Inter-War years

1. Inter-War years

2. Standard • Heavy Industry • Agricultural Production • Exports over Imports • Capital to lend and invest • Domestic and foreign companies, assets • Wartime Effects • European industry forced to convert to war effort • US industry supplies all types of goods, services to countries at war • US finances, supplies allies 1917-1919 • Industry Leaders • 1914: Great Britain, Germany, US • 1919: US, Great Britain, France • USA was the world’s largest industrial nation and producer of foodstuffs • Trade • 1914: Between developed countries especially US, Western Europe • 1919: No change except Germany eliminated • International Finance • 1914: UK (London) was the center of finance capital • 1919: US (New York) was the center of finance capital • Pattern repeated during World War II • Germany, Japan, France, United Kingdom eliminated as competitors • US was the great economic superpower • USSR joined statistics of heavy industry, foodstuffs but many aspects illusionary World Economies IN 1914 & 1919 & 1945

3. Weaknesses of postwar global economy • Germany, Austria borrowed money from United States to pay reparations • Allies used the money to pay war debt to United States • 1928 U.S. lenders withdrew capital from Europe; financial system strained • 1928: Austria unable to repay loans to US, defaults also on reparations • Industrial innovations reduced demand for raw materials--rubber, coal, cotton • Agriculture depressed in Europe, United States, Canada, Argentina, and Australia • Crash of 1929 • U.S. economic boom prompted many to speculate, invest beyond their means • Black Thursday (24 October 1929): stock prices dropped, investors lost life savings • Lenders called in loans, forcing investors to keep selling • Economic contraction in world economy • Overproduction and reduced consumer demand • Widespread business failure and unemployment • By 1932 U.S. industrial production and national income dropped by half • Industrial economies felt banking crisis, unemployment • Germany, Japan unable to sell manufactured goods to purchase fuel and food • Germany: 35 percent unemployment, 50 percent decrease in industrial production • European industrial states and Japan unable to sell to United States because of tariffs • Primary producing economies especially vulnerable • Export prices declined sharply after 1929: sugar, coffee, beef, tin, nitrates, and so on • Latin American states enacted import tariffs that actually helped domestic industry • Brazil built up steel and iron production • Impact on colonial Africa varied: exports hurt, but not local markets • China not integrated into world economy, less affected • Philippines was a U.S. colony; its sugar production protected by the United States GREAT DEPRESSION

4. Great Depression caused enormous personal suffering • Millions struggled for food, clothing, and shelter • Marriage and birthrates declined, suicide increased • Intensified social divisions and class hatreds • John Steinbeck's Grapes of Wrath criticized U.S. policy of "planned scarcity" • Governmental Reaction to the Depression • Economic nationalism • Favored over international cooperation • High tariffs, import quotas, and prohibitions to promote economic self-sufficiency • Trade restrictions provoked retaliation by other nations • International trade dropped 66 percent between 1929 and 1932 • Government policies • Reduce female, minority employment, especially of married women • Massive deficit spending, money to unemployed • Some nations not overly effected (USSR) • Economic experimentation • John M. Keynes challenged classical economic theory • Classic theory: capitalism self-correcting, operated best if unregulated • Keynes argued the depression was a problem of inadequate demand, not supply • Governments should play active role in stimulating economy, consumer demand • Government to influence economy through spending (fiscal policies), interventions • The New Deal of President Franklin Delano Roosevelt anticipated Keynes's ideas • After 1932, protected banking system, massive public works, farm subsidies • Also, legislation established minimum wage, social security, workers' unions • Military spending in WWII ultimately ended the depression in United States • Dictatorships, change in governments, Nazism = experimentation, reaction to Depression REACTIONS TO DEPRESSION

