The Interwar Period: Economic Crisis, Political Instability, and the Rise of Totalitarianism

Posted on Aug 3, 2024 in History

The Roaring Twenties

Definition

The Roaring Twenties was a period of time (1920s), especially in the USA, characterized by economic prosperity and the spread of the American way of life.

Characteristics of the American Way of Life

  1. Individual effort and success guarantee the wealth and well-being of its citizens.
  2. Economic growth was based on technical innovations.
  3. Wages growth, advertising, hire purchases, and back loans led to consumerism or the era of mass consumption.

Conclusion

The profits made by successful businesses led to a rise in demand for shares, whose value rose steadily.

The Paradox of Prosperity

This period of prosperity did not benefit everyone equally, and a series of events between 1926 and 1927 led to a crisis:

  1. Agricultural prices were increasing less rapidly than industrial prices. Many farmers, who had borrowed money to improve their farms with new equipment and land, realized the market could not absorb all their production. Stock accumulated, prices fell, and many farmers lost everything because they were unable to pay back their loans.
  2. Traditional industries stagnated, and entire regions missed out on modernization. Besides, the rise in wages was much lower than corporate profits and production, therefore people had little purchasing power and could not absorb all this production.

The Crisis and Fight Against the Crisis (New Deal)

The Crisis

Many shareholders knew that the prices of shares were much higher than their real value because a lot of people wanted to buy shares. Mistrust spread among investors, and on 24 October 1929 (Black Thursday), many investors began to sell their shares. Then, everyone tried to sell their shares, which made their value plummet.

Many investors were ruined, and people panicked and flocked to the banks to withdraw their money. The banks were forced to close due to a lack of funds because they couldn’t collect all their loans provided to individuals and firms.

Then, the crisis affected many industries, trade, and agriculture, which, apart from overproduction, suffered a lack of financial or investment. This led to a widespread economic recession. Many industries closed down, so unemployment increased, this made consumption decline, and, as a consequence, even more industries went out of business, therefore even more unemployment.

This crisis spread from the USA to the rest of the world because the USA immediately reduced their loans, withdrew funds deposits in European banks, and reduced imports. As a consequence of this, the USA crisis dragged down many countries.

The New Deal

The USA and most European countries took measures to solve this crisis and promote economic recovery. The president of the USA, Roosevelt, introduced the New Deal, a set of measures based on the ideas of the economist Keynes, who advocated state intervention in the economy. The measures were:

  1. Given the lack of private investment, the State created public companies to stimulate the economy and break the lack of investment.
  2. The government ordered agricultural stock to be destroyed.
  3. The state also established stricter control over banks by monitoring their deposits and forcing them to offer low-interest loans.
  4. To fight unemployment, the state promoted a major public work program.
  5. Authorities encouraged companies to increase wages and reduced the working week to 40 hours.
  6. Especially in Scandinavian countries, the Welfare State began.

The Crisis of Democracy (1): Fascism in Italy from 1922

The Situation of Italy After the War

  1. The peace agreement after the 1st WW was a major disappointment because the allies didn’t give Italy the territories of Dalmatia and Fiume, as had been agreed in 1915.
  2. Political instability: there were five different governments between 1919 and 1922 because no political party was able to win a sufficient majority.
  3. The human and economic consequences of the war (deaths, industries destroyed, and high debt) made the cost of life and unemployment rise.
  4. The economic problems led to great social tension and strikes with revolutionary goals.

The Rise of Fascism

In 1919, B. Mussolini created the Fasci, a paramilitary group, and fought to stop the rise of the labor movements by attacking the labor unions and their leaders.

In 1921, this group became the National Fascist Party based on building a strong state to guarantee private property and an expansionist foreign policy. It was presented as the most effective remedy to stop the revolutionary movement in Italy.

The new party was supported by the petite bourgeoisie, the Catholic Church, the large agricultural and industrial landowners, and the king himself.

In 1922 elections, the Fascist Party achieved just 22 deputies, but the king gave him control because the government was unable to control the general strike of socialist and anarchist unions. Mussolini organized the March on Rome with 300,000 black shirts to show his strength. In October, the king appointed him head of government.

The Main Ideologies of Fascism

Between 1922 and 1924, restricted freedom and persecuted his opponents but kept up the pretense of a parliamentary regime.

In 1924, Mussolini won the elections and established an authoritarian regime:

  1. Political parties are banned. Parliament was replaced with the Chamber of Fascism.
  2. Strikes were banned, and unions were replaced with cooperative unions made up of representative workers, employers, and the state.
  3. The economy was controlled by the state.
  4. Strict control over society with the mass media.
  5. A very traditional role for women.
  6. He signed a concordat with the Holy See to restore the authorities of the Catholic Church in Italy.
  7. An expansionist policy to create a new Roman Empire.

