Global Shifts 1919-1939: Democracy, Crisis, and the Rise of Authoritarianism

The Advance of Democracy and Authoritarianism

The majority of the states that arose after World War I were democratic republics, and women gained political rights and suffrage.

• However, in some countries, authoritarian systems became the norm, many of which were inspired by the Mussolini dictatorship.
• The most important democracy of this period was the Weimar Republic, but it lacked strong popular support. (In 1923, Hitler attempted a coup in Munich.)

From Versailles to Locarno: Seeking Peace

The first years after WWI were marked by widespread dissatisfaction with the Treaty of Versailles.

Politicians attempted to avoid another war, leading to the signing of the Locarno Treaties (1925). Key outcomes included:

• Frontiers were recognized.
• Some areas, such as the Rhineland, were demilitarized.

The Locarno Spirit represented the peak of optimism between the wars and boosted the prestige of the League of Nations.

The United States in the Roaring Twenties

• The US sought to expand its influence but faced competition, particularly from the Japanese fleet.
• Racism surged domestically, marked by the rise of the Ku Klux Klan.
• The USA's Prohibition law (banning the sale of alcohol) was exploited by gangsters, allowing organized crime to grow significantly.
• The economy grew rapidly, leading to a financial boom that eventually resulted in an economic crisis.

Technological Advancements and Consumerism

• Electricity became the main energy source, replacing coal and gas. The production line system and lower prices made the first electrical appliances accessible in homes.
• A consumer society was created, leading to new forms of mass entertainment (e.g., cinema and the gramophone).
• Radio became a powerful medium for mass communication and culture.

Beginnings of the Bubble: Causes of the 1929 Crash

The 1929 stock market crash was the largest economic crisis in history. Its primary causes included:

• Cyclical Depression: The capitalist system has inherent phases, one part of which is depression.
• Reduced European Consumption: Europe was financially devastated by the war, causing countries to reduce consumerism.
• Overproduction: Production grew faster than demand, leading companies to accumulate excessive stock. Prices dropped, and many businesses went bankrupt.
• Stock Market Speculation: Excessive speculation led directly to a speculative bubble.

The Great Depression and Global Recession

The crisis spread quickly to all areas of the economy, causing a general economic recession because American banks held significant European credits. Unemployment figures were extremely high, and low prices and salaries plunged families into poverty while industrial output dropped sharply.

Political Responses to the Crisis

This crisis marked the end of classic liberalism.

• In the United States, President Roosevelt introduced his New Deal, a political program with measures designed to fight against poverty.
• The Soviet Union experienced incredible economic growth, which made communism look tempting to many.
• Fascism was perceived by some as being more efficient in combating the depression than democracy.

Keynesian Economics: State Intervention

According to John Maynard Keynes, all economies were related. Keynes argued that state intervention was the best way to escape from the crisis, advocating for measures such as:

• Public investment to provide employment.
• Increased wages to boost consumption.