1. INTRODUCTION OF THE EUROPEAN AGRARIAN CRISES IN THE 1870s AND 1880s.
2. CONSEQUENCES IN SCANDINAVIAN COUNTRIES:
1. INTRODUCTION OF THE EUROPEAN AGRARIAN CRISES IN THE 1870s AND 1880s
The period in which these crises took place is known as LongDepression, and sometimes it has been considered to be economically more devastating than the Great Depression of 1929-1939. This period of downward trend in cyclical economics, which meant chronic unemployment and possible social unrest, took from 1873 until 1896, being contemporary with the Second Industrial Revolution.
This crisis in the agrarian sector was most notable in Western Europeand North America, but Britain is often considered the hardest hit by the Long Depression, since during this period Britain lost much of its large industrial lead over the economies of Continental Europe.
There are several causes to explain this period of crisis in the international framework. First of all, the amalgamation of industry, in the forms of larger corporations and mergers andalliances of separate firms had created inefficiencies and made some economies more unstable.
As a second cause, we find some technological advances along with monopolistic mass-production, that made some output greatly expanded and with lowered production costs. The consequence of this was that production often exceeded domestic demand.
Other causes are consequences of theemigration from Europe to America. This new people who emigrated to the New World took with them new and more efficient farming methods. Also, they had some advantages, like larger and more consolidated land, the land was more flat than in Europe, the fact that the climate was at least as fertile that in the Western Europe, the building of railways which facilitated the transportation of bulky goods fromthe interior to the coast and the increase in the number of steam ships that lowered transport costs by sea. All this made more profitable send large quantities of grain and with low cost to Europe.
In agriculture, large-scale imports of cheaper grain from America and poor harvests made European producer prices and incomes drive down and further constrained the whole demand among apopulation which was predominantly rural, except in United Kingdom, the Netherlands and some parts of Germany.
The effects of the Depression were that practically every industry suffered after 1873 from lengthy periods of low and falling profit rates and price deflation. The crisis also made some countries to abandon the free trade, like Germany in 1879 and France in 1881.A final consequence ofthe crisis is that as domestic demand and export opportunities became limited, some business and government leaders saw the solution in overseas colonies, that would provide export markets free of foreign competition and would supply cheap raw materials, which caused the phenomenon of the New Imperialism.
2. CONSEQUENCES IN SCANDINAVIAN COUNTRIES
The Long Depressiondid not affect every country in the same way. Denmark is an example of those countries which were not very hit by the agrarian crisis, since they managed to adapt to the circumstances. In the period in which the Depression took place, the labour productivity of Danish agriculture at the time compared favourably with that of other rich nations with the exemption of the UK. In this time, Denmarkhad already become a rich nation despite the agrarian dominance.
The growing export orientation of Danish agriculture from the end of 1880s made possible an expansion in transport, commodity trade and other services.
There are different linkages between agrarian change and economic development:
The first linkage that we can distinguish it is that Danish Agricultural Output...