Chapter 17 Chapter 3 The Great Economic Panic 1

1 First of all, let us assume that the First World War was nothing more than a short-lived disaster. The world economy and civilization were originally quite stable. Although the disaster of the World War I was serious, it caused only a temporary interruption.Once the war is over, it only needs to clean up the rubble, and then everything can be restarted as if nothing had happened, the normal economic order can be restored, and the road can continue.Just like the Great Kanto Earthquake in Japan in 1923, the Japanese buried 300,000 victims, cleared the ruins that left two to three million people homeless, and rebuilt a new one that was exactly the same as before, but the earthquake resistance was higher than before. many cities.If history is true, what would the world look like between the two wars?The answer, we will never know.It is meaningless to speculate on something like this that has never happened, and it is impossible to happen.But this question is not in vain.What kind of profound impact did the world economic collapse that occurred between the two wars have on the history of the 20th century?It is through this assumption that we gain insight.

If the world economy had not collapsed, Hitler certainly would not have appeared.Nine times out of ten, there will never be someone like Roosevelt.As for the Soviet-style economic system, it is even less likely to rival world capitalism or pose any real threat to it.Outside Europe, or in other words outside the West, the extent of the consequences of the economic crisis is even more striking.This book discusses it in another chapter.Simply put, for the world in the second half of the 20th century, we must have some understanding of the economic crisis before we can understand it.The collapse of the world economy is the subject of this chapter.

The artillery fire of the First World War did most of the damage in Europe, and did not completely destroy the Old World.But the wave of world revolution, the most dramatic episode in the decline of capitalist civilization in the nineteenth century, swept over a much wider area: from Mexico in the west to China in the east.The sound of colonial liberation and independence also spread from the Maghreb in Northwest Africa to Indonesia.However, at this time, the people of a large part of the world are extremely far away from the artillery fire of the war and the huge waves of the revolution, and have not been affected in the slightest. Among them, the most prominent countries and regions are the United States, which has its own world, and the Sahara Desert Southern African colonies.However, the economic crisis after the First World War was an out-and-out global catastrophe. At least in areas that completely relied on the impersonal market trading system, no one could escape this storm.In fact, the United States of America, which for many years has been considered the favorite of heaven and far away from those unlucky areas, has borne the brunt of this economic boom.Because the most powerful earthquake in the history of human economics-the world economic panic that occurred between the wars, its epicenter was the United States, which has always claimed to be a global safe haven.In a nutshell: between the two wars, the capitalist world economy appeared to have collapsed.How can we restore the old look?No one knows.

In fact, the economic operation of capitalism has never been calm.Every once in a while, of varying lengths, large or small, there is always some degree of fluctuation.This phenomenon has become an integral part of the capitalist economy. Industrialists since the 19th century are all familiar with the so-called "business cycle" of ups and downs.Usually every 7 to 11 years, the cycle of economic depression will repeat itself in much the same way.But at the end of the 19th century, this cycle suddenly became much longer, which attracted everyone's attention.It has been found that the original cycle length has changed abnormally over the past few decades.From about 1850 until the 1870s, there was an unprecedented boom in the world.But then, the economic situation fell into instability for more than 20 years (some economists also refer to this period as the Great Recession, but this is somewhat misleading).However, after more than 20 years of instability, the world economy has continued to prosper for a long period of time (see Chapter 2 of The Age of Capital and The Age of Empire).In the early 1920s, the Russian economist N.D. Kondratiev found that since the end of the 18th century, economic development followed a "long wave" model cycle, the cycle length covering five or six years. ten years.Kang's long-cycle theory has since become a term that often appears in economic monographs. (Unfortunately, in the early days of Stalin’s dictatorship, Kang was among the first victims of his dictatorship.) However, neither Kang himself nor other scholars could give a satisfactory explanation for this phenomenon; The existence of periodic phenomena.However, according to the long-term theory, the world boom, which had been going on for a long time at that time, was about to go downhill again.Unfortunately, Kang's speculation made sense.

