6. Capitalist stabilization of the 1920-s World economic crisis of 1929-1933

1. Brief content of the lecture

1. Characteristics of the period of capitalist stabilization

Economy . 1924-1929 was the period of economic stabilization and economic growth.

*Causes of economic growth:

USA

D

Germany

ermany

awes Plan

GB, France

Pre-war level of economic development was surpassed, but the tempos were uneven: the USA produced as much production as all other countries together.

Characteristic features of capitalist stabilization:

A). growth of industrial production

Index of industrial development compared 1913

USA	Germany	France	Great Britain
172%	103%	40%	Level of 1913

Causes of industrial growth:

*1) technical progress

**2) economic laws- “ theory of long waves”

Cycle -50-60 years

1950-s 1990-s

B. Intensification of concentration and centralization of production and capital.

Gremany-5 banks had 2/3 of all capital

GB- 5 banks had ¾ of all capital

C. Weakening of class struggle, political stability. Reformism in the workers’ movement increased their position. USA: 1918-1923 10 mln people took part in strikes:; 1924-1929-2,43 mln

D. State regulation was limited

But the capitalist stabilization was not stable. Why?

1. uneven development in branches

2. mass unemployment

3. purchase capacity of population was low

4. investment very often were made not in industry but into shares, financial games.

2. The world economic crisis, its causes

29 October, 1929 “ Black Tuesday” – collapse at New York stock market . Only on the 29 of October billions of dollars were lost; it was collapse of all financial system of the USA and then of all the world

Causes: balance between offer and demand was broken- it was crisis of overproduction;

automatic mechanism of outcome the crisis did not work because of great concentration of capital and production.;

mass production;

finance system was broken:

Crisis was long and deep, it took place in all spheres of economy and in all capitalist countries and in their colonies.

USA: volume of industrial production decreased 50%

Germany-59% .

France – decrease was on 1/3

Unemployment reached 30 mln( 1/5 of all workers). In the USA every third worker lost job.

Poverty and pessimism were accompanied by aggression and violence. Class struggle became very strong. Political instability led to changes of governments.

Questions for test

a. Causes and peculiarities of the economic stabilization

b. Causes of the world economic crisis

c. Consequences of the world economic crisis

Dates of the world economic crisis:

A) 1929-1933

B) 1918-1919

C) 1920-1927

D) 1927-1932

. One of the causes of the economic growth in 1924-1929 was :

A) Marshall Plan

B) Dawes plan

C) Churchill Plan

D) Versailles Plan

In 1920-s the country with the highest tempos of economic development was:

A) Great Britain

B) USA

C) France

D) Germany

Glossary

Stabilization	стабилизация, устойчивое развитие
Uneven	неравномерный
Branch	отрасль
сала
Unemployment	безработица
жұмыссыздық
Collapse	крах
Stock market	биржа
Overproduction	перепроизводство
артық өндіру

Reference

История стран Европы и Америки, т.3

Е. Ф.Язьков. История стран Европы и Америки в новейшее время 1918-1945. М. 1990. стр. 125-134

American history, any edition