This paper will look at the Austrian School of thought regarding the causes of the Great Depression and look at how the same mistakes are being made today....
The Depression's effects were aggravated by its uneven impact, by a rudimentary social-welfare structure and by misguided government policy. A third of Canada’s Gross came from exports, therefore the country was hard hit by the collapse in world trade. The four western provinces, which depended almost exclusively on primary-product exports, were the most seriously affected.
Clearly, the negative impact of the drought on agriculture resulted in a cease in crop production leaving farmers across both countries hopeless and poor as they were unable to yield any type of profit.
Increased tariffs in both the United States and Canada caused a decline in international trade and aided in the facilitation of the Great Depression.
Under Hoover in the U.S.
The Great Depression In Canada
Background Information (causes of the great depression)
Jobs were lost
1/5 people depended on government for help
32% of Canada was unemployed
Men without jobs were put into work camps for 20 cents a day.
The Great Depression was not something that appeared out of thin air; it grew over time like a tumor and eventually plagued America with an excessive disease....
The Great Depression of 1929-33was the most severe economic crisis of modern times. Millions of people losttheir jobs, and many farmers and businesses were bankrupted. Industrializednations and those supplying primary products (food and raw materials) were allaffected in one way or another. In Germany the United States industrial outputfell by about 50 per cent, and between 25 and 33 per cent of the industriallabour force was unemployed.
This quote was ultimately the reason why King lost power in the 1930 election to Richard Bennett and his Conservatives.i Prime minister Bennett also was not in favour of government intervention, but he did however create several acts to help Canadians through the Depression.
Economists still debate whether a specific event might have sparked the Great Depression, such as the 1929 crash of the Wall Street stock market. However, there is general consensus that the Depression was the result of widespread drops in world commodity prices and sudden declines in economic demand and credit, leading to rapid declines in global trade and rising unemployment.
In the booklet "The Great Depression of the 1930s in Canada" , Michiel Horn gives an intellectual dissection of the events that occurred during the Great Depression.
The United States
The Response of the Government
The Success of Policies
The Relationship Change Between Business and Government
The Response of the Government
to the Great Depression:
At least in part, the Great Depression was caused by underlying weaknesses andimbalances within the U.S. economy that had been obscured by the boom psychology andspeculative euphoria of the 1920s. The Depression exposed those weaknesses, as it did theinability of the nation's political and financial institutions to cope with the viciousdownward economic cycle that had set in by 1930. Prior to the Great Depression,governments traditionally took little or no action in times of business downturn, relyinginstead on impersonal market forces to achieve the necessary economic correction. Butmarket forces alone proved unable to achieve the desired recovery in the early years ofthe Great Depression, and this painful discovery eventually inspired some fundamentalchanges in the United States' economic structure. After the Great Depression, governmentaction, whether in the form of taxation, industrial regulation, public works, socialinsurance, social-welfare services, or deficit spending, came to assume a principal rolein ensuring economic stability in most industrial nations with market economies.
On March 11, 1936, Dorthea Lange’s iconic image, Migrant Mother, was published in the San Francisco News. Since that first publication, the iconic photo has come to represent America’s Great Depression and the strain of poverty in rural America.
shifted away from the "laissez-faire" approach and the federal government in both countries became more involved in industry and business overall.
This greater involvement was caused by the people wanting the federal government to step in and aid the country in escaping the shackles of the depression.
In Canada, centralized administrations were developed, such as the Bank of Canada and the Canadian Wheat Board, to aid the national government in facilitating, monitoring, and guiding the country's economy and business ("Great Depression").