False Hopes: Communism and Fascism

Vocabulary flashcards covering key concepts from the lecture on Communism and Fascism, the Great Depression, and postcolonial development strategies.

False Hopes: What were the two main ideological alternatives to liberal democracy that gained ground after World War I and during the Great Depression?

Communism and fascism, both claiming to fix the failures of capitalism and democracy by using strong centralized states, repression of opposition, and large scale economic intervention.

False Hopes: Why did the Great Depression make communism and fascism look attractive to many people?

Because the collapse of output, mass unemployment, and banking crises made capitalism look chaotic and unjust; both communists and fascists promised stability, full employment, and national or class revival through state control and planning.

False Hopes: In broad terms, how did communism and fascism differ in what they claimed to fix?

Communism claimed to fix class exploitation and private ownership by abolishing private capital and replacing markets with planning; fascism claimed to fix national weakness and social conflict by suppressing class struggle, unifying the nation, and directing private capital toward state goals.

False Hopes: What was the basic economic mechanism of Soviet style central planning?

The state owned almost all capital and land; planners set production targets and input allocations through material balances instead of prices; firms were rewarded for meeting quantitative plan targets rather than profits, and consumer goods were allocated through rationing and queues rather than market prices.

False Hopes: Why did early Soviet growth in the 1930s and 1950s look impressive?

Because the USSR could grow extensively by forcing a massive reallocation of labor and capital from low productivity agriculture into heavy industry, maintaining very high investment rates, and exploiting an initial gap to the technological frontier.

False Hopes: What is the difference between extensive and intensive growth in the context of the Soviet economy?

Extensive growth is increasing output by putting in more inputs (labor, capital, land); intensive growth is increasing output per unit of input, mainly through better technology, organization, and incentives; the Soviet model was good at extensive growth but bad at intensive growth.

False Hopes: Why did Soviet growth slow sharply after about 1970?

Because the easy gains from reallocation and high investment were exhausted, the system could not generate sustained productivity growth; distorted prices and soft budget constraints misallocated capital, and weak incentives for innovation made it hard to shift to intensive growth.

False Hopes: How did distorted prices and soft budget constraints hurt efficiency in the Soviet system?

Prices did not reflect scarcity or opportunity cost, so planners allocated too many resources to some sectors and too few to others; enterprises with chronic losses were bailed out instead of restructured or closed, so inefficient firms survived and capital stayed trapped in low productivity uses.

False Hopes: What was the "shortage economy" and what did it imply about planning?

It was a chronic situation of excess demand for many goods at official prices; shortages led to queues, rationing, and side payments; this showed that planners systematically underestimated demand and that fixed prices could not clear markets.

False Hopes: What were the two main ideological alternatives to liberal democracy that gained ground after World War I and during the Great Depression?

Communism and fascism, both claiming to fix the failures of capitalism and democracy by using strong centralized states, repression of opposition, and large scale economic intervention.

False Hopes: Why did the Great Depression make communism and fascism look attractive to many people?

Because the collapse of output, mass unemployment, and banking crises made capitalism look chaotic and unjust; both communists and fascists promised stability, full employment, and national or class revival through state control and planning.

False Hopes: In broad terms, how did communism and fascism differ in what they claimed to fix?

Communism claimed to fix class exploitation and private ownership by abolishing private capital and replacing markets with planning; fascism claimed to fix national weakness and social conflict by suppressing class struggle, unifying the nation, and directing private capital toward state goals.

False Hopes: What was the basic economic mechanism of Soviet style central planning?

The state owned almost all capital and land; planners set production targets and input allocations through material balances instead of prices; firms were rewarded for meeting quantitative plan targets rather than profits, and consumer goods were allocated through rationing and queues rather than market prices.

False Hopes: Why did early Soviet growth in the 1930s and 1950s look impressive?

