The New Deal And Black Thursday

The New Deal and Black Thursday

Introduction

On October 24, 1924, a date known as “Black Thursday” there was a catastrophic fall of the New York Stock Exchange that would trigger one of the most serious and long economic crises in history. This crisis, which lengthened for a decade, produced global repercussions, leaving the world in a state of severe poverty. 

It is at this time when several authors, not alien to controversy, place the birth of the welfare state. In spite.

Developing

This proposal was mainly based on the Keynesian thesis, who defended the possibility of granting the State the necessary power to control the economy in times of crisis or recession by which it was called fiscal policy. Thus the State will become a state of services, which will be responsible for guaranteeing the production and affordability of minimum products and services to guarantee the well -being of citizens. This was called services or welfare status. These policies had as main objective to provide support for demand maintenance.

The welfare state could thus, adopting a more active role than the one that had traditionally been assigned, intervene to stop the economic crisis financing social rights, braking market forces and promoting the distribution of wealth. It was evident that the State, through public policies that respond to the demands of society, could serve to reinforce the capitalist system.

One of the most notorious examples on public policies wants to alleviate the effects of the crisis in the same country where the crisis had begun, in the United States.

Under the promise of adopting an interventionist policy to stop the hard economic recession, FD Roosevelt was elected president of the United States of America. During his term he adopted the so -called ‘New Deal’ a program through which the government was ablebe able to speed up the market. In addition, through this measure, retirements and unions were also regulated, and several employment programs were carried out. A often 

conclusion

The welfare state was born with the intention of dealing with the serious economic crisis overcoming the individualistic conception of more traditional liberalism and promoting a state intervention with the aim of obtaining full employment, constituting a solid social security system and regulating the distribution of therent in order to encourage consumption and end the crisis.

The main characteristic of the welfare state was to promote the intervention of the economy policy. The State is put to the market, either to regulate it or to produce by itself goods and services. The market will no longer have absolute power, but on the contrary will lose its autonomy and will be limited its activity by the State.