The Great Depression
One of the challenges of a capitalist economy is the cycle of growth and recession. Recessions are caused, in part, by overproduction of goods and services. This means that production is greater than demand. In other words, companies are making too much stuff. When that stuff isn't bought by consumers, companies lose money and, ultimately, workers lose their jobs.
On October 24th, 1929, the New York Stock Exchange crashed following the announcement of a number of bankruptcies (businesses went out of business and couldn't pay their debts). This day, known as Black Tuesday, marked the end of an era of prosperity in Canada and signalled the beginning of The Great Depression, which would continue until the beginning of World War II in 1939. |
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Consequences of the Great Depression
There were a number of very serious consequences of the Great Depression in Canada.
Economically
Decline of raw goods and agricultural products Collapse of the price of wheat (prairies) Near collapse of mining and forest industries (Quebec) |
Socially
Unemployment rose to 30% Workers salary fell 40% Many people lost their homes Charities were overwhelmed with requests for help |
Political Reactions
The collapse of the economy made many people questions economic liberalism, the dominant economic philosophy in Canada. There were 5 main political movements that occurred during the Great Depression, each of which had its own ideas of how to fix the situation.
The political crises caused by the Depression wasn't limited to Canada. Fascist dictators gained control in countries like Spain and Italy. Most notably, Adolf Hitler came to power in 1933 in Germany.
- Liberalism - offer temporary support to unemployed workers (welfare, work projects, minimum wages, etc)
- Socialism - nationalize key industries, invest in large projects, and create social programs.
- Social Creditism - print more money, give generous social dividends to the population
- Fascism - abolish (get rid of) capitalism and use the power of the government (state) to create industrial societies
- Communism - nationalize the economy and direct it through centralized planning
The political crises caused by the Depression wasn't limited to Canada. Fascist dictators gained control in countries like Spain and Italy. Most notably, Adolf Hitler came to power in 1933 in Germany.
Quebec and Maurice Duplessis
Many people in Quebec saw the Great Depression as the result of an overly material world and worked to reestablish a traditional Catholic society. In 1936, a new political party called the Union nationale was elected with Maurice Duplessis as its leader. Duplessis would remain in power for about 20 of the next 25 years in Quebec and promoted a traditional Catholic society using anti-communist ideas to further his agenda.