Because the USSR could grow extensively by forcing a massive reallocation of labor and capital from low productivity agriculture into heavy industry, maintaining very high investment rates, and exploiting an initial gap to the technological frontier.

False Hopes: What is the difference between extensive and intensive growth in the context of the Soviet economy?

Extensive growth is increasing output by putting in more inputs (labor, capital, land); intensive growth is increasing output per unit of input, mainly through better technology, organization, and incentives; the Soviet model was good at extensive growth but bad at intensive growth.

False Hopes: Why did Soviet growth slow sharply after about 1970?

Because the easy gains from reallocation and high investment were exhausted, the system could not generate sustained productivity growth; distorted prices and soft budget constraints misallocated capital, and weak incentives for innovation made it hard to shift to intensive growth.

False Hopes: How did distorted prices and soft budget constraints hurt efficiency in the Soviet system?

Prices did not reflect scarcity or opportunity cost, so planners allocated too many resources to some sectors and too few to others; enterprises with chronic losses were bailed out instead of restructured or closed, so inefficient firms survived and capital stayed trapped in low productivity uses.

False Hopes: What was the "shortage economy" and what did it imply about planning?

It was a chronic situation of excess demand for many goods at official prices; shortages led to queues, rationing, and side payments; this showed that planners systematically underestimated demand and that fixed prices could not clear markets.

False Hopes: Why did central planning struggle with information, according to the Hayek type argument?

Because local information about preferences, technologies, and constraints is dispersed among millions of agents and changes constantly; a central planner cannot aggregate and process this information as effectively as decentralized price signals produced by markets.

False Hopes: How did communism affect innovation incentives at the firm and individual level?

Managers were punished more for failure than rewarded for success, so they avoided risky innovations; wage compression and the absence of stock ownership meant workers and scientists captured little of the gains from innovation, reducing effort and creativity.

False Hopes: What were some long run outcomes of communism in Eastern Europe compared to Western Europe?

Eastern European communist countries narrowed some gaps in basic education and health, but they fell behind in income per capita, productivity, and technology; after 1990, transition economies needed deep structural reforms to integrate into global markets.

False Hopes: What was the basic economic strategy of fascist regimes like Nazi Germany?

They used expansionary fiscal policy focused on rearmament and infrastructure, accommodative monetary policy, strict wage and price controls, and financial repression to engineer rapid reductions in unemployment and prepare for war.

False Hopes: Through what concrete policies did Nazi Germany reduce unemployment in the 1930s?

Large scale rearmament, public works like Autobahns, conscription, forced removal of women and Jews from certain jobs, and suppression of independent unions combined to raise measured employment.

False Hopes: Why was Nazi full employment not sustainable without war or plunder?

Because it relied on huge defense spending financed by deficit and hidden money creation, strict controls that suppressed consumption, and growing external imbalances; by the late 1930s the economy was hitting capacity limits and running out of foreign exchange, pushing Germany toward

False Hopes: What were the two main ideological alternatives to liberal democracy that gained ground after World War I and during the Great Depression?

Communism and fascism, both claiming to fix the failures of capitalism and democracy by using strong centralized states, repression of opposition, and large scale economic intervention.

False Hopes: Why did the Great Depression make communism and fascism look attractive to many people?

Because the collapse of output, mass unemployment, and banking crises made capitalism look chaotic and unjust; both communists and fascists promised stability, full employment, and national or class revival through state control and planning.

False Hopes: In broad terms, how did communism and fascism differ in what they claimed to fix?

Communism claimed to fix class exploitation and private ownership by abolishing private capital and replacing markets with planning; fascism claimed to fix national weakness and social conflict by suppressing class struggle, unifying the nation, and directing private capital toward state goals.

False Hopes: What was the basic economic mechanism of Soviet style central planning?

The state owned almost all capital and land; planners set production targets and input allocations through material balances instead of prices; firms were rewarded for meeting quantitative plan targets rather than profits, and consumer goods were allocated through rationing and queues rather than market prices.

