Great Crash
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The Great Crash was a worldwide price recession that occurred in 1890, with its global effects lasting through the entire decade until 1901 and the economical revitalisation brought about by the outbreak of the World War. The recession began in Etruarand before it spread to the other nations of Amlei, which had collectively experienced high growth during and after the Industrial Revolution of 1810. With the collapse of the western continent, the crash had a significant knock-on effect that spread to all other industrialised nations of the world, with the economies of Saeyri, Xhequa, Sine Weythern and Quenylga being particularly damaged during mid and latter half of the decade. The event is widely regarded as the most devastating financial crash in recorded history, with the brevity of its global effect revealing the extent of capitalism's post-revolution development and interconnectedness by the close of the 19th century.
Background[edit | edit source]
Economists generally attribute the Great Crash being triggered by a plateauing of growth following the global slowdown of the Industrial Revolution. The cause of this stagnation is widely disputed by many economists across the world.
Most mainstream economists, specifically those influenced by the popular classical school of Prucinnaian economics, generally explain the lack of growth as a result of hindrances in the free market, with common blames being the various state protectionist policies practised by the world's largest economies, reckless and poorly regulated loaning practices, and even the global rise of the union movement winning minimum wages and set work hours interfering with the natural processes of the free market.
According to Boris Heckel, a well renowned heterodox economist whose theories are commonly refereed to as "Heckelian economics", the crisis's cause lay not in protectionism or unions, but one of underconsumption. The crisis was thus primarily due to an over-saturation of goods in the world market not coinciding with global aggregate demand, particularly that of textiles, agriculture, iron ore and coal, with vast amounts of wealth simply sinking into goods that could not have been sold at a profit, rendering many thousands of companies bankrupt. Heckel's solutions called for a greater ability for governments to intervene in economies to finance under performing sectors, including higher wages to increase consumer confidence.
Anthone Harkēn, a lesser but still influential heterodox economist and a leading theoretician of the Syndicalist Republican Alliance, makes frequent note to the crash as not being caused a flawed and "fix-able" component of the global capitalist system, such as wage rates or government intervention, but as the result of the inevitable rate of profit to fall. This fall, according to Harkēn, occurs when investment in the means of production grows faster than the labour force, and it must also grow more rapidly than the creation of new value, from which profit comes, therefore putting a downward pressure on the rate of profit. This investment in the means of production is not simply an optional choice by capitalists, but a continual and unavoidable process carried out by them so that they can compete with other capitalists by increasing productivity through the mechanisation of labour.
Bartholomew Sherburne, valiant leader of the People's Revolutionary Front, attributes the crisis to the decay of Amulndian values in western society and the corrupting influence of the Chasteuilan Astralists in bankrupting the Amleian economy, while also citing Atraeth's remarkable recovery from the crisis as proof of the nation being a true successor of Amulndia free of Astralist corruption. In Virassia, he also blames the lack of economic growth and industrialisation on the stagnating influence of Vissers in the workforce, whose backward traditionalist ways have hampered growth and lack of dignity allowing them to accept miserable wages forcing many ethnic Virassians out of work. Though blatantly right-wing and racially charged, his views are not isolated, and mesh in quite well with the broad anti-Astralist and anti-Visser sentiments that deeply penetrate Virassian society, views of which have long been cultivated by the Virassian ruling class as a tried and tested tactic of divide and rule.
Effects[edit | edit source]
The crisis affected many nations differently, with the latent economic problems of most nations being sorely exposed post-crisis.
Atraeth[edit | edit source]
Atraeth was perhaps the least affected of all the large capitalist economies, having effectively recovered from the losses it suffered following Atrae-Seonmi War by the 1890's. By the time the crash swept across the globe, Atraeth stood tall as the world's most productive economy, with its GNP being practically double to that of other advanced nations[1]. In the wake of the crisis, Atraelish companies profited through the buying up of cheap capital from other economies that were previously reliant on Etruarand. Only a handful of its industries suffered, such as its automotive, mining and textile industries, which saw a sharp drop in sales on the international market, however these industries were effectively saved from bankruptcy through government intervention, with the automotive and textile industries being nationalised. Austerity measures were additionally kept to a minimum, with the government's minimal attacks on working class rights, with few cuts to wages or increases working hours, revitalising loyalty to the Atraelish national identity and boosting the popularity of the autocratic governmental regime.
Etruarand[edit | edit source]
Etruarand's decline and triggering of the crisis is largely attributed to the loss of its industrial lead over the economies of the other nations of Amlei and later Cymlun and Urcinne as the industrial revolution spread across the globe. Additionally, the loss of its colony of Makrisa during the Makrisan War of Independence of 1886 to 1888 prevented the nation from expanding into the Urcinnan goods market as effectively as the other global powers. Its influence over the economy and access to the oil reserves of its former colony of Gashaorhiel and present colony of Etruarac South Amlei is often cited as two key elements vital to the nation's recovery, whilst other economic authorities note that the nation's technological advancements in several advanced industries, specifically the automobile and weapons industries, as well as the Etruarac invention of polyite, gave the nation a much needed kick-start with the recovery of the global economy by the turn of the century, with demands for these technologies attaining record hights with the global outbreak of war.
