THE GREAT DEPRESSION IN THE 1930s Term paper

A decade after World War I ended the worst economic depression of the twentieth century struck. No country was immune. Triggered by the New York Stock Market crash of October 1929, financial markets in Vienna, Berlin, London, Paris, and Tokyo tumbled. This ripple effect in financial markets was expected; what was not expected was the stunning collapse of international trade in manufactured goods and agricultural products. Factory workers had no work, and farmers could not sell their produce. By 1932, 40 million people throughout the world were unemployed.

Initially most governments cut spending, tightened credit, reduced salaries, lowered prices, and raised tariffs. Yet by the mid-1930s democratic governments had given up on these traditional remedies and were experimenting with new approaches to jump start their flattened economies. Scandinavian countries, such as Sweden, developed very aggressive government-funded social programs. Britain, France, and the United States experimented with large government agencies such as the British Broadcasting Corporation (BBC) and the Tennessee Valley Authority (TVA), the latter of which produced electricity for the American South. Although these and other similar efforts showed promise, they did not put large numbers of people back to work.

Authoritarian governments were much more successful in battling the Great Depression. The Soviet Union was committed to economic planning, and Josif Stalin’s Five-Year Plans ensured that Soviet industry enjoyed robust growth during the 1930s. Italy, Germany, and Japan infused their capitalist economies with massive state intervention, particularly in large state-sponsored projects such as the Volkswagen automobile, highway and railway construction, and heavy armament manufacturing. In Germany Adolf Hitler’s economic policies resulted in full employment. By 1938 the German economy had surpassed the output levels of 1929. In Japan the government overcame a severe agricultural depression by shifting farm workers to heavy industry, especially in armaments and shipbuilding. Between 1929 and 1937 Japan added more than 1 million workers to its factories. By 1939 three lessons were clear. First, massive state intervention was necessary to combat this Great Depression. Second, the English economist J. M. Keynes was correct in arguing in his The General Theory of Employment, Interest and Money (1936) that deficit spending, (government spending of borrowed funds), not tight credit, would stimulate business. Third, authoritarian governments were more effective in rescuing capitalist economies than were democracies.
Suggestions for Term Papers
1. Read George Orwell’s Road to Wigan Pier (see Suggested Sources) and write a paper on his views of England in the Great Depression.
2. Write a research paper on the development of the Volkswagen automobile in Germany. How significant was this project in Nazi Germany’s battle against the Great Depression (see Suggested Sources)?
3. Why was Japan able to come out of the Great Depression so quickly? Examine the Japanese government’s policies for combating the Depression.
4. John Scott was one of thousands of Americans who immigrated to the Soviet Union during the Great Depression. Investigate his experiences working there during the 1930s (see Suggested Sources).
5. Do a research project on the life and ideas of John Maynard Keynes and evaluate his approach to overcoming the effects of the Great Depression.
6. To what extent did Sweden’s embrace of socialism help to overcome the Great Depression (see Suggested Sources)? What are some of the enduring legacies of the Swedish approach?

Research Suggestions

In addition to the boldfaced items, look under the entries for “The New Economic Policy (NEP) in Russia, 1921–1928” (#14), “Stalin’s First Five-Year Plan, 1928–1932” (#23), “The Japanese Economic Miracle in the 1950s” (#47), and “The Asian Economic Meltdown at the End of the 1990s” (#97). Search under New Deal and industrial policy.

SUGGESTED SOURCES

Primary Sources

Allen, Frederick Lewis. Since Yesterday: The Nineteen-Thirties in America, September 3, 1929–September 3, 1939. New York: Harper and Brothers, 1940. The classic social history of Depression-era America.

Fallada, Hans. Little Man, What Now? New York: Simon and Schuster, 1933. A powerful evocation of how the Great Depression flattened the German middle class.

Isherwood, Christopher. The Berlin Stories. Cambridge, Mass.: R. Bentley, 1954. Although largely fiction, these remain vivid portraits of Depression-era Berlin.

Keynes, John Maynard. Essays in Persuasion. London: Macmillan, 1933. Short, accessible essays on Keynes’s approach to economics.

Orwell, George. The Road to Wigan Pier. New York: Harcourt, Brace, 1958. First published in 1937. A classic depiction of the Great Depression in the British coal fields.

Scott, John. Behind the Urals: An American Worker in Russia’s City of Steel. First published in 1942. Bloomington: Indiana University Press, 1989. An account of life in Magnitogorsk in the 1930s by an American engineer.

Secondary Sources

Cameron, Rondo. A Concise Economic History of the World: From Paleolithic Times to the Present. 3rd ed. New York: Oxford University Press, 1997. A lucid and up-to-date analysis of the worldwide effects of the Depression.

Childs, Marquis William. Sweden: The Middle Way. New Haven: Yale University Press, 1936. A classic portrait of Sweden’s socialist approach to end the Depression.

Hopfinger, K. B. The Volkswagen Story. Cambridge, Mass.: R. Bentley, 1971. A solid account of Hitler’s “people’s car.”

Kennedy, David M. Freedom from Fear: The American People in Depression and War, 1929–1945. New York: Oxford University Press, 1999. Well written and comprehensive, the text has an excellent bibliography on the Depression.

Kindleberger, Charles. The World in Depression, 1929–1939. Berkeley: University of California Press, 1986. The most authoritative treatment available.

Landes, David S. The Unbound Prometheus: Technological Change and Industrial Development in Western Europe from 1750 to the Present. London: Cambridge University Press, 1969. Chapter 6 is a good analysis of the European depression.

———. The Wealth and Poverty of Nations: Why Some Are So Rich and Some Are So Poor. New York: W. W. Norton, 1998. Comprehensive in approach, with good chapters on Japan.