Lázaro Cárdenas (1934-1940)

pushed land reform

favored Mexican workers against foreign interests

nationalized an oil industrial dominated by American capital

Political

sharply challenged governments of industrialized capitalist countries

people looked at Soviet Union’s economic growth

dispossession of propertied classes

state-controlled economy

no Western country opted for Soviets’ dictatorial and draconian socialism

Britain, France, Scandinavia: “democratic socialism”

greater regulation of economy

more equal distribution of wealth

peaceful means, electoral politics

United States: New Deal (1933-1942)

President Franklin Roosevelt

permanently altered relationship

government

private economy

individual citizens

involved

immediate programs of public spending

dams

highways

bridges

parks

longer-term reforms

Social Security system

minimum wage

various relief and welfare programs

support for labor unions

subsidies for farmers

new degree of federal regulation and supervision of the economy

impact

did not work well to end Great Depression

economic disaster did not decrease until the massive government spending required by World War I

most successful to cope with Depression

Nazi Germany

increasingly militaristic Japan

Overview

Beginnings: United States

Impacts

Economic

Political

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