The Great Depression was an economic downturn in the 1930s that affected consumers and businesses worldwide. Among the effects of the Great Depression was an increasingly difficult life for the average person, including food shortages and unemployment. This economic crisis also yielded changes in international economics, like an end to the gold standard and lower trade barriers. Another result was an increase in social welfare programs by national governments. The rise of reactionary governments in Europe and Asia was also one of the effects of the Great Depression.
The stock market crash of 1929 that started the Depression led to the closure of businesses around the world. These businesses shut their doors due to decreased demand for their products. Companies that remained open were often operating at only fractions of their productive capacities in the 1930s. The effects of business closures were increased unemployment and decreased household wages, and this downturn in household spending meant food shortages and a decreased quality of life for children. Governments throughout the world adjusted their financial policies.
The United States and its European allies began to coordinate trade policies to eliminate heavy taxes on imported products. This uniformity in policy was designed to open up international trade once the crisis subsided. The gold standard that had ensured financial security in previous decades was halted temporarily. This policy change allowed governments to issue more currency without the constraints of gold supplies.
One of the major effects of the Great Depression was the adoption of aid programs by national governments to offset the economic downturn. The United States took the lead under President Franklin Roosevelt with his New Deal policies. This set of public programs established in 1933 were responsible for creating millions of jobs, supporting struggling farmers, and creating a retiree pension fund. European nations had adopted social welfare programs following World War I, but increased funding during the Great Depression. These aid efforts were replicated following the second World War with new constitutions in Italy, Germany, and Japan.
The struggles of people worldwide led to the rise of reactionary governments in places hit hard by the Great Depression. Benito Mussolini had assumed power over Italy in the early 1920s, but used the effects of the Great Depression to strengthen his position. Germany evolved from a nation led by democratically elected leaders in 1920 to an authoritarian state led by Adolf Hitler in 1933. Hitler's Nazi Party blamed foreign nations and European Jews for the economic problems faced by Germany in the Depression. The Japanese Empire took advantage of frustration among its citizens over the Depression to expand into China after 1931.
