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  • Dr. Timothy X. Merritt

The Greater Depression and the Reshaping of the Political Landscape

Abstract: Examines the potential impact of a fictional Greater Depression on Global Multimodal Logistics (GML) from the perspective of GML’s Chief Logistics Officer, Dr. Josef Ranell. Drawing parallels to the Great Depression of the 1930s, Ranell analyzes the political landscape and its potential reshaping during the Greater Depression. He concludes that the economic crisis of a Greater Depression could lead to the rise of authoritarian leaders and populist movements and increased government control and intervention in the economy. Ranell’s hunch is that as governments respond to the economic crisis, GML may have to relocate its operations to take advantage of opportunities emerging from the shifting political landscape.


Background (STEEPLE Analysis) for Directed Fiction


  1. Socio-Cultural

  2. Technological

  3. Economic

  4. Environmental

  5. Political

  6. Legal

  7. Ethical



This article is the fifth of a seven-part STEEPLE Analysis designed to examine the future impacts of a fictional Greater Depression. The specific Framing question for this exercise is:


How might Global Multimodal Logistics (GML’s) decision to purchase six hybrid airships be affected by a global-scale Greater Depression occurring in the decade of the 2020s?


From this perspective, it becomes possible to examine trends from the seven categories defined by the STEEPLE analysis. The fifth category is Political. This article seeks to offer a plausible answer to the following question:


How might GML best position itself politically during the Greater Depression?


Gaining an understanding of future political possibilities involves considering past political upheavals. The Great Depression was a period of economic and social turmoil that lasted from 1929 to the late 1930s. It was the longest and most severe depression experienced by the industrialized world and had far-reaching consequences for global economies and societies.


The Great Depression began with the stock market crash of 1929 and quickly spread, resulting in widespread unemployment, poverty, and social unrest. The effects of the Great Depression were felt around the world, but they were particularly severe in the United States, where the unemployment rate reached 25%, and millions of people were left without work or support.

The Great Depression was a crucial factor in the rise of fascist regimes in Europe and contributed to World War II's outbreak. It significantly impacted the political landscape, leading to the global rise of authoritarian regimes and the creation of economic policies and institutions that sought to centralize government control (Keen, 2020).


The depression also significantly impacted other countries, including those in Europe and Latin America, where it led to political and social upheaval and the rise of populist movements (De Witte, 2019). Despite the eventual recovery from the Great Depression, its lasting impact can still be seen today. The policies and institutions that were developed in response to the depression, such as the New Deal in the United States and the establishment of the International Monetary Fund, have had a lasting impact on the global economy and political landscape. Dr. Ranell understands that the legacy of the Great Depression resulted in the rise of authoritarian regimes and populist movements.


Rise of Authoritarian Regimes

The economic crisis of the Great Depression led to widespread poverty and unemployment, which fueled social unrest and political polarization. In many countries, this created an opportunity for authoritarian leaders to rise to power, promising to restore order and stability through strong centralized rule.


Europe

The Great Depression contributed to the rise of fascist regimes in Europe (Pelz, 2023). In Italy, Benito Mussolini came to power in 1922 and established a totalitarian regime that suppressed political opposition and emphasized national unity and military expansion. In Germany, Adolf Hitler and the Nazi Party rose to power in 1933 and established a totalitarian regime that persecuted minority groups, suppressed political opposition, and embarked on aggressive territorial expansion.


Latin America

Latin America was not spared from the rise of authoritarian regimes in the wake of the Great Depression (Smitha, 2018). In 1930, Getulio Vargas seized power in Brazil and established a dictatorship that lasted until 1945. He implemented many economic and social policies aimed at improving the lives of the working class but also suppressed political opposition and violated civil liberties. Similarly, in Argentina, Juan Perón came to power in 1946 and established a personalist regime that emphasized social welfare programs but also suppressed political opposition and violated civil liberties.


Asia

In Asia, Japan's economy was also hit hard by the Great Depression, and militarist and ultra-nationalist elements within the government seized power and established a fascist regime (Boundless, 2023). This led to the country's aggressive territorial expansion, culminating in its entry into World War II.


Rise of Populist Movements

The Great Depression was a key factor in the rise of populist movements around the world. Populist movements are characterized by their appeal to the common people, focus on social and economic issues, and opposition to established elites and institutions (Longley, 2022). During the Great Depression, populist movements emerged as a response to the widespread economic hardship and social unrest caused by the global economic downturn.


Extreme financial crises fundamentally affect how people view institutions (De Witte, 2019). The Great Depression led to widespread unemployment, poverty, and social discontent, creating anger and frustration among the general population. Populist movements could tap into this discontent by offering simple solutions to complex problems and blaming established elites and institutions for the economic hardships people were facing.


