 Hello and welcome to NewsClick. You are watching Present, Past and the Future. No conversation or thought process these days is ever complete without the mention of COVID-19 or coronavirus. The crisis has many similarities with war. In fact, most people call it the war against the virus. There are of course many similarities between war and this present challenge. Like in war, governments now, especially in India, are seeking to mobilize people to participate in various programs which they are announcing. Like in war, workplaces are shut. Much of the workforce will be relocated because when businesses open, many will not be able to come back to business and as a result the workforce will have to find jobs elsewhere. Schools, colleges and every other educational institution is shut. When they reopen, we do not know in what form they will reopen, what will be the kind of educational activity in those. But most importantly, like during war, fear is the most important and universal sentiment at the people across all demographic groups. Even in health workers, fear is paramount whether they are doctors or whether they are nurses or various other paramedics. Whenever they approach a patient, they not only are worried about the patient's health but also about their well-being. We really cannot ever halt them for this sentiment. At the moment everyone, governments downward, is willing to make their future unsure only to fight the particular crisis at the moment. As they say in Hindi, jahan hai to jahan hai. If we survive this moment, only then can we start looking at the future but then should we not look at the past and also the future simultaneously while coping with the present. Everybody is talking about an impending economic crisis but no one really has any clear idea as to how to tackle the situation. Some weeks ago, Gita Gopinath of the International Monetary Fund remarked that the great lockdown has resulted in unprecedented collapse of activity. None of us actually know what the future holds and she was candid enough to say that global growth is going to plummet to minus three. She added, this makes the great lockdown the worst recession since the Great Depression. She is not the only one to talk about the Great Depression. Google the term along with COVID-19 or coronavirus and you will get lakhs of hits. But what is the Great Depression? Which were the countries that were so badly affected? And most importantly, how is depression different from recession? Most of us know the basics that it lasted almost a decade starting from 1929 and continuing till 1939, the end of the 1930s. But what precipitated it and what was the real impact on the people and the countries and their economies? How did the world come out of it? And most importantly, how did the Great Depression affect the lives of the Indians and the anti-colonial or the freedom struggle? These are some of the very important questions which need to be understood. The term Great Depression was first coined to describe the Wall Street or the stock exchange crash of October 1929 in the United States of America. In the decade that followed, hundreds of millions of people were rendered jobless. Initially, it was widely believed that only America was affected, but now it is fairly well known that almost every country rich or poor was also affected. The depression began in the United States of America after what is called the Roaring 1920s. That is the time when the American economy soared. The stock market became a speculative playground in which everyone, right from the millionaire tycoons to just the ordinary person, the janitor, the watchman, everyone was investing money, either their own or on borrowed money they were investing. That was an era when the average American was buying household products, commodities. Of course, on credit, businesses made huge profits. There are estimates that they made as much as 65% profits, but the average workers wages did not rise correspondingly. Many calculate that was rising just about 8%. Consequently, the market expanded and the indices reached new levels. There were apprehensions that there is going to be a crash. And then the imbalances in the US economy became evident, production declined, retrenchment began and wages of those who managed to cling on to the jobs dropped dramatically. The price of stock had been artificially raised all through these years, the 1920s, the Roaring 20s, and then came the crash. Eventually, panic selling set in on the 24th of October, 1929, as many as 12.9 million shares were sold that day, which came to be known as the Black Friday. After this came Black Tuesday on October 29, another 16 million shares were traded on that day. Millions of shares had become worthless papers within minutes. Those who invested, either as we had said, of their own money or on borrowed money or what is called margin money became poppers. The American economy went into a tailspin. Other countries also were not spared. Although there were national variations, but across Europe, every nation was also affected. The worst affected countries were Poland, Germany, and Austria. Here, every fifth person became unemployed. Industrial output fell by as much as 40%. By 1932, value of European trade fell to one third of its value, of that what was in 1929. The Great Depression also impacted political developments in Europe and in other countries. Economic stagnation provided space to right-wing political parties to come to power in several countries. Authoritarian regimes were established in many of these European countries. The most important, of course, being the Nazi government in Germany. In the United States too, Franklin D. Roosevelt came to power during the Depression years. He was a populist and had little regard for the media. And he insisted on having a direct relationship with the people circumventing the mainstream media. He set up and started these popular radio shows which used to be called Fireside Chats. But did the Great Depression have any impact on India and Indians too? After