Bio-Polymer Chemistry Assessment Task

Production of Materials: Chemistry Assessment Task Part A: Biopolymers Definition: The term â€Å"Biopolymer† refers to polymers that are produced by living organisms. Since these are polymers, biopolymers contain monomeric units that are covalently bonded to form larger sructures. Biopolmers are divided up into 3 main classes. These are: Polynucleotides (which include RNA and DNA), Polypeptides ( short polymers of amino acids) and Polysaccharides. Examples of some Biopolymers include: Cellulose, Starch and Proteins. Source: http://en. wikipedia. org/wiki/Biopolymer#Polypeptides Biopolymer: Polylactic acidFormation: PLA is produced from a renewable source. For example corn. Corn is harvested and then milled to extract the starch from the raw materials. From the starch, dextrose is produced. The dextrose is then fermented, transforming into lactic acid. The lactic acid is altered into a polymer by the process of condensation, then forming long chain molecular compounds into pol ylactic acid. The organism is Lactic Acid. Source: http://www. hitachi-pt. com/products/ip/process/pla. html Properties and Uses: Being able to degrade into lactic acid, PLA is used as medical implants in the form of screws, pins, rods and as a mesh.PLA can also be used as a compostable packaging material. Cups and Bags have been made out of PLA. In the form of film, PLA shrinks upon heating allowing it to be used in shrink tunnels. PLA is also useful for producing loose-fill packaging, compost bags and disposable tableware. PLA can also be used in treatment in the body. Depending on the exact type used, it breaks down in the body within 6 months to 2 years. This degredation is desirable for a support structure because it gradually transfers the load to the body as the organ heals.Source: http://en. wikipedia. org/wiki/Polylactic_acid#Manufacturers Assessment: The impact of PLA on the society is that due to the high demand or PLA products from resources such as corn, corn growers ha ve been tampering with the genes of the corn to produce higher yields in order to suffice the demand. Even though PLA is biodegradable it still takes at least three months in a controlled environment to properly break down into it’s components. However it is estimated to take 100 to 1000 years to decompose in landfill.PLA is also from a different origin than regular plastics, therefore it needs to be kept separate when recycling. PLA is an alternative to the common plastic bag or plastic cup since it can be recycled which can be useful to the society. Source: http://www. scientificamerican. com/article. cfm? id=environmental-impact-of-corn-based-plastics Judgement: Even though PLA is an alternative to common plastic due to it being recyclable and biodegradable, PLA still needs to be refined to make it more efficient to produce, be cost effective and to be able to degrade at a much faster rate.Part B: Batteries Sources: Vertex Learning Centre: Book, HSC chemistry, Vertex Learn ing Centre: Book, Production of Materials Section 6 and 7 Button Cell Plastic seal Zinc case Graphite rod Electrolyte Negative terminal Positive terminal Plastic seal Zinc case Graphite rod Electrolyte Negative terminal Positive terminal Leclanche Cell (Dry Cell) Sources: http://www. comf-hk. com/zcart/index. php? main_page=page&id=3&chapter=1 Leclanche Cell diagram- 4. 6 cells and batteries word document By Bernard Broekhuizen

Change Management Essay

Change Management Essay Change Management Essay tThis literature is aimed at reviewing the management of changes implemented by Toyota Australia in response to the present economic struggle experienced in the automotive industry. Conflict had begun to brew in September 2011 as the manufacturing team at the Toyota Altona manufacturing plant in Melbourne pressed for a pay increment. The Altona team was represented by the Australian Manufacturing Workers’ Union (AMWU) in a negotiation for an increase of twelve percent over the duration of three years (Beissmann 2011a). This industrial action resulted in stop-work strikes that impacted Toyota Australia’s customers, dealers, suppliers and even employees whom did not participate in the industrial action (Beissmann 2011b). Resolution was finally reached between Toyota Australia and the union after six week of numerous intensive meetings. The agreement is that Toyota Australia will offer its employees an increase of eleven percent over a period of three years. This agreement came with the cost of loss productivity which prevented the scheduled launch date for one of its primary model, the new 2012 Toyota Camry (Beissmann 2011c). This literature brings forth an important point that the rationale basis of Toyota Australia to defend their position with the union over a difference of one percent increase is in question. In early January 2012, Toyota Australia publicized on their website of their strong sales performance despite having to overcome the challenges of production disruption due to the natural disasters in Japan and Thailand. Toyota was recognized as the Australia’s most popular automotive brand (toyota.com.au. 2012a). Therefore it was unexpected following this exciting news, that Toyota Australia President and CEO, Max Yasuda, announced the execution of downsizing its labour capital by mandating 350 redundancies. Mr Yasuda justified this action as absolutely essential to remain sustainable. Toyota Australia has been compromised by the gr im market conditions which consisted of a reduction in export sales due to the current strength of the Australian currency (toyota.com.au 2012b). While minister, Kim Carr, resounded optimism that the Australia automotive industry is sufficiently resilient to withstand this tough condition, Mr Yasuda does not share the same tune. In fact, Mr Yasuda has proclaimed at present, Toyota Australia has only managed to construct a five year business plan (Beissmann 2012c). In reference to the information provided by Toyota Australia suggests that the change implemented