Totalitarianism and Economic Turmoil: Interwar Period
The Rise of Totalitarian Political Systems
The period between the two world wars saw parliamentary and democratic political systems in many European countries. However, many countries in central and southern Europe adopted authoritarian regimes (further developed in Italy and Germany).
Causes and Social Support of Totalitarianism
The causes which favored the establishment of totalitarian regimes varied. These included:
- The existence of poorly consolidated democratic systems.
- Severe economic crises.
- Social polarization between revolutionaries and anti-revolutionaries.
- The formation of ultra-nationalist groups. Germany felt humiliated, and Italy believed it had received few rewards.
The social support of totalitarian systems came from the middle class, big business, veterans, and socially conservative sectors.
Features of Totalitarianism
- Implantation of an authoritarian political system.
- Control by the state of the economy and society.
- The rejection of social equality.
- Irrational thinking.
- Ultranationalism.
- Militarism.
Italian Fascism
Italian Fascism arose in Italy. It originated from the paramilitary political organization founded in 1919, known as the Black Shirts. In 1922, the intervention of these groups forced Mussolini to claim power, organizing a march on Rome. This ensured that the King tasked him with forming the government.
German Nazism
German Nazism arose in Germany around the Nazi Party (National Socialist German Workers’ Party), founded in 1920 and led by Hitler. In 1933, Hitler won the elections and was appointed Chancellor of Germany. He ended the republic and pursued an aggressive militaristic policy, rejecting the Treaty of Versailles.
The Economy in the Interwar Period
The Roaring Twenties
Between 1924 and 1929, Europe and the U.S. experienced a period of economic prosperity, “the happy 20s.” The U.S. became the world’s leading economic power. The foundations of this prosperity were significant industrial development, increased consumption, and growth in stock market investment.
- The development of industry was due to new systems of production, such as the assembly line. Industry mass-produced items.
- The increase in consumption was possible thanks to advertising and purchase facilities provided by installment sales and bank loans. This consumption also included mass spectacles.
- Stock market investments became a quick way to earn money. It was focused on business profits, bank deposits, and private money.
The Economic Crisis of 1929 and the Great Depression
The Crash of 1929 and its Causes
During World War I, North American agriculture and industry increased their production due to increasing demand from belligerent countries. After the war, the demand for agricultural and industrial products decreased, resulting in an excess of production. This excess provoked lower prices in American agriculture. The apparent prosperity did not reflect reality, but rather an excess of production relative to consumption. This situation led to a decline in confidence, which caused a subdivision of share prices. On “Black Thursday,” October 24, 1929, investors’ fear of lower shareholder value led to the sale of 13 million shares. This caused the New York Stock Exchange to crash.
The Great Depression
The stock market crisis caused a great depression, ruining millions of people, industries, banks, farmers, and businesses.
The Extent and Consequences of the Crisis
The crisis extended from the U.S. to the rest of the world.
Implications of the crisis:
- Demographic: It stopped population growth and transoceanic migrations.
- Economic: Agricultural and industrial production, as well as foreign trade, decreased.
- Social: Unemployment increased, and the middle class and workers were impoverished, generating a rejection of the capitalist system.
- Political: The crisis favored the discrediting of democracy, whose initial steps to resolve it were a failure. The crisis exacerbated rivalries between countries.
Search for Solutions
Some countries promoted autarky (economic self-sufficiency), but most adopted the ideas of John Maynard Keynes. Keynes advocated for the creation of state-owned enterprises and state intervention in the economy to boost investment, employment, and consumption. In the USA, a recovery program (the New Deal) was launched. This addressed agricultural and industrial surpluses, set minimum wages, and implemented measures against unemployment, including unemployment insurance.