The Great Depression that began in 1929 brought dramatic changes into the lives of many people throughout the world. The United States was among the countries that were adversely affected by this global economic recession. This paper is aimed at discussing various effects produced by this downturn. Moreover, it is critical to examine the way in which it influenced the individual experiences of many people, their values, and perceptions.
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On the whole, one can argue that that the Great Depression significantly lowered the standards of living and drove many citizens to the brink of property. Among its major consequences, one can also distinguish increased unemployment and the decline of economic activities in the United States and in other countries. Apart from that, one should not forget about political consequences such as increasing intervention of the government into financial sphere (Bauman 20).
These are the main impacts that can be distinguished. In many cases, they were closely interconnected. Overall, the legacies of the Great Depression were palpable in the course of several decades. This is why this topic continues to attract the attention of many researchers.
At first, it is important to mention the decline in people’s purchasing power. This effect can be partly explained by the fact that many of them lost their savings because of numerous stock market crashes such as the crash of 1929 also known as Black Tuesday (Gow 7; Bauman 10). As a result of this event, investors, who could represent different social classes, were deprived of their revenues. Additionally, many companies could not find capital that was necessary for the development and growth.
There are several impacts that should be singled out. First of all, people could not afford various products and services. For instance, they could not afford to purchase or rent housing (Roth 11). This is why historians speak about the growing number of foreclosures in the country and increasing homelessness (Roth 11). This decline in purchasing power affected a great number of entrepreneurs such as industrial manufacturers, farmers, or service organization and they had to dismiss many workers.
This is why unemployment became one of the most significant social problems. For instance, in 1933, the unemployment rate in the United States was approximately 25 percent (Taylor 500). As a result, many people were reduced to the state of poverty (Garraty 10). As a result, they became strongly dependent on the assistance offered by the government (Bauman 25). Unemployment rates began to decline only after World War II (Taylor 500).
Finally, it is important to mention many businesses had to close down because they could not sell their products and services. Moreover, the value of their stock declined dramatically. These are the main economic effects that can be distinguished. Overall, it is possible to argue the causes and effects of the Great Depression are closely intertwined.
For instance, one can mention such issues as the decline of purchasing power and the bankruptcy of many firms. It is very difficult to determine which of them came first. This is one of the questions that modern historians try to examine in their works. Furthermore, economists attempt to develop the mechanisms of the Great Depression in order to understand the reasons why industrial and financial sectors collapsed. Even nowadays, there are many disputes regarding the causes and effects of this economic stagnation.
It is necessary to discuss other consequences of the Great Depression. In particular, one should pay attention to political changes that originated from this financial crisis. For instance, in the United States, it gave rise to the New Deal policy which was aimed at recovering the economy of the country (Bauman 20).
This policy was premised on the idea that the government had to take closer control of financial transactions and business activities in order to help citizens live through this difficult period (Bauman 20; Garraty 50). This was the main goal of this strategy. On the whole, the New Deal can be regarded as a set of legislative acts that were supposed to support American households. Additionally, they had to provide a stimulus to the stagnant economy (Taylor 501).
One can argue that the New Deal policy contradicted the principles of laisser-faire ideology according to which the government should not intervene into the economy. This is one of the main issues that should be considered because various laws introduced during the Great Depression have not been completely eliminated even nowadays. Moreover, the Great Depression brought political changes in other countries.
For instance, it led to the creation of many totalitarian regimes. In particular, one should pay attention to Germany where the National Socialist Party came to power. This result can be partly explained by the fact that many people attempted to find the so-called culprits for the Great Depression.
In turn, the Nazi exploited this situation by arguing that Germany was betrayed by some people who had certain political affiliation or ethnic origins. This consequence is also vital to consider because it shaped the geopolitical landscape of the entire world, including the development of the United States, its politics and trade with other countries. Therefore, political and economic effects are closely intertwined with one another. This is the main argument that can be put forward.
Additionally, it is also vital to focus on the lives of people during this period. In particular, many of them lost their faith in the efficiency of the state, especially at the early thirties. To a great extent, many of them felt helpless and unprotected. This is one of the issues that Benjamin Roth explores in his book (Roth 7). They continuously thought about such threats as homelessness, hunger, or inability to support one’s relatives (Roth 8). Therefore, their values, attitudes, and priorities were changed dramatically.
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Furthermore, the term depression can be applied not only to the state of economy. This word accurately describes the experiences of many people who had to face continuous uncertainty. These difficulties were faced by workers, entrepreneurs, and governmental employees.
They could represent various social classes, ethnic groups, or religions. Apart from that, one should mention that economic difficulties led to the hostility within the society. For instance, one can speak about increasing racial or ethnic prejudice (Bauman 76). This is another impact that should not be overlooked.
To a great extent, this behavior can be explained by the lack of social cohesion and increasing insecurity of many people. Yet, one should also mention that the Great Depression contributed to the development of grassroots movement in the United States (Bauman 5). For instance, one can mention the increasing social importance of local churches. These organizations played a critical role because they helped citizen regain the sense of confidence.
Therefore, it is possible to say that the Great Depression influenced the values and attitudes of many people who could not easily earn their living. They became more cautious and reserved especially in their expectations about their future. Only economic recovery helped them to overcome their anxiety. Similar effects could be observed in various Western countries. This is one of the main impacts that can be identified.
These examples should be taken into account because they indicate that the Great Depression became almost engraved in public memory. This argument is particularly relevant of such a country as the United States in which the effects of this economic downturn were very accute. Yet, similar situation could be observed in different countries in which governments promoted capitalist development of the society.
Overall, this discussion suggests that the Great Depression affected individuals who could represent different occupations or social classes. This recession resulted in the downturn of economic activities, unemployment, and bankruptcy of many businesses. Additionally, this economic recession led to the increased intervention of the government into the sphere of economics. For instance, the New Deal was a response to possible inefficiencies of laisser-faire economy.
Moreover, the Great Depression gave rise to authoritarian regimes in various European countries such Germany. To some degree, this period profoundly affected the experiences of people living in various countries. Many of them became uncertain of their future, and they could not make long-term plans. More importantly, they sometimes became hostile to one another. These far-reaching effects are the main reason why historians continue to study various aspects of the Great Depression.
Bauman, John. In the Eye of the Great Depression: New Deal Reporters and the Agony of the American People, DeKalb: Northern Illinois University Press, 1989. Print.
Garraty, John. The Great Depression, Harpswell: Anchor Publishing, 1987. Print.
Gow, Mary. The Stock Market Crash of 1929: Dawn of the Great Depression, New York: Enslow Pub Incorporated, 2003. Print.
Roth, Daniel. The Great Depression: A Diary, New York: Perseus Books Group, 2009. Print.
Taylor, John. Economics, New York: Cengage Learning, 2008. Print.