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process" [3, p.190]. However, during the first industrialization production lay with small or medium-size enterprises and during second industrialization large corporations began to prevail (ex. German Kartelle or French comptoirs that fix the volume of production, selling prices, and conditions for sharing out profits (the coal and metal industries), German vertically integrated Konzerne (Krupp, Thyssen, Stinnes), the British 'amalgamations' and the American 'trusts' (electrical and chemical industries).
By a growth in industrial concentrations the development of shareholding companies was matched. So, shareholders became one more economic agent of second industrialization.
Another economic agent is banks. Although during the first industrial revolution the role of this agent was modest (they mainly financed international trade and the investment of government loans), during the second industrialization their role became more important. Banks needed to meet the growing need for commercial and industrial credit. "New banking institutions arose that accepted capital from small investors; new collecting techniques such as sight deposits, term deposits and current accounts were adopted and money was loaned at a higher interest rate than the rate granted to the depositor" [3, 192].
Public institutions also began to play important role as an economic agent of second industrialization.
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In the middle of 19 century idea of growth, and "later of economic development, implied technological innovation that required investment in the technical and cultural fields. Industrialization therefore went hand in hand with the creation of a basic education system, as well as with specialist training at a higher level, and, depending on the country, this took place rapidly or slowly" [3, p.194].
It also should be mentioned that in both first and second industrializations there were main leading countries. However, in first industrialization leading positions occupied by countries such as UK, Belgium, France and Switzerland, and industrialization in turn was a regional phenomenon. Second industrializations forces shifted toward USA, Germany and Japan and industrialization became global phenomenon.
References:
1. Cameron, R. and Nea, L. (2003) A concise economic history of the world: from paleolithic times to the present. New York ; Oxford : Oxford University Press
2. Hobsbawm, E. J. (1996) The age of revolution 1789-1848. New York: Vintage Books.
3. Vittorio Antonio Di (ed.) An Economic History of Europe: From expansion to development Routledge, 2006. — 393 p.
УДК 330.83
Смирнова М.М.
Студентка 4 курса бакалавриата, экономический факультет, ФГБОУ ВО Санкт-Петербургский Государственный Университут
ПРИЧИНЫ И ХАРАКТЕРИСТИКИ ВЕЛИКОЙ ДЕПРЕССИИ
Smirnova M.M.
Fourth-year bachelor student, Faculty of Economics
Federal State Budgetary Educational Institution of Higher Education «Saint Petersburg State University»,
Russia, Saint Petersburg
THE CAUSES AND CHARACTERISTICS OF THE GREAT DEPRESSION
Аннотация
24 октября (1929) - «Черный четверг» («волна панических продаж акций привела к обвальному падению котировок и уничтожила миллионы долларов фиктивных бумажных активов» [ 1]), еще одна волна 29 октября « Черный вторник». Обвал фондового рынка не был причиной депрессии, но это был четкий сигнал о том, что депрессия началась. Основные причины будут определены в этой статье.
Abstract
October 24 (1929) - "Black Thursday" ("a wave ofpanic selling on the stock exchange caused stock prices to plummet and eliminated millions of dollars offictitious paper values" [1]) another wave on October 29 "Black Tuesday". The stock market crash was not the cause of depression but it was a clear .signal that the depression was underway. Main causes will be defined in this paper.
Ключевые слова: Великая депрессия, фактор, причина, циклическое развитие, государство
Key words: Great Depression, reason, cause, cyclical development, government
For the depression period itself, 1929-1932/33, Poland experienced severe declines in economic activ-we can see that a lot of countries especially (outside ity (exceptions were Bulgaria, Portugal, the USSR), US) Austria, Germany, France, Czechoslovakia and what was expressed in sharp fell of commodity prices,
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share prices, exports and imports and huge growth of unemployment.
However, even after a long period of time there is still no general consensus about causes of depression. One of the reasons given by Cameron and Neal is monetary cause - "a dramatic decline in the quantity of money in the major industrial economies, the United States in particular, which spread its influence to the rest of the world"[2]. Other reason, mentioned by authors was real sector cause - "an autonomous fall in consumption and investment expenditure, which propagated itself throughout the economy, and the world, by means of multiplier-accelerator mechanism"[2]. Other given reason are "prior depression in agriculture, the extreme dependence of Third World countries on unstable markets for their primary products, a shortage or misallocation of the world's stock of gold, and so on"[2].