In addition to the economic conditions of the Great Depression, social and cultural factors also contributed to the rise of populism (Historyplex, 2023). The depression was a time of significant change and uncertainty, and many people were looking for a sense of stability and security. Populist movements were able to offer a sense of hope and purpose to people who were struggling to make ends meet. They also appealed to people's sense of identity and national pride, and they often used nationalist and anti-immigrant rhetoric to rally support.


Examples of Populist Movements

During the Great Depression, populist movements emerged in various countries around the world. These movements were driven by the economic and social conditions of the time, and they often had a significant impact on the political landscape. Some of the most notable examples of populist movements that emerged during the Great Depression include the New Deal in the United States and the rise of fascist regimes in Europe.


The New Deal was a series of economic and social policies implemented by President Franklin D. Roosevelt in response to the Great Depression. The New Deal was designed to relieve the unemployed and stimulate the economy through public works projects and other government initiatives. The New Deal was a populist movement because it appealed to the common people and sought to address the economic and social problems they were facing.


In an era marked by the rise of fascist regimes, the New Deal gave people “a choice between hope and fear” (Montagne, 2008). The rise of fascist regimes in Europe had a profound and tragic impact on the history of the 20th century. However, the populist programs developed then also serve as examples of how populism can create institutions that centralize government control at the expense of individual liberties.


A Turning Point in the Global Economy

The Great Depression was a critical turning point in the history of the global economy, and it had a lasting impact on the development of modern economic institutions (History, 2023). The depression revealed the flaws and limitations of the international monetary system of the time, and it led to the creation of new institutions designed to address these issues and prevent future economic crises. Some of the most notable examples of modern economic institutions that the Great Depression shaped include the International Monetary Fund (IMF) and the World Bank.


The IMF is an international organization that was created in 1944 to promote international financial stability and cooperation. One of the main goals of the IMF is to provide financial assistance to member countries facing economic difficulties, such as balance of payments problems or currency crises. The IMF was created in the aftermath of the Great Depression and was designed to address some of the issues that contributed to the economic downturn, such as the lack of international coordination and the instability of exchange rates.


The World Bank is another international organization that was created in 1944, and it is focused on promoting economic development and poverty reduction in developing countries. The World Bank provides loans and other forms of financial assistance to member countries and technical assistance and policy advice. Like the IMF, the World Bank was created in response to the Great Depression and was designed to address some of the economic and social issues exposed by the downturn.


The Role of Mitigating Economic Crisis

Since their inception, the International Monetary Fund (IMF) and the World Bank have played a key role in preventing or mitigating global economic crises (Lin & Wang, 2023). These institutions have been instrumental in providing financial assistance and policy advice to countries facing economic difficulties, and they have helped stabilize the global economy and promote economic development. In this section, we will explore how the IMF and the World Bank have helped to prevent or mitigate future economic crises.


One of the main functions of the IMF is to provide financial assistance to countries facing balance of payments problems or currency crises. When a country experiences a balance of payments problem, it has difficulty paying for its imports or servicing its external debt. The IMF provides loans to countries in this situation, which helps to stabilize their economies and prevent financial instability. Similarly, when a country experiences a currency crisis, its currency loses value or experiences significant fluctuations. The IMF can provide financial assistance to countries in this situation, which helps to stabilize their currencies and prevent further economic disruptions.


In addition to providing financial assistance, the IMF also provides policy advice to member countries. This can include recommendations on addressing economic imbalances, improving economic efficiency, and promoting sustainable growth. By providing policy advice, the IMF helps countries to identify and address the underlying causes of their economic difficulties, which can help to prevent future crises.


The World Bank also plays a role in preventing or mitigating economic crises through its financial assistance and policy advice. The World Bank provides loans and other forms of financial assistance to developing countries, which can help these countries to stimulate economic growth and reduce poverty. The World Bank also provides policy advice to member countries, which can help them to improve their economic performance and address the underlying causes of their economic difficulties. By providing financial assistance and policy advice, the World Bank helps countries to address economic challenges and promote sustainable growth.


Turning Point in the Welfare State

In the aftermath of the Great Depression emerged the rise of the welfare state, and it had a lasting impact on the expansion of social welfare programs in various countries around the world (History, 2023). The depression was a time of great economic hardship and social unrest.


It led to widespread demands for government intervention to address the economic and social problems people were facing. As a result, many countries implemented welfare state policies designed to provide a safety net for citizens during times of economic hardship.

One of the main goals of the welfare state is to provide a minimum level of support for citizens who are unable to support themselves due to poverty, illness, or other circumstances. The welfare state can take many forms, including social insurance programs, such as unemployment insurance and old-age pensions, and means-tested programs, such as social assistance and food stamps. During the Great Depression, many countries expanded their welfare state programs to provide relief to the unemployed and stimulate the economy.


