Spacial Analytics Crash Course Part Two: The End of the Great Depression, the Start of the Cold War
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Recapping Part One
In Part One of our economics series we over-viewed the fields of micro and macro economics as well as went over important definitions, introduced a bit of theory, showed a few videos which took everything to a greater depth, and closed with some opinion, a look to the future and the chart below. For those that missed it, you can catch up on Part One here.
In Part Two we are going to broadly cover the effects of World War 1, the Great Depression, World War 2, and look at how the often forgotten Chinese Civil War and the attack by Japan shaped China into the emerging superpower it is today. We will also briefly introduce the Cold War and lay the ground work for Part 3 of this series.
The Global Economy: Runup to The Great Recession
In order to understand the magnitude of how far-reaching the 2008 recession was, a little bit of economic history is in order. It would fill tomes to list all the global economic nuances in the last century, but that would be too much information to take in for the layman. Instead, we are going to cover a few periods of time and the major talking points for each era, starting with the run-up to The Great Depression.
World War 1 Through the Great Depression
World War 1 was a difficult time for the masses, as it was truly the first time that a majority of the Western world became a battleground. Running from 1914 until 1918, it left many European nations in a great deal of debt, most of which was owed to the United States. Post war reparations became a major issue for the losing nations, especially Germany who was held accountable, those reparations are partly to blame for not only the rise of Hitler but the onset of the Great Depression, but that is getting a bit a head of ourselves. As with all of their videos, Crash Course does an excellent job breaking down the events that led to war in an easily digestible format which can be found below.
For anyone who wants to REALLY get into action of World War 1 though, the YouTube channel The Great War, goes to painstaking lengths to capture the timeline and events in a weekly format. I highly recommend them for anyone who wants to dive into the weeds and learn about the mistakes of our shared past, so we can avoid repeating them again in the future. Their channel is linked below.
To sum up the economic portion of events though, the United States loaned a great deal of money to their European allies during the course of World War 1. Much of this money was then spent immediately in the United States on much needed supplies to allow the allies to continue fighting. Following the conclusion of the war, the United States government was eager to have it’s allies pay back the full $11.5 billion it loaned out, plus interest. This did not include the $33 billion which Germany was forced to owe to the world as reparations for the war. While not directly tied to the Great Depression, the economic conditions in post-war Germany were difficult for many and directly led to Hitler rising to power. The US Holocaust War Museum has a great collection of the history stored there and their link is below for those that desire to pursue the full rabbit hole. It is important for later.
Post World War 1 most of Europe has been ravaged, but the United States not only escaped suffering any damage to it’s mainland, but also experienced an economic boom as money from European war purchases poured into American business, which led to a period in time known as the Roaring 20’s. Summed up nicely, some Americans lived extravagant lifestyles, flocked from farms to cities, doubled the national wealth in 9 years, and experienced the first beginnings of the shift to a consumer driven economy. It was also a time of rapid social and political change. Mass culture was becoming a thing, the growing pains of the new urban lifestyle were settling in, the rise of gangland American was a reality due to the Prohibition, and the Ku Klux Klan was really starting to flex it’s muscles (1). The more things change though, the more things stay the same.
Part of what fueled the massive expansion of the United States economy during the 1920’s was wild investment and speculation in the stock market. So much money was being made so rapidly that it seemed like everyone was dumping every spare of money they had into stocks, all in the hopes that they could strike it big and make a lot of money themselves. This speculation was worsened by economic conditions throughout other parts of the country though. The History Channel states,“By then (1929), production had already declined and unemployment had risen, leaving stock prices much higher than their actual value. Additionally, wages at that time were low, consumer debt was proliferating, the agricultural sector of the economy was struggling due to drought and falling food prices, and banks had an excess of large loans that could not be liquidated” (2). In October of 1929, the stock market crashed, with events known as Black Thursday and Black Tuesday leaving millions of shares sold, and millions more having little to no value. The expansion had ended and the crash effected the entire world due to a global reliance on the gold standard, which dragged the still recovering nations of Europe into economic strife as well. The depression lasted for over a decade, and was not considered officially over until the cessation of hostilities of World War 2.
Rise of Nazi Germany Through the Golden Age of Capitalism
While the Great Depression may have found its roots in the collapse of the United State’s stock market, the icy tendrils of those selloffs on Black Thursday and Black Tuesday had a greater reach than just within the borders of the United States. Germany, which had a slow start getting back on it’s feet post WW1 relied heavily on U.S. loans to continue growing their economy, and come 1929 those loans had dried up. This resulted in a large dissatisfaction among the Germany people as millions of workers were fired from their jobs while thousands of children died in the streets from undernourishment; not because there was any particular food shortages occurring, but because there was a significant lack of ability for skilled laborers to obtain work in order to pay for the food. This resentment eventually reached a boiling point, and Adolph Hitler’s Nazi Socialist German Worker’s Party won first 107 seats in the Reichstag in 1930, and then 230 seats just 2 years later (3). For a much greater scholarly review of the rise and fall of the 3rd Reich I highly recommend Richard J. Evan’s, The Third Reich Trilogy, which can be purchased from the Amazon link in the works cited below (4).
