essay

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 political movement by the 19th 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 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.

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.