was driven from the external environment comprising of economic downturns and decrease of competitive advantage (Neo et al. 2011). The present interpretation is that Toyota Australia has adopted the political perspective of change when the decision was made to force as opposed to voluntary redundancy offered by Ford Australia (Spinks 2012). According to Graetz et al. (2011), the key features of this perspective revolves around acquiring organizational change via aggressive tactics that produces conflict that included bargaining. This directly reflects the continuous length of industrial conflicts that Toyota Australia has encountered from employees challenge for pay increment to forced redundancy (Drill 2012). It would appear that Toyota has neglected to approach this change decision from a psychological perspective to consider the damaging effects it would have on â€Å"survivors† from the redundancy movement (Graetz et al. 2011). The downsizing strategy implemented by Toyota Australia invokes what is term â€Å"survivor guilt†, which indicates a psychological reaction experienced by employees who survived and were able to retain their positions. However the impact can provoke anxiety over the stability of their jobs consequently decrease loyalty and staff morale. This anxiety is further exacerbated by the perception that good work ethics such as dedication and competency failed to save the jobs of their colleagues. Therefore, it is proposed

Natural Resources, Conflict and Conflict Resolution Research Paper

Natural Resources, Conflict and Conflict Resolution - Research Paper Example It will also look at how samples will be chose and studied for further deductions that will end up in the formation of an appropriate theory. This paper also contains limitations that are inherent in a research of this nature. The problem statement refers to fundamental problem in society that gives impetus for the enquiry to begin in a research (Harvey 2006). Anyone with some knowledge of the American revolution is aware that colonized population of the 13 states of America were fed up with the British taxes and tyrannical rule that practically enslaved the people. This is a common explanation for the revolt and uprising that followed between 1771 and 1776 when the British were eventually kicked out. However, a practical research can be set up in an attempt to evaluate the exact cause or a single cause of the uprising of the Patriots in this context. There is a wide range of issues that can come up this include the taxes, the justice system, general resentment etc. A research question is seen as â€Å"an explanatory question a researcher asks about variables of interest† (Wrench et al, 2003). In other words, when the researcher has an idea of what the research will be about, s/he can come up with a research question that will suit the situation. However, Wench et al (2003) continue to state that a research question should be formulated after some review of literature. In this case, the researcher needs to go through existing sources like books, journals, articles, websites and other materials written by credible sources to state the factual position relevant to the research. This means that the researcher has to fall on other authorities to find important matters and facts that have been arrived at by other authorities in the field. (Fearon 2005) argues that nations whose economies rely heavily or solely on primary commodity

Paper on Financial Monitoring and Control Essay

Paper on Financial Monitoring and Control - Essay Example According to Nikolai et al (2009), efficient monitoring and control of cash ensure that there is adequate cash to undertake important activities in organizations. Cash control systems need internal control measures that are adequate and effective, which must comply with laws and regulations of any given jurisdiction where the business or project is carried out. Kutz (2003) asserts that error and lack of control over organizations assets and cash lead to business or project failure. Components of financial monitoring and control system First, roles and responsibilities form part of the components of financial monitoring and control system. Every financial or accounting officer has a role to play regarding cash receipts and disbursement as well as towards financial records. Access to cash of the organization should be limited to few authorized personnel and duties performed by different accounting and finance officers should be separated. Cash should be controlled from the time it is r eceived from customers (at the point of sale) to the point it is deposited in the bank. Point of sales terminals or cash registers need to be used. This is because point of sales terminals and cash registers allow for monitoring cash inflow. Second, financial records are components of monitoring and controlling finances. All expenses and revenue (income) transactions are recorded in general ledger. General ledgers form the foundation for generating reports and financial statements of each project. Revenue, cost and managerial accounting are used for internal purposes for planning, monitoring and controlling organization’s monies. Financial records are evidences that financial transactions took place. Financial records assist project managers to determine how much they have spent, how much they have and how much they need to spent in future (Garman and Forgue, 2007). Gross et al (2005) asserts that well kept financial records enables managers and interested parties to review r esult of financial transactions. Cash shortages and excess will be easily identified and remedial measures taken to correct the situation when proper records are kept. List of all checks received must be recorded and forwarded to the appropriate department. Cashiers must prepare daily bank deposits. Records of all billings, payables, accruals, receivables, invoices, contracts and suppliers must be kept appropriately. Third, disbursements thresholds also form part of financial monitoring and