As with WW1, both Crash Course and Indy Neidell have fantastic videos which give amazing perspectives on WW2, and for those that wish to immerse themselves in every detail regarding the global conflict, please feel free to lose yourselves in the rabbit hole (again) below.
In short though, after years of suffering and war, the close of WW2 put the official lid on the Great Depression. While it is easy to say that the economic structure of the world had changed drastically due to the events of the Depression and the war, it goes much deeper than that; and the restructuring of economies, particularly the United State’s has had far reaching consequences and directly explains in great detail WHY the U.S. remains focused almost solely on defense spending above all else even to the present day. EH.net has a thorough breakdown of American economic history prior to and during WW2, and it is a great read if you care for the nuts and bolts of the entire affair.
The Start of the Cold War
While the close of World War II brought closure to both The Great Depression and years of open hostilities, it brought with it a greater sense of unease and tension to the world stage. Before we can start discussing some of the events of the Cold War though, we must first look at an often forgotten tragedy of the war. The civilian deaths at the hand of Stalin were in the tens of millions, and should rightfully have been considered a genocide (5), and while this fact is often overshadowed, the forgotten loss of life in China is what we must first shine some light on; as it sets the stage for the current geopolitical issues of the world. Prior to World War 2 China was in the midst of a civil war fought by the clashing ideologies of the Republic of China (KMT)and the Communist Party of China (CPC). This civil war was fought from 1927 until 1950 and the scope of the fighting extended far beyond the borders of China. The United States took a great interest is supporting the KMT, since a Democratic China would allow for a larger western presence in the region. The former Soviet Union on the other hand did not like the thought of Democratic ideals so close to it’s borders, especially after the tenuous relationship it shared with the Allies in the closing days of World War 2 and what followed. Because of this, the U.S.S.R heavily supported the CPC.
During World War 2, both sides agreed to a temporary cessation of hostilities so they could focus on their mutally shared foe, the Japanese, but the fighting was not fought evenly by both armies. The KMT bore the brunt of front-line defenses, while the CPC operated mostly in the rear utilizing guerrilla warfare and hit and run tactics. After the Soviets repulsed the Japanese from Manchuria, the CPC and KMT dissolved their alliance and resumed open hostilities. In the end, the Soviet backed CPC defeated the U.S. backed KMT and Communism spread throughout a now unified China. These events set the stage for the Cold War to begin, and the effects of the Communist victory in China are still being felt today.
For a more complete rundown of the events of the Chinese Civil War, make sure you watch the following videos. The synopsis provided by The Armchair Historian is a quick breakdown of the broad events which occurred during the years leading up to hostilities and beyond.
The U.S. propaganda documentary titled “Why We Fight” is heavily edited to incite anger in the viewer toward the actions of the Chinese, and uses many racial slurs which are no longer acceptable in today’s world, but it provides an important piece of history in this larger context. The United States wished to sway the support of the American people into not only fighting against the Japanese in the war, but to bring the Chinese and their land and people “under the umbrella of Democracy”, ensuring that they would become a longtime ally. It must be noted that this video shows scenes from war, as well and numerous dead bodies, including those of women and children, as well as individuals being shot by firing squads and buried where they fall. You have been warned.
At the end of the fighting in China it is estimated that an additional 20 million civilians were killed, but that number is heavily disputed due to a lack of intact records. Historians believe that the total loss of life in China as a result of both the Chinese Civil War and The Sino-Japanese War during World War 2 could easily top more than 50 million people. The National World War 2 Museum of New Orleans gives a by country breakdown of the known casualty figures from WW2.
Conclusion
That wraps up the events covering the 30 years spanning from World War 1 through the start of the Cold War. Germany has lost, twice, the world has suffered an economic depression which rocked caused strife the globe over, over 100 million military personnel and civilians have lost their lives at the hands of genocide, civil war or open warfare, and new battle lines have been drawn on the maps. The U.S.S.R. and Communist China have emerged as the regional powerhouses in Asia and Europe, while many European countries are reeling from the destruction wrought by the wars. The United States once again remains mostly unscathed and continues to be the source of economic power in the western hemisphere. In Part 3, we will break down the events of the Cold War, look at the collapse of the Soviet Union and start laying the ground work for the events which lead up to the 2008 economic recession. For real this time.
Thanks and External Links
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Works Cited
(1) History. https://www.history.com/topics/roaring-twenties/roaring-twenties-history
(2) History. https://www.history.com/topics/great-depression/great-depression-history
(3) Alpha History. https://alphahistory.com/weimarrepublic/great-depression/
(5) Stanford News. https://news.stanford.edu/2010/09/23/naimark-stalin-genocide-092310/
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