The Great Depression

World History Derrick Caples Moss Point High School

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Great Depression

The Great Depression was a worldwide economic downturn starting in most places in 1929 and ending at different times in the 1930s or early 1940s for different countries.

It was the largest and most important economic depression in modern history, and is used in the 21st century as a benchmark in how far the world's economy can fall.

Great Depression

The Great Depression originated in the United States; historians most often use as a starting date the stock market crash on October 29, 1929, known as Black Tuesday.

The end of the depression in the U.S. is associated with the onset of the war economy of World War II, beginning around 1939.

Causes

There were multiple causes for the first downturn in 1929

historians emphasize structural factors like massive bank failures and the stock market crash

inexact balances between supply and demand.

Free Markets

The even larger question is whether it was largely a failure on the part of free markets

A free market is a market in which property rights are voluntarily exchanged at a price arranged completely by the mutual consent of sellers and buyers.

The Flea Market

Free Markets Con’t

Free market economics is closely associated with laissez-faire economic philosophy,

In political economics, one opposite extreme to the free market economy is the command economy, where decisions regarding production, distribution, and pricing are a matter of governmental control.

Free Markets Con’t

In social philosophy, a free market economy is a system for allocating goods within a society: purchasing power mediated by supply and demand

Starbuck's as an example

For example, the gourmet coffee business, pioneered in the US by Starbucks revealed a demand for high quality robust fresh ground coffee. Further, the Starbuck's sales growth showed and that consumers would pay more for this type of robust high quality coffee.

The Competition

Other food service retailers like McDonald's, Burger King, and other stores began offering such coffee to satisfy the demand.

More Causes

Debt is seen as one of the causes of the Great Depression Easy money is the great cause of over-borrowing. When

an investor thinks he can make over 100 % by borrowing at 6 %, he will be tempted to borrow, and to invest or speculate with the borrowed money. This was a prime cause leading to the over-indebtedness of 1929. Inventions and technological improvements created wonderful investment opportunities, and so caused big debts.

More Causes

sharp decline in international trade after 1930 helped to worsen the depression, especially for countries significantly dependent on foreign trade.

Most historians and economists partly blame the American Smoot-Hawley Tariff Act (enacted June 17, 1930) for worsening the depression by seriously reducing international trade and causing retaliatory tariffs in other countries.

Effects

The depression had devastating effects in the developed and developing worlds.

International trade was deeply affected, as were personal incomes, tax revenues, prices, and profits.

Farming and rural areas suffered as crop prices fell by 40 to 60 percent

Coming Out Of Depression

Coming Out Of Depression

The New Deal was the name that United States President Franklin D. Roosevelt gave to a sequence of programs he initiated between 1933 and 1936 with the goal of giving work (relief) to the unemployed, reform of business and financial practices, and recovery of the economy during The Great Depression.

The Card Game

1st. New Deal

The "First New Deal" of 1933 was aimed at short-term recovery programs for all groups. The Roosevelt administration promoted or implemented banking reform laws, emergency relief programs, work relief programs, agricultural programs, and industrial reform (the NRA), a federal welfare state, as well as the end of the gold standard and prohibition.

2nd. New Deal

A "Second New Deal" (1935–36) included labor union support, the WPA (Work Progress Administration) relief program, the Social Security Act, and programs to aid farmers, including tenant farmers and migrant workers.

Wealth and Income

As mass production has to be accompanied by mass consumption, mass consumption, in turn, implies a distribution of wealth -- not of existing wealth, but of wealth as it is currently produced -- to provide men with buying power equal to the amount of goods and services offered by the nation's economic machinery.

End of Depression

The Great Depression ended at different times in different countries. The end of the depression in the U.S. is associated with the onset of the war economy of World War II, beginning around 1939.

The majority of countries set up relief programs, and most underwent some sort of political upheaval, pushing them to the left or right.