False Hopes: Why did early Soviet growth in the 1930s and 1950s look impressive?

Because the USSR could grow extensively by forcing a massive reallocation of labor and capital from low productivity agriculture into heavy industry, maintaining very high investment rates, and exploiting an initial gap to the technological frontier.

False Hopes: What is the difference between extensive and intensive growth in the context of the Soviet economy?

Extensive growth is increasing output by putting in more inputs (labor, capital, land); intensive growth is increasing output per unit of input, mainly through better technology, organization, and incentives; the Soviet model was good at extensive growth but bad at intensive growth.

False Hopes: Why did Soviet growth slow sharply after about 1970?

Because the easy gains from reallocation and high investment were exhausted, the system could not generate sustained productivity growth; distorted prices and soft budget constraints misallocated capital, and weak incentives for innovation made it hard to shift to intensive growth.

False Hopes: How did distorted prices and soft budget constraints hurt efficiency in the Soviet system?

Prices did not reflect scarcity or opportunity cost, so planners allocated too many resources to some sectors and too few to others; enterprises with chronic losses were bailed out instead of restructured or closed, so inefficient firms survived and capital stayed trapped in low productivity uses.

False Hopes: What was the "shortage economy" and what did it imply about planning?

It was a chronic situation of excess demand for many goods at official prices; shortages led to queues, rationing, and side payments; this showed that planners systematically underestimated demand and that fixed prices could not clear markets.

False Hopes: Why did central planning struggle with information, according to the Hayek type argument?

Because local information about preferences, technologies, and constraints is dispersed among millions of agents and changes constantly; a central planner cannot aggregate and process this information as effectively as decentralized price signals produced by markets.

False Hopes: How did communism affect innovation incentives at the firm and individual level?

Managers were punished more for failure than rewarded for success, so they avoided risky innovations; wage compression and the absence of stock ownership meant workers and scientists captured little of the gains from innovation, reducing effort and creativity.

False Hopes: What were some long run outcomes of communism in Eastern Europe compared to Western Europe?

Eastern European communist countries narrowed some gaps in basic education and health, but they fell behind in income per capita, productivity, and technology; after 1990, transition economies needed deep structural reforms to integrate into global markets.

False Hopes: What was the basic economic strategy of fascist regimes like Nazi Germany?

They used expansionary fiscal policy focused on rearmament and infrastructure, accommodative monetary policy, strict wage and price controls, and financial repression to engineer rapid reductions in unemployment and prepare for war.

False Hopes: Through what concrete policies did Nazi Germany reduce unemployment in the 1930s?

Large scale rearmament, public works like Autobahns, conscription, forced removal of women and Jews from certain jobs, and suppression of independent unions combined to raise measured employment.

False Hopes: Why was Nazi full employment not sustainable without war or plunder?

Because it relied on huge defense spending financed by deficit and hidden money creation, strict controls that suppressed consumption, and growing external imbalances; by the late 1930s the economy was hitting capacity limits and running out of foreign exchange, pushing Germany toward territorial expansion.

False Hopes: In what sense was fascism a “false hope” for solving capitalism’s problems?

It temporarily reduced unemployment and restored order, but did so by abolishing democracy, increasing repression, directing the economy toward war, exploiting conquered territories, and ultimately leading to destruction and long run loss, not sustainable prosperity.

Depression: What are the four classic explanations of the Great Depression listed in the review?

Austrian: capital misallocation; Marxist: declining profits, overproduction, high inequality; Keynesian: fall in aggregate demand with multiplier and animal spirits; Monetarist: policy mistakes, especially the Fed failing as lender of last resort and focusing on contraction.

Depression: Mechanically, what is the Austrian story of the Depression?

Loose credit in the 1920s financed too many unproductive or overly long term investments; when interest rates rose and expectations changed, these malinvestments had to be liquidated, causing a long painful adjustment as the capital stock was restructured.

