HIST363 Study Guide

Unit 7: Economic Crisis and War in the 20th Century

7a. Discuss how industrialization promoted imperialism

  • What is imperialism?
  • How did industrialization promote imperialism in the late 19th and early 20th centuries?

As industrialized European countries' economies developed, their growth began to slow. They needed to expand their products into new markets to continue to grow. At the same time, these powers required more natural resources to increase production. Imperialism both created new markets and reached new territories to exploit the natural resources there.
 
To review, see:

 

7b. Interpret the effect of industrialization on warfare to contextualize World War I as an industrial war

  • What is the industrialization of warfare?
  • Lenin argued that imperialism was the final outcome of capitalism. Was he right? Why or why not? How can we apply his theory to World War I?
  • What new military weapons were introduced in World War I?
  • How did the participants in World War I apply industrial technology and production to warfare? Why did these new applications result in horrific mass casualties?
  • How did military leaders fail to understand how new military technologies had made their strategies and tactics obsolete?

Several factors helped catapult Europe into World War I, although Gavrilo Princip's assassination of the Austrian Archduke Franz Ferdinand in 1914 provided the initial spark. Competition among the European powers for colonies was a primary cause, such as disagreements that erupted over Morocco and the Congo among Germany, France, and Britain.
 
Russia's Vladimir Lenin described imperialism as the last stage of capitalist development. The colonies had become a valuable source of natural resources and a market to sell finished consumer products. Combined with militarism, ethnic discontent, and a complex web of military alliances, the European leaders had created a tense atmosphere that resulted in the outbreak of war in 1914.
 
Military leaders at the time tragically failed to realize the technological changes that had occurred during the Industrial Revolution. The mechanization of warfare and mass production of new weaponry created a military stalemate where millions of soldiers and civilians were killed and maimed. The industrialization of warfare had rendered traditional military strategies and tactics obsolete and useless. The generals refused to understand this and led what was supposed to be a quick and relatively bloodless conflict into one of the bloodiest events in human history.
 
To review, see:

 

7c. Identify the main events of the Great Depression

  • What was the Great Depression?
  • What were some of the main causes of the Great Depression?
  • How did the Great Depression shake confidence in unfettered laissez-faire capitalism?

In the United States, the Great Depression (1929–1933) was an unintended consequence of the booming economy that followed World War I: the so-called "Roaring 20s". The postwar prosperity, and the social changes that came with it, made Americans believe the economy would continue to grow and expand forever; laissez-faire capitalism and the economic ideas of Adam Smith were the new norms. Speculation in the stock market, buying and selling stocks on margin, the proliferation of debt, and a lack of government regulation created the perfect conditions for an economic collapse.
 
When the stock market crashed in 1929, the Hoover administration relied on outdated economic ideas that suggested it should keep government involvement to a minimum. As the economy spiraled downward, President Herbert Hoover could not restore confidence in the economy or the government's ability to stabilize it.
 
To review, see Agricultural Depression 1920–1934, Great Depression: Turning Point and Recovery, and The Great Depression.

 

7d. Describe the methods governments used to recover from the Great Depression

  • What were the basic premises of Keynesian economics? How did President Roosevelt apply its principles to the U.S. economy after his election in 1932?
  • What measures did Roosevelt take to stabilize the U.S. economy and stimulate a recovery?

After his election in 1932, President Franklin D. Roosevelt took an active role in restoring economic confidence. Roosevelt increased government spending in accordance with his belief in Keynesian economics. John Maynard Keynes (1883–1946), the British economist, believed the government should pump money into the economy to stimulate activity, promote business growth, and pay off the deficit once prosperity returned. From 1933–1939, Roosevelt and Congress worked to jumpstart the economy by enacting the New Deal, a series of programs, public work projects, financial reforms, and regulations.
 
Roosevelt created new agencies and programs to bring about recovery and imposed new regulations on the stock market, banks, and businesses. These policies were beginning to have a positive impact, but the outbreak of World War II, and mobilization for war, created the most dramatic economic improvement. U.S. industries profited enormously from increased sales to Britain, other Allied forces, and the U.S. government when it entered the war in 1941. As a result, the United States emerged from World War II in 1945 as an economic and military superpower.
 
To review, see Great Depression: Turning Point and Recovery and The Great Depression.

 

7e. Explain how the Marshall Plan shaped global politics and economics

  • What was the Marshall Plan?
  • What were the main aims of the Marshall Plan? How was it developed, and what were its outcomes?

In 1948, the U.S. Congress enacted the Marshall Plan, which would provide more than $15 billion to European countries that needed help to rebuild. The fund provided food relief and aid for the physical reconstruction of war-torn Europe. The Russians and Soviet Bloc countries did not participate.
 
To review, see:

 

7f. Analyze the importance of the Bretton Woods Conference to the restructuring of the world economy on U.S. terms

  • What was the Bretton Woods Conference?
  • What were the purpose and outcomes of the Bretton Woods Conference? What organization did the conference create to assist with postwar economic recovery?

At the end of World War II in 1945, the Allied powers resolved to avoid repeating the mistakes they had made after World War I. Participants at the Bretton Woods Conference (1944) began establishing a new global financial system that would create a new foreign exchange system, prevent competitive devaluations of currencies, and promote international economic growth.
 
They created the International Bank for Reconstruction and Development (IBRD) and the International Monetary Fund (IMF) to help countries rebuild and develop local economies that had been decimated during the war.
 
To review, see The Affluent Society, George Marshall's Speech, and The Marshall Plan and Molotov Plan.

 

7g. Critique the impact of the Bretton Woods institutions on global industrial development

  • What was the intent of the Bretton Woods conference and the institutions it created?
  • Have the Bretton Woods institutions been effective with regard to global industrial development?
  • What are the most common critiques of the Bretton Woods institutions?

The intent of the Bretton Woods institutions was to help developing countries industrialize and build their economies. The thinking behind this was that "a rising tide lifts all boats" or that a successful global economy would improve the economies and quality of life in developing countries as well.
 
Common critiques of the IMF and World Bank are that their economic policies represent a wealthy Western worldview and economic assumptions, which may not always be appropriate and may lead to unfair practices; voting is skewed because it is based on shares held by a given country instead of a more egalitarian system (like, for example, the United Nations); and that the projects they fund can raise ethical questions around things like indigenous rights.
 
To review, see:

 

Unit 7 Vocabulary

Be sure you understand these terms as you study for the final exam. Try to think of the reason why each term is included.

  • Bretton Woods Conference
  • Franklin D. Roosevelt
  • Franz Ferdinand
  • Gavrilo Princip
  • Great Depression
  • Hoover administration
  • imperialism
  • International Bank for Reconstruction and Development (IBRD)
  • International Monetary Fund (IMF)
  • John Maynard Keynes
  • Marshall Plan
  • mechanization of warfare
  • New Deal
  • regulations
  • Vladimir Lenin
  • World Bank
  • World War I
  • World War II