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system sustained enormous strain, and even one misstep by the economic ministers could cause the international system to fail. In fact, several missteps came in the form of higher tariffs, tightening national money supplies, increasing taxation, and more government control over economies (socialism—which resulted in even higher taxes). The world economic system crumbled and the world’s worse depression hit—The Great Depression. With millions out of work; banks failing and taking people’s savings; industry shrinking; production falling; and international trade dying the government bureaucracies choked. Around the world finance ministers seemed unable to deal with the emergency, and the steps governments did take made the Depression worse. From 1929 to 1939, the Depression gripped the world, but the Depression hit hardest in the world’s most industrialized nation—the United States.[186]

In the United States, President Hoover, who took office in 1929, tried to keep wages high, and he approved of recent congressional moves to increase tariff rates substantially. Hoover adopted high government spending to solve the crisis, and he tried many economic moves never tried before. By keeping wages artificially high Hoover caused layoffs in major industries, keeping high tariffs shrank international trade, and high government spending created high taxes taking money away from consumers. President Roosevelt, elected into office in 1933,[187] also desired high wages, did nothing to reduce the towering tariffs, and his administration spent far more than Hoover’s. Roosevelt tried to raise the price of farm products and manufactured goods, he created extensive government works programs, and he raised taxes. This caused fewer goods to be available for purchase and took more money away from private enterprise inhibiting new hiring. Roosevelt’s “New Deal” programs did much more harm than good. Recovery from the Great Depression began only after World War II took men out of the workforce as soldiers, and started massive production to fight the war. In fact, some economists claim the recovery did not happen until the 1950s. (See our section on the Great Depression).

As the worldwide economic disaster started, dictators began taking over major nations in Europe and Asia. It seemed capitalism and democracy failed, as shown by the Great War and now the Great Depression. Italy moved to Mussolini as its leader (a dictator) in 1922; Russia came under a brutal dictatorship by 1928 (Stalin); Germany elected Hitler (another dictator) as its leader in 1933, and in Spain Franco became dictator in 1934. The economic tragedy of the Great Depression, caused in large part by WWI, led to a political catastrophe where powerful modern nations fell to cold-blooded dictators. In this fashion, World War I led to World War II. The Great War had changed everything, and everything collapsed quickly.

Some Thoughts on the Great War and the Aftermath

The great problems of the First World War stemmed from the Treaty of Versailles, the enormous debt incurred fighting the war, the massive death toll, the social dislocation, damage to political and economic structures, and the humiliation of the German nation. At the conclusion of any war, especially a momentous war such as WWI, the winning nation(s) must strive to create a peace stabilizing the situation in a fashion that prevents another war. This is winning the peace. The Roman general Scipio Africanus understood the principle of winning the peace, and this was why he made a generous peace with Carthage. Scipio ended the very long and brutal Second Punic War where Hannibal spent sixteen years destroying Italy as well as butchering several Roman legions. Scipio had won a total victory, and burning Carthage to the ground posed no problem—as was later accomplished in the Third Punic War after inferior leaders in Rome destroyed Scipio’s diplomatic triumph. Scipio knew Carthage could become a trading partner and assist Rome in controlling Africa; thus, Scipio designed a peace to avoid further war and bring additional prosperity