Inter-War Years (1918-1939)

Most countries showed signs of economic recovery by mid-1920s Yet recovery was only too fragile European economy was dependent on reparations paid by Germany and Austria as well as the flow of US funds to Europe Once the US withdrew its funds & loans due to economic crisis back home, world financial system collapsed The Great Depression

Great Depression: The US There were signs of economic hardships before 1929 especially across peripheral countries US played the anchorage role in the world economy after WWI due to its post-war economic boom Investors in the US started to invest in risky ventures and stocks Many people borrowed from brokers/banks and mortgaged their homes Stock market crash in October, 1929 after a wave of panic selling on the New York Stock Exchange Great Depression: The US

Great Depression: The US By 1932, industrial production had fallen half of its 1929 levels National income had dropped by approximately half 44% of US banks went out of business and deposits of millions of people had disappeared Due to US’s role in post- WWI recovery, crisis in the US had a domino effect across the globe Great Depression: The US

The Great Depression: Germany Britain and France’s post- WWI economic recovery was largely financed by reparation money paid by Germany & Austria German share of this money was especially high Banks in Germany & Austria took most of their loans from the US US banks called those loans back and refused extending short term loans in order to raise money Germany hit especially hard

The Great Depression: Germany Precipitous economic decline in Germany by 1932 35% Unemployment 50% decline in industrial production Discontentment with the Weimer Republic Rise of National Socialism after 1929 Hitler assumed power as chancellor in 1933 Germany became a single- party dictatorship

The Great Depression: the Domino Effect Being an exporter of manufactured goods, Japan was hit hard Exporters of raw materials were also influenced very negatively from depression such as countries in Latin America, Asia, and Africa Between 1929 and 1932, world production declined by 38 percent and trade dropped by more than 66 percent

Great Depression: Consequences Destruction of international financial and commercial networks of capitalist economies Resort to economic nationalism through inward- looking, protectionist economic measures Deepening of post-WWI pessimism Marriage, childbearing and divorce rates declined, while suicide rates rose: mass human suffering Rise of totalitarianism

Totalitarianism Stalin’s Soviet Union (1924-1953) Hitler’s Germany (1933-1945)

Stalin’s Soviet Union (1924-1953) A Georgian by birth, a Russian nationalist by conviction Adopted surname “Stalin” meant “man of steel” By 1928, became the unchallenged leader Initiated First Five Years Plan Centralization of the entire national economy was the alternative to market capitalism Stalin’s Soviet Union (1924-1953)

USSR Growth of industry Collectivization of agriculture

Stalin: “One death is a tragedy. A million is a statistic.”

Hitler’s Fascist Alternative Fascism emerged in Europe as a political ideology between two world wars Mostly the middle classes and rural populations were attracted to ideology Put emphasis on glorious objectives; national community as a unique ethnic or racial group; and a strong leader Hitler’s Fascist Alternative

Germany under Hitler’s Rule

Germany under Hitler’s Rule Once Nazi power was consolidated, racist ideology was put into practice Nationalism based on “pure” German “race” Policies designed to boost birthrates Compulsory sterilization Discrimination against Jews and gypsies

Mussolini’s Fascist Regime Indeed fascist movement grew first in Italy Ineffective political leadership; economic hardships; and disappointment with WWI settlements were influential in its rise Mussolini was initially a socialist Later turned to nationalism, demanded suppression of socialists, and strong leadership

Italy under Mussolini’s Rule Between 1925 and 1931, Italy turned into a one-party dictatorship In 1926, Mussolini seized total power and became the dictator He became Il Duce (the leader) Other parties were outlawed Political dissents silenced As Mussolini established good relations with Hitler, anti-Semitic laws started to be issued by 1938 Italy under Mussolini’s Rule