TOPIC 1.CRISIS IN THE CAPITALIST SYSTEM

 CRISIS IN THE CAPITALIST SYSTEM

First World War: Causes and Impact on Africa

The great depression: its causes and impact on Africa

The Meaning and Characteristics of the Great Depression

Explain the meaning and characteristics of the great depression

The great depression generally refers to the economic crisis which occurred between 1929 and the 1930s during the period of inter war between the world's super powers.

It can also be described as an economic disaster which spread throughout Europe following the collapse of the New York stock exchange in Wall Street on 19 October 1929.

In Britain it was called "the slump‟ and in German "Die Krise‟ (the crisis) and Americans used the term "great depression‟. The great depression began when the stock exchange crashed in 19 October 1929 and depositors feared bankruptcy and rushed to withdraw their deposited cash.

Characteristics of the Great Depression

Hyper inflation (high depression of money) facilitated to the collapse of economies.

Mass unemployment: The official figures are impressive, peaking at around 6 million unemployed in Germany, 14 million in the United States and 2.7 million jobless in Britain due to poor economic activities.

Social tensions increased considerably: With a rising intolerance towards groups or individuals who were perceived to be "economic rivals‟ or "outsiders,‟ many people began to blame their neighbors due to the economic collapse.

Low purchasing power:People were unable to buy food and other necessities due to poor economic activities.

Protectionism: Protectionism is the economic policy of restraining trade between nations through methods such as tariffs and government regulations. Preventing commodities from other nations was applied as a way to prevent depression.

Starvation famine and malnutrition related diseases:The depression took a heavy toll on the physical and mental health of European society. In Hamburg, for example over 50% of the young men were unemployed for more than two years and they were especially hard-hit psychologically.

Low production of industrial goods and steady fall of prices.

Closure of financial institutions like banks due to poor economic activity.

The wide spread of economic depression in the world, except for Russia.

It heightened gender divisions: In some cases married women workers were forced from the work place by state legislation in a campaign against so called "double earners‟ because their husbands also brought home a wage.

Domestic politics became increasingly turbulent: This was due to the government's failure to combat the depression effectively in much of central and eastern Europe and the Weimer Republic.

Widespread Malnourishment: Its effects on national health were long lasting. In the mid 1930s a routine medical inspection identified over 21% of school children in Pontypridd, Wales as malnourished.

The Causes of the Great Depression

Analyse the causes of the great depression

First world war of 1914, this war created an economic vacuum, whereby during the war many European countries were incurring high war expenditure while no production thus after the war the European nations wanted to compensate the gap of production that occurred during the period, which led to over production hence low prices in agricultural and industrial products.

Hence low investment which led to mass unemployment that brought low purchasing power that leads to poor welfare like famine starvation and death thus great depression.

Multi distribution of capitalist’s economy or uneven distribution of national economy in the capitalist’s nations. Whereby in pure capitalist‟s nations it‟s only few individuals that happen to own and control production for instance in U.S.A by the time of great depression it was only 5% of the population that owned the economy.

Unlike in socialism economy thus any withdraw of such people from the investments it affect the entire economy thus the fall of New York stock exchange in 1929 led to the investors to withdraw their money from the stock market which led to the economic depression of 1930‟s.

Heavy loans during the fighting, heavy debts from USA to France and Britain were acquired to facilitate the war even after the war more debts were got from USA like financial loan to construct the war damaged European nations, the results was when the pressure to repay loans and interests became greater particular in Europe, it created an economic situation whereby huge sum of money begun flowing from Europe to USA.

This destroyed international trade, thus Europeans nations couldn‟t develop but all of them depending on USA thus any problem on USA economy had to affect the entire world.

War indemnity of Germany and senseless circle payments, Germany was asked to pay huge indemnity or repatriation of 6.5 billion dollars to the victor power first of all this amount of money was too huge for Germany which had just come from war that led to inflation and created senseless circle payments.

Germany acquired loan from USA as to pay Britain and France who wanted to repay the loans from USA, who borrowed Germany thus a senseless circle payments that anything that would affect USA economy would affect the entire world economy hence the collapse of New York stock exchange led to great economic depression.

The collapse of new York stock exchange on 19th October 1929, this was the immediate cause of the great depression, many investors in USA and outside USA had invested a lot in USA stock exchange the fall of the prices of shares, made the investors to withdraw their shares which led to low investment that led to closure financial institutions like banks, and credit facilities, hence great depression.

Absence of international institutions like IMF and World Bank which would have acted as advisors and regulators of economic and financial issues in the world, like controlling inflation production, scarcity and financial regulation. Thus its absence in 1930‟s led to great economic depression

Over production of agriculture and industrial products, after the first world war that period was characterized with over production of agriculture and industrial output both in the periphery and in the metro pole, this led to the fall of prices of output of industrial and agriculture, which discouraged production in the long run, thus great economic depression.