control system. Procedures that allow payments of actual expenditures must be complied with accordingly. The organization must create ceilings above which payments shall only be made through checks. For example, an organization ensures that payments above $200 must be made using checks. Furthermore, large amounts of cash to be disbursed must be authorized and approved by people who are in higher positions. For example, any expenditure above $5,000 must only be approved and authorized by the proje ct director or managing director. The organization should properly utilize petty cash systems and payments should only be made upon verification of all supporting documents. Fourth, a budget forms a component of financial monitoring and control system. Budgets reflect financial goals and objectives of a project covering a specific period of time. During budgeting, technological trends, resource pricing, employee relations, raw materials cycles, inventory levels, financial needs and seasonality should be taken into considerations (Shim and Siegel 2008). Donovan (2005) explained that before a person or organization spend what they have earned, it is important to prepare budgets to be able to focus on priorities. Therefore, every

Earned Value Management in Multi-Projects and Programmes Essay

Earned Value Management in Multi-Projects and Programmes - Essay Example The paper will analyse earned value management by discussing three major objectives. The first will be describing the most important factors that should be considered when monitoring and controlling programs and multi-projects. The other will be to explain the advantages of implementing Earned value management for these programs and multi-projects. Finally yet importantly will be to establish the significance of earned value management data accuracy. There are five major factors that are considered by an earned value management technique. The first is organisation: It involves creating a work breakdown structure (WBS). The WBS is supposed to detail down all activities, to describe the task to be carried out, and the relationship it has to the products that can be delivered (Humphreys & Visitacion, 2009). In organisation, there is also the OBS, which refers to the organization breakdown structure. It is responsible for identifying the person in charge of the work effort described by the WBS. Both the WBS and the OBS define a control account. It means that at this level is where the key management control point is found. Planning, budgeting, and scheduling makes up the second group that an earned value management considers. An integrated schedule is what creates the contractors map to meet their objectives in a program of multi-project they are responsible for (Humphreys & Visitacion, 2009). The schedule has to be loaded with resources so that it can determine an effective budget as scheduled. The total budget created for every task, control account, or the whole project is known as the budget at complete (BAC). Management reserve (MR) is a backup of the total project amount that is incorporated to take care of the uncertainties that may occur, such as risks. Work should only begin when a formal work authorization has been offered. The disciplined approach clearly defines

Organazation design module Research Paper Example | Topics and Well Written Essays - 750 words - 1

Organazation design module - Research Paper Example This has not only improved the management, but it has also increased the revenue that has in turn created skilled labor based on special facts, skills and proficiency portrayed by the staffs being promoted as supported by fig. 1. Chipotle is one of the world fastest growing food companies with improved in revenue. Chipotle is a limited cafà © without a franchised system thereby allowing for its great synergy across the company. Synergies are gains that have effect when employees and departments systematize their work. From the data as of April 2011, Chipotle has about 1096 cafà © situated in key areas around the world including in the United States, France, London, Canada, Milan, Paris, Munich, and Ontario among others. In spite of its position around the world, Chipotle has achieved a lot in terms of business due to its organized management and organization in its operations that has been supported through implementing fig 5 order of organizational management. Chipotle has exceptional food tradition that provides the best ingredients in the fast food competitive market. Notably, specific Chipotle personalities have been key figures in its success. For instance, Steve Ells and Monty Moran-Chipotle Mexican Grill, CEO, have steadily improved the company’s income by investing in their staff by applying the principles defined in fig 2 below. Application of the same principles has made Chipotle to record increased revenues through increased investments and steady inflow of customers. Additionally, the company has the same employment prospect that give opportunity to all citizens in spite of their race, gender, country of origin, age, religion, or disabilities. Nonetheless, Ells and Moran boasts of tactical human resource management model that has helped Chipotle grow up from within. This is the model by which managers devise the workings of an HRM model to be dependable with each other and with other essentials of organizational design. Moreover, employees

Economic Indicators of The Great Depression

