Mada za sehemu hiiCrisis In Capitalist SystemMada 3
- First World War: Causes and Impact on Africa
- The great depression: its causes and impact on Africa
- The Second World War: Causes and Impact on Africa
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Depression in economic means a period in an industrial nation characterized by:
- Low production and sales
- High rate of business failures
- High unemployment
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The Great Depression refers to the worst period in the industrial nations characterized by:
- Low production
- Low sale
- High rate of business failure and unemployment
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It occurred from 1929–1933.
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It started in the USA and spread to Europe and other parts of the capitalist world (colonies) except Russia.
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Domestic over production — there was too much production of goods which was experienced in USA and Europe that lacked market and caused overproduction and low market hence the fall in production in 1929.
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High protective tariffs by USA made other European countries to impose tariffs on USA goods. This caused piling of goods that couldn't be sold (over production).
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Unequal distribution of income — capitalists paid workers low wages which reduced the purchasing power rate of the working class who were the majority.
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The fall of stock exchange in USA — this made businesses collapse as people were selling their shares and others withdrew their money from industries, banks and farms. Companies could not continue with production neither could they sell their products. They closed business and sack of workers.
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Speculations — it was the period when people were expecting depression to occur hence they started to produce more goods also in industries and farmers produce a lot of products and as an outcome the depression did not occur and resulted to overproduction of goods which could not be sold, that is high supply and low demand.
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Less government control of capitalists' economy — this made markets to be saturated with too much unsold goods. This caused problem of high supply and low demand in 1920's.
- Increase in colonial economic exploitation especially in agriculture e.g. increased forced labor, land alienation etc.
- Fall of price of agriculture products e.g. Price of sisal fell from 32 per ton in 1929/30 to 12 per ton in 1931/32.
- Fall of wages e.g. Wage of sisal cutter in Tanga fell from 30 TSH per month to 15 TSH per month in 1935.
- Fall of government revenue e.g. from Tsh 750,000 in 1929 to Tsh 450,000 in 1931/32.
- Massive unemployment due to low prices of agriculture products; many settlers in Kenya and Usambara left their farms thus leaving many workers out of work.
- Reduction of government expenditure on social services.
- Unemployment, many people lost their jobs due to closure of industries and companies.
- Reduction of wages, which reduced people's purchasing power, which cause more closing of industries and unemployment.
- Fall of production in industries due to lack of markets.
- Overproduction in USA, Britain and other countries.
- The growth of Military dictatorship in Europe. E.g. Germany under Adolf Hitler and his Nazi party in 1933, and Italy under Mussolini and his fascism party.
- Financial institution such as banks had no money hence some were closed down.
- Germany failed to pay for the war reparation to European allies and its debt to USA.
- Economic nationalism emerged whereby nations formed united fronts in order to get out of Great Economic Depression
- Intensive exploitation over the Africans. The Africans were forced to provide more so as to maintain income they used to get before the crisis, the government started cutting down the cost of running the government and also through taxation on the Africans the colonial government decided to increase tax on the Africans so as to rise revenue.
- Unemployment there was massive redundancy of wages labors that particular group faced economic and social hardship.
- Fall of prices in agricultural crops. The fall of production in Europe went together with the fall of market for primary product.
- Decline of social services. The colonial government cut out services such as education and medical services. The Africans had to pay for those services.
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