GREAT DEPRESSION 8
GreatDepression: Major Causes
GreatDepression: Major Causes
TheGreat Depression was an important economic effect in the UnitedStates (U.S.) and several other European nations, leading to thefinancial constraint worldwide. The paper, therefore, focuses on thecauses of Great Depression and the strategies used to address theproblem.
ThePrimary Causes of the Great Depression
Severaleconomic policies resulted in the Great Depression. For instance, thetax reduction approach championed by Lyndon Johnson hindered the U.S.from financing the Vietnam War. Similarly, the policy led to fullemployment economy over stimulation, thus, leading to an increase inthe consumer price inflation by 6% in 1965 while the inflation wasonly 2% in 1963 (Ohanian, 2011).
Worldtrade was a major contributor of Great Depression as most Europeannations could not undertake business with the U.S. by the 1920s dueto their devastated manufacturing capacity. The U.S, therefore,executed Smoot-Hawley Tariff which reduced international trade aswell as global income that culminated in a lot of losses (Hamilton,2014).
TheGold Standard was a major cause of the Great Depression as it led tothe restricted circulation of money around the world, but had toreturn to one central banker. The U.S. government specified that theglobal currency had to be in line with the value of gold. However, inthe pre-war era, the international communities opted for flatcurrency, which caused constraint in the U.S. (Ohanian, 2011).
Overproductionof agricultural and industrial commodities in the global markets ledto the Great Depression, with Europe’s products dominating the theninternational market. Since the global production occurred at a ratehigher than rate of consumption, the prices declined globally,causing the Great Depression (Hamilton, 2014).
TheThree Ways that the New Deal Sought to Address Great DepressionProblem
TheU.S. government set up an Emergency Bank Act which was vital inmanaging bankrupt financial institutions as well as tighteningcommercial businesses (Hamilton, 2014).
TheNational Youth Administration used the agency platform to trainpeople from 16 to 25 years and offer them part-time jobs as a way ofcurbing Great Depression (Hamilton, 2014).
Reliefand Recovery Efforts
TheUnemployment Relief Act was fundamental in dealing with the GreatDepression, which involved the U.S government formulating theCivilian Conservation Corps (CCC) to employ youths in public andconservation areas (Ohanian, 2011).
HowEnd of World War II Caused Cold War Tensions
ArmsRace and Cold War Tensions
Arguably,the introduction of nuclear weapons and the first atomic bombing ofJapanese Hiroshima greatly influenced the Cold War. The newlyinitiated nuclear weapons resulted in the beginning of an arms racebetween the world’s superpowers like the U.S. and Russia. As aresult, the arms race became crucial in the Cold War, as it aided themaintenance and continuation of the aggression between thesuperpowers. Consequently, the superpowers improved their militarystrategies by spending more on weapons and creating serious tensionamong countries. The increased expenditure on firearms by thesuperpowers amounted fear to other countries regarding thedestructive nature of the weapons during times of war (Dunbabin,2014). The first impact includes that which was noticed in Europe inthe nineteenth century when France and Russia dared Britain’smilitary superiority. As a result, there was an increase in the ColdWar between the three countries. However, the arms race situationalso lead to a severe economic downturn on all the superpowersinvolved, resulting in an urgent necessity to end the Cold War(Ohanian, 2011).
DifferingIdeologies and Cold War Tensions
Thedifferent ideas of the communist Soviet Union and the capitalist U.S.resulted in the rise of the Cold War, where the first one advocatedfor the government to own most of the public properties while theother required citizens to compete equally (Ohanian, 2011). Thecapitalist states like the U.S. believed in several ideologies. Forexample, the U.S. believed that people made significant achievementswhen they antagonize each other and acquire freedom. The U.S. alsobelieved that some individuals are wealthier than their colleaguesbecause they utilize their skills and abilities better. As such, theU.S. recommend that governments should not impede the rights ofhumans to make a personal living, but minimize its interference inthe economy.
Conversely,communist states like Russia had different ideologies. Theseideologies include believing that people achieve great things byworking together as equals since they need each other to succeed. Thecommunist countries also advocated for equality regarding what peoplepossessed. As a result, they maintain that governments must work toensure that all the needs of the citizens are met and fulfilled whilemaintaining a centralized control of the economy (Dunbabin, 2014).Consequently, there was tension between capitalist blocs andcommunist blocs on the best ideas of running an economy, which stoodout during the Cold War.
TheImpact of Cold War Tensions on American Culture and Domestic Policies
TheCold War led to the accusation of innocent persons as affiliates ofthe nations with divergent ideologies similar to that of the U.S.,for instance, the McCarthyism era (Ohanian, 2011). McCarthyism periodinvolved the investigation and accusation of individuals ofdisloyalty, subversion, and treason without clear evidence. The 1950speech by Senator McCarthy claimed that 205 communist officials wereworking to shape policy in the State Department. The work of theseofficials posed a serious threat to the U.S. security. However, theaccusations lacked concrete evidence, and the victims quoted byMcCarthy faced discrimination as they were investigated following theassertions by the senator (Dunbabin, 2014).
TheCold War tension made different nations to create the social andinternal strategies that enabled implementation of militarystrategies that utilized surprising attacks as opposed to excessivepower (Hamilton, 2014). The security issues compounded because manyweapons had been introduced with the advent of the arms race.Consequently, there were fears that the actual utilization of theweapons in war may result in the destruction of the entire globe(Dunbabin, 2014).
TwoChanges that Resulted from Feminist Movement
Thefeminist movement pioneered by Alice Paul led to the Equal RightAmendment under the U.S. Constitution, which got ratification in the1970s. The period of the 1960s was characterized by women whopreferably lived as home-keepers, who were married at their early 20sand starting families. However, the feminist movement was initiatedto address work and salary inequality via laws againstdiscrimination. In 1966, the National Organization for Women wasformed under the leadership of Betty Friedan. The movement aimed atassisting in the fight against gender inequality through use ofcourts and legislations. The feminist movement worked tirelessly viapublic campaigns to ensure that women had political and socialequality. Consequently, the Equal Rights Amendment was passed by theSenate in 1972, which put an end to gender prejudice. The amendmentwas initiated by Alice Paul in the year 1923, during the time when itwas known as Lucretia Mott Amendment. Each modification of theamendment was presented in the Congress sessions between 1923 and1970 before a final enactment in 1972 (Dunbabin, 2014).
Thefeminists’ actions led to the great cultural changes in the U.S.and other Western nations. For instance, education of young girls,equal rights to property ownership, and equal payments irrespectiveof sex orientation emerged (Hamilton, 2014). After the enactment ofthe Equal Rights Amendment, the traditional culture that restrictedwomen to participate in political and social issues changed. As aconsequence, women could take part in electoral positions as well asget employed to earn decent incomes (Dunbabin, 2014).
Theworld trade was a major contributor to Great Depression, and suchsystem came about because most European nations could not undertakebusiness with the U.S. by 1920s due to their devastated manufacturingcapacity. However, the U.S. government set up an Emergency Bank Actwhich was vital in managing bankrupt financial institutions as wellas tightening commercial businesses.
Dunbabin,J. P. D. (2014). TheCold War: The great powers and their allies.Abingdon, UK: Routledge.
Hamilton,J. D. (2014). Monetary factors in the Great Depression. Journalof Monetary Economics,19(2),145-169.
Ohanian,L. E. (2011). What–or who–started the great depression?. Journalof Economic Theory, 144(6),2310-2335.