Economic Indicators of The Great Depression 1. Start of the Great Depression The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s.[1] It was the longest, most widespread, and deepest depression of the 20th century. In the 21st century, the Great Depression is commonly used as an example of how far the worlds economy can decline. The depression originated in the U.S., starting with the fall in stock prices that began around September 4, 1929 and became worldwide news with the stock market crash of October 29, 1929 (known as Black Tuesday). From there, it quickly spread to almost every country in the world. The Great Depression had devastating effects in virtually every country, rich and poor. Personal income, tax revenue, profits and prices dropped while international trade plunged by  ½ to â…”. Unemployment in the U.S. rose to 25% and in some countries rose as high as 33%. Cities all around the world were hit hard, especially those dependent on heavy industry. Construction was virtually halted in many countries. Farming and rural areas suffered as crop prices fell by approximately 60%. Facing plummeting demand with few alternate sources of jobs, areas dependent on primary sector industries such as cash cropping, mining and logging suffered the most. Some economies started to recover by the mid-1930s. However, in many countries the negative effects of the Great Depression lasted until the start of World War II. 2. Causes and economic indicators There were multiple causes for the first downturn in 1929. These include the structural weaknesses and specific events that turned it into a major depression and the manner in which the downturn spread from country to country. In relation to the 1929 downturn, historians emphasize structural factors like massive bank failures and the stock market crash. In contrast, economists (such as Barry Eichengreen, Milton Friedman and Peter Temin) point to monetary factors such as actions by the US Federal Reserve that contracted the money supply, as well as Britains decision to return to the Gold Standard at pre-World War I parities (US$4.86: £1). Recessions and business cycles are thought to be a normal part of living in a world of inexact balances between supply and demand. What turns a normal recession or ordinary business cycle into an actual depression is a subject of much debate and concern. Scholars have not agreed on the exact causes and their relative importance. Moreover, the search for causes is closely connected to the issue of avoiding future depressions. Thus, the personal political and policy viewpoints of scholars greatly color their analysis of historic events occurring eight decades ago. An even larger question is whether the Great Depression was primarily a failure on the part of free markets or, alternately, a failure of government efforts to regulate interest rates, curtail widespread bank failures, and control the money supply. Those who believe in a larger economic role for the state believe that it was primarily a failure of free markets, while those who believe in a smaller role for the state believe that it was primarily a failure of government that compounded the problem. Current theories may be broadly classified into two main points of view and several heterodox points of view. First, there are demand-driven theories, most importantly Keynesian economics, but also including those who point to the breakdown of international trade, and Institutional economists who point to under consumption and over-investment (causing an economic bubble), malfeasance by bankers and industrialists, or incompetence by government officials. The consensus among demand-driven theories is that a large-scale loss of confidence led to a sudden reduction in consumption and investment spending. Once panic and deflation set in, many people believed they could avoid further losses by keeping clear of the markets. Holding money became profitable as prices dropped lower and a given amount of money bought ever more goods, exacerbating the drop in demand. Secondly, there are the monetarists, who believe that the Great Depression started as an ordinary recession, but that significant policy mistakes by monetary authorities (especially the Federal Reserve), caused a shrinking of the money supply which greatly exacerbated the economic situation, causing a recession to descend into the Great Depression. Related to this explanation are those who point to debt deflation causing those who borrow to owe ever more in real terms. Lastly, there are various heterodox theories that downplay or reject the explanations of the Keynesians and monetarists. For example, some new classical macroeconomists have argued that various labor market policies imposed at the start caused the length and severity of the Great Depression. The Austrian school of economics focuses on the macroeconomic effects of money supply, and how central banking decisions can lead to over-investment (economic bubble). The Marxist critique of political economy emphasizes the tendency of capitalism to create unbalanced accumulations of wealth, leading to over accumulations of capital and a repeating cycle of devaluations through economic crises. Table 1: Change in economic indicators 1929-32 USA Britain France Germany Industrial production −46% −23 −24 −41 Wholesale prices −32% −33 −34 −29 Foreign trade −70% −60 −54 −61 Unemployment +607% +129 +214 +232 3. Breakdown of international trade Many economists have argued that the sharp decline in international trade after 1930 helped to worsen the depression, especially for countries significantly dependent on foreign trade. Most historians and economists partly blame the American Smoot-Hawley Tariff Act (enacted June 17, 1930) for worsening the depression by seriously reducing international trade and causing retaliatory tariffs in other countries. While foreign trade was a small part of overall economic activity in the U.S. and was concentrated in a few businesses like farming, it was a much larger factor in many other countries. The average ad valorem rate of duties on dutiable imports for 1921-1925 was 25.9% but under the new tariff it jumped to 50% in 1931-1935. In dollar terms, American exports declined from about $5.2 billion in 1929 to $1.7 billion in 1933; but prices also fell, so the physical volume of exports only fell by half. Hardest hit were farm commodities such as wheat, cotton, tobacco, and lumber. According to this theory, the collapse of farm exports caused many American farmers to default on their loans, leading to the bank runs on small rural banks that characterized the early years of the Great Depression. 