In the past, no matter whether it was fluctuation or cycle, and no matter whether the period was long or short, people in the industrial and economic circles regarded it as a certain phenomenon, just as farmers are used to the changes of seasons and accept the good or bad weather. .Booms come and go, no one can help: good times are opportunities, bad years are full of problems.Individuals or businesses can make huge profits, or they can unfortunately go bankrupt.Only sociologists who believe in the inevitable demise of capitalism share the same idea as Marx, believing that the cycle after cycle is a process derived from capitalism itself, and will eventually prove its insurmountable internal conflict.Therefore, in their eyes, the previous fluctuation cycles have brought capitalism to a dangerous situation where it will never be restored.However, except for this group of people, it is generally believed that the world economy will only get better, just like the last century, with continuous growth and progress, during which there are occasional short-term cyclical mutations.But now, the situation has changed.For perhaps the first and only time since capitalism, economic fluctuations seemed to pose a great threat to the system itself.Worse, in many important respects, the long-sustained growth curve appears to be breaking down.

Since the industrial revolution, a history of the world economy is fundamentally a history of accelerating technological progress.The intervening economy, although uneven, was growing continuously, and corporate activity was rapidly "globally" expanding and combining.In short, the worldwide division of labor is becoming more and more sophisticated, and the network of flow and exchange is becoming more and more dense.Every part of the world economy is inseparable from the global organizational system.Even in the years of great turmoil, the pace of scientific and technological progress has not stopped for a moment. On the one hand, it changed the time of the world war, and on the other hand, it also caused changes due to the war.Although the experience of life for men and women of that era culminated in the economic upheaval of 1929-1933, in fact economic growth did not stop during those decades, it just slowed down.At that time, the United States was the most powerful economic force in the world, but from 1913 to 1938, the average GDP growth was only 8%.As for the world's total industrial production, in the 25 years after 1913, the growth rate was only about 80%, about half of the growth rate in the previous quarter century (W.W. Rostow, 1978, p. 662).We will also see this figure in Chapter 9 of this book.Compared with the growth after 1945, the difference is even more striking.However, if someone on Mars is observing the earth from a distance, the twists and turns on the curve of human economic activity will be invisible.From this distant perspective, it is clear that the world economy has continued to expand and grow.

However, looking at it from another perspective, this statement is obviously not true.In the interwar years, the globalization of economic activity seemed to have come to a halt.At that time, no matter what method was used to measure it, the world economy was in stagnation and depression, and there was even a phenomenon of regression.The years before the First World War were arguably the greatest influx of immigrants since recorded human history; but now this flood has dried up, or in other words, has been stopped by war and political constraints up. In the 15 years before 1914, almost 15 million people set foot on American soil.Over the next 15 years, however, the crowd has shrunk by two-thirds, to a total of 5.5 million.In the 1930s, and in the subsequent years of the war, it became a trickle and almost stopped completely. Only 750,000 people entered the United States in total (Historical Statistics I, p.105, Table C89-101).As for immigrants from the Iberian Peninsula, Latin America has always been the largest destination. It also dropped from 1.75 million in the 10 years from 1911 to 1920 to less than 250,000 in the 1930s. In the late 1920s, world trade gradually recovered from the devastation of the war and the crisis of the early post-war years, climbing back to levels slightly higher than in 1913, but then fell into the abyss of the Great Depression.By the end of the era of great turmoil (1948), the economic aggregate was only slightly stronger than before the First World War (W.W. Rostow, 1978, p. 669).However, looking back from the 1990s to 1913, the total economic transaction volume has more than doubled; from 1948 to 1971, it has more than five times.Even more surprising is the fact that many new countries emerged in both Europe and the Middle East in the period of depression between the two periods of massive growth.As the national boundaries are extended, trade between countries should naturally increase accordingly, because commercial transactions that were originally domestic in nature (such as the former Austro-Hungarian Empire and Tsarist Russia) are now transformed into international activities (statistics of world trade, Usually only transactions that occur across national borders are counted).As for the tragic influx of millions of refugees following wars and revolutions, this should and should have contributed to, not curtailed, the growth of international migration.But the fact is not the case at all.During the Great Depression, even international capital flows dried up. Between 1927 and 1933, international borrowing fell by more than 90%.

