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Inter-War Years
Inter-War Years
Period between WWI and WWII
Great uncertainty
Time of despair
Great Depression
Great Depression
American stock market crash, 1929
Global economy, so impacted all
Worst economic disaster in American history
Great Depression --- Causes
Policies of Federal Reserve System (Fed)
Expanded credit and money supply 1927
To fuel consumer spending
Lowered interest rates
Created bubble
False sense of financial security
Great Depression --- Causes
Mass consumerism
Fed policies “worked” short-term
In fueling spending
But prosperity was a mirage, not “real”
Not result of high savings
Bubble burst 1929
Great Depression --- Causes
Reckless banking practices
Felt invulnerable because of Fed policies
Good times here forever … so they thought
Unsound investments
Once bubble burst, had very little
Great Depression
Record high unemployment
Record low productivity
Every economic indicator terrible
Inter-War Years
Most rejected classical liberalism
Blamed laissez-faire capitalism for the depression
But false to do so
Fed policies were not laissez faire
Classical liberals rejected those Fed policies
But classical liberals blamed al the same
Inter-War Years
Most turned to different solutions
Progressive liberalism
Communism
Fascism
Democratic Nations
England
 Economy weak even before Depression
 Depression was double-whammy
 Labor Party won majority 1929
 Quasi-socialist, but not full communist
 But no positive results
John Maynard Keynes
British economist
New ideas
o Massive government spending
o To stimulate economic growth
o Government debt = positive
Rejected classical liberal ideas of limited
government and balanced budgets
England
 Conservative party won 1931
 Relied on balanced budget, rejected Keynesianism
 Some success
 Employment on rise
 Depression not over, but past the worst of it
France
 Uncertainty, anxiety
 Economic woes
 Swung from conservative regimes to socialists
 Economy still as bad by late 1930s
 Many starting to believe German fascism better
Scandinavian Nations
 Turned to social democracy
 Government welfare state
 Old-age pensions
 Unemployment insurance
 Free housing
 Free pregnancy treatment
 Government-funded vacations for workers
 Very high taxes
United States
Had always been most classical liberal of all
But rejected its founding beliefs
Accepted progressive liberalism
Under Herbert Hoover and Franklin Roosevelt
New Deal
 Higher taxes, government regulation of business
 Government economic planning, imposed ….
o Production levels, set prices
o Arbitrated wage disputes
o Largest government intrusion in economy in US history
 Keynesian approach --- government spending to stimulate economy
 Beginning of welfare
New Deal
 Recession within the Depression, 1937-8
 After 10 years of Keynesianism, failure
o High unemployment
o Low productivity
 Yet most still devoted to New Deal, progressive liberalism
 Still rejected classical liberalism
Anti-Colonialism
Colonies of European empires resentful
Attempts of independence
The Middle East
New independent
nations formed
Saudi Arabia
Iraq
Iran
Turkey
Heart of old Ottoman Empire
Most Muslims
But turned into westernized republic
More European in style than Middle Eastern
Mahatma Ghandi
Led independence movement against Britain
Civil disobedience --- peaceful, nonviolent resistance
Gathered huge following
1935 – India won some self-government
Outright independence after WWII
Authoritarian States
Problems in Italy
Soldiers angry
– Fought during WWI
– Felt civilians did not appreciate their service
– Or understand their experiences
– War was difficult
– Angry, bitter
Problems in Italy
Italians felt cheated after WWI
– Did not receive all the territory they demanded
– Thought England, France cheated them
– Not rewarded for their service to the Allies
– Angry, bitter
– National honor besmirched
Problems in Italy
Economic problems
– Inflation disaster
– Middle-class wiped out
– Standard of living plumetted
Benito Mussolini
Leader of Italian fascism
Former socialist
Rejected universal nature of socialism
Preferred nationalism
Fascism
Right-wing nationalism
– Not just patriotism
– Exalted the Nation above all else
– Willingness to wage war for national glory
– Extreme militarism
– saw other nations as enemies
Fascism
Rejection of democracy, liberalism
– Weak, ineffective, effeminate
– Too much focus on the individual, not the Nation
– Preferred dictators
Fascism
Progressive liberal economic policies
– Akin to US New Deal
