What is this about?
How different governments responded to the economic crises that followed World War I
- Great Depression occurred in 1930’s
- Broke faith in the market-based economies that once created wealth
- Countries like the US started to intervene more in the economies
- US became more liberal while Germany, Italy, and Japan radically turned to the right
- Russia starts implementing the Five-Year Plans
The Great Depression
- Started in 1929 to 1939 and started in the US
- Germany faced massive inflation which worsened its economy
- Reason why they started printing so much money was because Germany was basically bankrupt from the war and on top of that they have to pay billions in reparations, so they started printing money to meet payments
- France and Britain also faced difficulty in paying back their loans they took from the US
- Soviet government refused to pay the debts Russia acquired before it became communist
Global Downturn
- Causes of agricultural overproduction and the US’ stock market crash in 1929
- This cascaded into a global recession
- Germany out of all the Western nations suffered the most
- This was because when the Great Depression hit people frantically took the money out of German banks
- African, Asian, and Latin American economies also suffered because they depended on the economies of the West
Japan
- Japan suffered because its economy was dependent on foreign trade
- Japan’s exports between 1929-1931 cut in half!
- Led to a severe economic recession that led to high rates of unemployment and inflation
- The severe economic factor was arguably the biggest factor that allowed right-wing groups to take over
- Economic difficulties led to social unrest an political instability, allowing extreme right wing groups to take over
- Eventually Japan became very militaristic and ultra-nationalist due to these right-wing groups taking over
Keynesian Economics
- John Maynard Keynes said Great Depression was caused by the failures of laissez-faire capitalism
- Capitalism with basically 0 government intervention
- Government intervention is necessary to stabilize the economy and prevent recessions or depressions
- During a depression, a government should cut taxes and increase spending to stimulate the economy
New Deal
- Franklin Roosevelt’s New Deal used Keynes’ ideas
- Three R’s: Relief, Recovery, Reform
- Relief for citizens suffering
- Recovery through implementing Keynesian economics ideas of government spending
- Reform through implementing policies to make sure this doesn’t happen again
- World War II helped to end the Great Depression as it stimulated the economy
Impact on Trade
- Even though the Great Depression started in the US, it spread to Europe, Latin America, Asia, and Africa
- As unemployment increased, trade decreased
- Furthermore, countries levied strict tariffs (taxes on imports) in hopes of protecting domestic jobs (protectionism), but this made economies worse
- Japan however, was able to get out of the Great Depression quickly:
- They devalued their currency, which made Japanese-made goods less expensive than imports
- Japan’s rapid expansions also increased Japan’s military goods, which stimulated the economy
Political Revolutions in Russia
War Communism
- Took place from 1918 to 1921
- Hardcore implementation of communism
- No private property, collectivization of farming
- Massively unpopular and inspires rebellions against the new communist government
What is Collectivization?
- Collectivization of agriculture = when individual farmers and their families pool their resources, land, and labor to work on large-scale farms
- Goal was to increase agricultural production and efficiency as instead of small, fragmented plots of land, now you have larger, more productive units
- Peasants on these collective farms lived and worked together
- However collectivization policies were often met with fierce resistance
- Disrupted traditional family structures
- Caused tensions between farmers
- Collectivization often involved the forced redistribution of land from individual farmers to the state or collective farms
New Economic Plan (NEP)
- Created by Lenin after massive failure of War Communism
- Allowed some capitalist elements in the Soviet Union
- Allowed private trade
- Farmers could sell excess crops for profit
- Factories with fewer than 20 workers allowed to be privately owned
- Nevertheless despite the fact that the government gave these few economic liberties, it still maintained strict political and economic control
- Enjoyed modest successes, but came to an end after Lenin’s death
Joseph Stalin
- Took power after Lenin and remained in rule for 30 years (1927-1953)
- Abandoned Lenin’s NEP and instituted the first Five-Year Plan
Five-Year Plans
- Goal is to transform Russia’s agricultural economy to an industrial economy
- Stalin collectivized agriculture
- Individual, private farms were forcibly distributed to groups of peasants, called a kolkhoz, to work on it
- In theory this would mean that everyone in the kolkhoz would own the land but peasants were forced to meet the high, unrealistic demands of the state
- Government would seize the food and send it to the cities
- Wildly unpopular: farmers would burn crops and kill livestock or move to the cities
