“When the [crisis] struck, nationalists were quick to identify the cause in [liberalism]… . As the crisis spread from country to country, global commerce and the gold standard increasingly came under attack. Once praised as the engine of economic progress and prosperity, international trade was now viewed as a source of foreign contagion. More than ever before, the nation’s economy had to be protected from cheap goods from abroad, and saved from reliance on foreign materials. [Governments raised tariffs] and each time a government [did so], it increased the pressure on others to do likewise. This generated considerable hostility… . The failure to cooperate in the face of the economic threat of the early 1930s was a harbinger of the inability of the powers to work together to deal with the threat of aggressive nationalism in the latter part of the decade.”
John E. Moser, United States historian, book published in 2015
Use the passage to answer all parts of the question that follows.
a) Identify ONE piece of evidence that Moser uses in the passage to support his claim regarding nationalist perceptions of liberal economic policies.
Moser used a contradiction of nationalists’ thoughts before and after the crisis to support his claim. He mentioned that international trade used to be viewed as an engine of economic progress, but was then pointed out as a source of contagion. This suggests that nationalists’ perceptions of what they view as a threat and reduced global commercial activities might happen after.
b) Explain ONE development in the late 1930s and early 1940s that could be used to support Moser’s argument in the last sentence of the passage.
The founding of the Nazis would be an example of development that supports his argument that the lack of cooperation increased the threat of nationalism. Before that time, Germany had experienced a severe hyperinflation, which completely damaged its economic system; at the same time, there was no interaction with other countries that could have helped this situation happen either. This directly caused the rise of nationalism, which later provoked them to start the Second World War, which caused even worse consequences of genocide globally.
c) Explain ONE economic policy, other than those mentioned in the passage, that governments in Western Europe and North America adopted in the 1930s to address the economic crisis referred to in the passage.
The US used a new economic strategy to increase government spending on basic infrastructure to solve the economic crisis. Specifically, the government spends money to hire people to build those infrastructures, and their wages then become a circulative resources in which they spend their money on more services. This positive circulation goes larger and larger and finally increases aggregate demand and Nominal GDP overall.