Interwar Period: WWI Legacy

• Study notes on interwar period history are provided

The Legacy of World War I

• Europe faced negative impacts on population, infrastructure, and agricultural/industrial production due to the war
• States became heavily indebted through internal debt issuance and external loans
• Inflation increased dramatically, especially in Germany, where essential goods' prices multiplied
• The Treaty of Versailles imposed harsh reparations on Germany, leading to its inability to comply
• France occupied the Ruhr region in 1923, destabilizing the German economy, resulted in devastating hyperinflation
• These conditions fostered radical nationalism, contributing to the rise of fascism and Nazism
• Hostility towards Germany grew in France
• The US struggled to receive debt payments from France and England from WWI
• They created the Dawes Plan to revive the German economy to enable reparations payments, allowing France and England to repay their debts to the US
• Europe's recovery difficulties facilitated the US emergence as the world's leading economic power in the 1920s

North American Prosperity

• The 1920s marked a decade of economic expansion in the US, characterized by increased exports, investments, higher internal demand for products like telephones, radios, and automobiles, fueled by credit
• The automotive industry propelled other sectors and stimulated urban growth with skyscraper construction
• Jazz and tango rhythms culturally gained popularity, feminist movements strengthened
• The economy grew annually by 5% between 1922 and 1929

Imbalances and Inequalities

• During the prosperous years, business profits grew faster than salaries, exacerbating inequalities
• Traditional industries like textiles, coal, and cotton faced crises, compelling many workers, including African Americans, to migrate to cities
• The purchasing power of many Americans proved insufficient to absorb the excess production, leading to overproduction

Stock Market Fever

• Overproduction became a serious issue because of the lack of real purchasing power, resulting in reliance on credit
• Many investments shifted towards stock purchases instead of production improvement starting in 1926
• Increased stock demand inflated prices, creating a speculative bubble where stock values ​​exceeded the actual value of companies

The Stock Market Crash of '29

• Many investors began selling shares perceiving that prices could not continue rising, causing a value drop
• On October 24, 1929, known as "Black Thursday", 13 million shares were sold, triggering a collapse on the New York Stock Exchange
• Banks demanded loan payments, forcing massive stock sales.
• Investors cannot afford to meet debts

The Great Depression

• The banking crisis led to over 4,000 bank failures, causing millions of families and businesses to lose deposits
• Banks, unable to return funds, reduced credit, worsening the crisis
• Industrial production fell by 40% between 1929 and 1933, unemployment rose from 1.6 million to 13 million
• This reduced demand, as people saved due to economic uncertainty

Global Spread of the Crisis

• The US crisis in the 1930s spread globally due to overproduction, declining US imports, banking problems that reduced loans and investments, and protectionism through increased tariffs, affecting other economies

Crisis Recovery Proposals: New Deal

• Roosevelt's New Deal promoted government intervention to overcome the crisis by creating employment through public works, regulating agriculture and the mortgage market, and providing aid to prevent evictions
• Labor rights, minimum wages, unemployment insurance, and social subsidies were established
• Banking controls and deposit insurance were implemented

Keynes Proposal

• Some economists thought the crisis marked the end of the capitalist system
• Others argued the market would recover without government intervention
• Keynes believed economic recovery depended on state intervention

Europe in Times of Crisis

• Democracies increased in prestige after WWI, with new democratic states formed
• The 1920s were economically challenging, with a rise in trade unions, socialist and communist parties, causing fear among the bourgeoisie
• The 1929 crisis worsened the situation, destabilizing and favoring democracies, and the rise of dictatorships and totalitarian regimes

European Democracies Facing the Crisis of the 20s

• Consolidated democracies integrated socialism via universal suffrage and labor improvements
• This isolated radical parties, economic, and social crises
• Labor demands were managed parliamentarily in Great Britain despite the war in Ireland
• France experienced social tensions
• Stability was achieved through liberal coalitions in Switzerland, Belgium, and the Netherlands
• Social democratic governments curbed radicalism in Nordic countries
• Although these efforts limited the rise of dictatorships in Europe

Rise of Dictatorships in Europe

• Many European countries with little democratic tradition established authoritarian dictatorships in the 20s and 30s to confront the crisis
• They gained support from landowners, the army, and the Church
• Primo de Rivera led a coup in Spain in 1923
• Fascism spread to Italy (Mussolini, 1922) and Germany (Nazis, 1933), aiming to create a "new" anti-democratic order
• Stalin consolidated totalitarianism in the USSR in opposition to fascism

What Elements Did Fascism Defend?

