The Age of Anxiety & The Great Depression

1. The Age of Anxiety & The Great Depression 1920’s & 1930’s

2. The Age of Anxiety • The time period after WWI has been marked as the age of anxiety or uncertainty • The war had changed people and Europe was now different. People were anxious and questioned the meaning of life. • Scientists, writers, artists and musicians challenged the most deeply rooted ideas that people had about themselves, the world, and religion. • Existentialism: (Nietzsche) believed people focused too much on reason and should follow instinct • Dadaism: (Dali) Artistic movement that reflected the meaninglessness of the world after the war. Nonsensical objects reflected in art

3. The Great Depression • The US stock market crashed in October, 1929 & triggered a world wide depression. • The stock market boom that had existed in the years prior was built on borrowed money. • Stock: a piece of a company that can be bought • “buying on margin” – paying only a small amount for a stock • Many people would “buy on margin” and when the prices started falling in 1929, many owed their stock brokers lots of money… so they started selling stocks.

4. Continued…. • As panic set in and more people sold, stock value declined • Those who had their savings tied up in stocks lost everything • People started buying less, production fell, unemployment rose

5. World Wide Crisis • The US financial crisis affected many other nations world wide • US banks had loaned money to European countries • Once the panic had struck, US banks recalled loans • Lots of gold from reserves in Europe left the banks creating an economic decline • World production fell 38%

6. Why Did it Last so Long? • 1. No international economic leadership • 2. Poor national economic policy in almost every country

7. Unemployment • High unemployment in just about every country • No money to buy goods-14 million out of work • Poverty rose and the threat of public revolts was a real fear

8. New Deal • Franklin Roosevelt was elected president of the US in 1932 with promises of change and a “New Deal.” • “The only thing we have to fear is fear itself” • FDR did not favor socialism or govt. owned industry to help the US, but believed that the govt. should plan the economy like during WWI

9. Continued… • The US went off the gold standard • Means US $ was not backed by gold • Purpose: devalue the US dollar, inflate the price of goods, increase tariffs on goods • Through various acts, FDR targeted unemployment by creating government jobs and aide for farming. • Limited production of farm goods= “law of supply and demand” • Social services created: social security, old age pensions, welfare, unemployment benefits • All of these attempts at recovery never fully brought the US out of the depression- WWII did!

10. Responses to the Depression in Europe • Scandinavian Countries: • Social Democrats focused on cooperative community action. Govt. paid for many social services=high taxes • Britian: • Went off the gold standard and isolated themselves. Focused on building autos, appliances, lowering interest rates

11. Continued… • France: • Due to late industrialization, the depression hit France late. • Unstable govt. left many without faith in democracy and turned to radical political groups. • Communists, Socialists and other radicals unified against the Fascists and were known as the Popular Front. Fought for social and economic changes. • Popular Front eventually split due to internal issues and the threat of civil war.

12. What’s Germany up to? • Although affected by the depression the greatest, many Germans were frustrated by the weak and ineffective Weimar Republic. • Ideas from the new Nazi political party and its leader, Adolf Hitler, was very appealing. • He promised change and made good on those promises • Began industry through rearmament-breaking the Treaty of Versailles