Before the beginning of the Great Depression the rate of the U. Therefore, the level of unemployment increased at a very high rate because a large number of individuals in the rural areas depended on the farms to make a living. After this paper, world trade fell greatly, the companies could not supply anymore, and trade had no chance not to fall. . The stock market crash in October 1929 is believed to be the immediate cause of the Great Depression, but there were many other factors and long-term causes that developed in the years prior to the depression.
Politically, The United States government was also forced into passing new laws which resulted into the government more powers than it had ever had. The Great Depression was synchronized and comprehensive and affected all the sectors of the global economy. The timing of economic events varied greatly among nations The Great Depression began during October 1929 and ended during 1939. The older industries such as textiles, mining, lumbering, and shipping faltered, newer and more successful consumer- based industries, such as chemicals, appliances, and food processing, proved not yet strong enough to lead the way to recovery. Investors in real estate could not pay their mortgages. The stock market crash, banking panics, an increase in world tariffs, loyalty to the gold standard, and reduced consumption have all been blamed.
Racism became a strong issue as well. During the 1920s the share of the national income going to families in the upper and middle-income brackets increased. Many people faced a real threat of starvation. It marked the beginning of involvement from the government to the country's economy and also the society as a whole. It affected people from coast to coast, the young and the old, both rich and poor countries. The fall in commodity was at 20%. This sent hundreds of families and thousands of people roaming around the country in search of food, work and shelter.
According to experts, the causes of the Great Depression was a stock market crash, bank failures, a reduction in purchasing, American economic policy in Europe, and drought conditions. Herbert Hoover wasn't a bad president, when he took office; the United States was still reaping the benefits of the roaring twenties. The second led England in September 1931 to abolish the gold standard of the pound sterling, and its dominions, India, Brazil, Argentina and Scandinavian territories. However, the Greek government managed to strengthen economy of the country up to the Second World War. The unemployment rated no more than 5%. Following the end of world war one the industrial might that America had was being used for peaceful, domestic purposes instead of being used for violence and war. This is what happened to millions of Americans during the 1930s.
To this day people who have not been properly educated about the Great Depression believe that President Hoover was the cause. Thus, the reforms proved to be a tool to strengthen the state-monopolistic nature of American capitalism. This was a time that caused political, economical, and social unrest. Many people were out of work and unemployed, and the government at the time, believed that the best option was to stay out of its affairs, leaving the struggling people hung out to dry. Overnight, hundreds of thousands of customers began to withdraw their deposits.
However, the suffering and depression lasted way longer. Many people wondered what caused it to happen. The country also witnessed some form of instability from many protests organized by its citizens Burgan, 2011. This territory is famous for its dust storms, droughts. The world experienced three waves of inflation. In general, the recovery of the U. According to Keynesian theory the Great Depression of 1929 in the United States occurred due to overproduction of commodities and lack of money to buy them Rothbard 2005, p.
Undoubtedly, the booming growth of labor productivity had a stabilizing effect on prices, which would otherwise be higher Reed 2010, p. Trade was one of the major economic boosters within the Europe and therefore, its reduction, made that most of the companies had to lay off workers in order to meet the cost of the reduced production. People used it not carefully during the time before the Depression. It was an especially hard time for Germany depending on the depleting American loans and investments. Thus, the uniqueness of the Great Depression due to the action of all the above factors was expressed in a rare combination of a number of features like its extraordinary depth, duration, and a general nature. The unequal distribution of the wealth had several outlets.
The most obvious effects of the Depression were the widespread poverty and unemployment. The conclusion seems obvious: capitalism cannot be trusted, and the state should play an active role in the economy to save us from inevitable decline Reed 2010, p. Blaming the Gold Standard eventually ignores the role of significant monetary manipulations made by the Federal Reserve System together with governmental institutions. Changes in culture had an impact on the Great Depression. Effect on Farmers The Great Depression had a highly unfavorable effect on farmers, it should be noticed that for U. The United stated was not the only country affected by the turn of events. In the street outside, a crowd had gathered, trying to learn the news.
Economic slump in North America ruined multiple lives, destroyed families and individuals. Thus, Alan Reynolds 1979, p. Buying on credit became a really big problem in the 1920s. The great depression was one of the worst economy issues we have ever had in history. In any case, these manipulations are sufficient to deprive an economic card-castle of its shaky foundation Reed 201, p. In 1935, Roosevelt persuaded the Congress to establish a Social Security system, and in 1938 to introduce the minimum wage for the first time in the history of the country. Many of the middle class.
At one moment they were not capable to pay the debts, some of them had loans, the issues that occurred in the economy made them go bankrupt. On the one hand, the Gold Standard can be considered as a cause of Great Depression. Most economists-monetarists, in particular the representatives of the Austrian school, note the close relationship between cash flow and economic activity. Communist party was leading a struggle on workers behalf. Overextended investors, suddenly finding themselves in heavily in debt, began selling their stocks.