The Crisis of Democracy (2): Nazism in Germany

The Situation of Germany After the War

Once the Kaiser abdicated, Germany became a parliamentary republic led by Christian Democrats and socialists.

The harsh peace terms imposed on Germany, the economic crisis, poverty, unemployment, and public debt made discontent grow. This social discontent led to several coups developed by both left-wing revolutionary movements and extreme right-wing movements.

Hitler and the Emergence of the Nazi Party

Hitler was one of the former soldiers who could not accept the peace treaty and became the leader of the National Socialist Workers Party of Germany.

His ideology was reflected in his book Mein Kampf:

  1. He was against parliamentary democracy and Bolshevism.
  2. He advocated the superiority of the Aryan Race and the need to build a great empire (Reich). He was anti-Semitic.
  3. He promised jobs for everyone, the reduction of industrial profits, and better wages.

At the same time, Hitler spread his ideology, Nazi militias (SA and SS) violently opposed the Republic and clashed with left-wing organizations. They presented themselves as a guarantee of social order.

Hitler’s Rise to Power

The 1929 crisis stopped the relative economic improvements experienced between 1924 and 1929. As a consequence, the ruined members of bourgeoisie and the unemployed workers began to support extremist parties, either the Communist party or the Nazi party. 3.2.- In this context, the Nazi Party began to receive the support of important business man’s and in the elections of 1932 got 13 millions of votes. The President Hidenburg appointed Hitler as chancellor. 3.3.- Once in power, in 1933, Hitler called new elections to win a parliamentary majority. During the campaign, Nazi squads starred a fire in the parliament and blamed it on the communist. This was the excuse used by Horley to remove his opponents and demand full powers. He got them in 1934 after the death of Hidenburg.

7.5.- The characteristics of the Nazi regime: The Nazi regime was a totalitarian regime, this means that, both public and private affairs were controlled by the state. To do that, the government implemented these measures: 1.- Lack of political freedom:The Nazi party and the state united under the sole authority of Hitler. The rest of political parties and trade union were dissolved. Besides, public administration was purged and judges were submitted to the will on the party. 2.- The enforcement of Nazi ideology and the end of individual freedom: To achieve absolute ideological unity the state imposed a set of measures: 2.1.- Goebbels headed the ministry of Public Enlightenment and Propaganda. This institution controlled science and culture forbidding everything opposed Nazi ideology. 2.2.- To reinforce that, the Nazi parliamentary groups used violence and repression. 3.2- Maintaining the racial purity of German society involved the persecution and elimination of all minorities who were considered inferior. The persecution of Jews had several stages: a boycott of Jewish business (1933), the Nuremberg Laws which prohibited interracial marriage and exclude Jews from Germany citizenship (1935), the obligation of wearing a Jewish identity badge (1938) and, finally, concentrations camps. 3.3- The absolute control of the education of young people: teachers at school and universities were purged, and censorship was introduced in classrooms and textbooks. In addition, they created youth clubs to reinforced the Nazi ideology free time. 3.- Economic self-sufficient and rearmament: 3.1- Hitler wanted Germany to become a world economic power focused on militarization and expansionist protects. 3.2- The Nazi party exercised strong economic interventionism, as Italy, and try to achieve economic self-sufficiency or autarky to depend less on imports or foreign products. 3.3- The priorities were heavy industries. In this way he reduced unemployment and enlarged the army. 4.- An expansionist policy: 4.1- Hitler was convinced of the Aryan Race and, as a consequence, he wants to established a new order in Europe under domination of Germany. 4.2- To achieve that, he strengthened the army with the introduction of military service and the creation of a new army and modern air force. 4.3- His goals was to built a great empire and conquest of “Living space”.


7.6.- The crisis of Democracy (3): Stalinism  (1924-1953): 1.- Stalin rise to power:After the death of Lenin, in 1924, two leaders of Communist Party tried to come to power: 1.1- Leon Trotsky who argued that had to export the revolution to other countries. 1.2- Joseph Stalin who defended the theory of socialism in one country. 1.2.1- Stalin who had been the General Secretary of the CPSU took the control of the situation after 1927 and became the sole leader of the URSS. 2.- Stalinism: Stalin imposed a collective economy and society to generate growth and made URSS a great industrial based on: 2.1- A planned, state-managed economy: they developed five-years plans to organised agricultural and industrial production. An official body, Gosplan, set the objectives and evaluated the results. 2.2- The prohibition of private property: land, factories, banks, transport etc… became the property of the state. In 1929, Stalin enforced the collectivisation of the agricultural sector in two ways: a) the kolkhoz or cooperative managed by peasants and b) sovkhoz or state-owned farm. This collectivisation led to considerable tension in the countryside and the opposition of the kulaks or small and medium farmers. 2.3.- Heavy industry became the main priority, this meant that there was rapid industrialisation, but agriculture experienced a major delay as a result of its subordination industry. Furthermore, the production of consumer good was neglected, and the needs of the population disregard.


