Interwar crisis

Item 9

The crisis between the wars.

- The crash of 29.

"More banks quebron 5000 to 1933, most businesses fail and the 30min period mOsm. There are 13 million unemployed in 1933.

The bag NEW YORK Wall Street was the real center of the U.S. Economy and therefore the world. There is more money moving another bag cualkier k the world. On Thursday, October 24 (Thursday black) nervousness spread among many investors who wanted to sell at the same time and found no buyers. But Monday was 28 when the real disaster began on Tuesday, 29, called the black Tuesday 33millones shares went on sale and were worth nothing. Wall street stock market fell to levels totally unknown, the collapse of the U.S. Economy was complete.

CAUSES

- Overproduction: Mark had discussed the crisis of overproduction, appear as stocks, companies that manufacture these products do not sell and are ruined.

- Speculation: Many of the companies they had invested money ucho not engaged in production (they had no factories) or else to buy and sell all kinds of goods (tier, buildings ...) as they were rising prices continuously and were profitable. (U.S.)

- Economic dependence: the entire global economy depended heavily on the U.S., the dollar is the currency stronger, therefore, after the crack the crisis spread to the rest of the world beginning with Europe.

Consequences of the Crash of 29

- Social:

. 1932 Huge rise in unemployment in the world 40 million unemployed. Wages were very low due to the large stock of labor available = POVERTY.

. The birth rate decreased and mortality increased as population growth slowed.

. The social inequality increased and this has sharpened the class struggle. Workers suffered tb especially the middle classes, which leads Europe to take a political decision undemocratic: FASCISM.

. Many workers radicalized s tb (communism) supporting revolutionary actions were numerous demonstrations and strikes. Also there is a strong repression.

- Ideological:

. The open loiberalismo crisis following the First World War deepened more

. It imposed the idea that k hania abandon the principle of national state intervention in economic affairs. The state needed to intervene to protect the masses and seek recperacion (Keynes).

. Who most clearly formulated this idea was keynes economic theory which he proposed an alternative to the liberalism of the nineteenth century. HARE system ought to be corrected by state intervention to promote consumption and investment.

. The solution to the crisis starts in the U.S. By President Rossevelt in the new deal.