so World War one is finally over and we know that there's another world war coming in about 30 years but at least in those interwar years everyone in Europe can rest and live prosperously and I'm getting word that that is in fact not how the interwar years played out in fact Europeans suffered profoundly because of a worldwide economic crisis that's a bummer anyway I reckon we ought to talk about it so if you're ready to get them bring cows milked let's get to it okay now things didn't go straight down the toilet after World War One we're actually a few years when Europe seemed to be recovering from the war and all was well we call that in the Treaty of Versailles which ended World War one that Germany was made to pay for all the damage caused in the war which is to say they had to pay reparations first year after the war Germany paid what they owed but the next year they were like yeah we broke the German policy from that point on was just to print paper money like crazy a situation which led them into severe hyperinflation you know you don't need to know these numbers but just to give you a taste of how bad it got in 1914 the first year of the war one dollar was equal to about four German marks by November of 1923 one dollar was worth 4.2 trillion marks to which I say hey I'm Larry I thought you said all was well for refused after the war that sounds pretty bleak well my dear interlocutor by 1924 realizing the German situation was deteriorating profoundly an international commission cobbled together something called the Dawes Plan which did two very significant things first it decreed that Germany pay only the reparations it could afford to pay and second it invested a metric butt load of US Dollars into German recovery and all this work to keep Germany from imploding and actually LED them to some economic stability oh by the way if you need help studying for your class exams your National AP Euro exam then check out all the study materials I have in my AP Euro review pack which is linked in the description anyway as a result Europe experienced a season of upward recovery and prosperity it may be the chief illustration of how good everyone in Europe was feeling during this time was the signing of the Kellogg brand pack which essentially renounced War as an instrument of foreign policy everything is going great we're never gonna go to war again you want to tell them or should I so if everything is going so great how did it all fall apart well I've got four reasons that European economic recovery gave way to the Great Depression first was the problem of Ward I already mentioned Germany struggle with war debt but all major Powers involved in the war had borrowed money to finance their participation in World War one and that became a significant economic burden second was the problem of nationalistic tariff policies remember that a tariff has attacks unimported Goods many nations put High tariffs in place in order to protect their own domestic Industries but in cutting off the flow of free trade among nations unemployment Rose significantly the third problem was overproduction since World War One was a total war many Industries in any given State ramped up their production to meet demand for wartime necessity but when the war ended in 1918 farmers and you know this was especially true for Farmers they didn't decrease their production and thus saturated the market with goods for which there were no buys and that reality drove prices way down and caused significant economic suffering in the farming industry before the great economic collapse arrived now the fourth problem was speculation this was a problem that happened in the United States but soon had Global implications for the most part the 1920s was a prosperous decade for the United States and as a result many people borrowed money to buy into the stock market a practice known as speculation and borrowing that money to pay for stocks was a good bet since stock prices were continually Rising which meant that whatever you borrowed you could pay back but then something disastrous happened in 1929 that flushed the world economy right down the toilet now remember much of the economic recovery and prosperity Europe was experiencing from 1924 to 1929 was due in no small part to monetary investment from the United States there's already trouble in Horizon in the late 20s when American investors began diverting money from European recovery and especially German recovery to invest in the U.S stock market but then in October of 1929 for many interrelated reasons the U.S stock market crashed and when the market didn't rebound like everyone thought it would the Great Depression officially began in the United States but since the U.S all of a sudden lacked the extra money to invest in European recovery the Great Depression soon spread to Europe as well as economies collapsed across Europe unemployment Rose significantly by 1932 25 percent of the labor force in Great Britain was unable to find work in almost 40 percent of German Workers could find no job and in case you're not fluent in unemployment statistics those are a gigantic number now interestingly those numbers were more skewed toward male workers but women were in general more able to find work and low-paying jobs than men were so in some cases this led to a reversal of the domestic gender roles a reversal that many men resent now Western democracies did their best to remedy this problem one of the major economic Innovations during this period came from British economist John Maynard Kane the Keynesian system of Economics argued that government spending is the mechanism which will increase consumer demand and thus lift an economy out of a depression and that's the key to this system the government is responsible for spending money in order to correct the economy and it should do so even if it racks up ginormous budget deficits now this system did not take holding keynes's native Britain but it certainly did in the United States under the leadership of President Franklin Roosevelt there the federal government spent a metric butt load of money to put Americans to work on government projects historians debate how effective these policies were in rescuing the economy but the point here is that this was one new way of thinking about government involvement and economics in order to solve the problem of the Great Depression all right another method of dealing with the effects of the Great Depression was through Cooperative social action and this happened mainly in the Scandinavian state in the decades before World War One socialist parties had gained an increasing amount of influence in the Years between the world war socialists came to power in the Scandinavian states of Sweden Norway in Finland these socialist governments create a favorable conditions for the development of Cooperative Enterprises these were kind of a middle way between communism and capitalism or maybe better to say a kind of mixture between the two that sought to avoid the pitfalls of evil and in addition to that's Scandinavian States greatly expanded their welfare state which was paid for by higher taxes and created social safety nets for their citizens there were also political alliances that formed to respond to the ravages of the Great Depression in Great Britain the national government was an alliance between the conservative and liberal parties who if you'll remember had previously been bitter enemies now they didn't really stop hating each other but in the 1930s they United in the national government to cooperate on solving the unemployment problems and other National crises and to be fair they were somewhat successful another political Alliance that arose was the popular front in France the few years following the war France did better than anyone else but by 1932 the effects of the Great Depression hit them as well and into the economic and political chaos the leftist parties of France joined together and created the popular front government in this government you had a mixture of socialists and champions of democracy but the one thing that they could agree on is that France could not be taken over by right-wing folks who were advocating for fascist policy while the popular front did make some gains they ultimately failed to solve France's economic crisis and France was thus left vulnerable to deal with Germany to the east on which more in the next video there's also a popular front government in Spain who had similar goals but that's all you need to know for now Okay click here to keep reviewing for Unit 8 of AP European History click here to get my AP Euro review pack which will help you get an A in your class and a five on your exam in may not catch you on the flip-flop heimler out