GB and France disagree over Germany and the Treaty of Versailles. French view: reparations the key to security. British view: Germany a valuable market.

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Presentation transcript:

GB and France disagree over Germany and the Treaty of Versailles. French view: reparations the key to security. British view: Germany a valuable market. John Keynes and Economic Consequences of the Peace Denounced the Treaty of Versailles Impoverished Germany would increase economic hardship in all countries.

Repercussions of Germany’s inability to pay reparations. French and Belgians occupy the Rhur. German passive resistance. Runaway inflation. Gustav Streseman and compromise. German leader requested France reconsider reparations. France’s position very unpopular with GB, US, and French citizens.

1924: The Dawes Plan loans from the U. S. To Germany to pay reparations to France and GB. Logic: enabled France and GB to repay their loans to the U. S.

The Radical Right The appearance of Adolf Hitler. Democracy in Germany Thru 1929, parliamentary government and regular elections. Divisions between left and right. Rightists: nationalists, monarchists. Leftists: Communists.

Political conflict in France. Communists, socialists, moderates. Rebuilding of the north of France created a deficit and inflation. Solution: spending cuts and tax increases. GB and unemployment. Subsidy programs portend the welfare state to come. Rise of the Labour Party. Ramsay MacDonald.

American stock market crash. “Real” investment vs market speculation. Buying “on margin.” Panic selling. Declines in production. Lessened wealth led to buying slowdown. Buying slowdown led to production cuts.

Production decreased. Production cuts led to mass unemployment. Social and psychological problems. Marriage postponement. Declining birthrates. Increases in suicides.

FDR’s goal. Reform capitalism in order to preserve it. Government intervention in the economy. The National Recovery Administration (NRA) Reduce competition, fix prices and wages, and sponsor public works projects. NRA declared unconstitutional

Social security, etc… Old age pensions, unemployment benefits, collective bargaining. The failure of the New Deal. Never did pull the U.S. Out of depression. Balanced budget allure; deficits too small to be effective.

Socialism. Cooperative social action. Deficit spending. To finance public works projects. Maintained production and employment. Req: high taxes and large bureaucracy. Scandinavian welfare socialism. A middle ground between capitalism and communism or fascism.

Britain’s concentration on its national market. Government instability in France. Succession of coalition governments. Rise of fascist organizations. Growing strength of communism. The Popular Front: alliance of Communists, Socialists, and Radicals. Leon Blum