4. Debt deflation Irving Fisher argued that the predominant factor leading to the Great Depression was over-indebtedness and deflation. Fisher tied loose credit to over-indebtedness, which fueled speculation and asset bubbles. He then outlined 9 factors interacting with one another under conditions of debt and deflation to create the mechanics of boom to bust. The chain of events proceeded as follows: Debt liquidation and distress selling Contraction of the money supply as bank loans are paid off A fall in the level of asset prices A still greater fall in the net worth of business, precipitating bankruptcies A fall in profits A reduction in output, in trade and in employment. Pessimism and loss of confidence Hoarding of money A fall in nominal interest rates and a rise in deflation adjusted interest rates. During the Crash of 1929 preceding the Great Depression, margin requirements were only 10%. Brokerage firms, in other words, would lend $9 for every $1 an investor had deposited. When the market fell, brokers called in these loans, which could not be paid back. Banks began to fail as debtors defaulted on debt and depositors attempted to withdraw their deposits en masse, triggering multiple bank runs. Government guarantees and Federal Reserve banking regulations to prevent such panics were ineffective or not used. Bank failures led to the loss of billions of dollars in assets. Outstanding debts became heavier, because prices and incomes fell by 20-50% but the debts remained at the same dollar amount. After the panic of 1929, and during the first 10 months of 1930, 744 US banks failed. (In all, 9,000 banks failed during the 1930s). By April 1933, around $7 billion in deposits had been frozen in failed banks or those left unlicensed after the March Bank Holiday. Bank failures snowballed as desperate bankers called in loans which the borrowers did not have time or money to repay. With future profits looking poor, capital investment and construction slowed or completely ceased. In the face of bad loans and worsening future prospects, the surviving banks became even more conservative in their lending. Banks built up their capital reserves and made fewer loans, which intensified deflationary pressures. A vicious cycle developed and the downward spiral accelerated. The liquidation of debt could not keep up with the fall of prices which it caused. The mass effect of the stampede to liquidate increased the value of each dollar owed, relative to the value of declining asset holdings. The very effort of individuals to lessen their burden of debt effectively increased it. Paradoxically, the more the debtors paid, the more they owed. This self-aggravating process turned a 1930 recession into a 1933 great depression. 5 Keynesian British economist John Maynard Keynes argued in General Theory of Employment Interest and Money that lower aggregate expenditures in the economy contributed to a massive decline in income and to employment that was well below the average. In such a situation, the economy reached equilibrium at low levels of economic activity and high unemployment. Keynes basic idea was simple: to keep people fully employed, governments have to run deficits when the economy is slowing, as the private sector would not invest enough to keep production at the normal level and bring the economy out of recession. Keynesian economists called on governments during times of economic crisis to pick up the slack by increasing government spending and/or cutting taxes. As the Depression wore on, Franklin D. Roosevelt tried public works, farm subsidies, and other devices to restart the economy, but never completely gave up trying to balance the budget. According to the Keynesians, this improved the economy, but Roosevelt never spent enough to bring the economy out of recession until the start of World War II. 5.1 Monetarist Monetarists, including Milton Friedman and current Federal Reserve System chairman Ben Bernanke, argue that the Great Depression was mainly caused by monetary contraction, the consequence of poor policymaking by the American Federal Reserve System and continued crisis in the banking system. In this view, the Federal Reserve, by not acting, allowed the money supply as measured by the M2 to shrink by one-third from 1929-1933, thereby transforming a normal recession into the Great Depression. Friedman argued that the downward turn in the economy, starting with the stock market crash, would have been just another recession. However, the Federal Reserve allowed some large public bank failures particularly that of the New York Bank of the United States which produced panic and widespread runs on local banks, and the Federal Reserve sat idly by while banks collapsed. He claimed that, if the Fed had provided emergency lending to these key banks, or simply bought government bonds on the ope n market to provide liquidity and increase the quantity of money after the key banks fell, all the rest of the banks would not have fallen after the large ones did, and the money supply would not have fallen as far and as fast as it did. With significantly less money to go around, businessmen could not get new loans and could not even get their old loans renewed, forcing many to stop investing. This interpretation blames the Federal Reserve for inaction, especially the New York branch. One reason why the Federal Reserve did not act to limit the decline of the money supply was regulation. At that time, the amount of credit the Federal Reserve could issue was limited by the Federal Reserve Act, which required 40% gold backing of Federal Reserve Notes issued. By the late 1920s, the Federal Reserve had almost hit the limit of allowable credit that could be backed by the gold in its possession. This credit was in the form of Federal Reserve demand notes. A promise of gold is not as good as gold in the hand, particularly when they only had enough gold to cover 40% of the Federal Reserve Notes outstanding. During the bank panics a portion of those demand