The Great Depression
The Great Depression, which lasted for ten years between 1929 and 1939, was the longest and most severe economic decline. (Bernstein & Michael 45). In a time of uncertainty and suffering during the First World War, the depression gradually began. The global economic downturn, which originated in the United States, spread throughout the entire globe, causing massive unemployment and deflation. Many countries were left in debt after the First World War as they worked to repair their severely damaged economies. More precisely, the 1929 stock market crash in the US that year ignited the Great Depression. The specific day, 29th October came to be known as the Black Tuesday (Doak 54). The impacts of this depression are still etched in the Americans' minds, being the most affected nation in the world.
Impacts of the Great Depression
The Great Depression had a number of impacts not only in the US but also in other countries. The prices and the real output fell drastically. The real gross domestic product and the industrial production was on a decline between the peak and the trough stage. The price index was also affected resulting in a deflation with the rate of unemployment reported to be exceeding its highest point by 20% (Margo 333). Other countries in the world felt the impacts of the Great Depression although at a different magnitude. The United Kingdom witnessed a slow economic growth and a recession in the late 1920s (Margo 340). However, the nation did not experience a depression despite the low industrial production during the peak and the trough, something attributed to the sound economic policies to deal with any eventualities.
Social Problems and Responses
In all the countries that experienced the effects of the Great Depression, unemployment triggered various social problems like crime. In the US for example, the rate of crime was on a rapid rise as a result of the unemployment people trying to make ends meet. The rates of suicide because of the loss of hope in life were on a steady rise. Malnutrition and prostitution were also on the rise. Desperate women sought all the available means to pay their bills at a time when the chances of being employed were bordering impossibility. It was unfortunate for the able and talented students who could not afford to pay for the tertiary institutions of learning, thus, their dreams were either delayed or completely shuttered.
Global Impacts
Just like the UK, France experienced a relatively shorter downturn during the late 1920s and Early 1930s (Dobbin 23-24). The country, later on, recovered having witnessed a fall in the production levels and the fall of the fall of goods prices. Germany also felt the impacts of the depression, having slipped in the downturn in 1928 but stabilized a year later. When considering the decline in industrial production, Germany witnessed almost the same effects as the US. In the then developing and developing nations of the world, the effects of the depression were more severe while middle-income countries like Argentina and Brazil experienced mild economic effects (Dobbin 50-56). In some developed nations in Asia like Japan, the mild depression effects were short-lived, starting late and ending a few months after a decline in production.
Lessons Learned and Preventive Measures
The Great Depression had a number of historical importance to the countries that witnessed the effects particularly the United States. The administration put up measures in place to prevent a similar occurrence in the future through enacting effective policies to better the nation's economic system. The American government also expanded its intervention and the direct involvement into the economic and social affairs. For example, the government ensured that there was an intensified campaign at the national level for various agencies to give social assistance. The Central Bank also learned important lessons on the unnecessary forms of monetary tightening. The bank has been slashing the interest rates and using the principle of quantitative easing in order to avoid depression. Researches done on the subject of the Great Depression can be used to inform monetary and other economic decisions to be made.
Lessons and Future Scenarios
From the events during and after the Great Depression, there are valuable lessons that I have learned. Poor economic policies end up hurting not only the big businesses but also the ordinary citizens who are laid-off as a result of the economic meltdown. As a nation, I also feel that we should form a good basis for permanent employment which acts as a relief for all citizens. Besides plans by the federal government to be providing emergency relief, it is necessary to be offering temporary work, in case there is an economic problem. There is also a great need to advocate for a well-coordinated employment exchange's system, unemployment reserves and an advanced planning of the public works. Another preventive measure of a similar occurrence is the emphasis on education and training for all people regardless of their gender difference, an effective measure to trigger creativity necessary for the self-employment. From the lessons learned by the US in the Great Depression, similar future scenarios like the recession in the 1980s.
Works Cited
Bernstein, Michael A., and Michael Alan Bernstein. The Great Depression: delayed recovery and economic change in America, 1929-1939. Cambridge University Press, 1989: 45
Doak, Robin S. Black Tuesday: Prelude to the Great Depression. Capstone, 2007.
Dobbin, Frank R. "The social construction of the great depression: industrial policy during the 1930s in the United States, Britain, and France." Theory and Society 22.1 (1993): 23-56.
Margo, Robert A. "The microeconomics of depression unemployment." The Journal of Economic History 51.2 (1991): 333-340.