Depression: Mechanically, what is the Marxist story of the Depression?

High inequality and falling profits meant workers could not buy what capitalist firms produced; overproduction relative to mass purchasing power led to unsold inventories, layoffs, and a crisis of overaccumulation that only massive destruction or restructuring could resolve.

Depression: Mechanically, what is the Keynesian story of the Depression?

A negative shock to expectations reduced desired investment and consumption; the fall in aggregate demand caused output and employment to drop more than one for one because of the multiplier, while pessimistic animal spirits kept investment low, trapping the economy in a low demand equilibrium.

Depression: Mechanically, what is the Monetarist story of the Depression?

A series of bank runs and failures shrank the money supply; instead of offsetting this with expansionary open market operations and acting decisively as lender of last resort, the Fed allowed monetary contraction, turning a recession into a deep and prolonged depression.

Depression: How do more recent explanations combine Monetarist and other insights?

They emphasize the gold standard as a constraint that transmitted deflation internationally, the fragility of the banking system, and feedback between financial distress and real activity, integrating monetary, financial, and real economy channels.

Inequality: What do Piketty and Saez argue caused the big mid century decline in top income shares?

They argue that World War I, the Depression, and World War II destroyed wealth and profits, but that the persistence of lower inequality is mainly due to the creation and expansion of highly progressive income and inheritance taxes which permanently reduced after tax top incomes.

Inequality: What main corrections to Piketty and Saez are highlighted in the review?

Inequality is overstated; the Depression mattered more than World War II for the decline; adjusting for regional prices shows a faster interwar decline; once taxes and transfers are included, the top share of after tax income has not changed much and inequality has not risen as much since 1980 as they claim.

False Hopes: What were the two main ideological alternatives to liberal democracy that gained ground after World War I and during the Great Depression?

Communism and fascism, both claiming to fix the failures of capitalism and democracy by using strong centralized states, repression of opposition, and large scale economic intervention.

False Hopes: Why did the Great Depression make communism and fascism look attractive to many people?

Because the collapse of output, mass unemployment, and banking crises made capitalism look chaotic and unjust; both communists and fascists promised stability, full employment, and national or class revival through state control and planning.

False Hopes: In broad terms, how did communism and fascism differ in what they claimed to fix?

Communism claimed to fix class exploitation and private ownership by abolishing private capital and replacing markets with planning; fascism claimed to fix national weakness and social conflict by suppressing class struggle, unifying the nation, and directing private capital toward state goals.

False Hopes: What was the basic economic mechanism of Soviet style central planning?

The state owned almost all capital and land; planners set production targets and input allocations through material balances instead of prices; firms were rewarded for meeting quantitative plan targets rather than profits, and consumer goods were allocated through rationing and queues rather than market prices.

False Hopes: Why did early Soviet growth in the 1930s and 1950s look impressive?

Because the USSR could grow extensively by forcing a massive reallocation of labor and capital from low productivity agriculture into heavy industry, maintaining very high investment rates, and exploiting an initial gap to the technological frontier.

False Hopes: What is the difference between extensive and intensive growth in the context of the Soviet economy?

Extensive growth is increasing output by putting in more inputs (labor, capital, land); intensive growth is increasing output per unit of input, mainly through better technology, organization, and incentives; the Soviet model was good at extensive growth but bad at intensive growth.

False Hopes: Why did Soviet growth slow sharply after about 1970?

Because the easy gains from reallocation and high investment were exhausted, the system could not generate sustained productivity growth; distorted prices and soft budget constraints misallocated capital, and weak incentives for innovation made it hard to shift to intensive growth.

False Hopes: How did distorted prices and soft budget constraints hurt efficiency in the Soviet system?

Prices did not reflect scarcity or opportunity cost, so planners allocated too many resources to some sectors and too few to others; enterprises with chronic losses were bailed out instead of restructured or closed, so inefficient firms survived and capital stayed trapped in low productivity uses.