5. NEW STATE STRUCTURES, NEW IDEOLOGIES POLITICS 1914 - PRESENT

6. Bureaucracies • Technology allowed bureaucratization of government • Very easy for leaders to manage large group of specialists • Easy to organize state into agencies overseeing specific areas • Mass State in Practice • Common practice beginning in 19th Century • Trained, educated specialists run government not aristocrats • Policy part of the reform movements of 19th century • Common to China from the Han Dynasty onwards • Practice began in Europe after Enlightenment, French Revolution • All totalitarian states are bureaucratic states • Bureaucracies arose as a result of crises • World Wars required absolute control of state to win war • Revolutionaries need bureaucracies to manage state • Great Depression required government to intervene in society BUREAUCRATIC STATES

7. Technology impacts the state • Mass communication made mass state possible • Near instant transportation unifies large state • Both allow government unlimited power • Control news, information = control the state • Mass political movements • People across large areas mobilized quickly • One or a few leaders can influence many people • The total state • The total control by the state of all aspects of society • Particular to the 20th century • Leftist: USSR, Peoples Republic of China, Eastern Europe • Leftist: Vietnam, Cambodia, North Korea, Cuba • Rightist: Nazi Germany, Fascist Italy, Falangist Spain • Rightist: Peronist Argentina, Republican Iran, Baathist Iraq THE TOTALITARIAN STATE

8. The end result of reform was welfare • 19th reform sought to improve, help society • Carried to its end one needs a welfare state • Socialist, Populist movements • Use the state to achieve a more equitable social end • State regulated worst aspects of modern society • State provides for welfare what people could not • Great Depression made welfare state necessary • Depression • Classic government could not solve problems • Classic economics could not overcome economic collapse • Only a welfare government could provide aid • Closely linked to Keynesian Economics • Fiscal economics • Tax business, people’s income to acquire money • Regulate businesses to reduce inequalities, externalities • Government spends, redistributes wealth to achieve equitable end • State • Begins to provide public services, public utilities • Ends up providing unemployment, retirement, health care • All Western states, Japan are by 1980 welfare states WELFARE STATE

9. Outgrowth of World Wars • Classical Marxists • Revolutions would break out when economic conditions right • Society had to be at peak of industrial development • Marxist-Leninists and World War I • Changes • Elite revolutionaries could bring about a revolution • Conditions did not have to be ideal but needed industry • Revolutionize, mobilize peasants is key to success • Use anti-colonialism, anti-imperialism as issue to spread communist influence • Communist Revolutions followed World War I • Russia was first revolution • Soon spread to Germany, Hungary, Finland, Estonia, Ukraine, Slovakia • Strong sympathy across world including China, France, Spain, Vietnam • Soviet Union • Supported revolutions abroad to insure its survival • Stalin brought all communists under his strict control INTERNATIONAL MARXISM

10. Hypernationalism • Extreme nationalism and glorification of the state • World War I • The honor of the nation, nationalist aspirations led to war • Governments fanned nationalism, hatred of others to win • Racism fanned, genocide was outgrowth of this trend • Nazism, Fascism glorify the ethnic state • Many fundamentalisms today are religious nationalisms • Nationalism: Ideology of Nationalism, Nation-State Spread • Self-determination was a key point of Wilson’s 14 Points • Led to breakup of Austrian, Russian, Ottoman empires • Encouraged hope, anger, response in colonial peoples NATIONALISM

11. Joseph Stalin (1879-1953) • "Man of steel": Georgian by birth, Russian nationalist by conviction • Eliminated all rivals; by 1928, unchallenged dictator of Soviet Union • Stalin favored "socialism in one country," not international socialism • Lenin felt that Russia should support, be center for world wide communist revolution • Stalin felt Russia was too vulnerable, had to build communism in Russia first • Rest of world communists had to support Russia as first communist state • First Five-Year Plan, 1928-1932, replaced Lenin's NEP • Set production quotas, central state planning of entire economy • Emphasized heavy industry at expense of consumer goods • Collectivization of agriculture • States seized private farms, created large collective farms • Believed to be more productive, to feed industrial workers • Collectivization strongly resisted by peasants, especially the wealthier kulaks • Half of farms collectivized by 1931; three million peasants killed or starved • As an alternative to capitalism during the depression • Soviet Union offered full employment and cheap housing and food • Few luxuries or consumer goods • The Great Purge, 1935-1938 • Ruthless policy of collectivization led to doubts about Stalin's administration • Stalin purged two-thirds of Central Committee members • More than half of the army's high-ranking officers • 8 million people were in labor camps; three million died during "cleansing" STALINISM IN RUSSIA

