8.5-8.10

Global Economic Crisis

• European countries borrowed heavily to finance the war, particularly from the United States.
• High inflation occurred, with prices increasing $3-5$ times compared to pre-war levels.
• The gold standard, which tied currency value to gold reserves, lacked flexibility.
• The gap between workers and the wealthy expanded significantly.
• Overproduction of agricultural goods exacerbated economic problems.
• Stock speculation, including buying stocks on margin, became rampant.
• The supply and demand curve illustrates market equilibrium, where supply and demand intersect to determine price and quantity.
  • Price is represented on the y-axis, and quantity on the x-axis.
  • P1 indicates equilibrium price, and Q1 indicates equilibrium quantity.

Dawes Plan

• The Dawes Plan, proposed by American banker Charles G. Dawes, aimed to assist Germany through foreign loans to repay debts.
• Opponents argued that the Dawes Plan did not reduce the total reparations owed and allowed foreign control over the German economy.
• Initially, the Dawes Plan succeeded in stabilizing currency and controlling inflation in Germany.
• Germany was able to meet its Treaty of Versailles obligations for the subsequent five years.
• The international financial system under the Dawes and Young Plans (1924-1930) involved:
  • The U.S. provided $2.5$ billion in loans to Germany.
  • Germany made $2.6$ billion in war debt payments.
  • Allies received $2.0$ billion in reparations payments.

Great Depression

• The American stock market crash in 1929 triggered a global economic crisis.
• European companies' investments in U.S. stocks worsened the economic crisis in Europe.

John Maynard Keynes

• John Maynard Keynes advocated for deficit spending by governments to aid citizens.
• He proposed creating public works jobs to stimulate employment and spending.
• This approach is known as Keynesian Economics.

Responses to the Economic Crisis

• British Response
  • Established a National (coalition) government, including Conservatives, Liberals, and Labour parties.
  • Reduced unemployment from 3 million to 1.6 million in five years (1931-1936).
• French Response
  • Established a coalition government called the Popular Front, comprising left-wing parties (Communists, Socialists, and Radicals).
  • Granted labor unions more benefits, such as a 40-hour work week, paid holidays, and collective bargaining.
  • These measures had limited impact.
• Scandinavian Response
  • Employed cooperative social action involving both capitalists and socialists.
  • Implemented welfare programs, retirement benefits, maternity support, housing subsidies, and unemployment insurance.
  • Initiated public works programs.
  • Significantly raised taxes.
• German Response
  • Germany was already in an economic depression before other countries.
  • The U.S. eventually canceled Germany's debt.
  • The Weimar Republic lost public trust, paving the way for Hitler's rise to power.

Fascism and Totalitarianism

• Fascism is an extreme right-wing ideology.
• Dictatorships often exhibit similarities between far-right and far-left elements.
• Fascism prioritizes the nation or race as a unified community above all other loyalties.
• It promotes powerful and continuous nationalism.
• Constant use of patriotic mottos, slogans, symbols, songs, and flags.
• Fascism seeks to subordinate the population to its vision through totalitarian rule achieved by organized violence to suppress opposition.
• Glorifies force.
• Accepts tenets of Social Darwinism.
• It Is anti-democratic.
• The individual's significance diminishes, with individuals seen as members of the state.
• National pride is cultivated.
• The ruler's personality embodies the state.

The Growth of Fascism in Italy

• Fascism's rise in Italy was fueled by:
  • Fears regarding the survival of capitalism.
  • Economic depression.
  • The rise of a militant left.
  • A sense of national shame and humiliation after unfulfilled requests at the Versailles conference.
  • Rising socialism and communism.

Benito Mussolini

• Served as a sharpshooter in World War I.
• Originally a Marxist and newspaper writer before becoming a fascist.
• Spoke extensively about WWI and envisioned a new Italy emerging after it.

