The Great Depression and Totalitarianism
CRASH OF 1929
Economic prosperity came to an end in 1929. This was the year in which the US experienced a severe economic crisis caused by excess production in relation to consumption. During the First World War, the US agricultural industry and some other major industries had dramatically increased its production in order to supply their allies in the war. However, by the end of the war, the demand in these countries decreased, creating an accumulation of stock in agricultural products and industrial goods that had not been sold. This situation caused prices to fall, and companies suffered major losses. The real situation of those companies, therefore, did not correspond to the high value their stock had on the market. In 1929, this situation created an atmosphere of distrust, and the rise of share prices slowed. Thursday, October 24, 1929, was known as Black Thursday.
GREAT DEPRESSION
The crash of the US stock market sparked a widespread crisis from 1930-1931 due to the strong connection the world had with it. This crisis affected all aspects of life: economically, protectionism became more general as the capitalist system was rejected; socially, unemployment and inequality increased, making population growth and migration slower; politically, democracy was discredited since it couldn’t prevent the depression, and so new ideologies appeared, such as fascist totalitarianism and communism.
NEW DEAL
This was the economic plan developed by the 32nd President of the United States, Franklin Delano Roosevelt, in order to put an end to the Great Depression that started after the 1929 Crash. These series of economic and social programs started in 1933, but their results would not start to be noticed until the end of the decade. These measures were based on the proposals by the British economist John Maynard Keynes. Basically, it included regulations for banks, subsidies for landowners and businesses to limit production, minimum wages, unemployment insurance, and public works that would lead to unemployment reduction and to an increase in state revenue.
TOTALITARIANISM
These were political systems in which one party had total control over society. Totalitarian regimes had the social support of the middle class, who were unhappy about the decrease in their standard of living caused by the crisis; big businesses that were eager to halt the rise of communism; many former soldiers and frustrated jobless citizens; and the most conservative sectors of society. Two examples of totalitarianism were Fascism in Italy and Nazism in Germany.
FASCISM
Political, social, and ideological movement which was an example of totalitarianism and was led by Benito Mussolini after the First World War in Italy.
NAZISM
It arose around the ex-soldier Adolf Hitler and the National Socialist German Worker’s Party (NSDAP), founded in 1920. Hitler won the support of a large part of the middle class, who had been devastated by the 1929 economic crisis, and of the capitalists who despised the communists.
MOLOTOV-RIBBENTROP PACT
Also known as the German-Soviet Non-aggression Pact, was signed by Hitler and Stalin. It meant that Germany and Russia couldn’t fight mutually. It was one of the main causes of WWII. It also involved the partition of Poland between Nazi Germany and the USSR.