Great Depression II Economy II Brain Tech Tutorial

What is the Great Depression?

The Great Depression was a severe, worldwide economic downturn that lasted from 1929 to 1939, beginning in the United States with the stock market crash of 1929. It was characterised by widespread unemployment, bank failures, sharp drops in industrial production and trade, and extreme poverty. The global impact was profound, leading to a drastic decline in economic output and significant social and political changes.  

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  Timeline: 

  The period is generally considered to have started with the US stock market crash in October 1929, and the worst years were the early 1930s, with recovery beginning in the late 1930s. 
• Causes: 

  Contributing factors included a decline in consumer spending, the stock market crash, monetary contraction, and problems within the banking industry. 
• Impact:

  • Unemployment: The unemployment rate in the US reached 25% by 1933.
  • Bank and business failures: Over 5,000 banks failed in the US, leading to a loss of savings for many. 
  • Reduced trade: Countries implemented protectionist policies, leading to a sharp drop in global trade. 
  • Other effects: There was a significant drop in industrial production and GDP, and many farmers lost their land. 
• Government response: 

  Policies like Franklin D. Roosevelt's "New Deal" were implemented to stabilise the economy, and the economic stimulus of World War II ultimately ended the Depression in many countries. 
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Impact of the Great Depression on the working masses

The "working mass" (labour force) during the Great Depression faced mass unemployment, drastic pay cuts, and widespread poverty. Unemployment in the United States peaked at an astonishing 25% by 1933, meaning one in every four workers was jobless.

Impact on the Working Mass

• Mass Unemployment: Millions of people lost their jobs as businesses failed or significantly scaled back production due to falling demand and a weak banking system. In industrial nations like Germany, the rate was even higher.

• Wage Reductions: For those who managed to keep their jobs, significant pay cuts were common, sometimes by a third or more, drastically reducing household income. 

• Poverty and Social Distress: The loss of income led to widespread poverty, homelessness, and social dislocation. The rise of shantytowns, known as "Hoovervilles" in the US, became a symbol of the era's suffering. 

• Agricultural Crisis: Farmers were hit hard by a sharp decline in crop prices and environmental disasters like the Dust Bowl in the American Midwest, leading many to lose their land and become migrant workers. 

• Global Impact: The effects were global, with international trade plummeting and the crisis contributing to political instability and the rise of extremist movements in countries like Germany.

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