1. Nationalism, The Great Depression and the Rise of Facism

2.  In general, economics refers to the way people acquire goods and services  Involves the factors of production:  Land  Labor  Capital  In the modern world, it mostly involves understanding how money works and is used by people

3.  Economies work in a cause and effect manner.  All economies are based on the spending of money in a circular pattern  Consumer buys products  Business make products and pay employees  Government collects taxes  Anything that interrupts money flow negatively affects the overall economy

4.  Most economies go through good and bad periods  Good times = Expansion  Jobs are being created  Money is being spent  People are confident about their financial futures  Savings tends to be lower  Bad times = Contraction  Spending decreases  Less business = fewer jobs  Unemployment leads to even less spending  Overall economy goes down

5.  When contractions get bad enough, we give them names:  Recession  Significant job losses  Decrease in business production  Usually don’t last too long  Depression  Major job loss  Production decline much more severe  Tend to take much longer to recover from https://www.youtube.com/watch?v=5e1BuKBdi84

6.  So what causes the downturns? Anything that interrupts spending / flow of money  Natural Disasters  Unexpected price increases – especially for needed commodities (oil / gas)  War!  Inflation  Not totally bad – only when out of control  Value of money goes down  Happens when there is too much money in circulation  People can’t buy as much  Has many negative effects on the overall economy http://www.youtube.com/watch?v=- pwincsv4E0&feature=related

7.  European economies are wrecked from the war  Germany is expected to pay enormous reparations  Has to rely on investment from America  Through the 1920’s this works; America has money to invest  U.S. economy collapses in 1929. American investment in Germany dries up  Without American money coming in, Germany has to default on their payments  German economy completely collapses  Massive poverty and fear among the German people

8.  A new German political party forms that would become known as the National Socialist Party – or Nazi Party  They believe and promote the idea that the German WWI effort was sabotaged by Jews living in Germany. Making them a scapegoat for German anger.  They believed that Germans came from a “master race” known as the Aryans and were superior to all others

9.  The German government becomes concerned about this new party.  A former officer in the German army is sent to spy on this group  While a observing the group undercover, he gives a speech  So impresses the group that they ask him to join  So, Adolf Hitler the government spy, becomes the chief propagandist for the Nazi Party.  As you know, he would later become the leader of the Party.

10.  When Germany defaults, the economies of England and France take a hit  Great Depression becomes a world-wide problem – first time for a “global” depression  Japan begins a military build-up in preparation for its invasion of China  Japan had seen the West use imperialism  Felt justified in doing the same with weaker nation – China  Italy was also suffering economically. Benito Mussolini led an effort to take over the government there in mid-1920’s

11.  Stage is set for rise of strong, militaristic governments around the world. Reasons:  Citizens are fearful and looking for answers  National pride has taken a hit in many countries  Strong leaders are emerging who promise a better future  Western democracies are focused on their own problems and not looking at the big picture.