Government policy Great Depression in the Netherlands

hendrik colijn, prime minister during of great depression.

an important difference between great depression in netherlands , situation in other affected countries role of government. until late 1930s dutch government, headed 1933 1939 anti-revolutionary statesman hendrik colijn, described non-interventionist , internationalist. economic policy focussed on keeping balanced budget government spending , income. while government policy typical contemporary european , american governments, applied strictly in netherlands until late stages of depression.

in first years of depression government policy limited supporting heavily affected sectors of economy. in 1931 corn law issued (dutch: tarwewet), forced importers of foreign corn add quantity of more expensive dutch corn before sale, promote troubled dutch agriculture. starting in 1932 series of crisis laws issued further subsidise agricultural , shipping sectors, , enable measure of government control on import, export , capital flows. 1934 onward dutch government experimented labour fund (dutch: werkfonds) provide subsidised workplaces unemployed, on large scale public works (comparable new deal in united states).

the scale of these government interventions small change situation. while government intervention on economy limited, dutch government did lower spending (including income support poor , unemployed) , raised taxes keep budget balanced. effect of while poverty increased, government support poor decreased. such government policy heavily criticised keynesian school of economics, @ time still in infancy. keynesianism stresses governments should play active role in promoting public , private consumption during economic depression, balanced government budget should aimed @ on long run.

the dutch government reluctant intervene in trade policy. while industrialised countries increased trade restrictions stages of great depression onward, dutch government still hoped international cooperation solve economic crisis. after failed 1933 world economic conference, when became clear countries had solve economic problems themselves, did netherlands increase trade barriers more significant level. described earlier netherlands still unwilling drop gold standard, , instead joined agreement between last european countries maintain gold standard. subjected dutch economy fierce foreign competition, forcing dutch firms cut costs in order survive situation. in process wages , employment cut, , depression deepened. while economic situation gradually improved in industrialised countries around 1933-1934, great depression still getting worse in netherlands.