– Government economic planning
– Support for workers
– Guaranteed high wages, welfare programs
– But also assistance for corporations
Fascism
Rejection of socialism
– Socialists focused on universals
– Called for alliance of all workers
– Fascists only focused on the Nation
– Rejected socialism only on nationalist grounds
Seizing Power
 Fascist violence
 Against socialists newspapers, organizations
 By 1921, over 200,000 armed fascists
 Mussolini demanded power
 1922 --- named Prime Minister
Fascism
Fascism seemed like answer to millions
National glory
Economic recovery
Democratic government had been a failure
Third way --- neither socialism nor democracy
Becoming a Dictator
Cult of the Duce (leader)
– His posters everywhere
– Massive propaganda
– Almost god-like status
– All-powerful ruler
– Mystical connection with the people
Becoming a Dictator
Fascists the only legal party
– One-party rule
– Other parties prohibited
– Complete censorship of news
Becoming a Dictator
No liberties
– No democracy
– No rights
– Secret police
– No trial by jury, due process
Becoming a Dictator
Progressive liberal economics
– Economy planned
– Prices, production level, labor policies
– Set by government and major corporate leaders
– “Codes” imposed on entire economy
Fascist Totalitarianism
All-powerful government
No individual freedoms allowed
Foreign Policy
o Restore national glory
o To restore the old Roan Empire
o Foreign wars (to be discussed next week)
o Not all that successful
o But inspired by extreme nationalism
Fascism in Germany
o Similar story in Germany
o More most, fascism seemed like only solution
Problems in Germany
Treaty of Versailles (1919)
– Way WWI ended set the stage for WWII
– Very unpopular treaty
– Angered millions of Germans
Treaty of Versailles
Germany received sole blame for WWI
Lost colonies and part of its own land
Reparations to France and England
Drastic reductions in its military
Problems in Germany
Weimar government
– At end of WWI, revolution in Germany
– Quasi-socialist, democratic
– Democracy
– Nicknamed the Weimar Republic
Weimar Republic
Angered many Germans
Weak, ineffective
Moderately socialist (not communist)
Many Jews involved
Weimar Republic
 Accepted the Treaty of Versailles
 Anger directed towards Weimar
 Germany “stabbed in the back”
 By socialists and Jews
 Growing support for extreme nationalism
 Weimar seemed “un-German” to many
Problems in Germany
Horrible economy
– Far worse than the US
– Hyperinflation
– Money lost its value literally overnight
German Hyperinflation
 Poor economy in early 1920s
 Government responded by printing money
 Disastrous results
 Hyperinflation set in
 Run away levels of inflation
German Hyperinflation
Prices doubled every two days
Deutschmark became literally worthless
Became toy for kids, had lost its purchasing power
Problems in Germany
Overall
– National glory gone
– Absolute poverty
– Weak government
– Perceived domination of Jews and socialists
Fascists in Germany
National Socialist German Workers Party
Or Nazis
Combination of liberal workers’ parties
And right-wing nationalism
Adolf Hitler
Led the Nazis
And SA (Stormtroopers), Nazi
army/gang
Used violence and intimidation
Hitler and the Beer Hall Putsch
1924 coup against Weimar Republic
Failed, imprisoned
Wrote Mein Kampf (My Struggle)
Outlined Nazi fascist beliefs
Nazi Fascism
Similar to Italian fascism
But more virulently racist
And anti-Semitic
Lebensraum
“Living space” for German nation
Extreme social darwinism
German nation to conquer land itself
Non-Germans had no rights, were unfit
Rise of Hitler
 Problems continued throughout the 1920s
 Conservatives supported Hitler
 Could solve problems
 And be controlled by traditional conservative elites
 Never saw the danger of Hitler
Rise of Hitler
Hitler appointed prime minister 1933
By President Hindenburg
Hitler called for national elections
Crisis
 Reichstag building burned
 A week before the elections
 Blamed on Jews and socialists
 Anti-communist hysteria
 But all Nazi propaganda, lies
The Nazis Took Power
More popular than ever
Only Nazis could save Germany
Huge victory in election
Totalitarian State
Like Italy
But more complete
Hitler had firmer grip than Mussolini
No liberties whatsoever in Germany
Hitler As Dictator
Enabling Act 1933
– Gave Hitler emergency power
– To deal with “socialist threat”
Nazis as Dictators
All parties illegal except Nazis
Local governments abolished
All independent labor unions abolished
New Nazi-controlled union mandatory