Why is there such a phenomenon of economic stagnation?There are many general opinions, but there are many opinions.Some people believe that the main reason lies in the most powerful national economic system in the world - the United States.Because the United States at that time, except for a few raw materials that still needed to be imported, had gradually become completely self-sufficient. (But in fact, the United States has never been very dependent on foreign trade.) But there is a loophole in this statement. At that time, even countries that relied heavily on trade, such as the United Kingdom and the Nordic countries, also showed stagnation.The trend of the times, of course, countries have increased their vigilance; and their vigilance and precautions cannot be said to be wrong.Everyone has pulled out all the stops to protect their own economies from the threat of external shocks; that is, to avoid the world economy, which is obviously already in a quagmire and cannot be saved.

The business community and the governments of various countries originally thought that after the temporary difficulties during the World War II, the world economy would eventually return to the happy time before 1914.The phenomenon that the world is thriving is what they think is a normal state.In fact, there was a period of prosperity after the war, and at least in those countries not devastated by revolution or civil war, the future did look promising.However, both government and business circles are shaking their heads at the trend of labor and trade unions' soaring power; increasing wages and reducing working hours will inevitably increase production costs.However, post-war adaptation and adjustment was far more difficult than originally expected. In 1920, prices and prosperity collapsed together, and the labor force was greatly weakened. In the next 12 years, the unemployment rate in Britain remained high, never falling below 10%; trade unions also lost half of their members.Therefore, the control power of customers has risen firmly again, but the recovery of economic prosperity is still elusive.

So, starting from the Anglo-Saxon sphere of influence, and the neutral countries in wartime, all the way to Japan, all countries tried their best to tighten the currency.Trying to bring the country's economy back to the old safe path, back to the stable monetary policy that was originally guaranteed by sound finance and the gold standard.But this policy is difficult to cope with the super demand of war. From 1922 to 1926, their efforts were more or less successful.However, the defeated Germany in the west and the chaotic Russia in the east could not stop the disintegration of the currency system; its collapse was only comparable to the experience of some former communist countries after 1989.The most extreme example at the time was Germany in 1923, when its monetary unit suddenly fell to one trillionth of its value in 1913.In other words, the value of the German coin has been completely equal to zero.Other examples, while less extreme, have equally staggering consequences.My grandfather always liked to tell the younger generation a story: During the great inflation in Austria, his insurance policy just expired.So he cashed in a large sum of money, but this batch of worthless currency was only enough for a drink at his favorite restaurant.

