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After the events of the First World War in 1919, the global economy suffered a great depression due to the massive loss of able-bodied workers and widespread disruption of the international transport networks of trade and commerce. Especially in Europe, there was a significant reduction in the output of manufacturing and production processes because of the events of the war.
The positions of men in factory jobs were taken up by women during the period of the war which led to their economic and gender-based exploitation by the capitalistic classes. Great Britain had to borrow huge sums of money and assets from the US government to fulfill the needs of the war and consequently. The events of the First World War transformed the identity of the US government in the international forums from an ‘International Debtor’ to an ‘International Creditor’.
THE EVENTS OF THE POST-WAR RECOVERY PERIOD
During the 1920s, the wave of industrialisation spread among third-world countries like India and Japan which led to the downfall of the imperial forces of the British empire. The increase in the demands of raw materials in Britain gave an economic boost to the global economy. This was because many smaller nations were under the rule of the British empire.
However, after the war ended, there was a significant decline of almost 20% in the earlier rates of demand which negatively impacted the progress of the economy of Britain. This is because of other countries like Canada, India, and Japan ,the rural economies of the Eastern-European region were adversely affected by the sudden rise in prices and decline in demand which resulted in the phenomena of the Great Economic Depression of 1930.
THE LIMITS AND DRAWBACKS OF MASS-PRODUCTION & MASS-CONSUMPTION
The private manufacturing companies of the US adopted the ‘Ford Model’ of mass-production to overcome the economic aftershocks of the First World War. Henry Ford prescribed a factory-based model of production in the US which functioned on the concept of a well-organised and technically operated ‘Assembly Lines’ for the mass-production of cars in the industry. Between 1919 to 1929, the total production of cars rose from 2 million to 5 million, which forced the consumers to adopt the lifestyle of over-consumption and capitalism. The hire-purchase culture grew as a prevalent practice in the US causing an economic boom in the housing industry. As a result of these developments, the United States became the largest foreign lender in 1923, allowing world trade and commerce to resume their normal pace following the war.
THE EVENTS OF THE GREAT DEPRESSION, 1930
The sudden increase in prices across the global economy led to widespread inflation in the US and the UK. The main reasons that contributed to the worldwide economic depression included the over-production of commercial crops in agricultural economies like the US without the presence of adequate levels of demand in the international markets. The farm and agricultural products had to be sold at much lower prices during the Great Depression period because of their perishable nature which caused massive amounts of economic losses in the primary sectors of the global economy. The sudden withdrawal of international loans by the US led to widespread economic turmoil in the nations of Europe because they were heavily dependent on their assets and monetary exchanges. This resulted in the steep decline in the value of the currencies of many nations like Germany as well as the inevitable bankruptcy of many financial institutions and commercial banks.
IMPACT OF THE GREAT DEPRESSION IN INDIA
Between the years 1928-1934, the adverse impacts of the Great Depression were clearly visible in the trends of the Indian economy which suffered around a 50% decline in the import and export rates. Moreover, this period witnessed a significant decline in the prices of the agricultural produce causing the smaller farmers to sell their produce at cheaper rates due to the downfall in the levels of demand across the globe. The government imposed the same rates of revenue collection on the farmers despite their miserable economic condition. The farmers were forced to sell their jewellery and other precious articles to overcome the burden of agricultural loans and financial debts. The INC proposed the investment of huge sums of money in the industrial sector to overcome the effects of the Great Depression in India.