Mussolini Comes to Power

• Fascists gained government seats in the 1921 election.
• In October 1922, Mussolini threatened a coup d’etat, launching his “March on Rome” with 25,000 Black Shirts.
• King Victor Emmanuel II appointed Mussolini as Prime Minister.
• By 1926, Mussolini assumed dictatorial powers (Il Duce).
• New laws established a one-party state, abolishing independent political parties and trade unions.
• Freedom of the press was curtailed.
• Special courts were created to persecute political opposition.
• A national police force was established.
• Mussolini aimed to restore the glory of Ancient Rome and invaded Ethiopia; made updates and restorations on Ancient Roman monuments.

Anti-Semitism

• Approximately 50,000 Jews lived in Italy in the 1930s.
• Mussolini did not initially target the Jewish population as Hitler did in Germany until Germany occupied them and forced the Holocaust on them as well (1936).

Germany: The Rise of Hitler

• The Weimar Constitution was weak, hindering coalition formation.
• People distrusted the Republic, viewing it as an imposed Versailles government.
• It could not manage massive inflation.
• Adolf Hitler was born in Braunau, Austria but served in the Germany military during World War I after being rejected from the Austrian military; was gassed in 1918 and lost his vision for a time.
• Hitler believed Germany was betrayed by Jews and Marxists, not defeated in WWI.
• He espoused racist ideas, considering Germans as “Aryans” descended from a superior Caucasian people.

German Workers Party

• Hitler joined the German Workers’ Party, became its leader, and renamed it the National Socialist German Workers’ Party or Nazi Party.
• He took the title “Führer” (leader).
• He created a paramilitary group called the “storm troopers” (S.A.) led by Ernst Rohm that attacked people on the streets.

Beer Hall Putsch

• On November 9, 1923, Hitler attempted a coup in Bavaria and planned to march to Berlin, but it failed due to lack of military/police support.
• Hitler was arrested and sentenced to 5 years in jail.
• Hitler's trial speeches gained him popularity among Germans, spreading his extremist views.
• While in prison, Hitler wrote Mein Kampf (“My Struggle”), outlining his plans for Germany to rearm, conquer territories (especially eastward), and gain “living space” (lebensraum).
• He claimed victory had been stolen from Germany during WWI.
• Appealed to middle class Germans.
• The Great Depression increased Hitler's following, enabling him to create a mass political movement.
• President von Hindenburg appointed Adolf Hitler as Chancellor of Germany in January 1933, believing they could control him.

Hitler Consolidates Power

• Hitler ordered the German army to kill SA or storm troopers including leader Ernst Roehm (his friend!) because they were becoming too popular (The Night of the Long Knives).
• After Hindenburg's death in 1934, Hitler named himself both Chancellor and President, making him the sole ruler of Germany and the Nazi Party.
• Hitler established the SS organization to replace the SA and Heinrich Himmler carried out the purges, The Gestapo or secret police was created and arrested any threat to the Nazis.
• The Nuremberg Laws of 1935 stripped Jews of citizenship, prohibited marriage between Jews and non-Jews, and removed many other rights.

Kristallnacht

• November 9-10, 1938, marked Kristallnacht or the Night of the Broken Glass, a pogrom in retaliation for a Jewish boy killing a Nazi official.
• Jewish businesses, synagogues, cemeteries, and other Jewish places were attacked, burned down, or damaged.

Spain

• The Popular Front (left-wing) took control of the government, opposed by the army, Church, and wealthy elites.
• General Francisco Franco led the opposition (Fascists) in a Civil War.
• Franco’s army won, supported by Italy and Germany.

The Soviet Union

• Following Lenin's strokes in 1922 and 1924, a succession rivalry emerged between Trotsky (backed by the military) and Joseph Stalin (backed by Moscow).
• Lenin did not want either in power
• Trotsky backed off for fear that communism would collapse if a real fight for power took place.
• Joseph Stalin implemented aggressive Five-Year Plans to rapidly expand government-run heavy industry.
• The economy grew quickly, but working & living conditions were horrible and people who did not meet quotas were targeted, some killed or sent to gulags.

The Purges

• The assassination of party chief Sergei Kirov triggered a series of purges, targeting anyone Stalin considered an enemy.
• Liquidation of Kulaks (land owners)
• Collectivized agriculture
• Communes/Councils (soviets)
• Purges targeted people in the military and throughout all sectors of the Soviet Union and Sent to gulags; show trials were common.