Political instabilities during inter war period, this period did not enable many European nations to engage into commodity production and international trade, it left a little time for European and USA to engage in economic activities which led to poor planning that culminated into economic slump.

Bolshevik revolution of 1917, after undergoing the revolution Russia begun to under go command and central controlled economy, which narrowed the world market that led to the piles of goods without market from America and in western European nations, hence economic great depression.

Poor economic policies like protectionism, were also responsible for great economic depression e.g. USA during the inter war period practiced and pursued discriminative economic policy against world economies she passed the „Mc Cumber tariff‟ in 1922 to shelter her economies against imports of nation wishing to export more goods

The collapse of the Austria, as she was providing loans to the European nations but collapsed in may 1931 due to the withdraw on the French funds the financial crisis was intensified in Europe.

The recovery program after world war one, the European nations begun to discriminate the USA goods, and begun the recovery of agriculture sector which led to the discriminating of agriculture products in USA that resulted the pile of goods because of fewer buyers this affected the production and that marked the beginning of the great depression.

The Impact of the Great Depression on Africa

Assess the impact of the great depression on Africa

Fall of price commodity, it led to the fall of African cash crops tremendously like cotton, coffee, sisal and cocoa because the demand at the metro pole was also very low the peasants and European settlers who were the chief producers of such commodities almost abandoned the production.

Decline in provision of social services, whereby the colonial government was no longer interested in the investment of social services because of severe social crises in Europe.

Establishment of processing industries, like coffee, cotton ginneries an oil refinery as to increase the qualitative and quantitative output in the metro pole.

Intensive exploitation of african resources e.g. land alienation was doubled, new taxes were introduced, forced cropping was introduced and forced labour became a common place, this aimed at compensating the financial crisis that had affected their economy.

Regional imbalance, especially of transport network whereby railways lines and roads were constructed in areas where production was high and in places that there was no transport network

Provision of low wages, especially on colonial civil servants as to minimize colonial expenditures in the peripheries

Lay-offs / retrenchment that led to mass unemployment in many colonies because the colonial government reduced the number of workers so as to reduce colonial expenditure like teachers, nurses, clerks and others.

Development of migrant labourers, since colonial government increased plantation and labour reserves e.g. Rukwa, Kigoma and Dodoma in Tanganyika and northern Uganda as well.

Growth of food stuff, the crises contributed in putting more efforts in the production of food crops like cassava, banana, soy bean, potatoes and millet because cash crops had fallen in prices.

Increase in the import industrial commodities in the peripheries as to decrease the stock piles in the metro pole that had lacked the market during the period of severe economic crisis.

The Second World War: Causes and Impact on Africa

The war begun from September 1939 to August 1945; it was fought between the antagonistic imperialistic nations in two camps i.e. the Berlin-Rome-Tokyo axis Vs the allied forces being led by Britain, France, USA and Russia, the Berlin-Rome-Tokyo axis was defeated and surrendered.

The war was a global military conflict that in terms of live lost and material destruction was the most devastating war in human history. It began in 1939 as a European conflict between Germany and an Anglo-French polish coalition but eventually widened to include most of the nations of the world.

It ended in 1945, leaving a new world order of a super powers dominated by the United States and the Union on Soviet Socialist Republic (USSR) the second world war reached in every part of the world in the five continents and in 7 seas.

More than 50 million of people lost their lives in this disastrous war, more than 22 million were soldiers and more than 28 million were civilians. The real cause of this war is not known but most historians concur that it was the combination of factors that led to the outbreak of the world war II.

It was also unique in modern times for the savagery of the military attacks unleashed against civilians, and for the adoption by Nazi Germany of genocide (of Jews, Roma [Gypsies], homosexual and other groups) as a specific war aim.

The most important determinant of its outcome was industrial capacity and personnel. In the last stage of the war, two radically new weapons were introduced, the long range rocket and the atomic bomb.

The Causes of the Second World War

Analyse the causes of the second world war

The Versailles peace treaty of 1919, many world historians do agree that the seed that led to the second world war was sown during the Versailles peace treaty settlement, the Versailles men who had reduced Germany to a military cipher and had reorganized Europe and the world as they saw fit, this created more enemies than friends for example, Hitler promised to overturn the Versailles treaty, for having humiliated Germany to that extent, he secured additional support from Germany peasants, Turkey, Italy too were ill-treated by the treaty and opted to revenge. Thus the outbreak of World War II in 1939

Formation of hostile camps, after the failure of league of nation Germany was very successful to create an alliance with Italy, Tokyo and Japan, thus the Berlin-Rome-Tokyo axis which forced French to form the Anglo-French hegemony which was later on joined by other countries and formed the allied forces versus central power, it was these camps that the second world war was organized it provide confidence and increase enmity between the military camps that made the war inevitable.

