Running head: POLITICAL AND ECONOMIC TURMOIL LEADING TO DEPRESSION 1 Political and Economic Turmoil Leading to Depression Yinfan Li B00699999 Political and Economic Turmoil Leading to Depression Yinfan Li B00699999 Dalhousie University Jonathan Simms Econ 2239 2019/1/23 Political and economic turmoil leading to depression Economic, political and social growth in a country depends on various factors that are often interconnected and consequently related. Political stability is one of the most important aspects that determine the success and growth of any country across the world. However, when this vital item is lacking, countries are often thrown into turmoil and the state of confusion with activities dwindling as a result. Countries across Europe experienced different levels of political and economic woes before, during and after the 19th century. This paper, therefore, intends to offer a comprehensive analysis of various political and economic turmoil in different European countries that lead to the great depression. Economies of Norway, Sweden and Denmark took and other European countries diversified direction since the 1980’s. These economic changes influenced the political status of the Scandinavia countries leading to depression. For instance, despite a small population of Sweden, its economy is quite important and significant as a test on the general economic system of Europe at large (Eichengreen & Temin, 2000). The private sector had a higher percentage in terms of production while the government only controlled fifty percent. Industrialization was one of the major economic events which led to the transformation of the Scandinavian countries politically and economically. Industrialization in Sweden was positively influenced during the First World War. This was due to the construction of the railway which linked northern Sweden and the southern. Due to its mining-based economy, specialized metals industry was developed which majored in the production of metal-based manufactured products. In Denmark, industrialization began by around 1890s though it was confined to Copenhagen after which other small towns began to grow rapidly. Denmark maintained its position as an agricultural based country until the 20th century where modern methods in production and processing were brought on board. This resulted in majoring in the processing of dairy and meat as opposed to exporting raw agricultural products to other countries (Eichengreen & Temin, 2000). Use of new technologies and innovations in producing dairy machinery, turbines and electric motors greatly facilitated the process of production. As a result of this economic event, the country became more independent hence politically stable. There was increased better living conditions and even consumerism as there were ready-made goods and mass production. Denmark, Norway, and Sweden together formed Scandinavism movement which acted as a politic.

1. Running head: POLITICAL AND ECONOMIC TURMOIL
LEADING TO DEPRESSION 1
Political and Economic Turmoil Leading to Depression
Yinfan Li B00699999
Political and Economic Turmoil Leading to Depression
Yinfan Li
B00699999
Dalhousie University
Jonathan Simms
Econ 2239
2019/1/23
Political and economic turmoil leading to depression
Economic, political and social growth in a country depends on
various factors that are often interconnected and consequently
related. Political stability is one of the most important aspects
that determine the success and growth of any country across the
world. However, when this vital item is lacking, countries are
often thrown into turmoil and the state of confusion with
activities dwindling as a result. Countries across Europe
experienced different levels of political and economic woes
before, during and after the 19th century. This paper, therefore,
intends to offer a comprehensive analysis of various political

2. and economic turmoil in different European countries that lead
to the great depression.
Economies of Norway, Sweden and Denmark took and other
European countries diversified direction since the 1980’s. These
economic changes influenced the political status of the
Scandinavia countries leading to depression. For instance,
despite a small population of Sweden, its economy is quite
important and significant as a test on the general economic
system of Europe at large (Eichengreen & Temin, 2000). The
private sector had a higher percentage in terms of production
while the government only controlled fifty percent.
Industrialization was one of the major economic events which
led to the transformation of the Scandinavian countries
politically and economically.
Industrialization in Sweden was positively influenced during the
First World War. This was due to the construction of the
railway which linked northern Sweden and the southern. Due to
its mining-based economy, specialized metals industry was
developed which majored in the production of metal-based
manufactured products. In Denmark, industrialization began by
around 1890s though it was confined to Copenhagen after which
other small towns began to grow rapidly. Denmark maintained
its position as an agricultural based country until the 20th
century where modern methods in production and processing
were brought on board. This resulted in majoring in the
processing of dairy and meat as opposed to exporting raw
agricultural products to other countries (Eichengreen & Temin,
2000). Use of new technologies and innovations in producing
dairy machinery, turbines and electric motors greatly facilitated
the process of production. As a result of this economic event,
the country became more independent hence politically stable.
There was increased better living conditions and even
consumerism as there were ready-made goods and mass
production.
Denmark, Norway, and Sweden together formed Scandinavism
movement which acted as a political movement by the 19th