To make a long story short, in short, under the unprecedented devaluation of the currency, private savings were wiped out, and the source of capital for enterprises became a vacuum. The German economy had to rely on large amounts of external borrowing for many years.This made it more vulnerable, and Germany was hit hard when the world economic depression happened.The situation in the Soviet Union was not much better, but neither economically nor politically there was a serious wipe-out of private monetary savings.Finally, between 1922 and 1923, the governments of various countries decided to stop printing and issuing paper money without restriction, and completely changed the currency system, finally curbing the momentum of continued inflation.However, the German people who have always lived on a fixed income and savings are tantamount to annihilation.In Poland, Hungary, and Austria, however, the original currency has at least retained a meager value.Naturally, the trauma left by this experience on the local middle and lower middle classes can be imagined, and Central Europe thus created a psychology of accepting fascism.As for how to make people get used to long-term pathological inflation, it was invented after World War II. [The countermeasure is to make wages and other income closely follow the price and make relative adjustments according to its index—the term "indexation" (indexation) was used in 1960. ] By 1924, the storm at the end of the war finally calmed down.It seems that everyone can start to look forward, hoping that the situation will return to what a certain US president has called "normalcy".For a while, the world economy did seem to be heading in the direction of global growth.Although raw material and grain production areas, especially North American farmers, are extremely disturbed by the price setbacks of agricultural products after a short-term recovery.The prosperous 1920s was not a golden age for American farmers.The unemployment rate in Western European countries has also remained high; according to the standards before 1914, it was even pathologically high.It is hard for us to imagine that even in the boom period of the 1920s (1924-1929), the unemployment rate in Britain, Germany, and Sweden was as high as 10% to 12% on average; as for Denmark and Norway, it was even no lower than 17%. ~18%.Only in the United States, where the average unemployment rate is only 4%, is the economic giant really moving at full speed.Both of these facts point to a major weakness in the overall economic system.The decline in agricultural prices (the only way to stop it is to build up large inventories) has proved that demand cannot keep up with production.At the same time, we cannot ignore another fact, that is, the prosperity at that time was mainly driven by the large flow of funds between industrial countries, and the most important flow was Germany.Germany alone absorbed half of the world's capital exports in 1928; borrowings amounted to 20 trillion to 30 trillion marks, half of which were short-term loans (Arndt, p. 47; Kindleberger, 1986).As a result, the German economy became more vulnerable. In 1929, American funds began to retreat, and Germany really couldn't stand the blow. Under such circumstances, within a few years, the world economy will suffer again, so it is naturally not worth making a fuss about.Only the narrow-minded, complacent middle-class producers of small-town America would think otherwise.The childish features of these people, introduced by the American novelist Sinclair Lewis in Babbitt, have gradually become familiar to Western readers.At the same time, the Communist International also predicted that the economic crisis would recur at the peak of the boom.The Comintern believed—at least its spokesmen believed or pretended to believe so—that this upheaval would create a new wave of revolution.In fact, what happened next was the exact opposite, and it was overwhelming.The prelude to the catastrophe (well known even to non-historians) occurred on October 29, 1929, with the New York stock market crash.However, no one had expected the depth and scope of this catastrophe.Not even the most optimistic moments of the revolutionaries were foreseen.This economic upheaval is almost equal to the complete disintegration of the world capital economy.The entire economic system is now firmly locked in a vicious circle. Any decline in any economic index will make the decline of other indexes worse. (The only thing that hasn't gone down is the unemployment rate, which is pushing astronomical numbers time and time again.) What the League of Nations experts saw was really good. The astonishing Great Depression of the North American industrial economy soon spread to Germany, another global industrial powerhouse (Ohlin, 1931). Unfortunately, no one heeded the warning. From 1929 to 1931, the industrial production volume of both the United States and Germany fell by about one-third.However, this figure is only the average value of various industries, and it does not show the huge losses suffered by specific industries.For example, Westinghouse, an American electrical giant, saw its sales plummet by two-thirds from 1929 to 1933; its net profit fell by 76% during the two years (Schatz, 1983, p. 60 ).There was also a major crisis in the agriculture and forestry industry. The prices of grain and raw materials could no longer be maintained by stocks, and began to plummet.The prices of tea and wheat dropped by