1930s Economic Recovery: Contrasting European Strategies

Economic Recovery in Scandinavian Nations

The economic recovery in Sweden and Denmark was notably faster than in other countries. The key element was assigning the state budget an active, anti-crisis role in combating the economic downturn. When private investment from entrepreneurs decreased, leading to unemployment, the state increased its own investment to compensate for this effect.

The implementation of these programs was decisively influenced by social democratic parties, which were already promoting measures to improve conditions for workers. These parties were instrumental in approving plans to aid the unemployed.

International and British Responses

Beginning in 1932, the governments of the United States, France, and Britain struggled to end the ongoing trade war and stabilize the monetary system to facilitate international trade. To this end, the 1933 London International Conference was convened to resolve disagreements over war debts and put an end to volatile currency fluctuations.

Despite the severity of the crisis, the United Kingdom did not adopt measures similar to the American New Deal. Instead, it implemented traditional anti-crisis strategies, including:

• Devaluing the pound to encourage exports.
• Resorting to protectionism.
• Establishing preferential trade agreements with its colonies.

This strategy successfully increased its exports and improved the economic situation in countries that exported raw materials and foodstuffs.

Nazi Germany's Approach to Economic Recovery

Nazi Germany provided an example of economic recovery under a totalitarian state. To achieve this, the regime initiated a massive rearmament policy to stimulate industrial growth. Large-scale public works projects also played a significant role in the rapid economic improvement.

Hitler aimed to achieve economic autarky, or self-sufficiency, which would allow Germany to thrive without relying on exports by producing all necessary goods domestically. These policies led to significant growth in industrial production and a notable decline in unemployment.

However, this rearmament-based recovery was founded on Hitler's belief that state economic activity should be directed toward restoring the military power of the German people. Ultimately, this policy of stockpiling weapons led directly to the outbreak of World War II.