• WWI: A Century Later

    Economics: The Road to Depression

    The Great War created a seismic shift in the global balance of economic power—and paved the way to the Great Depression.

    The Great War was a financial catastrophe for Europe. For four years, the major European powers devoted some 50% of their GDP annually to fighting the war, only a fraction of which could be financed by taxes. Europe was left saddled with a gigantic overhang of public debt.

    European governments also came under pressure to expand the welfare state after the privations of the war years. Unable to raise taxes because of deep postwar social and political divisions at home, most of them (with the exception of Britain)...

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