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AP World History Unit 7 - Lesson 7.4

Economy During the Interwar Period

The Great Depression

  • Germany could not afford to pay the reparations they owed as a result of the Treaty of Versailles, so the government printed more money causing inflation.
  • Inflation: General rise in prices and fall of the value of money.
  • The Great Depression was the international economic crisis following world war one.
  • Causes of the Great Depression included:
    • United States stock market crash.
    • Agricultural overproduction.
  • Germany suffered from bank failures caused by American investors withdrawing.
  • Africa, Asia, Latin America, and Japan all depended on the imperial countries’ economies, thus suffered from their downturns.
  • Deficit Spending: Action of spending more than the government takes in. British economist John Maynard Keynes suggested the strategy to stimulate economic activity.
  • The New Deal: FDR’s set of domestic policies for relief of citizens suffering from the Great Depression.'
  • The Great Depression finally ended when the U.S. joined WW2 and raised military spending.
  • As unemployment increased rapidly across the world, trade declined.
  • Japan made it out of the depression quickly through lowering the value of their money.

Political Revolutions in Russia and Mexico

  • Russian Civil War (1918-1921): Russian and Ukrainian revolts and strikes against the Russian government.
  • Russian economy collapsed due to drops in industrial and agricultural production.
  • Lenin New Economic Plan: Temporary retreat from communism in Russia, reintroduced private trade and economic liberties.
  • Joseph Stalin took control of Russia’s Politburo and became a dictator.
  • Five Year Plan: Stalin’s plan to transform the soviet union into an industrial power.
  • Collectivized: Process in which farmland was taken from private owners and given to kolkhoz.
  • Kolkhoz: Group of peasants who freely joined together to farm a portion of land.
  • Russian farmers retaliated and moved to the cities.
  • The USSR’s brutal success posed a threat to capitalist countries experiencing unemployment.
  • The Institutional Revolutionary Party dominated Mexican politics in the interwar period and favored land reforms, access to jobs and education, land reforms, and improvement of infastructure.
  • PEMEX: This oil company became the second largest state owned company in the world.

Right Wing Governments

  • Germany and other countries turned to Fascism: A political system that promotes extreme nationalism, military glorification, denial of individuals rights, and putting blame on ethnic minorities.
  • Italy’s fascist movement was based of Corporatism: A political idea that different groups in society should take part in political decisions.
  • Italy imposed it’s fascist movement on everyone, becoming a Totalitarian State.
  • Italy was given little territory from the Treaty of Versailles.
  • Dictator Benito Mussolini of Italy conquered Libya, Somalia, and Abyssinia (Ethiopia), destroying the League of Nations credibility and forming an alliance with Adolf Hitler of Germany.
  • Spanish Civil War was sparked by the opposing ideologies in Spain, democracy and fascism.
  • The Popular Front: Electoral alliance in Spain, formed by left wing parties.
  • Nationalists led by Francisco Franco vs defenders of the new Spanish republic, the Republicans/Loyalists.
  • Despite a non-intervention agreement, Germany, Italy, and Portugal aided the nationalists, while the U.S, USSR, Britain, and France aided the Loyalists.
  • Guernica Attack: Aerial bombing on citizens in the northern basque region, exercised the German air force.
  • Franco and the nationalists won in 1939, and Franco ruled as dictator until his death.
  • Brazil had a very slow switch from agricultural to industry based economy, as a result they struggled bad from the Great Depression.
  • Getulio Vargas took power as president of Brazil, his actions were similar to Mussolini’s as he:
    • Implemented pro-industrial policies.
    • Strict government censorship of differing political beliefs.
    • Hyper nationalism: Belief that one’s nation is superior over all others.
  • Brazil joined the Allies in WW2, causing them to also push for democratic government in their own country.