notes were redeemed for Federal Reserve gold. Since the Federal Reserve had hit its limit on allowable credit, any reduction in gold in its vaults had to be accompanied by a greater reduction in credit. On April 5, 1933, President Roosevelt signed Executive Order 6102 making the private ownership of gold certificates, coi ns and bullion illegal, reducing the pressure on Federal Reserve gold. 5.2 New classical approach Recent work from a neoclassical perspective focuses on the decline in productivity that caused the initial decline in output and a prolonged recovery due to policies that affected the labor market. This work, collected by Kehoe and Prescott, decomposes the economic decline into a decline in the labor force, capital stock, and the productivity with which these inputs are used. This study suggests that theories of the Great Depression have to explain an initial severe decline but rapid recovery in productivity, relatively little change in the capital stock, and a prolonged depression in the labor force. This analysis rejects theories that focus on the role of savings and posit a decline in the capital stock. 5.3 Austrian School Another explanation comes from the Austrian School of economics. Theorists of the Austrian School who wrote about the Depression include Austrian economist Friedrich Hayek and American economist Murray Rothbard, who wrote Americas Great Depression (1963). In their view and like the monetarists, the Federal Reserve, which was created in 1913, shoulders much of the blame; but in opposition to the monetarists, they argue that the key cause of the Depression was the expansion of the money supply in the 1920s that led to an unsustainable credit-driven boom. In the Austrian view it was this inflation of the money supply that led to an unsustainable boom in both asset prices (stocks and bonds) and capital goods. By the time the Fed belatedly tightened in 1928, it was far too late and, in the Austrian view, a significant economic contraction was inevitable. According to the Austrians, the artificial interference in the economy was a disaster prior to the Depression, and government efforts to prop up the economy after the crash of 1929 only made things worse. According to Rothbard, government intervention delayed the markets adjustment and made the road to complete recovery more difficult. 5.4 Marxist Marx saw recession and depression as unavoidable under free-market capitalism as there are no restrictions on accumulations of capital other than the market itself. In the Marxist view, capitalism tends to create unbalanced accumulations of wealth, leading to over-accumulations of capital which inevitably lead to a crisis. This especially sharp bust is a regular feature of the boom and bust pattern of what Marxists term chaotic capitalist development. It is a tenet of many Marxists groupings that such crises are inevitable and will be increasingly severe until the contradictions inherent in the mismatch between the mode of production and the development of productive forces reach the final point of failure, at which point, the crisis period encourages intensified class conflict and forces societal change 6. Inequality Two economists of the 1920s, Waddill Catchings and William Trufant Foster, popularized a theory that influenced many policy makers, including Herbert Hoover, Henry A. Wallace, Paul Douglas, and Marriner Eccles. It held the economy produced more than it consumed, because the consumers did not have enough income. Thus the unequal distribution of wealth throughout the 1920s caused the Great Depression. According to this view, the root cause of the Great Depression was a global over-investment in heavy industry capacity compared to wages and earnings from independent businesses, such as farms. The solution was the government must pump money into consumers pockets. That is, it must redistribute purchasing power, maintain the industrial base, but re-inflate prices and wages to force as much of the inflationary increase in purchasing power into consumer spending. The economy was overbuilt, and new factories were not needed. Foster and Catchings recommended federal and state governments start large construction projects, a program followed by Hoover and Roosevelt. 7. Turning point and recovery Various countries around the world started to recover from the Great Depression at different times. In most countries of the world, recovery from the Great Depression began in 1933. In the U.S., recovery began in the spring of 1933. However, the U.S. did not return to 1929 GNP for over a decade and still had an unemployment rate of about 15% in 1940, albeit down from the high of 25% in 1933. There is no consensus among economists regarding the motive force for the U.S. economic expansion that continued through most of the Roosevelt years (and the 1937 recession that interrupted it). The common view among mainstream economists is that Roosevelts New Deal policies either caused or accelerated the recovery, although his policies were never aggressive enough to bring the economy completely out of recession. Some economists have also called attention to the positive effects from expectations of reflation and rising nominal interest rates that Roosevelts words and actions portended. However, opposition from the new Conservative Coalition caused a rollback of the New Deal policies in early 1937, which caused a setback in the recovery. Picture 3: The overall course of the Depression in the United States, as reflected in per-capita GDP (average income per person) shown in constant year 2000 dollars, plus some of the key events of the period. According to Christina Romer, the money supply growth caused by huge international gold inflows was a crucial source of the recovery of the United States economy, and that the economy showed little sign of self-correction. The gold inflows were partly due to devaluation of the U.S. dollar and partly due to deterioration of the political situation in Europe. In their book, A Monetary History of the