The Great Depression lecture outline 1/19/10 I. World War I changed the world economic order II. Crisis of capitalism III. Alternatives to capitalist democracy IV. Reforming capitalism: state planning and welfare I. World War I changed the world economic order. 1) Britain’s role as enforcer of international stability was broken forever. 2) World economies had reorganized to suit the needs of total war (industrial production, raw materials and food.) When war ended, demand declined. Colonies and former colonies especially suffered from tumbling prices for their goods. 3) European countries had high war debts, almost all to U.S. banks. 4) War reparations, imposed by the Treaty of Versailles, crippled the world’s second-largest industrial country, Germany. This had ripple effects across Europe and the U.S. 5) After the war the U.S. dominated the world economy, as the world’s largest industrial producer (42%), importer (40%), exporter and creditor. The U.S. stock market crash in 1929
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