Definition of the Great Depression

On October 29, 1929, the world was sinking. Well, not all, but a good part, at least that which was beginning to globalize and become deeply involved with the capitalist model of economy.

That day, baptized as black tuesday, the New York Stock Exchange was sinking, despite the fact that it had already shown signs five days before (the black thursday, which had been barely contained), victim of a series of conditions and structural failures of the system, dragging the world into a savage economic crisis, with few precedents in the world of economy. It was the Great Depression.

The Great Depression was the period that, spanning from October 1929 to the start of the Second World War, represented a economic crisis that was felt globally, with greater or lesser intensity depending on the countries and, especially, in the States United.

It was a financial crisis, a consequence of the investor euphoria of the post-World War I period. The European powers had lost their hegemony, the USSR was being isolated from the world, and the United States emerged as the new power, although still half asleep and half isolationist, allowing itself to intervene only in the affairs of the American continent (which was already annoying for some countries Latin Americans ...).

In this context, the American economy took a quantitative leap forward that propelled it to the first place in the world order. Investing in the stock market had become popular, and the growth in stock prices seemed to have no end.

To this must be added that the economies of most countries in the world were more interrelated narrowly than before, with which we have the perfect setting for the fall of the main actor to drag to others.

The country whose images of the great depression have remained in the collective imagination for posterity was the United States

There the crisis was primed with the population at all levels, both in the city and in industries, but also in the countryside, in rural areas.

However, the crisis struck a global blow, and this caused a lot of damage to international trade.

To get out of the crisis, innovative solutions were needed, and these came from the hand of the British economist John Maynard Keynes.

For simplicity, we will say that Keynes believed in public intervention in the economy to facilitate the circulation of money in times of crisis with the aim of getting workers to spend and thereby reinvigorate the economy.

The economic system capitalist, based on supply and demand, was thus driven, since the more money people have, The more they spend, the more companies earn from it, which can better pay their workers, who, in turn, complete the circle spending more.

In this way, the economy forms a perfect circle that moves continuously.

In the United States, theses keynesian They were adopted by the new President Franklin Delano Roosevelt, elected in 1933, who summed up his ideas for overcoming the crisis in the so-called New deal.

New deal means "new contract", and it was exactly that: a new social contract between the government, the state, and the citizens. And the new contract was more interventionist on the part of the public administration than before, something that the United States does not like very much (and that led to Roosevelt's enemies calling him a communist).

Among the measures adopted by the United States government was the financing of individuals through loans soft goods, social aid for the unemployed, control of private companies, and strong regulation of the sector financial. It was also invested in numerous public works.

The Great Depression was one of the direct causes of World War II

The economic crisis hit Germany especially hard, and the attitude of the countries that won the conflict it didn't help dampen it. The desperate Germans became the broth of culture ideal for radical solutions to triumph, such as communism or the Nazism.

Many of those who voted for Hitler for chancellor were people who had been impoverished until they lost everything because of the recession economic power, so they had nothing else to lose, and much to gain if the Führer kept his promise to restore pride and economic power. To Germany.

The economy of war and, above all, the hardships of this, made the Great Depression go away. After the end, in a world that had lost part of its population and was licking its wounds, the time of the Great Depression was no longer more than a distant memory. Reconstruction, healing the wounds and being attentive to the Cold War that was already looming, were the main concerns of the postwar moment.

Themes in The Great Depression