Economic Boom and Political Turmoil: 1920s Europe
The Economic Boom of the 1920s
Since 1924, the economy entered a phase of expansion that lasted until 1929. This drove forward new industrial sectors, especially the automobile industry. Increased energy consumption, primarily oil and electricity, became widespread. Assembly line working increased productivity and lowered prices, leading to growing business concentration. Prosperity was first noted in the U.S., thanks to the return of credits that helped extend to Europe. This boosted individual consumption, and the American lifestyle became a model for the rest of the world. Fashion, sports, and entertainment culture became profitable, helping industries disseminate this model, symbolized by new musical rhythms (jazz, blues).
Imbalances
- Maintenance of a high unemployment rate. Europe was affected by the restriction of immigration in the U.S.
- Unequal growth of the productive sectors. The agricultural sector entered a crisis of overproduction, leading to a drop in prices and the impoverishment of farmers. New industrial sectors had captured investment to the detriment of traditional sectors, which stagnated.
- Excess supply in relation to demand. High rates of unemployment and low wages, which did not increase at the rate of production and benefits, limited demand.
- Instability in the international monetary system and inflation.
The prosperity of the twenties was an essentially American phenomenon. In contrast, the economic momentum in Europe, greatly affected by World War I, was late and uneven.
Crisis of Liberal Democracies
Between 1919 and 1939, Europe was marked by social unrest and political instability. The fragility of the new democracies, the communist revolution in Russia, the economic difficulties of the war, and the global economic depression encouraged the emergence of totalitarian regimes.
Liberal States and Totalitarian States
Most states emerged from the disintegration of empires after the First World War and adopted democratic republics as their form of government. Parties emerged, both left and right, that defended authoritarian governments. The triumph of the Bolshevik revolution in Russia marked the rise of Communism as an alternative to liberal bourgeois democracy. Conservative and nationalist anti-democratic groupings viewed democracy as responsible for the weakness of their own nation. Internal problems compounded the system. The balance of powers broke, causing a malfunction of representative institutions. In some cases, the legislature dominated the executive, generating continuous ministerial crises. In others, the Government, through the promulgation of decrees of law, assumed legislative functions of parliament itself.
The adoption of universal suffrage, widespread after the war, gave large social bases of representation in Parliament and gave way to multipartyism and mass parties. This provoked the suspicion of the ruling classes. In countries with long democratic traditions, although parliamentary regimes survived, they were not exempt from political instability. In the UK, the irruption of the Labour Party, a socialist party, broke with the traditional bipartisanship. In France, political instability was more pronounced due to the severity of the monetary and financial problems and violence by right-wing forces. Leftist groups formed a coalition, the Popular Front, which took office in 1936.
Northern Europe (Belgium, Netherlands, Switzerland, Czechoslovakia) and the USA were characterized by a multiparty, parliamentary system and individual freedoms.
Totalitarian Regimes
Italy, which had not achieved its territorial aspirations, was the first state in which liberal democracy showed the first signs of weakness. Political and economic crises pushed the middle classes to support a totalitarian regime, fascism. The new states that emerged from the decomposition of the Austro-Hungarian, Russian, and Turkish empires did not have a democratic tradition, which did not allow the correct functioning of a parliamentary regime. Since the mid-twenties, there were democratic coups that were replaced by right-wing authoritarian regimes, influenced, more or less, by fascism, in Hungary, Greece, Portugal, and Spain. In Germany, overcoming the difficulties of political and economic crises facilitated the establishment of a totalitarian regime in 1933.