The Interwar Period: Economic Recovery, Political Turmoil, and the Rise of Fascism
RECOVERY AND UNEQUAL ECONOMIC GROWTH AFTER WWI
Following World War I, global economic dominance shifted from Britain to the USA. European nations struggled to adapt from wartime to peacetime economies, with Germany facing a particularly severe crisis due to war reparations. This led to hyperinflation and a significant decline in living standards. However, from 1924 onwards, European economies began to recover, with production, employment, and living standards gradually improving, thanks in part to British and American investments.
THE ROARING TWENTIES IN THE USA
Between 1922 and 1929, the USA experienced a period of massive industrial growth, driven by the production line method, standardized production, and the rise of large corporations. The construction industry also boomed. This economic prosperity led to a rise in living standards and the birth of the consumer society, with middle-class homes acquiring modern amenities and people purchasing automobiles and appliances on payment plans. New forms of entertainment, such as cinema, popular music, and radio, gained immense popularity.
INTERNATIONAL POLITICS IN THE EARLY 1920s
Tensions arose between France and Germany as Germany struggled to pay war reparations. France, in turn, faced difficulties repaying its debts to the United States. In 1923, France occupied the Ruhr, a key industrial region in Germany, to extract resources and recoup its losses. The United States intervened with the Dawes Plan in 1924, providing loans to Germany to facilitate reparations payments and stabilize the situation. This led to improved relations between France and Germany, culminating in the Treaty of Locarno in 1925 and Germany’s admission into the League of Nations in 1926.
CAUSES OF THE 1929 CRASH AND THE GREAT DEPRESSION
The Wall Street Crash of 1929 and the subsequent Great Depression were caused by a combination of factors, including:
- Overproduction: During WWI, participating countries focused on wartime production, while others produced consumer goods. After the war, a surplus of goods led to excess supply.
- Speculation: Banks provided loans to businesses and individuals who invested heavily in the stock market. When companies needed to repay debts, they sold their stocks, triggering panic selling and a stock market crash.
The crash had devastating consequences, leading to bank failures, company closures, and widespread unemployment. The USA reduced imports and withdrew investments from Europe, exacerbating the crisis.
THE NEW DEAL
To combat the Great Depression, President Roosevelt implemented the New Deal in 1933. This program included public works projects, farm subsidies, improved working conditions, and financial reforms. The aim was to stimulate consumption, boost the economy, and provide relief to struggling Americans.
FASCIST ITALY
Italy, despite being on the winning side of WWI, faced economic hardship and social unrest. Discontent with the Paris Peace Treaties and a fear of communist revolution led to the rise of Benito Mussolini and his National Fascist Party.
WHAT WAS FASCISM?
Italian Fascism, under Mussolini’s leadership, was characterized by:
- Opposition to democracy and communism
- Totalitarian state controlled by a single leader
- Suppression of individual rights and opposition
- Single-party rule and state-controlled media
- Nationalism, militarism, and expansionist foreign policy
THE FASCIST DICTATORSHIP
Mussolini’s Fascist Party seized power through violence and intimidation. He established a dictatorship, suppressing opposition, banning unions and political parties, and creating a secret police force. The regime aimed to create an autarky, a self-sufficient state, through increased production and economic control. Mussolini pursued an aggressive foreign policy, occupying Ethiopia and Albania and supporting Franco in the Spanish Civil War.
THE WEAK WEIMAR REPUBLIC
Following WWI, Germany transitioned into a democratic republic known as the Weimar Republic. However, the new regime faced challenges from both the extreme left and right. The Treaty of Versailles and the economic crisis weakened the government, making it vulnerable to extremist ideologies.