Europe During the Interwar Period

• Hitler initially moved cautiously, unsure of how France and Britain would react and stated only desired peace when breaking the treaty.
• He isolated France and negotiated with Britain and Italy.
• Appeasement: Britain and France allowed Hitler to violate the Treaty of Versailles, hoping he would stop; due to the Great Depression, they felt they had no choice.
• Hitler exploited this by seizing territories and rearming.
• Germany's unemployment rate was 33% in 1933, with skewed figures excluding Jews and women.
• Military expansion and factory construction for rearmament increased.
• The Rhineland was remilitarized by Germany.
• Refusal of offered employment resulted in consignment to a concentration camp.
• $Germany Invades the Rhineland$ - March 7, 1936

Rome-Berlin Axis Pact

• In 1936, Mussolini and Hitler signed the “Pact of Steel,” forming the Axis alliance.
• Later, Japan joined the Axis Powers.

Aggression & Appeasement

• Hitler pressured Austrian Chancellor Kurt von Schuschnigg to legalize the Austrian Nazi Party.
• On March 12, 1938, Hitler’s troops marched into Austria, claiming to protect mistreated Germans, and unified the countries; Britain and France did nothing.
• The Sudetenland: In 1938, Hitler demanded Germany gain the Sudetenland, a Czechoslovakian territory with a German majority.
• The Munich Agreement: Great Britain and France ordered Czechoslovakia to cede the Sudetenland to Germany under threat of war.
• On March 16, 1939, Hitler seized all of Czechoslovakia, shocking Mussolini.
• Britain and France did nothing.

Nazi-Soviet Non-Aggression Pact

• Germany signed a nonaggression pact with the Soviet Union on August 23, 1939.
• They agreed to divide Poland and other areas of Eastern Europe.

World War II

• On September 1, 1939, Germany invaded Poland using blitzkrieg tactics, with 1.5 million troops entering as Soviets invaded from the east.
• The German air force (Luftwaffe) destroyed the Polish air force immediately.
• Britain and France declared war but could not intervene in time.
• An immediate attack on Germany might have been successful as Britain & France had twice as many forces on the Western front, but they did not want another WWI.
• Months of inaction followed, known as the “phony war” or “Sitzkreig” (Sitting War).
• In April 1940, the Germans invaded Denmark which surrendered without fighting.
• Germany then conquered Norway, where Vidkun Quisling became head of a puppet government.
• On May 10, 1940, Winston Churchill replaced Chamberlain as prime minister of Great Britain.

Battle of Britain

• Air war over London and surrounding areas in the Summer and Autumn of 1940.
• France was prepared for a fight with the Maginot Line, their defense wall and fortresses along the German/French border.
• The army became demoralized sitting in their bunkers, waiting all winter long from 1939 to 1940.
• French generals lacked confidence in their army.
• Belgium refused to coordinate war plans as they prepared to stay neutral leaving a vulnerable border.
• May 10, 1940: Germany began their attacks focused to take the Netherland, Belgium, and France.
• The French government fled Paris for Vichy in the south.
• Churchill wanted the French government to move to North Africa and continue fighting.
• The French military surrendered in June 1940 after 100,000 deaths.

Nazi-Soviet Pact (part 2)

• Hitler always intended to invade the Soviet Union.
• Mein Kampf implies Russia would provide grain, factories, & “living space”.
• The Pact was used to help him keep the Soviet Union out of the war until Hitler attacked.
• “Operation Barbarossa,” the invasion of the Soviet Union, began on June 22, 1941.
• Russia joined the Allies.
• Hitler failed to prepare for the Russian winter in Moscow (like Napoleon).

Key Allied Leaders

• Britain: King George VI/Winston Churchill (joined in September 1939).
• Soviet Union: Joseph Stalin (joined in June 1941).
• USA: Franklin Roosevelt (joined in December 1941).
• Germany: Adolf Hitler (joined September 1939).
• Italy: Benito Mussolini (joined June 1940).
• Japan: Emperor Hirohito (September 1940).
• German tank divisions, led by Erwin Rommel, the