Great Depression

Definition

The Great Depression was a severe worldwide economic downturn that lasted from 1929 to the late 1930s, marked by massive unemployment, plummeting industrial production, and widespread poverty. It profoundly impacted the United States and many other countries, leading to significant changes in economic policies and social structures, including a shift towards government intervention in the economy.

5 Must Know Facts For Your Next Test

1. The Great Depression began after the Stock Market Crash of 1929, leading to a rapid decline in consumer spending and business investment.
2. Unemployment soared during the Great Depression, reaching about 25% in the United States at its peak, leaving millions without jobs.
3. Agricultural sectors were heavily affected, particularly in rural areas like Georgia, where sharecropping became increasingly difficult due to falling crop prices.
4. The federal government took on a more active role in the economy as a response to the Great Depression, leading to new regulations and support programs.
5. Social safety nets were established during this time, including Social Security, to provide financial assistance to those in need as a response to economic hardship.

Review Questions

• How did the Great Depression influence economic policies and government intervention in the economy?
  • The Great Depression forced governments to take a more active role in managing the economy as traditional laissez-faire policies proved ineffective. In the United States, President Franklin D. Roosevelt's New Deal introduced numerous programs aimed at job creation, financial reform, and economic recovery. These changes laid the groundwork for future government involvement in economic matters, demonstrating that state intervention could be necessary during times of crisis.
• Discuss the impact of the Great Depression on agriculture and sharecropping systems in states like Georgia.
  • The Great Depression had devastating effects on agriculture, particularly in states like Georgia where many relied on sharecropping. Falling crop prices made it nearly impossible for sharecroppers to earn a sustainable income, leading to widespread poverty and food insecurity. The economic hardship forced many families off their land or into tenant farming arrangements that often left them deeply in debt, illustrating how economic downturns can exacerbate existing inequalities.
• Evaluate the long-term social consequences of the Great Depression on American society, particularly regarding labor rights and social welfare.
  • The Great Depression fundamentally transformed American society by highlighting the need for labor rights and social welfare programs. As workers faced unprecedented unemployment and poor working conditions, labor movements gained momentum advocating for better wages and working conditions. In response, New Deal legislation established key protections for workers and laid the foundation for future labor rights. Additionally, the introduction of social welfare programs created a safety net that has continued to evolve, reflecting society's ongoing commitment to address economic disparities.

Related terms

New Deal: A series of programs and policies implemented by President Franklin D. Roosevelt aimed at economic recovery and social reform during the Great Depression.

Dust Bowl: A period of severe dust storms in the 1930s that greatly damaged agriculture in the U.S. Great Plains, exacerbating the effects of the Great Depression for farmers.

Stock Market Crash of 1929: The catastrophic collapse of stock prices in October 1929 that marked the beginning of the Great Depression and led to widespread financial devastation.