United States and the Great Depression

United States and The Great Depression

One of the major developments following the First World War was the decline of European dominance and the emergence of the United States as a global economic power. While the war severely weakened European economies, the U.S. economy grew stronger.

Since no battles were fought on American soil, and the

U.S. continued to expand its industries by supplying arms and materials to the Allies, its economy flourished during the war. However, serious economic troubles emerged about a decade later, eventually spreading to Europe.

The U.S. operated under a capitalist system, where industrial owners pursued maximum profit. Yet, most workers lived in poverty and couldn’t afford to buy the goods being mass-produced, leading to overproduction and unequal distribution of purchasing power—two primary causes of the Great Depression that began in October 1929 and quickly spread globally.

The crisis began with a dramatic fall in stock prices, triggering the collapse of the U.S. stock market. As unsold goods piled up, countless factories shut down, leading to widespread unemployment, hunger, and hardship.

Most European nations—except the Soviet Union—were also severely affected, as their economies had grown dependent on U.S. financial institutions, particularly American banks. The impact of the crisis in these countries was similarly devastating.

The economic downturn also had political consequences. In the United States, the Democratic Party came to power with Franklin D. Roosevelt as President. He launched the New Deal, a comprehensive program of economic reform and social welfare.

In contrast, the post-war disillusionment and economic hardships in Germany and Italy helped fascist parties rise to power