The words are Sir Compton Mackenzie’s, and he does well to remind us that the Great Depression was not simply an economic catastrophe, but a political disaster as well. No depression before or since has struck with such intensity, spread its tentacles so wide, or had such profound and long-lasting effects. One side of the coin was falling prices, mass unemployment, and an avalanche of bankruptcies. The other side was the political response; a rise everywhere of beggar-my-neighbour policies of protective tariffs, trade quotas, currency depreciation, and debt defaults. If the curtain of depression began to lift in 1933 in some countries, and was lifting nearly everywhere by 1936, it was to reveal a very different world. Far from the pre-1914 ideals of free trade, the gold standard, and economic interdependence, which Britain had vainly tried to re-create in the 1920s, the 1930s was a period of economic nationalism, of low international investment, and low levels of world trade.
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