two-thirds at once, and the price of silk by three-quarters.As a result, all countries that mainly export agricultural products have suffered unprecedented blows, including Argentina, Australia, the Balkan countries, Bolivia, Brazil, British Malaya, Canada, Chile, Colombia, Cuba, Egypt, Ecuador, Finland , Hungary, India, Mexico, and the Dutch East Indies (now Indonesia); these are just the countries enumerated by the League of Nations in 1931.In short, the phenomenon of the Great Depression is genuine this time, and has global significance. As for Austria, Czechoslovakia, Greece, Japan, Poland, and the British Empire, they were also extremely sensitive to shock waves from the West (or East), and were also strongly shocked.In order to supply the huge demand for silk stockings in the United States, the Japanese silk industry has tripled its production in the past 15 years; but now the stocking market has temporarily disappeared - which means that overnight, 90% of the Japanese silk market in the United States has become Nothing.Prices of rice, another key agricultural product in Japan, were also weighed down.As for a large area of ​​major rice-producing areas distributed in East Asia and South Asia, they are naturally not immune.But the price of wheat fell even worse and more completely, and it was even cheaper than the price of rice.All of a sudden, it is said that even the orientals, who used to eat rice as the staple food, switched to wheat instead.But even if flour was popular—and even if it were true—farmers in major rice exporters such as Burma, French Indochina, and Siam (now Thailand) would suffer even more (Latham, 1981, p. 178) .The price of rice has been falling all the way, and rice farmers have no other choice. The only way to subsidize it is to grow more and sell more, which results in lower prices. For farmers who mainly supply the market, especially output, this situation is tantamount to ruining their fortunes, unless they resume the traditional small-scale farming economy that only produces for self-sufficiency.Generally speaking, most exporting countries can still take advantage of this outlet, because farmers in Africa, South Asia, East Asia, and Latin America are still mostly small farmers, and there is finally a little room for buffering.But Brazil is miserable. It has become synonymous with capitalist waste and the severity of depression. In order to save the price from plummeting, local coffee growers have turned their surplus coffee into train steam engines as coal. (Two-thirds to three-quarters of the coffee sold in the world market comes from Brazil.) Until today, the proportion of Brazilians working in agriculture is still quite high.The upheaval of the economy in the 1980s hit them even harder than the Great Depression that year, because at least the farmers in the early years had far lower hopes for the economy than later. Having said that, the people of the colonial small peasant countries were still quite affected.For example, the imports of white sugar, flour, canned fish, and rice in the Gold Coast (now Ghana) dropped by two-thirds at once, the (small farmer-style) cocoa market fell to the bottom, and the imports of gin shrank even more fiercely. 98% drop (Ohlin, 1931, p. 52). As for those men and women who depend on wages, they have no control over the means of production, nor can they live a normal life (unless they have a home and can go back to the fields to eat rice), the direct consequence of economic depression is unemployment.Unemployment was unprecedentedly widespread and prolonged beyond anyone's expectations.During the worst period of the Great Recession (1932-1933), the unemployed population in Britain and Belgium was 22% to 23%, Sweden 24%, America 27%, Austria 29%, Norway 31%, Denmark 32%, Germany Even higher than 44%.What is also striking is that even after the economic recovery in 1933, the unemployment rate in the 1930s has not improved significantly. The UK and Sweden have remained at around 16% to 17%, while Austria, the United States and the rest of the Nordic countries have remained at the same level. Above 20%.The only country in the West that successfully solved the unemployment problem was Nazi Germany from 1933 to 1938.Never in living memory has the working class been subjected to such a dire economic catastrophe. To make matters worse, at that time, public social security, including unemployment benefits, either did not exist at all (as in the United States), or they were pitifully meager by the standards of the late 20th century.For the long-term unemployed population, a drop in the bucket is simply not enough.For this reason, life security is always the biggest concern of workers: not only need to protect the danger of losing their jobs (that is, wages) at any time, but also deal with illness, accidents, and doomed old age without any support.No wonder working families most want their children to find a job. It doesn't matter if the money is less, but it must be safe and reliable, and provide pensions.But even in the United Kingdom, the country with the most widespread unemployment insurance, less than 60% of the working population is insured—a figure that is possible only because Britain had to do so as early as 1920 due to mass unemployment.As for the rest of Europe (with the exception of Germany, which is more than 40%), the number of people holding unemployment insurance ranges from as low as zero to as high as a quarter (Flora, 1983, p. 461).A population