Economy in the Interwar Period Summary

Economy in the Interwar Period

  • Government Intervention

    • Increased government role in economies worldwide during the 1930s due to the Great Depression.
    • U.S. response under President Roosevelt: liberal policies targeting economic inequities.
    • Contrast with Germany, Italy, and Japan's shift to far-right governments.
    • Soviet Union's implementation of Five-Year Plans for economic control.

  • The Great Depression

    • Resulted from World War I fallout and economic instability.
    • Treaty of Versailles imposed heavy reparations on Germany, leading to inflation.
    • Global downturn initiated by U.S. stock market crash in 1929; inflation and unemployment followed.

  • Keynesian Economics

    • John Maynard Keynes advocated for government deficit spending to stimulate the economy.
    • Roosevelt's New Deal utilized Keynes's ideas for recovery, focusing on relief, recovery, and reform.

  • Global Economic Impact

    • Over 30 million unemployed globally by 1932.
    • Trade and production declined sharply; strict tariffs imposed by nations.
    • Japan managed a quicker recovery through currency devaluation and military expansion.

  • Political Revolutions

    • Countries like Mexico, China, and Russia underwent significant revolutions, impacting their economies.
    • In Russia, Lenin's NEP allowed some private trade, but Stalin's Five-Year Plans focused on industrialization and collectivization, leading to widespread famine.

  • Rise of Fascism

    • Fascism emerged as a radical right-wing response to economic crisis; glorified nationalism and militarism.
    • Mussolini’s governance in Italy emphasized corporatism and totalitarianism.
    • Spanish Civil War became battleground for democracy vs. fascism; international involvement shaped its course.

  • Brazil's Shift

    • Getulio Vargas's rule began after the 1930 coup; focused on industrialization but curtailed political freedoms.
    • Economic and political repression mirrored European fascist trends.

  • Summary of Economic and Political Policies

    • Economic approaches:
    • Communism: Government-owned production, international solidarity, political/economic equality.
    • Capitalism: Private ownership, competition, mixed nationalism/internationalism.
    • Fascism: Private ownership but with government control over competition, strong nationalism, anti-equality.