8. The Interwar Period

4th ESOMaira Gil Camarón

What problems led to a new world was in just 20 years?

Global economic imbalancesUSA: the world’s leading economic power European countries were indebted to the United States as a result of the war loansEurope: the WW1 had impoverished the countries of Europe and had to cope with war loans and the devaluation of their currencies1929: Wall Street Crash (economic crisis) the entire global economy, which was linked to and dependent of USA, entered a period of economic depression unemployment and poverty led to a severe social crisisGERMANY was unable to pay the war reparations: inflation, drop in the value of the mark, a sharp rise in unemployment and a rapid decline in living standards surge in nationalism

The effects of the Russian RevolutionEconomic difficulties caused a serious social crisis.1919-1920: strikes in Britain, France, Germany (Spartacist Massacre), Italy… and the demonstrations were suppressed and trade union rights were limited unions, socialists and communist parties became stronger by reminding workers that the Russian Revolution had led proletariat to powerProletariat and bourgeoisie started to oppose to the democracy: ones because were dissatisfied with the repression of their rights, and others because feared a revolution

The crisis of democracies: the rise of totalitarian regimesEconomic crisis + social unrest

Countries with democratic and parliamentary tradition integrated the socialism through the universal suffrage and political coalitions (GB, France, Belgium…)

Countries with little parliamentary tradition: the liberal parties were powerless in the face of social unrest and ended up imposing authoritarian political systems which promised to combat the spread of socialist and communist ideas

The United States: from prosperity to crisis

The Roaring Twenties1918-1929: decade of prosperity (the Roaring Twenties) in which the American way of life became a model for the whole worldEconomic growth was based on a transformation of goods manufacturing processes Taylorism and Frodism helped increase productivity and reduce costs. The rise of the wages, advertising campaigns, hire purchase and bank loans paved the way for an era of mass consumptionThis prosperity was reflected in a huge stock market boom the profits from good business led to a rise in demand for shares, whose value rose steadily

Five causes of the boom

Isolationism different governments kept out of foreign affairs and limited foreign competition by imposing high import tariffs

Technology electrical, chemicals and film industries

Mass production automobile industry (Ford)Hire purchase borrowing increased the

amount of money available to spend and the demand for goods

Shares firms learned to raise money for expansion by selling shares of the Stock Exchange (what caused problems later)

The paradox of prosperity and the Wall Street Crash

Many people in the USA grew richer in the 1920s, problems:

Farmers borrowed money to acquire new land/machinery to increase the production they were producing too much food, so prices fell and small farmers grew poorer

Inequality was growing because wages grew much more slowly than profits; many people couldn’t afford the new consumer goods overproduction

Share prices had risen too high due to speculation: the prices were higher then their real value

Towards the end of the 1920s, these problems helped to slow down economic growth. Manufacturers were now making too many goods; they had to reduce production, so workers lost their jobs. People started to worry about the economy and in October 1929 share prices fell suddenly the Wall Street Crash created panic, so more and more people sold their shares (24 October 1929, the Black Thursday). Many investors were ruined and panic spread among the population and the bans were forced to close due to a lack of funds.By 1932, shares had lost over 85% of their value.

In few years the crisis affected many industries, trade an agriculture economic recession (the Great Depression) and unemployment in the whole world

Effects of the Depression Unemployment: 13 million people were out of work Industrial production dropped by 45% between 1929

and 1932 House-building fell by 80% between 1929 and 1932 The entire American Banking system reached the

brink of collapse From 1929 to 1932, 5,000 banks went out of

business Although many people went hungry, the number of

recorded deaths from starvation during the Depression was 110, although many other illnesses and deaths were probably related to a lack of nutrition

The New DealUS + European countries adopted measures to reduce the effects of the crisisF. D. Roosevelt introduce the New Deal, a series of political programmes based on the ideas of the economist Keynes who advocated state intervention in economy. The measures included:

Paying farmers to produce less so that food prices would rise

Making banks strongerBuilding infrastructure such as roads, bridges and dams

in order to provide employmentProviding free food through “soup kitchens”Introducing unemployment benefit and old age pensions

All these measures stabilised the banking system and reduce unemployment, but US economy did not recover completely until the previous moments of the WW2New Deal made the US government much more involved in the economy and some people criticised this

The crisis of democracy: fascism in Italy

Post-war Italy The peace agreements a major disappointment Political instability 5 governments in 3 years War: human and economic consequences crisis Social tensions: strikes… fear of a revolution