accustomed to intermittent employment or periodic short-term unemployment now finds it hard to find work everywhere.What little savings I had was exhausted, there was no more credit at the grocery store, and there was nowhere to go. As a result of mass unemployment, the political situation in the industrialized countries has been dealt the worst blow.Because for many people, the most immediate and obvious meaning of the Great Depression is mass unemployment.While economic historians point out (and logic proves it too), in fact, at the worst of times, most people still had jobs.Moreover, between the two wars, prices fell, and food prices fell even faster than during the most depressed period. The life of employed laborers is actually better than before.But what's the point?The image that looms over that era is that of soup kitchens and the "hunger march" of defunct steelworkers gathering in metropolitan capitals to protest against those they deem responsible.Nor can politicians ignore the fact that up to 85 percent of members of the German Communist Party are unemployed.In those years the growth of Communist Party membership was almost as fast as that of the Nazis during the Depression years; in the months leading up to Hitler's rise to power the growth was even faster (Weber, I, p. 243). Unemployment and its consequences are so serious that it is no wonder that it is regarded as the heaviest and even fatal blow to the country.In the middle of World War II, an editorial in The Times of London wrote: "Unemployment, second only to war, is the most widespread, deepest, and most unsuspecting disease of our generation. It is a unique Western disease in our era. social ills.” (Arnet, 1943, p. 250) A passage like this, which never appeared in the history of industrialization in the past, can be said to hit the nail on the head. Compared with any textual research, it can fully explain the post-war Western government. Reasons for various administrative measures. Strange to say, the feeling of catastrophe and confusion is more profound in the hearts of entrepreneurs, economists, and politicians than ordinary people.For the general public, although the taste of unemployment is very bitter, and the prices of agricultural products have fallen too much, they think that no matter what direction—whether it is left or right—there is always a political means to solve the problem for them. The injustice that comes, because the desire of poor people is actually very low.But in fact, the old free economic system structure lacks the means to solve it. With poor technology, economic decision makers are even more embarrassing.In the short term, in order to immediately resolve the domestic crisis, they have to sacrifice the foundation of the overall economic prosperity of the world. Within 4 years, international trade fell by 60% (1929-1933). At the same time, countries accelerated the construction of barriers, trying to protect their domestic markets and currencies from the impact of the world economic storm.But everyone knows that in doing so, the international multilateral trading system necessary for global prosperity will also fall apart. Of the 510 international commercial agreements signed between 1931 and 1939, 60 percent no longer included the most important cornerstone of the international trade system, “most favorable nation staitus.” Reduce (Snyder, 1940). I wonder if this vicious circle will ever come to fruition? All of this had of course a huge direct impact on the political environment, producing one of the most traumatic pages of tragedy since the dawn of capitalism, as we shall discuss further below.But before looking at the short-term shock, it is important to look at the long-term significance of the recession.In a nutshell: The Great Depression destroyed the liberal economy for half a century. Between 1931 and 1932, the United Kingdom, Canada, the Nordic countries, and the United States all abandoned the gold standard system long considered necessary for international exchange rate stability.By 1936, even Belgium, the Netherlands, and even France, which had always believed in gold bars, did so.A more symbolic event occurred in 1931, when even the British Empire abandoned its "free trade" policy.We must know that since 1840, economically, free trade has been to Britain, just as the US Constitution is to the United States politically, and it has been a symbol of the identity of both.Britain's retreat from the world economic system and the abandonment of the principle of free trade have increasingly highlighted the eagerness of countries to protect their own portals.To put it more clearly, under the pressure of the Great Depression, Western countries had to give priority to social policy considerations, and economic affairs had to take a backseat.Otherwise, the political consequences will be serious, as in the examples of Germany and other countries - regardless of left or right, all parties are forced to embark on an increasingly fierce road. Thus, every country which has in the past used high tariffs as a means of resisting foreign competition and protecting its domestic agriculture now raises tariffs still higher.However, raising tariffs alone was not enough. During the Great Depression, governments of various countries began to provide subsidies to guarantee the price of agricultural products, and to purchase surplus products, or simply pay farmers to stop production. After 1933, the United States has made such a bad