United States, Milton Friedman and Anna J. Schwartz also attributed the recovery to monetary factors, and contended that it was much slowed by poor management of money by the Federal Reserve System. Current Chairman of the Federal Reserve Ben Bernanke agrees that monetary factors played important roles both in the worldwide economic decline and eventual recovery. Bernanke, also sees a strong role for institutional factors, particularly the rebuilding and restructuring of the financial system, and points out that the Depression needs to be examined in international perspective. Economists Ha rold L. Cole and Lee E. Ohanian, believe that the economy should have returned to normal after four years of depression except for continued depressing influences, and point the finger to the lack of downward flexibility in prices and wages, encouraged by Roosevelt Administration policies such as the National Industrial Recovery Act. 8. Gold standard Economic studies have indicated that just as the downturn was spread worldwide by the rigidities of the Gold Standard, it was suspending gold convertibility (or devaluing the currency in gold terms) that did most to make recovery possible. What policies countries followed after casting off the gold standard, and what results followed varied widely. Every major currency left the gold standard during the Great Depression. Great Britain was the first to do so. Facing speculative attacks on the pound and depleting gold reserves, in September 1931 the Bank of England ceased exchanging pound notes for gold and the pound was floated on foreign exchange markets. Great Britain, Japan, and the Scandinavian countries left the gold standard in 1931. Other countries, such as Italy and the U.S., remained on the gold standard into 1932 or 1933, while a few countries in the so-called gold bloc, led by France and including Poland, Belgium and Switzerland, stayed on the standard until 1935-1936. According to later analysis, the earliness with which a country left the gold standard reliably predicted its economic recovery. For example, Great Britain and Scandinavia, which left the gold standard in 1931, recovered much earlier than France and Belgium, which remained on gold much longer. Countries such as China, which had a silver standard, almost avoided the depression entirely. The connection between leaving the gold standard as a strong predictor of that countrys severity of its depression and the length of time of its recovery has been shown to be consistent for dozens of countries, including developing countries. This partly explains why the experience and length of the depression differed between national economies. 9. World War II and recovery The common view among economic historians is that the Great Depression ended with the advent of World War II. Many economists believe that government spending on the war caused or at least accelerated recovery from the Great Depression. However, some consider that it did not play a very large role in the recovery, although it did help in reducing unemployment. The massive rearmament policies leading up to World War II helped stimulate the economies of Europe in 1937-39. By 1937, unemployment in Britain had fallen to 1.5 million. The mobilization of manpower following the outbreak of war in 1939 finally ended unemployment. Americas entry into the war in 1941 finally eliminated the last effects from the Great Depression and brought the unemployment rate down below 10%. In the U.S., massive war spending doubled economic growth rates, either masking the effects of the Depression or essentially ending the Depression. Businessmen ignored the mounting national debt and heavy new taxes, redoubling their efforts for greater output to take advantage of generous government contracts. Picture 5: A female factory worker in 1942, Fort Worth, Texas. Women entered the workforce as men were drafted into the armed forces. 10. Effects The majority of countries set up relief programs, and most underwent some sort of political upheaval, pushing them to the left or right. In some states, the desperate citizens turned toward nationalist demagogues—the most infamous being Adolf Hitler—setting the stage for World War II in 1939. Canada Harshly affected by both the global economic downturn and the Dust Bowl, Canadian industrial production had fallen to only 58% of the 1929 level by 1932, the second lowest level in the world after the United States, and well behind nations such as Britain, which saw it fall only to 83% of the 1929 level. Total national income fell to 56% of the 1929 level, again worse than any nation apart from the United States. Unemployment reached 27% at the depth of the Depression in 1933. During the 1930s, Canada employed a highly restrictive immigration policy. France The Depression began to affect France around 1931. Frances relatively high degree of self-sufficiency meant the damage was considerably less than in nations like Germany. However, hardship and unemployment were high enough to lead to rioting and the rise of the socialist Popular Front. Germany Germanys Weimar Republic was hit hard by the depression, as American loans to help rebuild the German economy now stopped. Unemployment soared, especially in larger cities, and the political system veered toward extremism. The unemployment rate reached nearly 30% in 1932. Repayment of the war reparations due by Germany were suspended in 1932 following the Lausanne Conference of 1932. By that time, Germany had repaid â…› of the reparations. Hitlers Nazi Party came to power in January 1933. Japan The Great Depression did not strongly affect Japan. The Japanese economy shrank by 8% during 1929-31. However, Japans Finance Minister Takahashi Korekiyo was the first to implement what have come to be identified as Keynesian economic policies: first, by large fiscal stimulus involving deficit spending; and second, by devaluing the currency. Takahashi used the Bank of Japan to sterilize the deficit spending and minimize resulting inflationary