India in the World Economy 1900 to 1935 : The inter-War Depression and Britain’s Demise as World Capitalist leader

The inter-war Great Depression, one of the most interesting periods in the history of modern capitalism, saw an effective transfer of global power from Britain to the USA. Apart from plunging the capitalist world into a deflationary spiral of falling output, employment and trade, this period also saw the demise of Britain as the world capitalist leader and the passing of the mantle to a reluctant and unprepared United States of America. The impact of the Depression is widely recognised to have been more severe and more prolonged in USA than in Britain, so the fact of being caught up in the Depression alone could not be the main reason for Britain’s inability to maintain any longer its long and undisputed position as the leader of the world capitalist system.