• Fascism is based upon the rejection of the enlightened tradition, democracy, and political pluralism
• It defends submission to a charismatic leader, the exaltation of the nation and the State above individual rights, the use of violence, a non-egalitarian society
• Fascism is dominated by elites, racist nationalism, plus the mobilization of the masses to create a unified collective

Origins of The Nazi Party

• Adolf Hitler joined the National Socialist party in 1919, became leader in 1921, and militarized the party with SA squads
• He wrote Mein Kampf, which expressed his hatred of democracy and communism, the need for a strong leader, antisemitism, the supremacy of the Aryan race, and the creation of a large Reich after attempting a coup in 1923 and imprisonment.

Rise of The Nazi Party

• Hitler consolidated his leadership in the Nazi party and created the SS after leaving prison
• He adapted his strategy to achieve parliamentary power, converting the party into a mass movement and seeking alliances with nationalists, the middle class, and business leaders despite economic improvement between 1924 and 1929.

Threats to German Democracy

• The Weimar Republic, created in Germany after World War I, was threatened by three main factors
  • Communist insurrections seeking revolution
  • Opposition from the nationalist extreme right, especially ex-combatants, who rejected the Treaty of Versailles
  • Difficult economic situation stemming from war debts and reparations that Germany had to pay

Nazi Party Arrival to Power

• The National Socialist Party arose in the Weimar Republic with a nationalist, authoritarian, anti-capitalist, and antisemitic platform
• The economic crisis of 1929 increased its popularity, growing from 12 to 107 deputies in 1930 and 230 in 1932
• Hitler was appointed Chancellor of Germany in 1933

Nazi Propaganda

• Modern propaganda techniques transformed Hitler into a top presidential candidate in the 1932 elections
• Hitler wrote that propaganda does not aim to expose objective truth, but to serve party interests favorably in 1924

German Nazification

• Hitler limited fundamental rights upon gaining power and used the Reichstag fire to justify repression
• The Nazi party secured 288 deputies in 1933, but allied with nationalists and the Center Party to govern without parliament for four years

Hitler's Measures to Nazify

- Illegalizing Social Democratic and Communist parties, coupled with detentions and re-education camps for leaders; Germany becomes a single-party regime.
- Unification of federal states by removing the federal system and regional parliaments.
- Removal of non-Aryan or regime-opposed officials, persecuting intellectuals/artists.
- Strengthening repression via a Gestapo SS creation, plus concentration camps.
- Eliminating internal dissent during the "Night of the Long Knives" (1934) by assassinating SA leaders.
- Territorial expansion for the Aryan race through the conquest of living space (Lebensraum).

• The Nazi economic policy aimed to:
  • Turn Germany into a major industrial power + prepare for war
  • Eradicate unemployment

Mass Indoctrination

• Theories of racial hygiene popular in Europe from the 19th century sought to justify racial inequality

• Nazis defended the purity of the Aryan race, deemed superior, believed needing "living space" for expansion

  • 1933: Boycotts of Jewish businesses, doctors, and lawyers
  • 1934: Sterilization of the Romani and castration
  • 1935: Nuremberg Laws (racial segregation + rights deprivation)
  • 1937: Concentration camp internment of homosexuals
  • 1938: Gypsy cleansing week, Star of David wearing, Night of Broken Glass (attacks on Jewish establishments)
  • 1939: Secret program to kill disabled children, later for adults

• Italy faced a severe economic crisis, inflation, unemployment, and social conflicts post World War I

• Mussolini took advantage of the discontent by creating the fasci di combattimento and starting the National Fascist Party in 1921, with a nationalist, militaristic, private-property supporting agenda

• The "March on Rome" in 1922 secured support from the king, military, and business people, leading to his appointment as Prime Minister

• Mussolini established a fascist dictatorship characterized by:

  • Democracy suppression (constitutional rights, opposition, censorship, secret police).
  • Total power centralization under Mussolini.
  • Corporatist State creation to end "class struggle".
  • Establishment of relations w/ the Vatican by giving social/institutional privilege.
  • Imperialistic policy (conquest of Ethiopia, resistance liquidation in Somalia).
  • Racial laws of 1938 (antisemitism + marriage ban between whites/blacks + Germany placating).

• Mussolini's economic planning was known for:

  • Strong economic intervention to implement autarky (economic self-sufficiency)
  • Import reduction to the minimum to boost national production
  • Farming output controlling for self-sufficiency guarantee
  • Key industries controlling like naval construction/electricity
  • Supporting output military to heighten state defense capacity

• The consequences led to wealthy industrialists + financial people with poor standards of living for Italian laborers, w no labor rights.

• Societal management by Mussolini in Italy was marked by:

  • Populace growth demographic policy promoting birth rate + restraining emigration
  • Fascist party + trade union supporting for political power consolidation.
  • Educational setting establishments for young people
  • Leisure time organization to govern activities with fascist propaganda

• These measures allowed populace indoctrination of the worship through education, propaganda and rallies of Mussolini.