all, the 1920s and 30s were not the decades of great economic activity in India. Very peculiarly, when we look at books, most books of modern history, modern Indian history, we do not find much mention of the Great Depression. The 1920s and 30s, especially the 1930s, were also great and very important years of political activity. So the historians, unless they were economic historians, had too much on their plate. There is no doubt that the Great Depression precipitated the end of the empire in India. The farmers were stiff because farm prices came down heavily, but their rents and other costs did not come down in any way. As a result of which, their angered needed a vehicle for articulation. And the nationalist leaders, the national movement, the freedom struggle, provided such a space and platform. We must remember 1929 when the Great Depression started with the October Wall Street Crash. That is also the time when the National Movement in India is beginning to revive. We know about the 1929 call for Pune Suraj at the Lahore Congress. We also know that in early 1930, Mahatma Gandhi gave the call for the Salt March or what came to be known as the Dandi March, which challenged the might of the British Empire. That is the backdrop to which the Great Depression started having economic impact in India. By that time, commercialized segment of the Indian rural sector, Jude, for instance, had to bear the brunt of the Great Depression. As a consequence, there was a very significant rise in rural indebtedness. Agriculture debt between 1929 and 1939 went up by almost 80 percent. By the end of the Great Depression, Indian farmers were spending twice the amount that they were doing previously in paying off their loans. Part of the problem stemmed from British encouragement to farmers to shift from traditional crops to cash crops. And when the demand for the cash crops collapsed in their British markets, the farmers had no place to sell and Indians were prohibited from buying these cash crops. When the price of cotton fell, farmers were left with huge amounts of unsold stock. Moreover, the imperial government adopted a protective trade policy. This helped the British economy but did not do the Indian farmers or the Indian economy any good. Because the British economy was not doing very well during the Great Depression, export and import from and to India also came down very heavily. As a result of which the development of railways suffered very badly. This to a great extent, it also reduced the social expansion, the networking of India and general overall development also suffered. The Great Depression also resulted in the British increasing tax on various things, most importantly on salt and this angered the people and was one of the primary reasons as to why Gandhi found so much of support. For his salt march, the Great Depression angered Indian people and this is evident in the fact that when the first elections were held after the 1935 Government of India Act, that is the first elections held after that there was a large turnout and people came out to vote. Within two years of the onset of the Great Depression in India, the Indian farmers had been financially crippled. What could the farmer have done at that time but to sell family treasure and which was nothing but pure gold, physical gold. By 1931, almost 1600 ounces or 46 kilograms of gold was being shipped from Mumbai to England every day to meet their domestic requirements. This gold which was siphoned off from India was also loosely called Distress Gold. Taking credit for this, the viceroy of that time, Lord Billington said, for the first time in history, going to economic situations, Indians are this gorging gold we have sent to London in the past two or three months. 20, 250, 100,000 or 2.5 crore sterling and I hope this process will continue. In 1931, the British government abandoned the gold standard and linked rupee to the sterling. The Indians from the industry as well as the political leadership opposed this. At the round table conference Mahatma Gandhi questioned the British government about their currency policy. No one had any answer to this. The Great Depression and the debate and the anger among the people at that particular time however had one positive development for the Indian economy. This was because of the pressure of the nationalist leaders that in 1935 the Reserve Bank of India was set up after a law making it possible for the formation of such a body was passed in 1934 by the British parliament. We must keep in mind that the Great Depression was not triggered by just economic factors but because of the deep economic impact of the First World War. It ended because of the onset of the Second World War but we shall not talk about the end of the Great Depression at that time because at the moment we just seem to be sterling into an economic crisis. We rarely do not know what will be the dimensions of it. Depressions are often also triggered by diseases which destroy not just a part of the humanity but also large sections of the economy. Recession in contrast for most economists who believe in the capitalist system of economy. They believe that recession is unnecessary, evil. It is basically to cull out those who are not doing very well so that there can be reallocation of resources and manpower. Depression is much more longer and a much more serious and complex phenomenon. The big question now is that are we heading into a prolonged recession or are we heading into a much longer depression? Is the government of India doing sufficiently enough to ward off impending economic crisis? Indians in any case have been prisoners of an economic slowdown for several years and there have been several measures but really not really has happened to you know to elevate the problems of the people. The Indians are currently hostage to fear, irrationality, superstition and myths. The last that we can afford at this stage is another great depression. For that however we must prepare for the future. The question is, is that being done? Thank you.