It's hard to define only one reason for depression, mainly it was "unfortunate concatenation of events and circumstances, both monetary and nonmonetary" [2] that affected the onset of depression.
It also can be assert that the onset of depression is associated with the World War I (breakdown of the gold standard, the disruption of trade, nationalistic economic policies etc.) and disastrous position of most states after the end of war.
Authors also point out long-run consequences of the depression which are "growth role of government in the economy, a gradual change in attitudes toward economic policy (Keynesian revolution, and the efforts on the pert of Latin American countries and some other Third World countries to develop import-substaining industries" [2].
As it was mentioned earlier it's hard to point out only one or two reasons for depression. As it known from economic theory every economy experience cycles (one of the most famous theory of economic cycles was invented by Russian economist Kondratiev also known as supercycles, the long economic waves etc.). So, we can apply this theory to find out consequences of depression too. As it was stated in Aldcroft text: "the depression of 1929-32 was no exception to the longrun historical sequence of cyclical activity and hence requires nothing more in the way of explanation than a general theory of the cycle. The depression did occur at a logical sequence in time on the basis of past busi-nesscycle history and some of its characteristics had been reflected in previous downturns" [1, p.63].
Despite the fact that there is no general agreement on the causes of depression, the reason for length and depth is clearer. As far as after the WWI Britain was no longer a leader (it used to be commercial, financial, and industrial nation that had played a key role in stabilizing the world economy), United States were clearly dominant economy. Nevertheless, US didn't want to become a kind of leader that was Britain before (immigration policy, trade tariffs policy, monetary policy and its attitude to international cooperation). Cameron and Neal made a suggestion that if US "pursued more open policies...the depression almost surely would have been both milder and briefer" [2]. Also the fact that condition of American economy has affected length and severity of depression stated in Aldcroft paper. Basically, author says that: "events in the United States,
together with that country's influence over the world economy, determined to a large extent the timing, the severity and the duration of the depression. In brief, the United States administered two severe shocks to the world economic system at a time when it was most vulnerable and therefore least able to withstand them. The initial shock came with the curtailment of foreign lending in 1928-9 and the second with the peaking of the American boom in the summer of 1929" [1, p.66]. According to Aldcroft, the major destabilizing influence came with the collapse in American lending that exercised a powerful deflationary impact on the world economy. "The American downturn in economic activity was accompanied by a further reduction in foreign lending and a sharp contraction in import demand, the consequences of which were a severely reduced flow of dollars to Europe and the rest of the world". [1, p.68] But as we already said in introduction, crash of stock market was not the cause of depression but signal that the depression was underway.
One reason that was mentioned before is cyclical development, but what made depression so length and strong according to Aldcrof is that this recession and then depression (part of economic wave) came when all countries economies were weak and unstable due to post-war distortions. And another reason is a fail of misguided government that applied policies that just "helped to aggravate the deflationary spiral"[1, p.68]. Governments applied such protective measures as tariffs, monetary retrenchment etc. and these actually made things worse. The fact that economic relations between countries were really close played important role in spreading of depression.
Now let's refer to Hobsbawm and the role of the Great Depression in the "Fall of liberalism". According to the text, Great Slump played crucial role in the "Fall of liberalism"[3, p.109]. Peace, social stability, economy, political institutions and intellectual values of nineteenth century liberal bourgeois society, were in retreat or collapse during the Great Depression. Governments, however, failed to respond correctly to the crisis and this lead to loss of trust between citizens and government. As it was discussed earlier one of the most crucial social impact of Great depression was huge rate of unemployment that in turn causes even greater distrust of the government by workers. That in turn accelerated tide of fascism. So, we can conclude that if the Great Depression didn't hurt social stability and intellectual values to that high extent and if government applied right policies fascism would not spread to such extent.
References:
1. Aldcroft Derek H. (2001)The European economy 1914-2000. London ; New York . Routledge, 2001, 327 p.
2. Cameron, R. and Nea, L. (2003) A concise economic history of the world: from paleolithic times to the present. New York ; Oxford : Oxford University Press
3. Hobsbawm, E. J. (2001). Age of extremes: The short twentieth century, 1914-1991. London: Abacus.
4. Великая депрессия и «Новый курс» в США. [online] Available at: https://infope-dia.su/10x7ddb.html [Accessed 31 Jan. 2019].