12. Fascism: new political ideology of 1920s • Started in Italy; also found in other countries around the world • Fascism hostile to liberal democracies, socialism, communism, unions • Dictator: devotion to charismatic leaders • One party state dictatorship and elite party replace competing parties, interests • Secret police enforce conformity, censorship of media • Sought subordination of individuals to the service of state • Emphasized an extreme form of nationalism • Veneration of the state, devotion to charismatic leaders • Militarism exalted, uniforms, parades • Church and family also emphasized • Italian fascism • Benito Mussolini, founder of Italian fascism, 1919 • Armed fascist squads called Blackshirts terrorized socialists • After march on Rome, Mussolini invited by king to be prime minister • The fascist state in Italy • All other political parties banned, Italy became a one-party dictatorship • Supported by business, the party crushed labor unions, prohibited strikes • Not aggressively anti-Semitic even after alliance with Hitler in 1938 • ) FASCISM

13. Adolf Hitler (1889-1945) • Born in Austria, schooled in Vienna; hated Jews and Marxists • Moved to Munich and fought in German army in WWI • 1921, joined obscure group, National Socialist German Workers Party • The Struggle for Power • Emergence of the Nazi party: attempt to take over Weimar Republic failed; Hitler jailed • Nazis organized for a legal takeover through elections • National socialism enjoyed broad appeal, especially from lower-middle class • Public lost faith in democracy: associated with defeat, depression, inflation • 1930-1932, Nazi party became the largest in parliament • 1932, President Hindenburg offered Hitler the chancellorship • Rapid consolidation of power, 1933-1935 • Nazis created one-party dictatorship; outlawed all other political parties • Mass party, secret police, use of terror as a weapon of rule • Took over judiciary, civil service, military • Nazi ideology • Cult of the leader to replace all religion • Women praised as wives and mothers; were discouraged from working • Cult of motherhood: propaganda campaign to increase births was unsuccessful • Nazi eugenics: deliberate policies to improve the quality of the German "race" • Compulsory sterilization of undesirables: mentally ill, disabled • State-sponsored euthanasia of physically and mentally handicapped • Anti-Semitism central to Nazi ideology • 1935, Nuremberg Laws deprived Jews of citizenship, outlawed intermarriage • Jews economically isolated, lost jobs, assets, businesses • 1938, Kristallnacht: official attacks on synagogues and Jewish businesses • 250,000 Jews fled to other countries; many others trapped NATIONAL SOCIALISM

14. European aggression • Italy after the Great War • Italians felt slighted at the Paris Peace Conference • Mussolini promised national glory, empire • Annexed Libya; invaded Ethiopia (1935-1936), killed 250,000 Ethiopians; annexed Albania • Germany: deep resentment at Treaty of Versailles • Harsh terms: reparations, economic restrictions • Former Allies inclined not to object when Hitler violated terms of the treaty • Hitler blamed Jews, communists, liberals for losing the war and accepting the treaty • After 1933, Hitler moved to ignore terms of peace settlement • Withdrew from League of Nations, 1933; Rebuilt military, air force; reinstated draft • Took back the Rhineland, 1936; Austria, 1938; at each step, France and Britain did nothing • Spanish Civil War 1936 - 1939 • Spanish fascists stage coup against republic; socialists and communists fight back • Italians, Germans, Russians helped each side but fascists won • The Munich Conference: Peace for our time? • In 1938, Germany "appeased" by taking Sudetenland, promised to stop there • Britain and France desperate to avoid war, appeased Hitler • 1939, violating Munich agreement, Hitler seized most of Czechoslovakia • Russian-German Treaty of Non-Aggression, 1939, shocked the world INTERWAR DIPLOMACY