The Economic, Social, and Political Impact of the First World War on Europe

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The Economic, Social, and Political Impact of the First World War on Europe

At the end of the First World War in 1918, the economic, social and political state of Europe was such that the potential rebuilding of the continent seemed a distant and unrealistic vision.

The war had affected much of Western Europe, in particular France and Germany, not to mention Belgium, Italy and Austria. In addition vast regions of Eastern Europe also suffered dearly as Russia’s bloody involvement in the war took its toll. Consequently over 8 million people were directly killed in fighting and many more millions were injured or unaccounted for. It’s no surprise therefore that the impacts of the war were so strong
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Although the USA was well into its industrialisation programme and its economy was growing steadfast, the impact of the war effectively ground Europe’s economy to a halt, thus allowing the US to catch up. In the period that followed it is estimated that the US economy grew by triple that of Europe’s in relative terms[2]. As a result investment in Europe fell, enhancing the problems already facing the economies of the continent. Newly established Japanese firms decided to relocate to the US, and many European firms decided to cross the Atlantic to save their businesses. In addition to moving to the US, many firms also left for Canada and Australia whose economies were significantly growing at the time. The impact of this mass movement was to inflict more misery on the governments of war torn Europe. Less investment meant less money in the economy and much less to rebuild with. Inflation rose as the French and in particular German governments printed more and more money.

Many economies of Europe were somewhat saved by the resurgence and growth of various industrial sectors. Although industries such as textiles and shipbuilding were effectively diminished forever, construction industries and their suppliers grew. Bricks and tools were needed, and a guaranteed outflow of resources was