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

THE WORLD OF THE 1930s:
RESPONSES TO THE GREAT
DEPRESSION
CHAPTER 34b
THE GLOBAL GREAT DEPRESSION
The Impact of the Great Depression
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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
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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
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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.
THE GREAT DEPRESSION
In Images
THE DEBACLE
The economic collapse first occurred in the United States in 1929
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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Investment funds were withdrawn when creditors went bankrupt.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.
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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
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The USSR
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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
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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
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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
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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
THE DEPRESSION IN ART
Days of Wrath
Frozen Assets
COLLAPSE OF
WORLD TRADE AND THE
GOLD STANDARD
WESTERN
EUROPE
& USA
Responses to the Depression in Western Europe
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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
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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
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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
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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
NAZISM
In Germany
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The Depression led to Nazism, the German variant of Fascism
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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
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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
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Built a totalitarian state
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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
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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
RISE OF THE
3RD REICH
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
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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
MAPPING FASCIST AGGRESSION
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
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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
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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.
THE DEPRESSION & REGIONAL RESPONSES
The Impact of the Great Depression
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Foreign investment, exports collapsed as nations restricted trade
Infrastructure collapsed as groups associated with both became unemployed
Both the demand for Latin American exports and foreign investment in Latin
Their failure led to the complete bankruptcy of the liberal agenda.
Responses
– Corporatism won growing support
• New regimes started social reform, mobilized mass support from poor, out of work
• President Cárdenas in Mexico nationalized petroleum industry, made land reforms
– In Brazil
• Getúlio Vargas became president of Brazil
• Estado Novo (New State)
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Defeated both Communist and Fascist insurrections
With support of military, imposed new constitution based on Mussolini's corporatist state
Allied himself with the United States during World War II; received arms and economic aid
Opposition to the strongly centralized state grew toward the end of the war
Vargas turned to labor groups and Communists for support
Vargas nationalized the petroleum industry as a means of limiting foreign capital in Brazil.
– Argentine Populism and Peron
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Military insurrection brought the Nationalists to power in 1943
Leader Juan D. Perón, sought to create a broad base of support among workers, lower classes
His wife, Evita, became a popular figure and spokesperson for Perón
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A New Argentina
Don’t Cry for Me Argentina
Using a coalition of workers, industrialists, military, Perón pursued a populist program
Nationalization of resources, industries, exclusion of foreign capital, political repression
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
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Most groups supported increased militarization
1932, some officers assassinated the prime minister
• Military Government
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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?
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• 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.
JAPAN AND DIPLOMACY
STALIN & THE USSR
Joseph Stalin
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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
STALIN’S PURGES
Kulaks
Intellectuals
Journalists
Landlords
White
Russians
“Army
Officers”
Social
Misfits
Priests
“Mensheviks”
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.
VOCABULARY
Great Depression
Keynesian Economics
Welfare States
Popular Front
New Deal
Totalitarianism
Gestapo
1936 Spanish Civil War
1931 Manchurian Incident
1935 Ethiopia
1938 Austrian Anschluss
1938 Munich Conference
Corporatism
Five Year Plans
Socialism Realism
IDENTIFICATIONS
Franklin Delano Roosevelt
John Maynard Keynes
Joseph Stalin
Adolf Hitler
Emperor Hirohito
Francisco Franco
Lorenzo Cardenas
Getulio Vargas
Juan Peron