Crises In The Capitalist World
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Crises In The Capitalist World
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Post Icon Crises In The Capitalist World


These are the conflicts and problems which upset the capitalist production mainly in Europe and in the colonies especially in Africa and Asia. These crises were as follows:

1. The First World War
2. The Great Economic Depression
3. The Second World War  

This was the war fought between the members of Triple Entente and the members of Triple Aliance from 28th July 1914 to 11th November in 1918. 
The Triple Alliance was formed by Germany, Italy, Austria-Hungary, Turkey and Bulgaria 
The Triple Entente was formed by Britain, France, Russia, Japan, Romania, Serbia, Belgium, Greece, Portugal, Montenegro and USA  

The WW1 started on 28th July 1914 and ended on 11th November 1914. The war started first in Balkans Peninsular in which the Austria Hungary heir Archduke Francis Franz Ferdinand and his wife Sophie were assassinated by a Bosnian Serb nationalist Gavrilo Princip on 28th June 1914 in Bosnia capital city Sarajevo. The assassination of Ferdinand setoff diplomatic crisis between Austria-Hungary and Serbia because few days later Austria-Hungary government gave Ultimatum to Serbia to submit the assassin but Serbia refused. On 28th July 1914 Austria-Hungary invaded Bosnia with support from Russia.

On 2nd August Germany invaded Belgium and Luxemburg and 3rdAugust 1914 Germany declared war against France in the fear that France would help Russia. On 4th August the Britain declared war against Germany. The USA joined the war on 6th April 1917 to assist the members of the Triple Entente. The war ended on 11th November 1918 in which Germany was defeated by victorious powers.  

The causes for the WW1 can be categorized into two groups, namely short-term causes and long-term causes

These were the causes which prepared grounds for the occurrence of the war. These factors are as follows:
1.      The development of capitalism in the highest stage in 1860’s 
This created a stiff competition among capitalist powers such as Germany, France, Britain, Italy and Austria Hungary. For example Germany fought a war with France over the issue of Alsace and Lorain rich region in coal in Franco-Prussian war of 1870-1871. This contributed to the formation of Alliances hence a war. 
2.      Dissatisfaction in territorial division
The partition of colonies in the Berlin conference of 1884/5 was not fair because some European countries such as Italy was given few colonies compared to other European countries. This created hatred among super powers thus creating grounds for the war. 
3.      The rise of military alliances
The Germany sought alliance with Austria and signed a Dual Alliance in 1879 with condition that they have to help each other during the war. Italy joined in 1882 to form Triple Alliance. On the other hand France-Russia treaty was signed 1890 to form Entente Cordially and Britain join later to form Triple Entente. The rival alliances created weapons such as bombs, guns, tanks, and created armies which were ready for the war at any time. 
4.      The France desire to regain Alsace and Lorain
Germany annexed the two provinces in Franco-Prussian war of 1870-1871. This created grounds for revenge among the French men hence preparing ground for    WW1. 
5.      The Balkan crisis
The Balkan nationalism created conflicts between Austria-Hungary and Serbia and between Austria-Hungary and Russia. The competition between the three powers led to the assassination of Francis Ferdinand hence a WW1. 
6.      Moroccan Crisis 1905 and 1911
The conflict was between France and Germany in which Germany declared independence to Morocco which was a France colony. 

The immediate cause for WW1 was the assassination of Archduke Francis Franz Ferdinand on 28th June 1914. 

1.      All German colonies such as Tanganyika , Burundi, Rwanda, Namibia, Togo and Cameroon were under League of Nations as mandatory territories. This led to the changing of colonial administrative systems which affected Africans.
2.      Deaths among Africans especially in Germany colonies such as Tanganyika and Togo in which the war was fought.
3.      The spread of disease such as flue which consumed the lives of thousands of Africans for Example in Tanganyika it is approximated about 7000 people died because of flu.
4.      Destruction of properties such as farms, mines and infrastructures like railway were badly destroyed in German colonies.
5.      The fall of the external trade between Europe and Tanganyika due to the destruction of European economies such as banks and industries.
6.      There was increasing exploitation in the colonies such as land alienation, low wages and introduction of agricultural schemes.  

1.      The Germany was prevented from building naval ships, airplanes and tanks. The number of her soldiers was limited to 100,000 soldiers.
2.      The Germany was required to pay war reparation of 6500 USD million to the winners of the wars.
3.      The destruction of economies such as industries and trade. During the war time many industries were closed.
4.      Loss of lives for example it is estimated that about 13 million people died while others became disabled and orphans.
5.      It led to the formation of League of Nations which guaranteed world peace and security.
6.      The Alsace and Lorraine province were returned to France from Germany domination.
7.      It led to the Great Economic Depression in 1929-1933 which affected the world economy.
8.      The rise of aggressive policies which prompted to occurrence of WW2.

