Studies of the Great Depression in the United States often focus on the effects of and responses to this economic and social crisis in this country. Special attention is often given to the innovative responses to the Great Depression proposed and implemented by the U.S. government, namely the so-called alphabet agencies, the most ambitious and effective public employment program[s] in American history”[1], and the influence they exerted over the development of the national welfare system. The Great Depression, however, was experienced as a cataclysmic event on the other side of the Atlantic as well, and European governments, like their North American counterpart, spearheaded initiatives to revitalize social and economic confidence. It is important to remember that the Great Depression, while particularly devastating in North America, was also a profound historical event in Europe as markets worldwide in the 1930s were all quite connected and interdependent.

The results of these policy initiatives and efforts were mixed, however, in terms of evaluating their success. On the one hand, economic recovery did eventually occur in most cases, though it was not without substantial hardship, sacrifice, and significant long-term economic and social effects for all of the European countries affected by the Great Depression. On the other hand, the economic and social policies that were implemented by European governments as a response to the Great Depression resulted in major ideological transformations that would leave a lasting impression on international relations. Though current foreign policy initiatives and international relationships are not frequently assessed through the lens of the Great Depression, it is nonetheless true that many contemporary dynamics can be traced back to that most turbulent period of history between the two World Wars. In order to explore the relationship between policies made as a result of the Great Depression in North America, it is most useful to define and examine what occurred in Europe.

At the time when the confluence of factors that gave rise to the Great Depression occurred, European nations were still busy grappling with the economic aftershocks caused by World War I; therefore, the acute effects of the Great Depression on the continent were severe, posing unique challenges and requiring specific regional solutions from one country to another. Yet the general consequences of the Great Depression were shared by all nations. Massive-scale unemployment and the resulting issues of widespread poverty and the loss of economic security were felt throughout Europe, in some cases, just as much as they were in the United States. ?The impact of the Great Depression was seen and felt in the economic stagnation that was caused by an unprecedented rise in unemployment, a marked decline in agricultural and industrial production, a significant slowdown in domestic and international trade, a destabilization in national currencies, and widespread poverty and increasingly sharp social class divisions.[2]Considering the close ties the British had to the American economy, it might be reasonable to assume that Great Britain experienced these effects the most, but this is not exactly the case. While complications in England did arise, the countries that were affected most by the challenges of the Great Depression were Austria, Germany, and Poland, though “no country was left untouched”.[3]As a result of the many problems that resulted from Great Depression, economic problems precipitated political unrest and provoked social panic in these regions; thus, governments were compelled to intervene by introducing policies and practices intended to restore stability to their respective countries. Many of the strategies that were identified were utilized by all of the European countries, though the strategies were adapted to reflect particular regional needs.

One of the initial interventions identified by European governments as a response to restoring public confidence during the economic and psychological instability caused by the Great Depression was the reorganization of political parties. England, France, Belgium, and The Netherlands were just a representative sample of the European countries that proposed a single national party that would unite disparate political groups under a single umbrella, the goal being to present a united front and inspire national unity.[4]Such national unity efforts, however, had the unanticipated effect of creating divisions among the nations, as each country fought to represent its own national economic interests in an attempt to curry favor with its electorate.[5]The national party schemes actually exacerbated each country’s economic difficulties, as each country introduced complex tariff schemes intended to protect their individual markets.[6]As a result, many European nations were forced to make difficult decisions about how to nurture economic recovery. One of the strategies adopted by England was to abandon the gold standard; after doing this, England’s economy began to rebound.[7]Other countries soon followed suit, especially those European nations whose economies had been aligned with that of England; these included Scandinavian countries. Still, although these efforts were eventually successful, the immediate impact of the wide-scale changes caused a great deal of internal strife and even tensions between countries.

Germany was another country that suffered greatly as a result of the Great Depression and they, like other countries, were forced to reevaluate and reorganize their existing political and economic structure. To deal with the crisis, Germany created a nationalist party and subsequently abandoned the gold standard, and when it did so, its commitment to self-sufficiency was sealed. The ruling Nazi party took almost all institutions into its sole control, and invested government funds into a rigid economic recovery program based almost entirely upon the militarization of the economy.[8]While the social effects of this scheme would become painfully evident almost immediately, the interventions did foster a rebound in the German economy that was more rapid and more impressive, quantitatively speaking, than that of Belgium, France, and The Netherlands.[9]The negative imprint, of course, is the social scourge of the Holocaust. It is argued that the Great Depression actually created the conditions that permitted the rise of the Nazi Party.[10]The effects of the Great Depression would reverberate, then, long after the economic crisis was resolved. In short, although the Great Depression may seem like an isolated event, it did help set up and organize a Europe that was drastically different and that had new balances of power and new countries emerging as economic leaders.