The great depression as a consequence of wwi. U. s economy prospered as did mass production. Over-production slowed growth/recovery, sinking prices of consumer goods. With defaults on loan repayments and u. s increase in interest rates, banks started to collapse; lenders called back their funds worsening the situation. Global trade shrunk to 1/3 of its pre-depression size. 4 million unemployed in the u. s, farming shrunk by 2/3 and industrial output by 1/2. 1933, newly elected fdr expanded the role of government in offering protectionism. Depression led to reconsideration of prevailing laissez-faire economy in favor of state interventionism: o. How does this lead to wwii: the non-economic side. Post-wwi, liberal democracies made room for mass movements and populist leaders, even dictators fear of russian ideology. In italy, fascists took power in 1922 in spite of their losses in the 1921 elections. In germany, a re-examination of wwi, harsh peace terms and french actions nurtured resentment o.