The Effects Of Great Depression On Foreign Policy Essay

The Effects Of Great Depression On Foreign Policy - Essay Example The gold standard, which was introduced by the government in 1920s, added fuel to the fire resulting a complete disappearance of gold from the country. ("Great Depression in the United Kingdom") Expectedly, the British foreign policy was also affected. There are three aspects of British foreign policy, " Peace, Security and Trade"---the first two became of immense importance after the First World War, especially because after the war British had become militarily weak. It lost its position as a great power and on the other hand, Germany, America and Russia became immensely powerful. Thus the Americans, to great extent, dictated foreign policy of the British. The further aggravation of economy during the Great Depression weakened the position of Britain on international level. (Willert, 1928) British realized that they could not afford another major conflict with any power as the war and depression has made them very vulnerable. Thus they adopted a policy of appeasement during this period, as explained by Paul Kennedy in his book " Strategy and Diplomacy" as follows: "the policy of settling international quarrels by admitting and satisfying grievances through rational negotiation and compromise, thereby avoiding the resort to an armed conflict which would be, expensive, bloody and possibly dangerous." The most prominent case of appeasement was that with Hitler by British Prime Minister Neville Chamberlain in late 1930s when the Munich Agreement was signed, which eventually failed.There were several reasons for the appeasing Hitler. Firstly, there was fear of spread of communism. British believed that if they continued to fight Germany in the West and didn't pay any attention to the Soviets, the latter... After the fall of Macdonald's government over pound issue, Neville Chamberlian began the Chancellor of Exchequer in 1931 and strict economic, especially trade policies were implemented. For the first time, the government abandoned the policy of free-trade. The Government imposed high tariffs and duties on imports. People were encouraged to buy products made within the British Empire.This was done to protect local industry and agriculture which was already facing many problems resulting from Great Depression—local demand, local production, high unemployment, high taxes etc.The Government nationalized important industries, including coal and wages and salaries were fixed for workers in these industries. Many industries lost business as they failed to cope up with increased modernization and competition. While the situation within the British Empire compounded, both economically and politically, new competitors entered the international market. The United States of America became a tough competitor, along with Germany who had recovered from the Great Depression as a result of massive rearmament. From 1935 onwards, it was clear that Mussolini and Hitler had other goals than recovering from the damaging effects of Depression. The stage for another war was being set up. However, it is believed that it was the anticipation of another war that increased demand and investment and consequently pulled the world out of depression, otherwise the world would have entered another Great Depression by 1937.

Th Scond Globl Shft s Rloctng Clustrs n th Fnncl Industry n Europ Term Paper

Th Scond Globl Shft s Rloctng Clustrs n th Fnncl Industry n Europ - Term Paper Example ent economically and politically reigning over the world, but the rapidly emerging economic power of China and Japan is also an undeniable fact; which is the precursor of the second global shift. An emergence of competitors in the shape of China and Japan is adversely affecting the economic power of the USA. The resurgence of Asia especially East Asia is undoubtedly, the most significant global shift in the geography of the world economy during the past 40 years. (Dicken, 2007, p. 43) Another very important fact is the complex geography of the product manufacturing process. â€Å"In other words, economic activity is becoming ‘deterritorialized’ or ‘disembedded’.† (Dicken, 2007, p. 18). For example, open boarders today allow some parts of the product being made in one country and it’s assembling being done in another. The purpose of this paper is to highlight the influence of the second global shift on the financial service industry, particularly the European financial services. Moreover, we will examine how this global shift will change the structure of financial groups in Europe. The first global shift is the period of time when economic and political power was shifted from Britain and some European countries to the United States. This shift started occurring after the Second World War when United States appeared as a supreme economic and political power. After 1945 the world was dominated by two blocks i.e. the United States with its allies and the Soviet Union with its allies. This division was not only confined to economic differences but to socio-political differences as well. This is when the silent strain between the capitalist and the communist world began. â€Å"Hence, the world economic system that emerged after 1945 was, in many ways, a new beginning. It reflected both the new political realities of the post-war period – particularly the sharp division between East and West _ and also the harsh economic and social experiences of the