False Hopes: What was the "shortage economy" and what did it imply about planning?

It was a chronic situation of excess demand for many goods at official prices; shortages led to queues, rationing, and side payments; this showed that planners systematically underestimated demand and that fixed prices could not clear markets.

False Hopes: Why did central planning struggle with information, according to the Hayek type argument?

Because local information about preferences, technologies, and constraints is dispersed among millions of agents and changes constantly; a central planner cannot aggregate and process this information as effectively as decentralized price signals produced by markets.

False Hopes: How did communism affect innovation incentives at the firm and individual level?

Managers were punished more for failure than rewarded for success, so they avoided risky innovations; wage compression and the absence of stock ownership meant workers and scientists captured little of the gains from innovation, reducing effort and creativity.

False Hopes: What were some long run outcomes of communism in Eastern Europe compared to Western Europe?

Eastern European communist countries narrowed some gaps in basic education and health, but they fell behind in income per capita, productivity, and technology; after 1990, transition economies needed deep structural reforms to integrate into global markets.

False Hopes: What was the basic economic strategy of fascist regimes like Nazi Germany?

They used expansionary fiscal policy focused on rearmament and infrastructure, accommodative monetary policy, strict wage and price controls, and financial repression to engineer rapid reductions in unemployment and prepare for war.

False Hopes: Through what concrete policies did Nazi Germany reduce unemployment in the 1930s?

Large scale rearmament, public works like Autobahns, conscription, forced removal of women and Jews from certain jobs, and suppression of independent unions combined to raise measured employment.

False Hopes: Why was Nazi full employment not sustainable without war or plunder?

Because it relied on huge defense spending financed by deficit and hidden money creation, strict controls that suppressed consumption, and growing external imbalances; by the late 1930s the economy was hitting capacity limits and running out of foreign exchange, pushing Germany toward territorial expansion.

False Hopes: In what sense was fascism a “false hope” for solving capitalism’s problems?

It temporarily reduced unemployment and restored order, but did so by abolishing democracy, increasing repression, directing the economy toward war, exploiting conquered territories, and ultimately leading to destruction and long run loss, not sustainable prosperity.

Depression: What are the four classic explanations of the Great Depression listed in the review?

Austrian: capital misallocation; Marxist: declining profits, overproduction, high inequality; Keynesian: fall in aggregate demand with multiplier and animal spirits; Monetarist: policy mistakes, especially the Fed failing as lender of last resort and focusing on contraction.

Depression: Mechanically, what is the Austrian story of the Depression?

Loose credit in the 1920s financed too many unproductive or overly long term investments; when interest rates rose and expectations changed, these malinvestments had to be liquidated, causing a long painful adjustment as the capital stock was restructured.

Depression: Mechanically, what is the Marxist story of the Depression?

High inequality and falling profits meant workers could not buy what capitalist firms produced; overproduction relative to mass purchasing power led to unsold inventories, layoffs, and a crisis of overaccumulation that only massive destruction or restructuring could resolve.

Depression: Mechanically, what is the Keynesian story of the Depression?

A negative shock to expectations reduced desired investment and consumption; the fall in aggregate demand caused output and employment to drop more than one for one because of the multiplier, while pessimistic animal spirits kept investment low, trapping the economy in a low demand equilibrium.

Depression: Mechanically, what is the Monetarist story of the Depression?

A series of bank runs and failures shrank the money supply; instead of offsetting this with expansionary open market operations and acting decisively as lender of last resort, the Fed allowed monetary contraction, turning a recession into a deep and prolonged depression.

Depression: How do more recent explanations combine Monetarist and other insights?

They emphasize the gold standard as a constraint that transmitted deflation internationally, the fragility of the banking system, and feedback between financial distress and real activity, integrating monetary, financial, and real economy channels.

Inequality: What do Piketty and Saez argue caused the big mid century decline in top income shares?

