Economic and Social effects of World War One
Impacts of war can often be pictured as glamorous in nature for the victorious nations; the victors decorated, and the price for bloodshed are paid in wealth at the expense of the defeated. However, once technology evolved warfare above mere swords duels to possible total destruction of nations, the rewards from warfare (economically and socially speaking) may not be as glamorous as once pictured. Thus this ill assumption gave false hope for countries post-war and consequentially prolonged the turmoil. Although there have are numerous cases on economic and social impact of World War One this essay focuses on specifically the troubles in Russia, Western Europe and Germany.
Immediately after the First World War the European countries were in economic ruins. These countries, whom greatly invested in weapon-manufacturing now had to transition the manufacturing sector back to consumer goods. This difficult and expensive transition, along with the large sum of war debt owned, was the main cause for the post World War One recession (which affected all European countries). And the defeated Germany consequentially received the harshest economic impacts post-war.
The terms of defeat for Germany were to surrender thirteen-percent of its territory and its colonial turfs. Economically, ninety-percent of its merchant marine and all the investments overseas (which amassed to one tenth of the country's capital) were forfeited. These conditions, in addition to the European wide rescission was already enough to put the German economy in a volatile state. However these were merely the preludes.
Under the Treaty of Versailles Germany forcibly assumed responsibility for all losses and the damages that had done to the Entente nations. A value marked at one-hundred-thirty-two billion gold marks, paid by annual payments of two-billion gold marks in addition with twenty-six percent of the German exports value. Furthermore German was barred from entering into a trade-alliance with Austria-Hungary and its neighbors in fears of another Central Power confrontation. This barred Germany from even small economic activities with these countries which it desperately needed to not only to rebuild the country but also to pay the reparations.
The German monetary standard was unstable the years directly following the war. This was the caused by not only their obligation to pay for the reparations but also the result of the allies' seizure of the country's economic assets. Germany, in a haste response to repay its debt printed a significantly large amount of money which devalued the German Marks drastically. The Marks, which was trading at sixty per American Dollar in 1921, reached eight-thousand by the December of 1922. As Germany was unable to pay for the reparation, the Entente countries decided to occupy Ruhr, to extract the reparations themselves. This caused Germany, whether in protest or as a-result-of, defaulted on their resource reparations. The occupation marked the point where the German economy worsened to a volatile point as hyperinflation rocketed the Marks to one-trillion Marks per American Dollar. In the end, after several international interventions, only one-eighth of the reparation owned was paid off by Germany.
Germany's economic collapse was largely not its own undoing. The one-hundred-thirty-two billion gold marks debt was far beyond the total Germany gold in reserve. Along with other restraints, Germany only able to repay its debts by dangerous means of borrowed and increased printed money. These reasons, among other accounted for German economy's collapse and, as the result, caused a great social unrest in Germany.
Economic stability was now nonexistent in Germany; foods were bought in the millions. The government struggled with clashes from both the extreme-right and the far-left. This unrest, added upon the latter uprising due to the Great Depression staged the setting for the rise of dictatorship in Germany.
Russia, suffered a similar degree of turmoil as Germany. Discontent grew as Russians were forced into war or to arms manufactory plants. The quality of living decreased from its previously severe lows and it was in this context a social uprising occurred in Russia. The February Revolution was the movement that toppled the preexisting Tsarist Government. It began with no headship but was instead lead by general discontented for Nicholas II. This uprising ended with the Russian Civil War which gave victory to the communist Red Army.
In Western Europe, the impacts of war proved to be not much better than it did in Germany or Russia. The United Kingdom endured the recession with general unease. The GDP, as the result of, decreased by 23% from 1919 to 1921. The veterans' reemergence increased the unemployed population. This drastic social change turned to an economic burden for the government. By 1921 more than two-million unemployed were on the national unemployment insurance. Western France was demolished by the end of the First World War. Thought France gained back Alsace and Lorraine that added a large abundance of coal and other minerals under the French control, it was unable to fully utilize due to the lack of manpower following the war. Also due to its economic instability the French treasury Bankrupted due to massive borrowing. The problem of these two countries was due to the lack of reparation payments by Germany.
As mentioned previously, Germany was unable to pay most of the reparations to the allied countries. This was problematic because these countries were dependent on the credit which Germany was meant to of bestowed for their recovery. As that did not happen, the general European economy was not able to quickly recover from the recession. This prolonged the recovery post war for the European countries.
World War One was the first instance of a total war, where all the participating countries utilize all its resources towards the destruction of the opposition and ultimately victory. In contrast, warfare before the First World War was only designed strategically for the opposition to surrender thus consequentially victory, not by the means of complete annihilation. Therefore it was possible, for this type of warfare, to plunder and gain wealth to cover the cost of war expenditure at the opposition's expense. However this idea could not be applied to total warfare: for if it's the complete destruction of the opposition one seeks in a total war, then what is there left to be plundered? And thus it was this false assumption deepened the impact of the First World War.
The First World War brought with it, in essence, a double edge word: where neither the victorious or defeated party would have gained any major benefits from each other. However it was the delusion that victory would yield large rewards that motivated the countries into total warfare; thus consequentially devastated the European economy and society in the post-war years.