1. World War IIInterwar Period

2. "These are days whenmany are discouraged.In the 93 years of my life, depressions havecome and gone. Prosperity has alwaysreturned and will again. - John D. Rockefeller onthe Depression in 1933 3. Global Industrialization Between the late 1800s and early1900s, industrialization made it difficult forpeasants to compete with the highproductivity of industrial manufacturers andfarmers. Less industrialized nations found it difficult tocompete Technology and economics changed rapidlyduring this time. 4. Global Industrialization Rapid economic growth put increasing pressure on the natural environment. A return to economic protectionism expressed chiefly in high tariffs for importsundermined global economic integration. Two world wars, which unleashed terrible weapons such as the atomic bomb backedby the power of industrial production, devastated Europe, Japan, and other combatzones, and helped undermine European wealth and power. Countries with rising economies, notably the United States, Japan, and the SovietUnion, began to challenge Europes economic power. Anti-colonial and nationalist movements began to weaken Europes grip on itscolonies and spheres of influence. In the sciences and arts, new theories, attitudes, and insights eroded the confidenceof late nineteenth-century European thinkers. The horrors of global war provokednew ways of looking at the world and a search for new ideas beyond Europe. At thesame time, new technologies of mass communication brought to prominence amodern mass culture that was no longer the preserve of elites. 5. Percent Population living in Cities Region18901950 USA3564Japan 3056China511 Western Europe 3563Latin America541Africa 515World 1429Between 1941 and 1949 more than 7 million people migrated to the UnitedStates, Canada, Australia, and New Zealand (largely from Europe).Also, dislocation of rural area residents to cities contributed to the rapid urbangrowth.Death rates have historically been higher in cities than in their rural counterpartsbut increased sanitation caused death rates in cities to fall below the countrysidefor the first time in history. 6. The Roaring 20s: Boom and Bust! Rapid deforestation to meet material and land needs and to clearland for cash crops Land erosion created the dust bowl Fish catch increased from 2 million to 15 million between 1900 and1950 causing the fisheries from the north sea to the pacific tocollapse Technology created more resource consumption and more waste Fossil fuels consumed for internal combustion engines and to produce electricity rose Coal consumption increased as well Big cities such as London and Chicago began to see smog pollution. Nuclear power was acquired. 7. The Roaring 20s: Boom and Bust! Between 1870 and 1913 the global economy roseto 2.11 percent annum and then, after 1913 fellto as low as 1.85 percent The proportion of world production that wastraded fell because the global commercial systemfractured. Too much product not enough demand Surplus goods werent being sold Countries fell to protectionism (higher import duties) WWI was, in part, fought for global market share 8. The Roaring 20s: Boom and Bust! After WWII, production increased again, but themarket wasnt strong enough to support theproduction. Germanys economy was still struggling because of itsresponsibility to pay reparations. Reparations had beenfinanced by banks in Brittan and France. US banks lent Germany the money they needed to payreparations. Bankers started pulling money back causing the stockmarket to crash in 1929. Industrial output, farm production, and employmentplummeted 9. Black Tuesday The stock market crashed harder than everbefore on October 29, 1929.http://www.youtube.com/watch?v=RJpLMvgUXe8 10. ProsperityHigh level of output and trade. Large expansion of bank credit.High level of effective demand. Overall business optimism.High level of income andA high level of MEC (Marginalemployment.efficiency of capital) andRising interest rates.investment.Inflation. 11. RecessionEconomic activities slow down.liquidity, so credit also contracts.Overproduction and future investmentExpansion of business stops, stock marketplans are also given up. falls.There is a steady decline in theOrders are cancelled and people start losingoutput, income, employment, prices and their jobs.profits. The increase in unemployment causes aBusinessmen lose confidence and become sharp decline in income and aggregatepessimistic which reduces investment.demand.The banks and the people try to get greater Generally, recession lasts for a short period. 12. DepressionFall in volume of output and trade.In depression, there is under-utilization ofFall in income and rise in unemployment. resources and fall in GNP (Gross NationalDecline in consumption and demand. Product). The aggregate economic activity isFall in interest rate. at the lowest, causing a decline in prices andDeflation. profits until the economy reaches its TroughContraction of bank credit.(low point).Overall business pessimism.Fall in MEC (Marginal efficiency of capital)and investment. 13. RecoveryExpansions/rise in economicBanks expand credit.Demand rises, production increases.Business expansionInvestment levels increase Activation of stock marketsRise in output, income, employment, prices and Prices and profits continue to rise.profitsThe businessmen gain confidence and becomeoptimistic. This increases investments.Stimulation of investments brings revival andrecovery. 14. Franklin D. Roosevelt Elected in 1932 Government responsible for citizens First president to make a nation-wide inaugural address Passed the Social Security Act 15. The New Deal As a result of the NewDeal, millions of men were ableto find work. Four-day Bank Holiday Civil conservation corps Works progress administration National Industrial Recovery Act National RecoveryAdministration Federal Emergency ReliefAdministration Agricultural Adjustment Act Home Owners Loan Corporation 16. The Treaty of Versailles Germanys total armed forces could notexceed 100,000 troops Germany was not to enter or fortify anyterritory west of the Rhine or within 50Kilometers east of Rhine. Germans and allies (Austria and Hungary)had to accept full responsibility for WWI. Germany had to pay reparations tocountries impacted by the war (finalpayment was maid in October of 2010). 17. ReparationsX 132,000,000,000X 31.4,000,000,000X 442,000,000,000 18. The Aftermath of WWI The German, Austro-Hungarian, Ottoman, and Russian empireswere devastated. Belgium, Serbia, and France suffered manycasualties 60 million European soldiers were mobilized. 8 million were killed, 7 million were permanently disabled, 15 million were seriously injured. Hundreds of thousands of Europeans starvedto death due to famine Weakened immune systems from famine andwar conditions brought diseases on a rapid 19. The Aftermath of WWI As a result of the treaty, the Allied powersdivided the Germans overseas colonies andthe Arabic provinces previously held by theOttoman Empire. This was executed by the League of Nationsat the Paris Peace Conference. Mutual international security. Attempt to preventanother war on the magnitude of WWI We see a world desperate to prevent anotherwar. National leaders were willing to belenient on German infractions because of themassive scale of casualties. 20. Germanys discontent After the war, Germany became disgruntled atthe terms of the treaty. Germans felt victimized and didnt acceptresponsibility for the war. 21. Stab in the Back Myth Stab in the back myth:General ErichLudendorff, blamedBerlin for the armisticeof November 1918, forneglecting to supporthim. The Germans didntreally lose the war,they were betrayed byAn illustration from an 1919 Austrian postcard showing acaricatured Jew stabbing the German Army in the back with adagger. (1919)civilians whooverthrew themonarchy and bygovernment officialswho signed the peace 22. Weimar Republic The Weimar Republic replacedthe imperial government thatformerly dominated Germanyafter World War I. It was aliberal parliamentaryrepresentative democracy. Socialists, Jews, and Bolshevikswere considered to be largelyA 1924 right-wing German political cartoon showing Philipp Scheidemann, second Chancellor and supporter of theto blame for the WeimarWeimar Republic, and Matthias Erzberger, an anti-war politician from the Centre Party, who signed the armistice withRepublic and signing of thethe Allies, as stabbing the German Army in the backarmistice. Nazi propaganda painted aruthless picture of the WeimarRepublic leaderswho, supposedly, wereresponsible for the back-stabbing. a morass of