Quenylga[edit | edit source]
An over saturation of textiles in the world market - amongst hundreds of other products from dozens of other industries - in the years leading up to the Great Crash greatly limited the cotton export dependant slave state of Quenylga from competing globally. This, coupled with its ongoing war with Sine Weythern since 1888, has put immense pressure on the nation's economy and workforce.
Saeyri[edit | edit source]
The Great Crash effectively halted the rapid industrialization of the nation as the import of foreign heavy industrial machinery became financially untenable. Small developing businesses were all but wiped out as they could not compete with the larger mechanized powerhouses and the internal economy of the Kingdom of Saeyri collapsed in 1891. The civil unrest that followed has been directly attributed to the meteoric rise of Juotsou Hou-gemgun and the armed overthrow of the government by the military in 1894. The new Republican Government proactively resolved the economic crisis by renewing trade agreements with the Etruarac Republic, nationalizing the major domestic businesses through lethal force and liquidating the provocateurs of the worker strikes in the agricultural northern territories. Foreign observers have noted that since the crash, the disparity between development in the cities and the rural provinces increased significantly, delaying the mechanization of agriculture by decades.
Variyako[edit | edit source]
As a largely feudal nation, Variyako's feudal economy was minimally affected by the crash, however its capitalist economy and export market suffered heavy damage, specifically its previously fast-growing mining industry. The Variyakoi bourgeoisie and the small private sector they dominated virtually disintegrated, with many companies being absorbed by the religious establishment and in some rare cases the state. Countless bankrupt merchants were thrown into poverty, resulting in the explosion of city slums and migration to the countryside. Those who survived complete bankruptcy were typically also landlords or former land owning peasants who post-crash reverted back to their traditional peasant lifestyle. The Great Crash is often attributed as a key contemporary delaying factor to Variyako's industrialisation and ability to compete with the Western world. This in turn discredited the economic liberalism that had started to gain ground amongst Variyakoi officials and intellectuals, and strengthened the feudalist and conservative socio-economic order that had been the norm for centuries.
Virassia[edit | edit source]
By western standards Virassia proved to be a particularly backward country. After the first few waves of the Industrial revolution there was little further industrial development, with a large 70% of its population still living on the land as peasants and agricultural labourers (with agricultural produce accounting for two thirds of the nation's exports) and an infrastructure unable to compete with those of the advanced Amleian economies.
At the time of the crisis, the division of Virassian land was amongst the smallest in Amlei; 70% of Virassian land was in the hands of only 2% of all landowners, of whom were highly concentrated within the ranks of the state. Unlike in nations such as Etruarand, Sine Weythern or Atraeth - where truly bourgeois revolutions occurred, dismantling feudalism and establishing the nations as capitalist republics - the Virassian bourgeoisie never properly consolidated itself as a new ruling class of the nation, with the Virassian military proving to be an effective and vital crutch for the survival of the Virassian feudal state. The post-revolution makeup of the state was thus characteristically different from that of other industrialised nations in the decades following, with ownership of the means of most capitalist production kept primely in the hands of the aristocracy and military as opposed to the private sector. Due to the state's monopoly over the economy, internal competition was minimal, severely limiting long-term internal growth, with Virassia instead relying on its ever diminishing edge over the international market. This bottleneck ultimately caused Virassia to enter a deep recession following the Great Crash.
Yashurhiel[edit | edit source]
Though predominately a nation of agricultural serfs, the ruling Altoehyozo dynasty of Yashurhiel had since the enlightenment looked keenly to the west as a source of inspiration. By the 1890's Yashurhiel boasted a large manufacturing and mining sector, with most of its modern industrial machines acquired through trade deals with Etruarand in exchange for products from the Yashurhieli inner sea colonies. The Empire's artisans, merchants and other burghers of old quickly grew to become a proto-bourgeoisie, as thousands of peasants left their plots of land to seek better lives as workers. Due to the state's uncompromising laws of majority state ownership of all companies, as well as restricting foreign ownership and trade deals outside of the Empire - a practice finding its origins in the mercantilism of the late medieval Empire - the Great Crash had a significantly lesser impact on the nation compared to the nations of the western world. Post-crash, industralisation halted, even reversing in some less-established sectors, with imports of manufacturing machines, vehicles and other advanced technology being strangled out by both the state of the world economy and raised tariffs. To return profit levels to normal, the Yashurhieli state enacted program of mass austerity, cutting wages drastically and increasing working hours across the board. With the advent of the World War, the Emperor ushered in a state of martial law, further driving down wages and increasing work time, as well as effectively smashing many active trade unions, with strike actions being branded as treason. The Empire's actions in revitalising its economy post-crash were in fact so successful that it drew significant adoration from several world leaders and business tycoons.