Hitler and Mussolini foreign policy, this were characterized by expansionism aggression hatred revenge and domination, Adolf Hitler the leader of the Germany national socialist (Nazi) party, preached a brand of fascism predicated on anti-Semitism and racism. Hitler promised to overturn the Versailles treaty and secure additional Lebensraum (living space).German people who he contended deserved more as members of the superior race he wanted to make the capital of the world to be at Berlin, this created the outbreak of World War II when they attempted to fulfill their desires e.g. 1935 Mussolini attacked Ethiopia, in 1938 Hitler attacked Austria, 1939 Hitler attacked Poland as that resulted the outbreak of world war II.

Military preparedness and re armament, when Hitler came to power in 1933 having denounced the disarmament clauses of the Versailles treaty, created a new air force, and re introduced conscription, in march 1936 Hitler dispatched German troops into the Rhine land he withdraw Germany from the league of nations and begun manufacturing more weapons preparing for revenge, this act attracted other countries to do the same thing e.g. Britain and France increased their military budget to prepare weapons. Such military readiness brought tension which brought the war in 1939.

Imperialism, German begin the war because she wanted to regain her lost imperial interesting Africa like in Tanganyika as well as to get more colonies in Africa, for Italy she fought to get more colonies and territories, France wanted to maintain and defend her imperialistic gains from Germany, while Russia was interested in the Balkans and Britain wanted to maintain her status quo as the shark of the sea with the colonial empire.

Factors that led the War to Spread Worldwide

Analyse the factors that led the war to spread worldwide

The Second World War was centered in Europe but after a period of time spread worldwide this was due to some factors; among of them are colonialism, expansion of military alliances, imperialist interests, the rise and spread of socialist and capitalist ideologies in the world.

The Impact of the Second World War on Africa

Assess the impact of the second world war on Africa

Involvement of Africa into the war, some Africans were recruited to fight on the behalf of their colonial power for instance the British colonies recruited the King African Riffles (KAR) to fight on the side of allied forces.

The rise of African nationalism, especially after the return of ex-soldiers who begun to mobilize their fellow Africans to fight against colonialism after getting awareness, it was attributed both on internal and external forces.

Formation of United Nations (UN), especially after the collapse of League of Nations whereby African countries became members of UN especially those that became independent.

Destruction of African agriculture and economic activities, since the war reached in African soil like in Somali, Kenya, Libya and other parts, African property were destroyed.

Intensive exploitation of African resources by the colonialists in order to compensate the losses incurred during the war although this led to large scale nationalism in Africa.

The rise of USA as a leading capitalist nations, which introduced open door policy neo colonialism as compensate what for having not colonized like European nations.

Spread of socialist ideologies in Africa e.g. Ujamaa village in Tanganyika, commons mans charter in Uganda and consciousness in Zambia.

Death and suffering, since many Africans fought on the side of their colonial master, around 100,000 were mobilized in east and southern Africa whereby, many of them died; there was outbreak of diseases and hunger that killed many Africans.

Formation of none allied movement (NAM), this was formed in 1955 in Bandung Indonesia whereby neutral nations who did not belong in side i.e. capitalism or communism.

Collapse of Italian colonialism in Africa, the war marked the end of Italian imperialism in Africa following the defeat of central axis Italy lost her colonies of Libya and Eritrea.

Transfer of mandatory territories to the UN trust ship and the trust territories were put under the supervision of the UN which included Tanganyika, Namibia, Rwanda, Burundi and many others.

Intensification of exploitation in the colonies, measures were taken in the colonies to increase raw materials in the metro pole, a lot of exports were needed from the colonies to rebuilt the war ruined Europe, for example new taxes were introduced, land alienation, forced cropping and processing industries.

Development of rural urban protest, which was attributed to extreme exploitation in the colonies, mass discontent was developed both in the rural and workers in the urban centers who manifested in the form of strikes and riots.

Introduction of new economic, social reforms and social policies in the colonies for example import substation industries were encouraged in relation to education the curriculum was changed and the emphasis was put on hand work and agriculture as to envisage qualitative and quantitative production.

Environment degradation in the colonies, this was due to the over use of the environment during that period as to create enough commodity for export in the metro pole for example land became exhausted.

State intervention in the colonial economy, the colonial state became increasingly involved in organizing, coordinating and controlling commodity production in the colonies whereby it involved in marketing of export commodities by creating export marketing boards for example coffee marketing board in Kagera and Lint marketing board in Uganda.

Activity 1

Do the following Assignment

1.      1. The First World War did not come as thunderstorm but from clear environment. Discuss.

2.      2. How did the great depression affect Africa and what were the solutions to the problem?

3.       3. What was the impact of great depression of 1929-1933 on the colonial economies ofAfrica?

4.       4.Explain the reasons that led the east African nations t