8.1.- The reforms undertaken by the Republic: The municipal elections on 12 April 1931 were seen as a choice between a monarchy and a republic and, thought monarchist parties got more councillors that republican, in large cities win republicans. This led to demonstrations in these large cities calling for the proclamation of the Republic. As a consequence, the king Alfonso XIII  fled the country to live in exile and the republicans was proclaimed. The provisional government was made up of the Republican-socialist coalition which began a series of reforms:1.- Reform of the army:Manuel Azaña, the president of the government, wanted to reform the army because it’s organisation was backward and over-staffed  (too many high officials). Besides he want an army loyal to the Republic. To achieve that, he allowed  the retirement of almost half military officers, closed the Zaragoza Military Academy, the officers most opposed to the Republic were reassigned. Finally they created the Guardia de Asalto, loyal to the Republic.  2.- Separation of church and state: They tried to reduced church’s influence on public life and education: they abolish public spending on maintaining the clergy and dissolved influential orders dedicate to teaching, such as Society of Jesus. 3.-Territorial reform: The government tried to decentralised the government by recognising the existence of historical nationalities with their own languages and identity and allowed statutes of autonomy and autonomy governments. Catalonia was the first (and unique) territory to accept and establish its government in 1931.4.- Land reform: In some parts of Spain, specially in Andalusia and Extremadura, there were hundreds of thousand of landless workers living in extreme poverty, while property was concentrated in the hands of a few hundred landowners. The Republic decreed that larges estates that were not being cultivated would be expropriated and distributed among the landless peasants. The institute of agrarian reform expropriated a large amount of land, but very few families were settled.



8.2.- The different political parties and it’s reactions to reforms: 1.- During the 2nd republic there were different political parties which can be divided according to several criteria: 1.1.- On the one hand, they can be classified as: a) Left-wing parties which defend a high level of social equality. b) Right-wing parties which were in favour of a capitalist freedom without state intervention in the economy. 1.2.- On the other hand they can be grouped by: a) Republican parties: they can be left or right. b) Parties against the Republic: all right. c) Autonomous parties: (Nacionalistas). d) Labour parties and trade unions: Communist and anarchist. 2.- The different governments and its reactions to the reforms: 2.1.- The reformist Bienium(1931-1933): It was a republican-socialist coalition that undertook the reforms. This government faced two different blocs of opposition: a) The bloc made up of those affected by the reforms, such as the landowners, the hierarchy of the Catholic Church, most of military and large part of the middle and upper classes. b) Criticism from left-wing because of the slowness of some reforms, especially land reform. This angered some day laborers and workers. Anarchist organised uprisings and one of them, the one of Casa Viejas where many peasants were killed by the Guardia Civil made the Govan call new elections which were won by a coalition of right-wing parties (CEDA). 2.2.- The Conservative Bienium (1933-1935): the new government stopped the reforms and this provoked strong opposition from left-wing parties and unions which prepared insurrectional movements in Catalonia and Asturias. This movements were severely repressed. This caused new elections by Prime Minister.  2.3.- The Front Popular (1936-1939): The left-wing republicans formed new coalition that won the elections by a narrow margin. They reinstated the reform program started in 1931 at same time that Franco, Mola and Goded were moved far away from Madrid.


8.3.- The causes of the civil war (1936-1939) in the international context: 1.- The opposition of the Conservative forces and the left-wing groups: The Popular Front reinstated the reforms with the opposition of the most conservative sector of society. On the other hand, some unions and left-wing groups defended the idea of staging a social revolution. The military opposition of the Republic. 2.-A climate of confrontation and the polarisation of the society: Political tension and the polarization between those on the right and those on left resulted in violence and several assassinations. The assassination of the monarchist deputy Calvo Sotelo, in retaliation fire the killing of militant socialist Lieutenant José Castillo, was the pretext to accelerate the military coup. 3.- The international context:The international context of the 1930 were Europeans democracies were threatened by the rise of both, fascism and revolutionary, movements, weakened the Republic and democracy. 4.- The military coup and the beginning of the civil war:The military uprising began on 17 July in North Africa and spread to the Canary Islands, the Baleric Islands and the peninsula (Pamplona), but failed in large cities and industrial areas, thanks to popular resistance, and the support of some polices forces and a section of the army. The rebel force tried to take Madrid but the capital resisted and the war lasted for three years (1936-1939).