The Global Great Depression: Impact and Responses

1. THE WORLD OF THE 1930s:RESPONSES TO THE GREAT DEPRESSION CHAPTER 34b

2. THE GLOBAL GREAT DEPRESSION • The Impact of the Great Depression • Intensified the decline in globalization • Intensified the shakiness of Western democracy • Authoritarian regimes arose in Europe, Asia, and Latin America • Global framework established by Western nations seemed to collapse • Immediate Causes • The Kreditanstalt in Austria, German banks failed • Former Central Powers unable to pay reparations to Allies • Allies unable to repay loans to the USA • Crash of the US Stock Market in 1929 • There were numerous economic problems in the aftermath of World War I • In order to repay the US, Allies needed German reparations • Germany suffered from massive inflation, which was difficult to control • Britain, dependent on exports, found a global market with much stiffer competition. • Agricultural overproduction sent prices for food products plummeting in all nations. • In Europe, falling farm prices made it more difficult to repay war loans. • Economic recovery in Germany and France in the 1920s was fragile. • Overproduction was a problem in dependent countries of the world trade system. • Inability of colonies, dependent regions to purchase European-manufactured goods • Weakened demand for Western goods • Nationalism frustrated international attempts to deal with these problems. • Tariffs barriers, which further reduced trade, were erected in many nations.

3. THE GREAT DEPRESSIONIn Images

4. THE DEBACLE • The economic collapse first occurred in the United States in 1929 • American banks closed their doors • Europe, which remained dependent on American credit, drawn into the crisis. • Investment funds were withdrawn when creditors went bankrupt. • Without capitalization, industrial production, demand for labor fell • Massive unemployment meant less money to consume goods produced • The social devastation of the Depression was evident at all levels. • This slump was deeper and more prolonged than previous ones. • It brought widespread unemployment and increased suicide rates • Popular culture turned towards escapism • The Depression confounded 19th century optimism • Depression led to extreme experiments and paralysis in government around world • The USSR • Resisted the general trend to depression because it was a centralized, command economy • Without ties to most of the West, the Soviets were unaffected by the drop in worldwide demand. • Colonial nations • Depended on exports of raw materials suffered enormously • Nations raised tariffs, trade barriers to protect themselves against competition • Colonies had replaced agriculture with export industries, crops suffered horribly • Latin America. Japan • Industries were heavily dependent on exports • Countries suffered typically high unemployment figures • The Depression increased Japanese paranoia about the West • Promoted more aggressive imperialism in Asia • In Latin America, it inspired greater state involvement in the economy • In the West • The Depression prompted new government-led welfare schemes and political radicalism • Rise of Keynesian economics where government used fiscal economics to remedy situation • State spent its way out of depression • State raised, lowered interest rates to benefit society • States taxed richer populations, industry to achieve end • World Trade Collapsed as nations protected domestic economies from competition

5. WESTERN EUROPE & USA • Responses to the Depression in Western Europe • Depression showed that the achievements of the 1920s had been fragile • Weak governments responded counterproductively to the crisis • Old style economic policies often made things worse • Confidence in normal politics declined • Radical political parties gained new support. • In most cases, however, parliamentary forms of government were weakened. • In France • Popular Front government dominated by socialist groups won election in 1936. • Opposed by conservatives, Popular Front was unable to enact effective policy • In Scandinavia, Great Britain, Canada, Australia, New Zealand • First Socialist (or Labor in UK) Governments come to power • Governments intervened more actively in economy with positive results • In Britain, new industrial sectors emerged under creative business leadership. • Labor parties become influential in English speaking world • In the United States: The New Deal • After floundering for a few years, the USA initiated a new economic program • Franklin Delano Roosevelt elected President, started the New Deal • Based on social welfare and government intervention • New Deal greatly increased size of government and restored public confidence • Western Europe all relied heavily on Keynesian Economics

6. NAZISM • In Germany • The Depression led to Nazism, the German variant of Fascism • German Fascists attacked parliamentary democracy as corrupt and weak • Proposed a strong leader with a vigorous foreign and military policy • Supported by business leaders as they attacked unions and socialists • Adolf Hitler called for the state to guide society • The state was greater than the sum of individual interests • He criticized much of modern life • Promised to end the humiliation of Versailles • Railed against Jews. • Nazis in power • Built a totalitarian state • Exercised direct control over many aspects of German life • Eliminated opposition groups through terror, secret police, concentration camps • Jews were made the scapegoats for all modern problems and persecuted • In foreign policy • Hitler prepared for war: looked to rebuild a German empire • He withdrew Germany from the League of Nations • Broke Treaty of Versailles by suspending reparations, rearming • Remilitarized the Rhineland • Germany declared a union with Austria in 1938 • Threatened to invade Czechoslovakia in 1938: European nations demand a conference • France and Britain acceded to Hitler's demands in return for the hope of continued peace. • Appeasement failed when Hitler's forces swallowed all of Czechoslovakia in 1939. • The Soviet Union and Germany signed a peace treaty in the same year. • Finally, when Hitler invaded Poland in 1939, Britain and France declared war