move. In the 1970s and 1980s, under the Common Agricultural Policy, the European Community was nearly brought to its knees by subsidies for ever-smaller farming households.And this strange contradictory policy is actually a remnant of the Great Depression. As for the working class, post-war countries strived to eliminate massive unemployment, and "full employment" became the primary economic task of reformed capitalist democracies.Although there were more than one person who advocated this policy, the most famous visionary and pioneer among them was the British economist Keynes (1883-1946).His theory advocates that eradicating a large number of permanent unemployment is conducive to economic development, and its starting point is to give consideration to both politics and economy.The Capitol believes that the income of fully employed workers will create consumer demand for the economy.This view is certainly quite correct, but apart from this, there are actually many ways to increase demand.The reason why the British government can't wait to single out this haste to implement it - even before the end of World War II - is mainly because of the extremely destructive power of mass unemployment, both politically and socially.Everyone saw this fact with their own eyes during the Great Depression.People believed this so much that many observers (including the author of this book) thought that social disorder would resume when mass unemployment reappeared years later, especially during the severe recession of the early 1980s.As a result, unexpectedly, confusion did not occur (see Chapter 14). The main reason why the society has not been in chaos is that in view of the painful lessons, various countries have established social welfare systems after the Great Depression. Who would be surprised by the passage of the Social Security Act in the United States in 1935?For many years, the advanced industrial countries—with a few exceptions such as Japan, Switzerland, and the United States—have generally had welfare programs on such a scale that everyone has become accustomed to them.We have almost forgotten that as late as World War II, there were not many "welfare states" in the world that met the modern definition. Even the Nordic countries, which are known for their perfect welfare, were just in their infancy. In fact, the welfare state The term did not start to be used until after the 1940s. The severity of the Great Depression underscored the fact that the country that had long since parted ways with capitalism, the Soviet Union, seemed immune to it.While the rest of the world, at least as far as the liberalized Western capitalist countries were concerned, their economies were stagnating, only the Soviet Union, under the guidance of its five-year plan, was industrializing by leaps and bounds.According to the most conservative estimate, from 1929 to 1940, the industrial output of the Soviet Union tripled. In 1938, the Soviet Union's share of total world production had jumped from 5 percent in 1929 to 18 percent.At the same time, the proportion of the United States, Britain and France dropped from 59% of the global total to 52%.What is even more surprising is that there was no unemployment in the Soviet Union.So regardless of ideology, everyone began to learn from the Soviet Union. From 1930 to 1935, a small but influential group of socio-economic figures traveled to the Soviet Union to learn from it.The Soviet economy they saw, although traces of its primitive backwardness and inefficiency can be seen everywhere, it also exposed the ruthlessness of Stalin's collectivization and large-scale repression.However, these impressions are not as profound as the achievements of the Soviet economy in not being affected by the depression.Because the problems that these foreign visitors wanted to solve were not the real political and economic phenomena in the Soviet Union.The object of their concern is the collapse of their own economic system and the extent of the failure of Western capitalism.What is the secret of the Soviet system?Is there any experience worth learning?One after another, imitations of the Soviet Union's five-year plan have emerged.Suddenly, the word "plan" became the most fashionable term in politics.The social democratic parties in Belgium and Norway have even begun to formally adopt the "plan".Sir Arthur Salter, the most respected elder of the British government and an important member of the Church of England, also published a book at this time advocating the importance of the plan, titled "Recovery".In his book, he argues that society must be well planned to avoid vicious circles of a Depression-like nature.Many middle-of-the-line officials in the British government have also organized a non-partisan think tank group called "Political and Economic Planning" (Political and Economic Planning, PEP).The younger generation of Conservative Party figures, such as MacMillan (Harold MacMillan 1894-1986), who would become Prime Minister in the future, have called themselves the spokespersons of the planning faction.Even Nazi Germany, which advertised itself as anti-communist, copied ideas from the Soviet Union and launched the so-called "Four-Year Plan" in 1933. (In fact, after 1933, the Nazi’s own plan to deal with the Great Depression was also quite effective. However, due to some reasons, the success of the Nazis did not attract the same attention from the international community, which we will discuss in the next chapter.)