ORGANIZATION: THE FRAMEWORK OF SOCIETY PART 3 Economic crisis in the developed world The western economies went in severe recession in 1929. In a market economy while wages are fully consumed the same is not true of profits. Profits require fresh investments provided workers have rising wages or new employment. Due to income inequality .which kept on growing in early twentieth century the workers wages were inadequate to buy products from new investment. What was needed was transfer of wealth to workers . However at this time world wars took place. This immediately increased production of armaments in new factories by government leading to new jobs and money to overcome the recession. War led to destruction of wealth of large capitalist and again reduced wealth and income gap. Post war Keynesian economics was adopted where govt taxes were used to create infrastructure projects creating new employment and purchasing power in workers.Govt investment had a multiplier effect in ...