7. RISE OF THE 3RD REICH

8. THE SPREAD OF FASCISM • 1935 Ethiopia • Italy also wanted an empire • Started a war with, annexed Ethiopia • Western Allies, League of Nations did nothing to halt war • Spanish Civil War • 1931 Radicals oust Spanish king, declare Spain a republic • Military, Church, elite hate republic • 1936: Spanish Army launches a coup, leftists resist • Francisco Franco assumes leadership, creates fascist organization • Civil War 1936 – 1939 saw world involvement • UK, France refused to become involved • USSR sent aid, volunteers to Republicans • Italy, Germany sent aid, volunteers to Falangists (Nationalists) • Germany tested out its new weapons, tactics on SpanishFa • Fascists Elsewhere • Strong Fascist movements in France, Belgium, Eastern Europe • Groups often cooperated: many had great influence in society • Most fascists saw liberals, democrats, communists, socialists as enemies

9. MAPPING FASCIST AGGRESSION

10. Early 20th c. Changes in Latin America • World War I • Latin American trade boomed, some growth of new industries • End of war brought sudden end to prosperity • Postwar inflation, declining standard of living hurt region • Labor and the Middle Class • Growing importance of labor and urban middle class • Forced traditional landowning elite to make changes • Opened up the political structure to new groups, ideas • Argentina and Brazil • 1916, middle-class Radical party won election in Argentina, forged ties with elites • Brazilian middle class allied with traditional landed interests in Republican party • Labor groups composed of European immigrants exerted some influence on politics • Strikes and other labor movements were often suppressed violently. • Despite government opposition, strikes, labor unrest common between 1914, 1930 • Ideology and Social Reform In Latin America • Older liberalism seemed out of place • Middle-class political movements so often allied with traditional landed elites • Disillusioned intellectuals began to attack concepts of liberalism during 1920s • Movements for social reform spread rapidly in many countries • Both socialism and Communism appeared in Latin America • The Roman Catholic Church also contributed to the assault on liberalism.

11. MILITARIZATION OF JAPAN • Responses to Depression • 1931 Manchuria • World distracted by domestic problems, • Japan invades China, conquers Manchuria • World reacts lamely and Japan walks out of League of Nations • Authoritarianism appeared earlier in Japan than in the West • Nationalist groups emerged supporting Confucian and Shinto values • Most groups supported increased militarization • 1932, some officers assassinated the prime minister • Military Government • A second attempted military coup in 1936 was blocked by established officers • But the military gained further control over the government • Civilian politics were suspended • Role of Emperor Hirohito confused: did he reign or rule? • After 1936 • Militaristic prime ministers presided over expansion in Asia • Began creation of a regional empire • Army demanded even wider conquests leading to entry into World War II. • Industrialization and Recovery • Massive government spending • Armed the military and pulled Japan out of the Depression quickly • Industrialization grew quickly after 1931. • New policies stabilized the labor force and reduced unrest.

12. JAPAN AND DIPLOMACY

13. STALIN & THE USSR • Joseph Stalin • Was able to gain control of the Communist apparatus, • Stalin wished to accelerate the process of nationalization • Repealed NEP: did not trust private initiative or capitalization • Establish an industrialized society under governmental control • Totalitarian Rule or Stalinism • Stalin forced both artists and scientists to conform to government demands • Created a totalitarian state through creation of state police, the party • Potential rivals were ruthlessly eliminated • Dissemination of information was carefully controlled • Stalin's regime was repressive • A New Reign of Terror – The Purges • To further his control, agenda purged all opposition, real, imagined • Soviet secret police arrested people without warrants, usually on gossip suspicion • System of informers left society in utter terror awaiting the knock on the door • In early 1930s, began region of terror • Purged intellectuals and party officials • Some executed, some sent to prison camps in Siberia called Gulags • Late 1930s • Purged Red Army • Executed more than 60% of all officers above the rank of major • Left Red Army unable to resist Nazi invasion during World War II

14. THE NEW SOVIET SOCIETY • Economic Policies • Stalin ordered the collectivization of agriculture in 1928 • Large state-run farms replaced individual family units. • Collectivization permitted government capitalization • Collectivization permitted firmer control over the peasant population • Wealthier peasants, or kulaks, resisted: Stalin ordered them killed • Communists imposed collectivization by force • Government-run farms produced little incentive for peasantry • Collectivization siphoned capital, labor out of agriculture into industry • To foster industrialization • Stalin created a state planning commission and a series of five-year plans • Government paid for infrastructure and industrialization • The focus was entirely on heavy industry, not consumer production • State planning reduced dependence on markets but created bottlenecks and waste • Despite problems, Russian industrialization under the five-year plans was rapid. • Toward an Industrial Society • Soviet industrialization shared some aspects with early Western developments. • Urbanization rapidly increased • Factory management of labor was strict, and welfare services developed over time. • Standards of living remained low • Industrialization produced few consumer products. • The process was state-directed, and there was no mechanism to air worker grievances.