3. century. Through the movement, Sweden and Norway
contributed with enough military force during the war of
Schleswig. Due to increased population, the vast majority of the
emigrants migrated to the United States in search for better
farming and economic opportunities. By 1873, Denmark and
Sweden formed a monetary union called Scandinavian
Movement Union through fixing their currencies against the
gold standard at par to each other (Eichengreen & Temin, 2000).
Norway joined the union two years after the formation by fixing
its currency to the gold standard at the same level with both
Sweden and Denmark. Scandinavian Monetary Union was very
significant as it led to the formation of the Scandinavian
political movement by 19th century. Monetary union provided
fixed exchange rates and economic stability in terms of
monetary but the countries in the union continued to provide
their separate currencies.
Despite late coming of the situation, the expected security
resulted to acceptance of the formally separate currencies on the
round that they were good as the legal tender virtually in the
entire economic block. Due to the outbreak of World War I by
1914, the monetary union came to an end as Sweden abandoned
the tie to the gold standards and with no fixed exchange rates
hence leading to the end of the free circulation of currencies
(Eichengreen & Temin, 2000). After the settlement of the
Scandinavians into the United States, the population increased
leading to the economic depression. This was witnessed through
collapsing of the market demands especially export demand
(Hart & Spero, 2013). A good number of businesses were faced
with the decline in sales leading hence laid off many workers as
others reduced the wage rates of the workers. As a result,
workers went on strike but the government brought full force to
disperse the crowd leading to the death of several people. The
reaction of the public following the deaths led to the electoral
victory of the Social Democratic Party in 1932.
Following these economic changes in Sweden for instance, there
was a great shift in political sentiment and the governing

4. ideology. Coming to power of the social democratic party, it
represented labor movement and socialism which later led to
predominant of the production by the private sector but the
government determines kind of products they produce and
where to export them through price controls, regulations, taxes
and social programs (Bernake, 1983 Later Swedes developed
some institutions to help in the market economy like provision
of tax code to allow Swedish businesses to obtain tax reduction
by putting half of their profits to the central bank.
All the three Scandinavian countries remained neutral in during
the First World War. The war had significant influence in the
economy of the region due to British blockade of Germany. The
trade agreement with the Britain made it easy for the three
countries to work as the large merchant marine from Norway
helped in supplying vitals to Britain but experienced huge
losses in sailors and ships due to the attack by the Germans
navy which was indiscriminative. During the Second World
War, only Sweden was not invaded and she remained neutral
throughout the war while Denmark and Norway were both
attacked (Bernake, 1983). This, therefore, affected the economy
of the two countries. On the contrary, Sweden cultivated peace
with Germany by supplying them with raw materials.
After the war, the three countries agreed to form mutual policy
for defense as they immediately began to discuss Scandinavian
defense union. They proposed to remain separate sovereign
countries but act as a single block on security issues and foreign
policy. Despite their effort to formulate the union, it was
overshadowed by the cold war tension between the Soviet Union
and the United States (Bernake, 1983). In the realization that
the west will not supply the Scandinavians with the armaments
they needed, Norway turned back and resigned from the
agreement talks. On the other hand, Denmark was ready to
proceed with the talks but the Swedes did not see enough merits
hence leading to the fall of the proposal. In long Denmark and
Norway became signatory parties of the North Atlantic Treaty
hence members of NATO as Sweden remained.

5. In conclusion, a number of vital lessons and insights can be
learned from the economic and political turmoil experienced in
different countries across Europe. Firstly, countries should
develop various mechanisms through which they can face and
evade various challenges resulting from political and economic
turmoil. Secondly, all possible steps should be taken to ensure
that turmoil such as those experienced in Europe do not occur
again.
References
Bernake, B. S. (1983). Non-monetary effects of the financial
crisis in the propagation of the Great Depression.
Eichengreen, B., & Temin, P. (2000). The gold standard and the
great depression. Contemporary European History, 9(2),
183-207.
Hart, J. A., & Spero, J. E. (2013). The politics of international
economic relations. Routledge.
Dalhousie University
Economics 2239
The European Economy Since 1900
Second Essay Topics
Instructions: Select one of the following. See syllabus for due
date and required format.
The three, four-page papers are to be based upon the weekly
readings described in this syllabus. Students will be assigned
an essay topic with key questions and issues to be addressed.
The essay assignments will be posted on Brightspace 10 days
before their due date. The format is to include a cover page,
four pages of text (tables and graphs, etc. may be embedded or
annexed), and a bibliography which is to include at least two

6. sources in addition to those noted for the topic in the syllabus.
Papers are to be delivered by e-mail to the Teaching Assistant
no later than 11:59pm on the due date.
RESERVE LIST
Aldcroft, D.H., Morewood, Stephen The European
Economy Since 1914, 5th ed.
Berend, I.T. An Economic History of
Twentieth Century Europe
Clavin, P. The Great Depression in Europe
Crouzet, F. A History of the European
Economy, 1000 – 2000
Eichengreen, B. The European Economy
Since 1945 (2007 ed.)
Kindleberger, C. A Financial History of
Western Europe
Nove, A. An Economic History of the USSR:
1917 - 1991
1. Depression and the Rise of Fascism
What were the root causes of The 1930’s Depression and to
what degree were the various major European economies
affected by the effects of The 1930’s Depression? Cite specific
measurable indicators of economic change. What were the
circumstances that explain how fascism arose in certain
countries? Explain the economic factors the determined the
timing, acceptance and effects of fascist sentiments. Are there
lessons for today in Europe?
2. The Golden Age

7. Why was Western Europe’s economic growth in the period 1950
– 1970so much better than in the interwar period? What
contribution did government policy make to the post-war boom
in Europe? To what degree did the establishment of the
European Economic Community play in advancing economic
growth on the continent?
3. Inflation and the Search For Stability
What were the main cause of the slowdown in growth in the
1970’s? To what extent did Europe suffer from structural
rigidity in the 1980’s and how did governments tackle inflation?