II. THE GREAT ECONOMIC DEPRESSION 1929- 1933                
This was an economic slump crashed capitalist from 29th October 1929 up to 1933. The depression started in USA and spread to Britain, Canada, Italy, France and Austria and in colonies such as Africa and Asia. The black Tuesday 29th October 1929 was the fourth day of the market crash; it was the worst day in the history of New York Stock Exchange and USA in which the stock of 50 companies dropped from $252 to $62 within four days. Two months later stock holders had lost more than 40 billion. 

1.      Fall of production in industries due to over production
2.      Low prices of crops and goods such as in US the price of wheat declined.
3.      Closure of banks in capitalist world for example in US 5000 banks were closed by 1932.
4.      Unemployment in the world for example over 30 million people had no jobs in US by 1932.
5.      Collapse of the national income.6.      Low wages, foods shortage and poor social services. 

The capitalist production has four major stages:
 [Image: depression.PNG] 

This is the period when the economy is at the highest level. During this period the economy has the following characteristics:
1.      High level of investment
2.      Lowest level of employment
3.      High standard of living
4.      Social and political stability
5.      Expansion of trade .

This is the temporary decline in the economic activities and it has the following challenges
1.      Decrease in investment
2.      Decrease in employment
3.      Decrease in income
4.      Decrease in trade
5.      Decrease of commodity price 

This is the period of total decline in the economy or stagnation of the economy. It has the following characteristics;
1.      Lowest level of investment.
2.      Highest level of employment.
3.      Lower standard of living
4.      Total closure of enterprises and investment
5.      Lowest level of income.

This is the period when the economy starts to improve and expand follows after a depression or a recession; It has the following characteristics;

1.      Income increase
2.      Prices start to rise.
3.      Standard of living starts to rise.
4.      Opening of Banks.  

1.      The effects of WW1  
The war ruined the economies of almost all European countries. Due to the collapse of economies efforts were made to recover economies by producing as much as possible. This created over production of goods due to low consumption hence Great Economic Depression.
2.      High Protective tariffs by US on the imported goods from Europe
This appealed European countries to put tariffs on US goods as a result market was narrowed to both continents hence over-production and great economic depression.
3.      Un-equal distribution of income
The difference in income between capitalist and workers in which workers were paid inversely proportional to what they produced created a gap between production and consumption hence depression.
4.      The fall of stock exchange.
Stock exchange is a business term which refers to market in which workers were paid inversely proportional to what they produced created a gap between production and consumption hence depression.
5.      The failure of spectators to pay back loans borrowed from banks
Speculators are people who trade commodities, bonds, equities and currencies, the failure to repay the loan affected economy hence great depression. 
6.      Nature of the capitalist economy
Economists believe that depression was inevitable due to the fact that any capitalist economy has to pass four phases which are cyclic. Boom, Crisis, Depression and Recovery. There for its nature is what driven it to depression. 

1.      Drastic fall of the prices of raw materials in the African countries for example the price of sisal exported to Europe dropped from 32 pounds per ton to 12 pounds per ton between 1931-1932.
2.      Fall of worker wages; Colonial government reduced the salaries of workers for example in Kenya the worker’s wages fell from 36/=Ksh to 10/= Ksh in 1930.
3.      Unemployment; The depression caused unemployment in many African countries because colonial government retrenched some workers and reduced the size of army.
4.      The introduction of agricultural schemes such as ground nuts schemes in Gambia and Tanganyika.
5.      Intensification of exploitation; post-depression period witnessed the increase of tax, reduction worker’s wages, forced labor, low price of cash crops and long working hours which were introduced by colonialist so as to compensate their economies.
6.      Social welfare for example famine and shortage of food because there was little exportation of goods from Europe to Africa.  

1.      The great economic depression affected the entire capitalist nations and other small states either directly or indirectly.
2.      It led to the bankruptcy of capitalists due to failure of business and closure of enterprises.
3.      Social miseries for example famine and shortage of food.
4.      The great depression, led to the collapse of the League of Nations.
5.      It led to the exploitation of most African resources.
6.      The great depression led to the rise of dictatorship states i.e. Nazism in German, Japan and Italy.
7.      The great economic depression led to withdrawal of US loans to the European countries.   
[Image: gd.png]  
Figure 1: Family during great depression ,Carlifonia , 1932
 [Image: english-buried-machinery-barn-lot-dallas...united.jpg]
 Figure 2: Buried machinery in a barn lot; May 1933 on the Great Plains coincided with the Great Depression  

Several measures were taken by the colonial powers to revamp the impact of the great depression on the metropolitan economies. This includes the following:
1.      The expansion and consolidation of peasant’s cooperation.
2.      Intensification of labor recruitment particularly migrant labor was intensified to meet extra labor free demand.
3.      Increase of taxation. Taxes of various kinds were introduced after the depression in order to expand source of income for the colonial state.
4.      The colonial state allowed peasant to grow prohibited crops in settler’s colonies. For example in Kenya peasant were allowed to grow coffee.
5.      African education curriculum was reviewed to give more emphasis to agricultural education.


