Industrial production stagnated in the interwar period. Capacities installed in the immediate postwar years were never fully utilised and there was industrial unemployment even before the depression. In striking contrast with this there was a significant increase of agricultural production in Western countries and in the output of cash crops around the world. Grain production benefited from progressive mechanisation and the use of chemical fertilisers. In many Western countries agricultural productivity increased by leaps and bounds in this way and agricultural labour could be greatly reduced. The countries of the periphery where many crops were produced by smallholders did not experience such an increase in productivity. The increase in output was usually achieved by extending cultivation rather than intensifying it.
Wheat was overproduced in this way, as will be shown in detail in the subsequent section. A rising population would have consumed more wheat, but instead of increasing, the population of Western countries declined due to the demographic transition. The beginning of such a transition is heralded by a drop in death rates which is then followed by a decline in birth rates. The conditions for such a transition have not yet been fully explained by demographers, but empirical data show that in most Western European countries there was an almost parallel decline of birth rates from about 1900 to 1930. They were reduced by about 50 per cent from 30 to 15 per 1,000 in this period and more or less remained at that level in subsequent years. This reduction of population growth at a time of rising productivity of labour also