To what extent was the Great Depression the main reason for Hitler’s rise to power? One of the main reasons for Hitler’s rise to power was the effects of the Great Depression of 1929. After the Wall Street crash, the U.S. called in its loans to Germany thus increasing both poverty and unemployment levels. The Weimar government did not understand how to reverse the situation so the general public became angry and lost confidence in the relatively new democratic system. During a depression, political trends become extremist and so the Nazis flourished; Hitler offered both a scapegoat and himself as a strong leader to look up to.
The imbalance of trading caused deficits and upset the foreign exchange market, especially against America. After the World War II, American political leader committed to promoting international trade by supporting for multilateral organizations such as General Agreement on Tariffs and Trade. They made the international currency markets the Breton Woods system. However, since the Japanese economy grew so fast, the United States was worried to lose the leadership to Japan, which linear projections called as the “superstate”, the world’s largest capital market to boot. On the other side, the United States government was complained by its domestic industry companies during its recession period since Japanese products was very competitive.
How Far Can the Failure of the League of Nations in the 1930s be blamed on the Great Depression? The failure of the League of Nations in the 1930s can be blamed partly on the Great Depression because this economic crisis in 1929 influenced the later invasions, such as the Abyssinian Crisis and Manchurian Crisis, which are believed to have undermined the League because it was then seen as powerless and irrelevant, however, it is not the most significant reason as to why the League failed, because both self-interest and the absence of the USA in the League, were major factors that caused the failure of the League, and are more significant origins of the failure than the Great Depression. The Great Depression can be regarded as a significant factor as to why the League of Nations failed in the 1930s because as a consequence, all countries around the world lost their good will, which the League greatly depended on in order to be successful, and lead to militarism; to which the League was unsuccessful in controlling. The Great Depression was a severe worldwide economic depression, and hit many powerful countries critically. Therefore, it led to militarism because many countries did not know what to do in response, other than to focus on expansion as a solution to their problems.
This theory was the first school of thought for economists and one of the major theorists and founders of Classical Economics was Adam Smith. Smith stated, “By pursuing his own interest, he (man) frequently promotes that (good) of the society more effectually than when he really intends to promote it. I (Adam Smith) have never known much good done by those who affected to trade for the public good.”(Patil) Classical Economic theory assumes three basic ideas: Flexible Prices, Shay’s Law, and Savings-Investment equality. Flexible prices in Classical theory suggests prices will rise and fall as needed but is not always true, due to, the interference of government agencies including unions and laws. Smith stated in the Wealth of the Nation (1776), “Civil government, so far it is instituted for the security of property, is in reality instituted for the defense of the rich against the poor, or of those who have some property against those who have none at all.” (Patil) Shay’s Law implies supply creates its own demand and demand is not based on production or supply.
It makes the standard of living for the masses suffer. The price of basic necessities sky rocket, like the recent price rise in gas and other fuels. I hope to explore several individual cases of economic disasters and depressions and asses what was the root cause of their failure. My first case study is the German Hyperinflation of 1918-1924. Before the first world war had started the Germans over spent and went into a massive deficit because they thought that when the won the war they would inherit the country and its wealth.
The crisis began with the Great Depression, as argued by Abramovitz (2004) it was the collapse of the American economy in the 1930s that led to the rise of the welfare state. This change in the welfare state meant a stronger response from the government was needed. The economy counted on the government to offer a New Deal that would restore profits by fostering economic growth. The New Deal focused on programs that would provide relief for the poor, such as AFDC or Food Stamps and Social Security for the unemployed, retired or disabled. The New Deal also focused on the recovery of the economy to normal levels and reform of the financial system to prevent a repeat depression (Chen 2013).
In Europe, the Great Depression strengthened extremist forces and lowered the prestige of liberal democracy. Economic distress directly contributed to Adolf Hitler's rise to power in 1933. The Nazis' public-works projects and their rapid expansion of munitions production ended the Depression there by 1936. Hitler adopted policies that were more interventionist, developing a massive work-creation scheme that had largely eradicated unemployment. Also rearmament, paid for by government borrowing, started in earnest.
The New Deal: Successes and Failures In 1932 Franklin Delano Roosevelt was sworn in as president of the United States during the greatest economic downturn, The Great Depression. After much of the blame falling on the shoulders of republican president Hoover, many Americans turned to the democratic solution, Roosevelt. First thing in office President “Roosevelt promised, ‘A new deal for the American people’”, giving them great hope in a turn for the better (BBC Bitesize). FDR had three main goals of the New Deal: to relieve those suffering from the effects of the Great Depression, recover the depressed the economy, and reform the society so a crisis would be avoided in the future. FDR also reassured Americans with quotes such as “let me assert my firm belief that the only thing we have to fear is fear itself – nameless, unreasoning, unjustified terror”, during his inaugural speech.
Germany was in major debt and this created depleted economic conditions for business and industries. Hitler promised Germany to restore the profits of small businesses and the value of savings, to end the communist threat, employment and the most appealing promise was to make Germany proud again. Another factor which contributed in Hitlers rise to power was social conditions. After Germany's loss of World War I, Britain, France and USA discussed peace terms in Versailles, France. Germany was blamed for the war and harsh repercussions were listed for the German people.
The strength of the economy encouraged Americans to take out more loans and buy more stocks, making them susceptible to future changes in the economy. The freedom caused financial markets to crash globally which helped power the Great Depression. Another example of lack of government intervention was the robber barons, a term referring to the wealthy and powerful businessmen in the 18th century. They were also known as “pure capitalists”, because they believed in an economic system that involved minimal interference from the government. Those working for robber barons were beaten and threatened, and the working conditions were terrible.