World War 11, global military conflict that, in terms of lives 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 in1945, leaving a new world order of the Superpowers dominated by the United States and the Union of Soviet. Socialist Republics (USSR)

The Second World War, reached in every part of the world in the five continents and in7 seas. More than 50m people lost their lives in this disastrous war, more than 22m were soldiers and more than 28rn 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. The war begun between 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, Russia etc. The Berlin Rom Tokyo axis was defeated and surrendered.

It was also unique in modern times for the savagery of the military attacks unleashed against civilians, and for the adopt [on by Nazi Germany of genocide (of Jews, Roma [Gypsies], homosexuals, and other groups) as a specific war aim. The most important determinants of its outcome were industrial capacity and personnel. In the last stages of the war, two radically new weapons were introduced: the long-range rocket and the atomic bomb.

The Versailles peace treaty of 1919, many world historian do agree that the seed that led to the Second World War was sown during the Versailles peace settlement, the Versailles men, They 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 France 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 provided confidence and increase enmity between the military camps that made the war inevitable.

Hitler and Mussolini foreign policy, these were characterized by expansionism aggression hatred revenge and domination, Adolf Hitler, the Führer (leader) of the German 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) for the German people who, he contended, deserved more as members of a superior race he wanted to make the capital of the world to be at Berlin, this created the outbreak of the 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 rearmament, when Hitler came to power in 1933 Having denounced the disarmament clauses of the Versailles Treaty, created a new air force, and reintroduced conscription, in March 1936 Hitler dispatched German troops into the Rhineland he withdraw Germany from the league of nation and begun manufacturing more weapons preparing for revenge, this act attracted other countries to do the same thing, e.g. Britain France increased their military budget to prepare weapons. Such military readiness brought tension which brought the war in 1939.

Imperialism, Germany begin the war because he wanted to regain his lost imperial interest in Africa like in Tanganyika as well as to get more colonies in Africa for Italy she fought to get more colonies, 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.
Extreme nationalism /ultra nationalism Many European nations began to preach nationalistic ideologies that brought excessive nationalism. Germany wanted to rule the whole world, Italy wanted to form another Roman Empire, Japan wanted to control Asia such nationalistic demands led the outbreak of World War II.

Failure of the League of Nations in her major task of maintaining world peace and security, During the 1920s, attempts were made to achieve a stable peace. The first was the establishment (1920) of the League of Nations as a forum in which nations could settle their dispute. The League’s powers were limited to persuasion and various levels of moral and economic sanctions that the members were free to carry out as they saw fit. Such weaknesses were responsible for the out break of world war two. 

Chamberlain appeasement policy, he was the prime minister of Britain who feared war he adopted appeasement policy on Hitler as one of the way to keep him happy by giving him loans grants pardoning Germany: debts and official visits which Hitler used as an opportunity to concentrate and to by time as he prepared fore revenge, Britain failed to punish Hitler for aggressing other nations.

Attack of Poland by Germany, this was the immediate cause of World War II on 2” Sept. 1939 at 11:00 am. German troops entered Poland, Britain and French asked Hitler to withdraw from Poland immediately but Hitler gave them a deaf ear. Britain declared war on Germany and on the same, day France declared war on Germany. Thus the outbreak of World War II.

American isolation policy led to the out break of World War II after the end of world war two USA maintained political isolation from the European nations, USA as a strong nation militarily and economically was very significant to maintain the world peace, The United States, disillusioned with the Treaty of Versailles, with the selfish nature of Allied war aims, and with the secret treaties they had signed during the war, disavowed the treaty and the League of Nations included in it, and retreated into political isolationism. Being a neutral state USA would be able to reconcile the vanquished and the victor powers but her political isolation made the war to become inevitable in 1939.

The Spanish civil war in 1936-1939, Hitler tried out his new weapons on the side of right-wing military rebels in the Spanish Civil War (1936-1939). The venture brought him into collaboration with Mussolini, who was also supporting the Spanish revolt after having seized Ethiopia in the Italo-Ethiopian War of 1935-1936, treaties between Germany, Italy, and Japan in 1936-1937 brought into being the Rome-Berlin-Tokyo Axis. The Axis Powers thereafter became the collective term for those countries and their allies Germany and Italy used Spanish civil as laboratory for testing their weapons, the weapons proved very effective that made Italy and Germany to build confidence in themselves. Thus inspiring them to wage a major war in order to realize their long term objectives like, to regain their lost colonies, to dominant the world. 




(This post was last modified: 03-02-2016 07:59 AM by MyElimu.)
03-02-2016 07:18 AM
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