The Origins: From an American Crisis to a Global Crisis
Why did speculation on credit make the U.S. economy so vulnerable in 1929?
Because when shares lost value, people who had bought on credit couldn’t repay their loans, causing bank failures and a chain reaction of bankruptcies.
How did the New Deal try to break the cycle of unemployment and low demand?
By creating jobs and social programs, putting money into people’s hands to stimulate consumption.
Why did mass unemployment and economic hardship make authoritarian solutions more attractive in Germany, Italy and Japan?
People were desperate for stability, jobs and national pride; authoritarian leaders promised quick action and strength unlike weak democracies.
What does the Manchurian Crisis reveal about the League of Nations’ ability to enforce collective security?
The League’s slow investigation, lack of an army and Britain/France’s reluctance to act meant aggressors could break rules without consequences.
How did the “Roaring Twenties” prosperity hide structural weaknesses in the U.S. economy?
Overproduction, speculation, unequal wealth distribution and reliance on credit created instability; once confidence faltered, the system collapsed.
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What does the Matignon Agreements’ success show about the power of organised labour in 1936 France?
Strikes and unity gave workers leverage to win major reforms within democracy.
Explain how economic autarky and rearmament were linked in fascist states.
Autarky reduced reliance on imports; rearmament created jobs and prepared for expansion, reinforcing a war economy.
Did U.S. isolationism in the 1930s make another world war more likely? Argue both sides
Yes — it denied support to victims and emboldened dictators. No — U.S. intervention might not have deterred aggression and Americans wanted to avoid another costly war.
Why did U.S. banks’ decision to recall loans after the crash create a “domino effect” in Europe?
It cut off essential funds for Germany and others, spreading the crisis overseas.
Why did some conservatives fear that New Deal–style measures would prolong the crisis?
They worried higher wages and regulation would raise costs, scare off investors and slow recovery.
Some countries responded to the crisis by building a welfare state, others by authoritarianism. What does this difference tell you about how economics shapes politics?
Economic shocks can push societies toward very different political paths depending on institutions, public opinion and leadership; crisis alone does not determine outcomes.
Do you think the 1931 Manchurian Crisis can be called the “beginning of WWII”? Explain your reasoning.
Yes — it showed collective security failing and encouraged future aggressions. No — WWII started in Europe years later; Manchuria was a regional event.
Protectionism is meant to shield economies. Explain why it worsened the Great Depression.
Retaliatory tariffs shrank world trade, deepening the downturn everywhere.
Compare how reforms arose in the U.S. versus France.
Both used state intervention to protect workers and stimulate demand. The New Deal was a large program to rebuild an entire economy; the Matignon Agreements were social reforms achieved after strikes but within a parliamentary democracy.
What does Japan’s invasion of Manchuria reveal about how economic problems can drive foreign policy?
Loss of trade and resources pushed leaders to secure new territories by force.
The U.S. passed Neutrality Acts to avoid war. How might that have affected aggressors’ calculations?
They saw the U.S. would not intervene, making aggression less risky.
Could stronger government regulation or international coordination in the late 1920s have prevented the crisis from becoming global?
regulation might have slowed speculation and coordination might have maintained trade; but global imbalances and debt might still have caused collapse.
Do you think democratic social reforms like the New Deal and Matignon Agreements helped prevent extremism? Explain.
They could ease hardship and restore trust in democracy; but if too slow or limited, extremism can still rise.
Compare fascist state intervention with democratic state intervention during the depression.
Both intervened but fascists directed economies toward autarky and rearmament; democracies toward welfare and demand.
Could stronger collective action in the early 1930s have prevented WWII? Defend your view.
Possibly — decisive sanctions or military action might have deterred aggressors; or not — democracies lacked will and public support.