- Also emphasized industry, particularly steel production
- Collectivization was a huge failure, leading to millions starving and even a famine
- Heavy industry, however, grew tremendously
- Now there were a lot of factory jobs available as well
- Russia under Stalin rapidly industrialized
Authoritarianism under Stalin
- Punished political prisoners by executing them or sending them to gulags
- The Great Purge was when Stalin solidified his power by purging political rivals within the party between 1936 to 1938
- Relied on a secret police
- Kept control of the press, so stuff like the famines and the gulags were covered up
- Despite this and the failure of the collectivization of agriculture, Russia was able to rapidly industrialize and build up their military strength
Political Revolutions in Mexico
Party Rule in Mexico
- The Institutional Revolutionary Party, also known as the PRI, held uninterrupted power in the country for 71 years, from 1929 to 2000
- Dominated Mexican politics for most of the 1900s
- Under the party, economic improvement in Mexico was substantial
- Land reform in the 1930s was successful under Lázaro Cárdenas
PEMEX
- In 1938, the PRI nationalized Mexico’s mostly foreign-owned oil industry
- Angered foreign investors
- Company became known as PEMEX
Rise of Right-Wing Governments
- Fascism became popular
- Appeals to extreme nationalism, glorifies military, and blames problems on ethnic minorities
- Emphasizes and glorifies violence
- Fascist governments suppress other political parties, protests, and other things that challenge their rule
Rise of Fascism in Italy
- Italian fascist state was totalitarian, meaning the government controls all aspects of society
Mussolini Takes Control
- Takes advantage of the bitterness caused by the Treaty of Versailles
- Even though Italy was on the winning side, they did not get the territory they were promised for joining the Allies in the war
- This failure to gain from the war made many people in Italy angry and bitter
- Mussolini and his Fascist party use these feelings to their advantage to rise to power
- Mussolini becomes a dictator, suppressing anything against him
- Heavily emphasized militaristic propaganda glorifying war
- Part of his philosophy was to conquer an “inferior” nation and make it Italy’s
- Sets his sights on Ethiopia and conquers it
- League of Nations should have stepped in and prevented this but they just watched and did nothing
- This event largely destroyed the League of Nations’ credibility
- In 1936 Mussolini and Hitler form an alliance
Fascism and Civil War in Spain
- Spanish Republic, a democracy, is formed in 1931 after the king abdicates
- Popular Front, a coalition of left-wing powers, was elected in 1936
- Key part of their agenda was land reform, which made them wildly popular amongst peasants and radicals
- Conservatives, such as the Catholic Church and military officers, were very opposed to the Popular Front
- Under Francisco Franco, these conservatives led a military uprising against the Popular Front
- Marked the start of the Spanish Civil War (1936-1939)
- War was fascism vs. democracy
- Nationalists = Conservatives led by Francisco Franco
- Republicans = Spanish Republic
- Francisco Franco wins war and establishes a fascist state in Spain, making himself the dictator and ruling from 1939 until his death in 1975
- Franco’s regime was supported by the Catholic Church and the military, as well as Portugal, Mussolini’s Italy, and Hitler’s Germany
- After his death Spain transitioned back to a monarchy
Guernica
- During Spanish Civil War, Germany and Italy aerial bomb a Spanish city controlled by the Republicans called Guernica
- Marks one of the first instances ever of an aerial bombing targeting civilians
- For Germany it also served as a way to test out their air force, called the Luftwaffe
Rise of a Repressive Regime in Brazil
- Brazil known as “Latin America’s sleeping giant” as Brazil slowly transitioned from an agricultural to an industrial economy
- In 1930, Getulio Vargas takes power in a bloodless coup with the support of the people and sets up a government based on hypernationalism
- Hypernationalism = extreme nationalism and although it is similar to fascism in many regards, one major difference is hypernationalism does not rely or glorify violence
- When fighting for power he claimed he would promote democracy but instead he censored the press, abolished political parties, and imprisoned political opponents
- Brazil in World War II sided with the Allies, so on the outside they seemed more liberal than they actually were
Factors Leading to the Rise of Vargas
- Large landowners dominated the economy, which upsetted the urban middle class
- Furthermore, the Great Depression frustrated workers
Vargas’ Economic Reforms
- Under Vargas, Brazil no longer was a sleeping giant and rapidly industrialized
- Created labor reforms to improve the conditions of workers (such as a minimum wage)
- Established several state-owned companies that would provide the infrastructure and resources necessary to rapidly industrialize
- By the end of the Vargas era in 1945, Brazil had become the ninth-largest industrial economy in the world