They argue that World War I, the Depression, and World War II destroyed wealth and profits, but that the persistence of lower inequality is mainly due to the creation and expansion of highly progressive income and inheritance taxes which permanently reduced after tax top incomes.

Inequality: What main corrections to Piketty and Saez are highlighted in the review?

Inequality is overstated; the Depression mattered more than World War II for the decline; adjusting for regional prices shows a faster interwar decline; once taxes and transfers are included, the top share of after tax income has not changed much and inequality has not risen as much since 1980 as they claim.

Trente Glorieuses: What are the “trente glorieuses” in economic history?

Roughly 1945 to 1973, a period of exceptionally rapid and broad based growth in Western Europe and other advanced economies, with rising living standards, low unemployment, and strong productivity growth.

Trente Glorieuses: What three main pillars of international economic cooperation were built after World War II?

Political institutions like the UN and NATO; economic institutions like the IMF, World Bank, and GATT; and integration mechanisms like the Marshall Plan, OECD, and the evolving European Community.

Bretton Woods: What was the Bretton Woods system in simple terms?

A system of fixed but adjustable exchange rates anchored on the dollar, with the dollar convertible into gold at 35 dollars per ounce, plus capital controls and the IMF as a lender to help countries maintain parities while pursuing domestic goals.

Bretton Woods: In the “impossible trinity” or policy trilemma, which corner combination did Bretton Woods choose?

Fixed exchange rates and independent monetary policy, achieved by restricting international capital mobility through capital controls.

Bretton Woods: Mechanically, how did restricting capital mobility help countries keep fixed exchange rates and their own monetary policy?

Capital controls limited arbitrage flows that would otherwise react instantly to interest rate differences; this allowed central banks to change domestic interest rates without triggering massive cross border flows that would force exchange rate adjustments.

Bretton Woods: What does “fixed but adjustable” exchange rate mean?

Currencies were pegged at a par value against the dollar, but countries could occasionally devalue or revalue in a coordinated way when the balance of payments was persistently out of line, instead of constantly floating.

Bretton Woods: Why were European countries incentivized to run trade surpluses and accumulate dollar reserves?

Holding dollar reserves was needed to defend their pegs; surpluses helped rebuild reserves and provided insurance against future crises, especially when they feared U.S. inflation or doubts about the gold peg.

Bretton Woods: Why was the United States tempted to pursue expansionary policy under this system?

As the issuer of the key reserve currency, the U.S. could run balance of payments deficits financed in its own currency; expansionary fiscal and monetary policy supported domestic goals and global liquidity, even though it gradually undermined confidence in dollar gold convertibility.

Bretton Woods: What is the Triffin dilemma and how did it contribute to Bretton Woods collapse?

The system needed U.S. deficits to supply liquidity to the world, but persistent deficits eventually made foreign holders doubt that the U.S. had enough gold to back all outstanding dollars; once doubts intensified, countries rushed to convert dollars into gold, forcing the U.S. to suspend convertibility in 1971.

Trente Glorieuses: What were the main sources of Western European catch up growth during this period?

High investment and capital deepening, rapid technology adoption in mass production industries, reconstruction from war damage, favorable demographics and migration, and supportive institutions that stabilized macro policy and promoted trade.

Trente Glorieuses: How did war destruction paradoxically help growth in countries like West Germany?

War destroyed a lot of old, obsolete capital but left human capital largely intact; rebuilding allowed them to install state of the art plants and management practices, which boosted productivity relative to countries like Britain that kept older capital stock.

Trente Glorieuses: What were the key inputs behind West Germany’s “Wirtschaftswunder”?

Large inflows of high human capital refugees and expellees, rapid capital formation, adoption of mass production technologies, good industrial relations, and a social market economy with strong property rights and a hard Deutsche Mark managed by an independent Bundesbank.

Trente Glorieuses: How did the United Kingdom’s postwar performance differ from West Germany’s?

