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Understanding the Great Depression

November 27, 2012

“Free Soup, Coffee & Doughnuts for the Unemployed” in Chicago in Feb. 1931

Below please find web questions on the global circumstances of the Great Depression written by your classmate, Ebru Oktayer. These questions are drawn from the reading from James Fulcher’s Capitalism: A Very Short Introduction on the Great Depression (pp. 108-113).

According to James Fulcher, what were the three main vulnerabilities of the global economic system that the Great Depression of the 1930s revealed? How did they combine to make the Depression worse?

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11 Comments leave one →
  1. Vera Orlando permalink
    December 9, 2012 6:57 pm

    According to James Fulcher, the three main vulnerabilities identified were: 1. huge growth in productive capacity. This meant that since supply of manufactured goods and other products was so high, the demand for those products needed to be just as high and they werent, which caused massive over production. 2. The international division of labor that integrated the world economy. Incomes dropped due to a decrease in demand all over the world. 3. Tension between international trade and national protection. Being that during this time the world was divided between “competing empires,” each country felt self-sufficient and had everything under control. However, this resulted in a huge decline of international trade which had a huge impact on the depression happening, making it much worse.

  2. Seon Samuel permalink
    December 17, 2012 7:00 am

    According to James Fuller, the three main vulnerabilities were: 1. A huge growth in productive capacity. Meaning that more factories where being opened, more people being hired to produce a certain amount of products but not enough people to consume these products; 2. Another was the international division of labour that integrated the world economy, this is basically if demand fell, the primary producers sales dropped and income drop and then the overseas market for industrial goods declined; The final being was being the tension between international trade and national protection. This was were countries developing there industry try to protect their industries. Each was inter-related and each would result in the other happening, when combined they made the depression worse.

  3. Khansa Mansoor permalink
    December 17, 2012 4:09 pm

    According to James Fuller, the three main vulnerabilities of the of the global economic system that the Great Depression of the 1930s revealed were: a huge growth in productive capacity, international division of labor, and tension between international trade and national protection. These three things had worsened the depression because there was mass production and supply and demand were not rationalized. The supply was too high but the demand was not and this caused overproduction. International division of labor worsened the depression because since the demand was already low for things, producer and income sales dropped internationally. International trade and national protection also worsened the depression because each country did everything for itself. SInce the U.S. only depended on itself when it came to trade and protection, it crippled, therefore worsening the Great Depression.

  4. Richard Cabral permalink
    December 18, 2012 4:27 am

    The world economy was left in a fragile state after the first world war. James Fuller states that along with this as the a starting point. The huge growth in production over the last century had increased the output of the market, though a drop in consumer buying caused a drop in sales which in turn created a cycle that would create a lost of jobs. There was also the fact that because different societies were industrializating at different rates they had different procedures. however even so they were linked in the world economy and if one part suffered it put a toll on a different economy somewhere else. These sorta things would also put a toll on exporting and importing causing even more of a decrease.

  5. Fuad Hamid permalink
    December 18, 2012 4:02 pm

    According to James Fulcher, one of the biggest factors that led to the Great Depression was the overproduction of goods that went well beyond the demands of consumers. Industries were investing in so much money in producing goods but they weren’t selling enough to actually make a profit. This leads to the next factor which is the international division labor. Since the declining demand dropped worldwide, the overseas market fell as well. The final factor was the rising tensions in international trade. Every country wanted to boost their own economy up and defeat their competition by not buying anything from them. Every country became dependent on themselves and in turn hurt the economy of the world.

  6. Ezra PIchotto permalink
    December 18, 2012 5:05 pm

    According to James Fulcher there were three main factors that led to the great depression
    1) Over production – the years before the depression were some of the most productive agricultural years. This led to a huge spike in supply but in demand. There was so much food and live stock during the depression that the US government started to kill the animals to destroy crops, all in an effort to lower the supply. This was done while people were starving to death all over the country
    2)The second reason connects to the first factor. Due to the fact that there was so much overproduction in America, this led to the global demand to also drop. This further intensified the effects of the depression.
    3)The level of international trade also fell because various countries were trying to build up their own industries and to become more self sufficient.
    The general state of the economy was also extremely fragile due to WW1 and I personally think that it would have been just a matter of time until a depression would have fell

  7. Andrew Laperuta permalink
    December 18, 2012 8:07 pm

    Production of goods became a factor the production of agriculture was at its best before the depression so most of the supply was plentyful. the divison of labor also became a factor because there was many people out of jobs but no jobs to be had. the last factor is the international trade. every country wanted to raise its own economy so noone would buy goods from other places because they would be supporting the other countries economy instead of their own.

  8. Anastasia Davidyants permalink
    December 18, 2012 11:47 pm

    According to James Fulcher, there were three main factors that lead to the Great Depression. The first, and the most commonly referred to, was overproduction. Before the Great Depression, supply outstripped demand due to the abundance of livestock and crops around the nation, while a large amount of people were meanwhile starving, as Ezra said. There was a separation of production and consumption, resulting in too much being produced and not enough being consumed. The second reason had to with international demand falling which meant that incomes all around had dropped. With the United States outstripping demand, the inter national division of labor that integrated the world economy also worsened and the consumer prices as well as incomes dropped worldwide. Technical advances driven by competition between producers resulted in the production of more goods than the worldwide market could absorb. Prices then fell to the point where no profits were being made and companies had to let go of worker, which meant worldwide income went down and demand further decreased. The third reason that Fulcher pointed out was the United States tension between international trade and national protection. Growing international competition between markets called for more national protection. The world market was no longer dominated by Britain’s policy of free trade after WWI, which hindered the stable economic growth. Countries figured that protecting the national economy against foreign competition was the only way they could survive this economic downfall, which then also negatively impacted the worldwide market, further lowering demand since there was a mass amount of overproduction within the country and outside trade was out of the question.

  9. Syed permalink
    December 19, 2012 10:22 pm

    Enormous advancement in manufacture, international disharmony of labor and anxiety over international trade and national safeguard are the three vulnerabilities of the global economic system that the Great Depression of the 1930s revealed. Enormous advancement of manufacturing created over production of supplies and demand was very low so the prices drop dramatically. variance over the international trader and national economical stability slowed the trade between the countries that stooped the global demand mechanism. over production and unemployment and global unrest on trade worked together to worsen the great dispersion.over production of supplies lacked the necessity item and unemployment stooped earning and stoppage of trades caused the overproduction to rise buy not trading with other countries.

  10. Caryn Rosario permalink
    December 19, 2012 10:44 pm

    According to James Fulcher, the three main vulnerabilities of the global economic system revealed by the Great Depression of the 1930s were: the huge growth in productive capacity, the international division of labour that integrated the world economy, and the tension between international trade and national protection. These combined to worsen the depression because the increasing scale of production and growing number of unemployed did not keep pace with production, global economic integration, and cumulative decline of world trade.

  11. Xiarra-Diamond Nimrod permalink
    December 21, 2012 8:15 am

    According to the book , Capitalism: A Very Short Introduction , James Fulcher believes that the three main vulnerabilities of the global economic system during the era of the Great Depression were, over production which led to a drastic increase of demand.The United States government started to kill the animals to destroy crops, all in an effort to lower the supply because there was too many food and crops being grown during this time. Unfortunately these acts were done while there were still high numbers of people dying of starvation around the country.Due to the fact that there was so much overproduction in America, this led to the global demand to also drop. This further intensified the effects of the depression.Levels of international trade also fell due to the fact that many countries wanted to build up their own industries in order to become more independent.

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