Jews and non-Nazis removed from power
Concentration camps for enemies
The Problem with the SA
 Traditional military distrusted SA
 Hitler needed military more than SA
 SA purged, leaders murdered
 Night of Long Knives
 Military now supported Hitler
 Hitler named president once Hindenburg died (1934)
Destruction of the Republic
By 1934 Weimar republic dead
Hitler dictator
Of a new Nazi Germany
Hitler As Dictator
Police state
– SS, Hitler’s private goon squad, bodyguards
– Gestapo, secret police
– No individual rights
– Complete censorship, no freedom of speech
– Arbitrary arrests, no trials or juries
Hitler As Dictator
Hitler Youth
– Nazi version of Boy and Girl Scouts
– Encouraged to spy on parents and neighbors
– Turn in all enemies of the Nation
Hitler As Dictator
Nazi control of major institutions
– Churches
– Schools
– Businesses
– No independent source of power
– All institutions under control of Nazi party
Nazi Anti-Semitism
Aryan superiority
– Aryans = pure-blooded Germans
– Master Race
– Even those who did not live in Germany itself
– Aryans should be united into German Empire
Not Aryans
Jews
Socialists (whether Germans or not)
Slavs
“Mongrel races” (French, English, Dutch)
Gays (forced to wear pink triangles)
Handicapped
Nazi Anti-Semitism
Sought to remove Jews from leadership
And all areas of influence
Remove from German society
To purge Germany of Jewish presence
Anti-Semitism
Nuremberg Laws (1935)
– Jews lost citizenship
– Jews kicked out of schools
– And most professions
– Removed from homes, placed in ghettos
– Then moved from ghettos to concentration camps
Targeting the Jews
Yellow Star (Jews)
Pink Triangle (Gays)
Anti-Semitism
Nuremberg Laws (1935)
– Prohibited mixed marriages
– And sex between Jews and German citizens
– Jews forced to register with government
– Forced to wear yellow stars
Kristallnacht (1938)
o Night of Broken Glass
o Attack on synagogues, Jewish businesses
o Absolute destruction of Jewish communities
o 30,000 sent to concentration camps
Concentration Camps
Not death camps (yet)
Just place to put Jews
And other non-Aryans
Later turned into extermination camps
Fascism in Spain Also
Similar story as Italy and Germany
Same problems
Disenchanted with democratic government
Preferred fascism
Economic growth
National glory
Effective government
Spanish Civil War
 National Front
Leftists, socialists, republicans, secularists
Aided by Soviet Union (communist Russia)
 Nationalists
Fascists, conservatives, military, Catholic Church
Aided by Italy and Germany
General Franco
Led Fascists/Nationalists
Prevailed in civil war 1939
Fascist dictator until his death 1975
Authoritarianism in East Europe
 Poland
 Yugoslavia
 Bulgaria
 Hungary (fascist)
 Romania
 Democracy declining
 Classical liberalism nearly dead
Lenin’s NEP
 Soviet Union
 New Economic Policy 1921
 Temporary compromise with capitalism
 To jumpstart economic growth
 And then go to full communism
NEP
Peasants could sell produce for private gain
Small stores could earn private profit
Communism for rest ….
Corporations, banks, railroads, mines
Communist Totalitarianism
 Same type of all-powerful government
 As in Italy, Germany
 Different goals
 Lenin a communist, not fascist
 But methods of ruling the same
Communist Totalitarianism
No democracy or civil liberties
Arbitrary arrests, complete censorship
All other parties prohibited
Police state, under KGB
After Lenin?
 Lenin died 1924
 Trotsky and Stalin competed to be successor
 Most supported Trotsky
 Brilliant, right-hand man to Lenin
 Stalin smeared him, had him exiled, later murdered
Stalinist Purges
Killed off all personal and political enemies
Over 8,000,000
More brutal than even Hitler
Shown here signing a death warrant
Economic Policies
 Abolished NEP
 Proceeded with full-scale communism
 All private property abolished
 Businesses
 Money
 Shops
 Farms
Agricultural Collectivism
 Peasants moved from traditional land
 Into new government collective farm
 Strong opposition
 Most produce taken by government for Red Army
Agricultural Collectivism
 Peasants outraged
 Worse off than under czars
 Stalin cut off food completely
 Starved nearly 10,000,000 to death
 More killed by Stalin than by Hitler
Industrialization Program
 Intensified industrialization
 Imposed very high quotas for workers
 Wages fell nearly 50%
 Standard of living on decline
 Yet working harder than ever
Work Camps
 Prisons for trouble makers
 In Siberia, blistering cold
 Extreme working conditions
 Many died
 Brutal totalitarian regime