Long Depression

Great Depression or Long Depression or Great Deflation are names for the first time postulated by economic theorists of the 1920s economic downturn of the global economy in 1873 to 1896. For the situation in the German Empire and Austria - Hungary is also the term Gründerkrise used.

Term

Designation and actual existence of the " Great Depression " are scientifically controversial due to the overall slowdown in global economic growth only in the last quarter of the 19th century. The study of the political processes in this period has brought the former crisis fears with the appearance of radical (anti -Semitic ) movements and the " German nervousness " as a characteristic of Wilhelminism in conjunction.

In the English -speaking world is defined as the time from 1870 to 1890, when prices of assets, materials and labor eased sharply, as a Grand deflation. They had a negative impact on established industrial societies such as the UK, while at the same time the United States who were only in the early stages of industrialization, gave a very large growth. She was there one of the few periods of deflationary economic growth.

Business cycle 1873-1896

Until well into the 19th century, agricultural production had a determining character for the business cycle, which was thus primarily due to the nature. This dependence was lost during the Industrial Revolution by the factors trade, industry and finance. Primarily due to the rapidly growing trade resulted in a large spatial integration and the previously locally strongly varying economic cycles aligned itself. Ups and downs became international phenomena, the variation tends to be increased. After a long period of growth since 1850, the economy was in 1873 with a rapid slump of many financial markets around, first in Vienna, then the world. The bear market began a sharp permanent until 1879 caesura ( exceptions were the UK, Denmark and the Netherlands) the transition from free trade to protectionism in most states marked. In the early 1880s kept an upward trend, before once again began a violent, second, to 1886 permanent crisis. Another series of up-and again a slight downturn after the collapse of Barings Bank in 1890 came to 1896., The boom in the world economy remained after these hectic sequences of crisis and growth continues unabated until the outbreak of World War I in 1914.

Effects

Economic theorists of the 1920s (especially Nikolai Kondratiev, later Joseph Schumpeter and Hans Rosenberg ) postulated for the period 1873-1896 a coherent world economic crisis. They described this as a " Great Depression " or "Long Depression" and understood it as part of a Long shaft ( economic boom and bust phase) from 1850 to 1896. For the situation in the German Empire and Austria - Hungary, the term Gründerkrise is used. But this time is less well defined; it can also refer to only the phase between 1873 and the late 1870s.

While some industries actually suffered severe recessions in the period 1873-1896 Total -. Albeit cooled - but continued the expansion of the world economy. The world pig iron production, which had grown in the twenty-five years ago in 1873 at an annual rate of 5.3 percent, then increased by 3.3 percent annually while still thirteen years. The growth rate of world tonnage steamer, which stood at 7.3 per cent annually from 1848 to 1873, declined 1873-1896 to 5.8 percent a year. Given the economic indicators speaks more for a price as a production crisis, which is why the alternative era name " Great Deflation " has been proposed. By prices fell by about a third, to strong real wage increases were, as wages did not decrease to the same extent. The long-term growth across all economic movements across was, however, difficult to perceive for the individual. Even short dips in an industry or manufacturing facilities, unemployment, illness or death of a working family member could cause immediate suffering in the face of minimal -developed social network.

Free competition was limited by the concentration phenomena such as trusts or cartels and organized by legal regulations of the state. The economic disruptions were in the industrialized countries of Western and Central Europe and in North America the most. It is assumed that Britain was most affected; it lost its hitherto unchallenged economic leadership in key areas of the German Reich. Its industrial rise yet not manifested itself in a growing consciousness of power of its own people. The unpredictable cyclical swings promoted the belief that the economic liberalism and the capitalist system was at all dysfunctional. The often anti-Semitic by continued criticism of the " speculation " reached its peak around 1890. A grassierendes sense of crisis and the mass phenomenon of " Reizsamkeit " sprang brief but fierce felt recessions. The collective experience of time left, at a much stronger influence than by the long-term growth trend. The " German nervousness " was in the decades of the Wilhelmine become a much discussed topic.