American Prosperity, Depression, and Rise of Fascism
American Prosperity After the First World War
U.S. growth continued during the decade following World War I. This era of prosperity solidified an American way of life based on high consumption.
The Stock Market Boom
This prosperity fueled a boom in the stock market. Strong business performance led to increased demand for shares, and their value rose steadily.
Growing demand and increasing industry profits further boosted share values.
The Stock Market Crash and the Great Depression
Amidst growing investor mistrust, on October 24, 1929, a massive sell-off occurred as everyone wanted to sell their shares, and no one wanted to buy. This caused a sharp decline in value, leading to the Stock Market Crash of 1929.
Panic spread, prompting people to withdraw their money from banks. Banks, unable to meet the demand and collect loans, closed, ruining individuals and businesses. This collapse led to widespread bank failures.
The crisis spread to industry, commerce, and agriculture, causing the Great Depression. Consumption decreased, and unemployment soared.
The crisis spread globally as U.S. banks withdrew funds deposited in European banks.
The New Deal
In 1932, Franklin D. Roosevelt proposed the New Deal, a program for economic recovery. It advocated for government intervention to revive the economy.
The New Deal included measures such as aiding struggling companies, creating public companies in sectors lacking private investment, and reducing agricultural surpluses. The government controlled banks, forcing them to provide low-interest loans to businesses for expansion or new ventures.
To combat unemployment, the government initiated large-scale public works projects.
These measures stimulated the U.S. economy, reduced unemployment, and by 1934, productivity returned to 1929 levels.
The Rise of Italian Fascism
The end of World War I left Italy with significant consequences, including high foreign debt and increased living costs.
Peace agreements and political instability led to five different governments between 1919 and 1922, none with a sufficient majority.
The economic crisis fueled strikes. Farmers occupied lands, and workers seized factories, raising fears of social revolution among conservative classes.
Benito Mussolini and the Fascist Party
In 1919, Benito Mussolini created the Fascist Combat Squads, paramilitary groups that attacked labor unions and their leaders.
In 1921, the Fasci became the National Fascist Party, presenting itself as the solution to revolutionary movements.
The party gained support from the petty bourgeoisie and funding from landowners and industrialists.
In 1922, despite winning only 22 seats in the election, the Blackshirts crushed a general strike. Mussolini demanded control of the government and organized the March on Rome. Under pressure, the king appointed him prime minister.
Mussolini’s Dictatorship
Between 1922 and 1925, Mussolini restricted freedoms and persecuted opponents. After the 1924 elections, he established an authoritarian regime, assuming full powers as Il Duce.
Political parties were banned, and Parliament was replaced by a Fascist Chamber. Strikes and unions were banned, replaced by a corporate system.
The state controlled all aspects of social life and dominated the media.
The Rise of Nazi Germany
Adolf Hitler, a World War I soldier, founded the National Socialist German Workers’ Party (Nazi Party) in 1920, becoming its undisputed leader. The party adopted a paramilitary organization, the Sturmabteilung (SA).
Hitler’s Ideology
In Mein Kampf, Hitler expressed his contempt for democracy and hatred of Bolshevism. He advocated anti-Semitism, Aryan racial superiority, and the creation of a German-speaking empire.
Hitler promised jobs, better wages, and blamed Jews, communists, and democrats for Germany’s crisis.
The Nazi Party’s Rise to Power
The 1929 crisis severely impacted Germany. American capital withdrawal led to bank failures, factory closures, and increased unemployment. This fueled support for the Nazis among the bourgeoisie, peasants, and workers.
The party gained support and financial aid from industrialists and financiers.
In 1932, the Nazis won 13 million votes, and in January 1933, Hitler became chancellor. In 1934, after Hindenburg’s death, Hitler became Führer of the Third Reich.
The Nazi Dictatorship
Hitler dissolved political parties and trade unions, closed Parliament, abolished elections, and persecuted opponents. Only the Nazi Party was allowed.
Public administration and the judiciary became subservient to the party.
Literary and artistic production was suppressed, and banned authors were listed.
Women were relegated to domestic roles.
Germany became a police state ruled by terror, enforced by the Gestapo and security sections.
Jews were persecuted to maintain racial purity.
Concentration camps were established in 1933 to detain opponents and Jews, who were subjected to forced labor and extermination.
German Rearmament
Hitler aimed to transform Germany into a global power, preparing for war against France and Britain.
Heavy industry, especially arms production, was prioritized. Public works projects, including highways, were initiated to address unemployment.
Hitler implemented a military policy, strengthening the army with conscription, a new army, and a modern air force.
Hitler prepared for the conquest of Eastern Europe, setting the stage for World War II.