The expansion of the welfare state during the Great Depression was driven by a combination of economic and social factors (Historyplex, 2023). On the economic side, the depression led to widespread unemployment and poverty, which created a sense of urgency for government intervention. On the social side, the depression was a time of great uncertainty and insecurity, and many people sought stability and security. The expansion of the welfare state provided a sense of hope and purpose to people struggling to make ends meet, and it helped to address some of the social and economic problems caused by the depression.


A Safety Net, or Something More Sinister?

The welfare state is an important safety net for citizens during economic hardship. It plays a critical role in supporting those unable to support themselves due to poverty, illness, or other circumstances. The welfare state can take many forms, including social insurance programs, such as unemployment insurance and old-age pensions, and means-tested programs, such as social assistance and food stamps. These programs are designed to provide a minimum level of support for citizens and help ensure they have access to basic necessities, such as food, housing, and healthcare.


One of the main goals of the welfare state is to provide a safety net for citizens during times of economic hardship. This is particularly important during economic downturns, such as the Great Depression, when unemployment and poverty rates are high. The welfare state helps to cushion the impact of economic downturns by providing support to those who are most vulnerable. For example, unemployment insurance provides income support to workers who have lost their jobs, and social assistance provides income support to those unable to work due to illness or other circumstances. By providing a safety net for citizens during economic hardship, the welfare state helps reduce poverty and social unrest and promote economic stability.


The welfare state also provides a safety net for citizens during times of personal hardship. This includes providing support to those who are unable to work due to illness or disability, as well as those who are caring for children or elderly relatives. The welfare state can help to provide income support, healthcare, and other forms of assistance to these individuals, which helps to ensure that they can meet their basic needs and live with dignity. By providing a safety net for citizens during times of personal hardship, the welfare state helps promote social cohesion and ensure that all members of society can participate fully in the community's life.


Lessons of the Great Depression

Dr. Ranell understands that the Great Depression had a profound and lasting impact on the modern political landscape. The legacy of the Great Depression can still be seen today in the ongoing debates about the proper role of government in addressing economic inequality and providing for the welfare of its citizens. The lessons learned during this tumultuous period continue to shape the political landscape and inform the policies of modern governments around the world.


To him, all the perilous paths of the global economic catastrophe lead inexorably in one direction; toward rising authoritarianism and increased government control. As he navigates the political hellscape of the Terror Twenties, Ranell knows that he must risk making deals with the devil or face the destruction of the GML corporation. As governments around the world respond to the urgent demands to ‘do something’ about the economy, they will inevitably increase in power. He sees only the slimmest possibility that any nation will embrace free markets and reduce government controls.


His one hope is that since GML is a global transportation company, he will be able to divert assets anywhere in the world where he can find advantage.


References

Boundless. (2023). Fascism in Japan. History of Western Civilization II. Boundless World History. Retrieved from https://courses.lumenlearning.com/suny-hccc-worldhistory2/chapter/fascism-in-japan/


De Witte, M. (2019). How the Great Recession influenced today's populist movements. Stanford Business. Retrieved from https://www.gsb.stanford.edu/insights/how-great-recession-influenced-todays-populist-movements


History.com Editors (2023). Great Depression History. A&E Television Networks. Retrieved from https://www.history.com/topics/great-depression/great-depression-history


Historyplex (2023). The Great Depression: Social, psychological, and cultural effects. Buzzle.com. Retrieved from https://historyplex.com/effects-of-great-depression


Keen, A. (2020) The twilight of democracy and the rise of authoritarianism. Keen On. Retrieved from: https://lithub.com/the-twilight-of-democracy-and-the-rise-of-authoritarianism/


Lin, J. Y. & Wang, Y. (2023). Capital flight and the role of the OIMF and the World Bank in stabilizing the world economy. Boston University Global Development Policy Center. Retrieved from https://www.bu.edu/gdp/2022/12/08/capital-flight-and-the-role-of-the-imf-and-the-world-bank-in-stabilizing-the-world-economy/


Longley, R. (2022). What is populism? Definitions and examples. ThoughtCo. Retrieved from https://www.thoughtco.com/populism-definition-and-examples-4121051


Montagne, R. (2008). FDR’s antidote to Great Depression, totalitarianism. NPR. Retrieved from https://www.npr.org/2008/03/04/87877864/fdrs-antidote-to-great-depression-totalitarianism


Pelz, W.A. (2023). Economic collapse and the rise of fascism, 1920-1933. Brewminate. Retrieved from https://brewminate.com/economic-collapse-and-the-rise-of-fascism-1920-1933/


PESTLE Analysis. (2015). Difference between STEEP and STEEPLE Analysis. Retrieved from https://pestleanalysis.com/steep-and-steeple-analysis/


Smitha, F.E. (2018). Economic depression and politics in Latin America. Macrohistory: Worldhistory. Retrieved from http://www.fsmitha.com/h2/ch17.htm



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