pressures. Econometric studies have identified the fiscal stimulus as especially effective. The devaluation of the currency had an immediate effect. Japanese textiles began to displace British textiles in export markets. The deficit spending, however proved to be most profound. The deficit spending went into the purchase of munitions for the armed forces. By 1933, Japan was already out of the depression. By 1934, Takahashi realized that the economy was in danger of overheating, and to avoid inflation, moved to reduce the deficit spending that went towards armaments and munitions. This resulted in a strong and swift negative reaction from nationalists, especially those in the Army, culminating in his assassination in the course of the February 26 Incident. This had a chilling effect on all civilian bureaucrats in the Japanese government. From 1934, the militarys dominance of the government continued to grow. Instead of reducing deficit spending, the government introduced price controls and rationing schemes that reduced, but did not eliminate inflation, which would remain a problem until the end of World War II. The deficit spending had a transformative effect on Japan. Japans industrial production doubled during the 1930s. Further, in 1929 the list of the largest firms in Japan was dominated by light industries, especially textile companies (many of Japans automakers, like Toyota, have their roots in the textile industry). By 1940 light industry had been displaced by heavy industry as the largest firms inside the Japanese economy. Soviet Union Having removed itself from the capitalist world system both by choice and as a result of efforts of the capitalist powers to isolate it, the Great Depression had little effect on the Soviet Union. A Soviet trade agency in New York advertised 6,000 positions and received more than 100,000 applications. Its apparent immunity to the Great Depression seemed to validate the theory of Marxism and contributed to Socialist and Communist agitation in affected nations. United Kingdom The effects on the northern industrial areas of Britain were immediate and devastating, as demand for traditional industrial products collapsed. By the end of 1930 unemployment had more than doubled from 1 million to 2.5 million (20% of the insured workforce), and exports had fallen in value by 50%. In 1933, 30% of Glaswegians were unemployed due to the severe decline in heavy industry. In some towns and cities in the north east, unemployment reached as high as 70% as ship production fell 90%. The National Hunger March of September-October 1932 was the largest of a series of hunger marches in Britain in the 1920s and 1930s. About 200,000 unemployed men were sent to the work camps, which continued in operation until 1939. In the less industrial Midlands and South of England, the effects were short-lived and the later 1930s were a prosperous time. Growth in modern manufacture of electrical goods and a boom in the motor car industry was helped by a growing southern population and an expanding middle class. Agriculture also saw a boom during this period. United States President Herbert Hoover started numerous programs, all of which failed to reverse the downturn. In June 1930 Congress approved the Smoot-Hawley Tariff Act which raised tariffs on thousands of imported items. The intent of the Act was to encourage the purchase of American-made products by increasing the cost of imported goods, while raising revenue for the federal government and protecting farmers. However, other nations increased tariffs on American-made goods in retaliation, reducing international trade, and worsening the Depression. In 1931 Hoover urged the major banks in the country to form a consortium known as the National Credit Corporation (NCC). By 1932, unemployment had reached 23.6%, and it peaked in early 1933 at 25%, a drought persisted in the agricultural heartland, businesses and families defaulted on record numbers of loans, and more than 5,000 banks had failed. Hundreds of thousands of Americans found themselves homeless and they began congregating in the numerous Ho overvilles that had begun to appear across the country. In response, President Hoover and Congress approved the Federal Home Loan Bank Act, to spur new home construction, and reduce foreclosures. The final attempt of the Hoover Administration to stimulate the economy was the passage of the Emergency Relief and Construction Act (ERA) which included funds for public works programs such as dams and the creation of the Reconstruction Finance Corporation (RFC) in 1932. The RFCs initial goal was to provide government-secured loans to financial institutions, railroads and farmers. Quarter by quarter the economy went downhill, as prices, profits and employment fell, leading to the political realignment in 1932 that brought to power Franklin Delano Roosevelt. Shortly after President Roosevelt was inaugurated in 1933, drought and erosion combined to cause the Dust Bowl, shifting hundreds of thousands of displaced persons off their farms in the Midwest. From his inauguration onward, Roosevelt argued that restructuring of the economy would be needed to prevent another depression or avoid prolonging the current one. New Deal programs sought to stimulate demand and provide work and relief for the impoverished through increased government spending and the institution of financial reforms. The Securities Act of 1933 comprehensively regulated the securities industry. This was followed by the Securities Exchange Act of 1934 which created the Securities and Exchange Commission. Though amended, key provisions of both Acts are still in force. Early changes by the Roosevelt administration included: Instituting regulations to fight deflationary cut-throat competition through the NRA. Setting minimum prices and wages, labor standards, and competitive conditions in all industries through the NRA. Encouraging unions that would raise wages, to increase the purchasing power of the working class. Cutting farm production to raise prices th