The rise of FascismBenito Mussolini: Fasci violent group that fought to stop the

rise of the labour movement 1921: the Fasci became the National Fascists Party with a

program based on building a strong state and a expansionist foreign policy

It were supported by the bourgeoisie, the Catholic Church and the king

1922: the Fascist Party achieved 22 deputies March on Rome the king gave Mussolini the control of the government

The main ideologies of Fascism1922-1924: Mussolini restricted freedom and persecuted his opponents1924: Fascist Party won the elections authoritarian regime where Mussolini had total power. The Parliament was replaced with the Chamber of FasciStrikes were banned and unions were replaced with cooperative unions. The fascists also controlled the economy, advocated a self-sufficient economy policy and supported private enterprises with military orders and heavy subsidiesThe state used the party to exercise strict control over societyMussolini promised the creation of an Italian Empire that would control the Mediterranean in a similar way to the ancient Roman Empire. He invaded Ethiopia in 1935 to expand the Italian colonies in the North Africa

Germany: the rise of NazismPost-War Germany

1918: Kaiser Wilhelm II abdicated Weimar Republic was founded. It was threatened by left-wing revolutionary movements (the Spartacist o communist uprising) and by several coup attempts by the extreme right (the Munich Putsch by the Nazis)

Germany had to accept the military defeat and the harsh peace terms imposed on them they considered the Treaty of Versailles humiliating: The treaty accused Germany of causing the war, robbed it of its territories, reduced its army and imposed heavy economic reparations

Economic crisis, poverty, unemployment

Adolf Hitler and the emergence of the Nazi PartyHitler was a demobilised soldier from the WW1 and he could not accept Germany’s defeat. In 1920 he joined the National Socialist Workers Party of Germany (NSDAP). They had their own flag, with the swastika, and their paramilitary groups: SA and SSHitler’s ideology: Mein Kampf disrespect for parliamentary democracy and hatred of Bolshevism. He advocated antisemitism, the superiority to the Aryan race and the need to build a great empire (Reich)To attract the working classes, Hitler used demagoguery: he promised jobs, the reduction of industrial profits and better wages. He blamed Jews, communists and democrats for the crisis in GermanyNazi militias opposed the Republic and were responsible for several revolts

Hitler’s rise to power1924-1929: improvement in economic 1929 crisis finished with this improvements: bankruptcies, factory closures, unemployment, social unrest… Much of the population began to support extremist parties: bourgeoisie, farmers and desperate workers were attracted by Nazi promisesNazi Party began to receive the support of industrials and financers, and received financial assistance 1932 they won 13 million voted. January 1933, President Hindenburg appointed Hitler as chancellorMarch 1933: new elections Nazi squads started a fire in the Reichstag (parliament) and blamed it on the communists the fire served as a pretext for Hitler to remove his opponents and demand full powers1934, after the death of Hindenburg, Hitler declared himself Fürer (leader) and Chancellor of the Third Reich

The Nazi regime: a totalitarian system

A totalitarian system1934: Individual freedoms and rights were abolished. The political parties and trade unions were dissolved. Only the NSDAP was allowed and all workers were forced to join the only trade union: the German Labour FrontPublic administration was purged the Gestapo was created, lead by Himmler. It was responsible for repressing opponents of the regime and controlling public opinion

The enforcement of Nazi ideologyAbsolute ideological unity Ministry of Public

Enlightenment and Propaganda (Goebbels) guaranteed a culture and fixed attitude based on racist and nationalist ideas. Science and culture were “nazified”, destroying intellectual freedom

Education of young people: the education system was politicised teachers were purged and censorship was introduced in classrooms and textbooks

Maintenance the racial purity of German society persecution and elimination of all minorities. The persecution of Jews was most prominent Nuremberg Laws prohibited interracial marriages and excluded Jews from German citizenship, were enacted in 1935 and, from 1938, Jews were forced to wear a Jewish identity badge

After 1933, concentration camps were created to imprison socialists, communists, democrats and, above all, Jews

Economic self-sufficiency and rearmamentThe Third Reich wanted a revival that would make Germany a world economic power and the idea of a war was inevitable militaristic and expansionist projectsEconomic self-sufficient (autarky) heavy industry (arms industry). And ambitious public works programme was carried out to solve unemployment (motorways and other infrastructure was created)

An Expansionist policyHitler wanted a new order in Europe under the domination of Germany. He needed a powerful army and he strengthened the army with the introduction of the military service and the creation of the Wehrmacht (army) and the Luftwaffe (air force) he wanted to conquest a “living space” (Lebensraum) in eastern Europe

The indoctrination of the populationIndoctrination Hitler YouthPropaganda and fear and the appeal of Hitler’s project, secured the support of the people.