The UK suffered relative decline, with slower growth, stagflation, repeated balance of payments crises, high public spending without supply side reforms, an often overvalued currency, industrial relations problems, and delayed entry into European integration.

Trente Glorieuses: What structural problems contributed to British deindustrialization?

Loss of empire and traditional export markets, an overvalued sterling, antiquated manufacturing plants, fragmented craft based unions that hindered coordination, weak vocational training, and late integration into the European Economic Community.

New Countries: What broad development strategy did many newly independent countries adopt in the 1950s and 1960s?

State led development with strong intervention, redistribution, big infrastructure projects, and especially import substitution industrialization behind high tariffs and quantitative restrictions.

New Countries: In India, what was the “License Raj” and why did it matter?

It was a system where firms needed multiple licenses and approvals to invest, expand, or import; combined with high tariffs it closed the market to foreign competition, encouraged rent seeking and inefficiency, and slowed productivity growth.

New Countries: What does the term “Hindu rate of growth” refer to?

India’s low average growth rate of around 2.5 percent per year for many decades after independence, far below potential and East Asian benchmarks.

New Countries: How did inward looking policies affect India’s external sector?

Trade as a share of GDP fell, trade shifted away from Britain toward the USSR, but Indian exports remained uncompetitive; restrictions on foreign investment limited FDI inflows, even as India relied heavily on foreign aid.

New Countries: How did the neglect of agriculture show up in India’s development path?

Despite abolishing the Zamindari system, agriculture received less attention and investment, leading to low productivity and vulnerability to shocks like the major crop failure in 1966 before the Green Revolution.

New Countries: What role did trade and institutions play in the “Great Divergence” according to Pascali’s work cited in the slides?

Trade increased per capita GDP in countries with inclusive institutions, but it could reduce it in places with extractive institutions; many colonies with weak institutions saw trade deepen inequality and extraction instead of broad based growth.

New Countries: How does Lucas’s “Why doesn’t capital flow from rich to poor countries” connect to colonial India?

Colonial India had low capital inflows despite being poor, illustrating that weak institutions, political risk, and lack of credible property rights can prevent capital from flowing where marginal returns should be highest.

New Countries: What was the Green Revolution and how did it change Indian agriculture?

It introduced high yielding seed varieties first in wheat then rice, combined with more irrigation and fertilizer; this raised yields, increased capital intensity, required subsidies, and widened inequality between more and less capitalized farmers.

New Countries: Why is it hard to claim that trade clearly benefited late colonial India?

Because per capita GDP growth in the late nineteenth century was low, and the gains from trade appear small and short lived; different historians emphasize either destruction of traditional industry or gains from cash crop trade, so the net effect on incomes is ambiguous.

New Countries: Why did many postcolonial development theories “mostly not work” according to the slides?

Because countries that followed the consensus of heavy protection, state planning, and big push industrialization often stagnated; the highest growers tended to follow different strategies focused on exports, low distortions, and basic education.

New Countries: What four elements are highlighted as things that actually worked in successful developing countries?

Peaceful land reform, export oriented growth, low distortions in relative prices, and a focus on primary and secondary education rather than university expansion.

False Hopes: What were the two main ideological alternatives to liberal democracy that gained ground after World War I and during the Great Depression?

Communism and fascism, both claiming to fix the failures of capitalism and democracy by using strong centralized states, repression of opposition, and large scale economic intervention.

False Hopes: Why did the Great Depression make communism and fascism look attractive to many people?

Because the collapse of output, mass unemployment, and banking crises made capitalism look chaotic and unjust; both communists and fascists promised stability, full employment, and national or class revival through state control and planning.

False Hopes: In broad terms, how did communism and fascism differ in what they claimed to fix?

Communism claimed to fix class exploitation and private ownership by abolishing private capital and replacing markets with planning; fascism claimed to fix national weakness and social conflict by suppressing class struggle, unifying the nation, and directing private capital toward state goals.