Interwar Transformations: France and US Economic Paths

France's Interwar Challenges and Resilience

The French Republic also suffered the impact of the First World War, to an even greater extent than Britain. France had dedicated more human and financial resources to the conflict, leaving the country deeply in debt. France underwent dramatic moments until 1924, then experienced a period of prosperity. However, after the crisis of 1923, it suffered a serious economic and social depression. France successfully prevented the establishment of authoritarianism thanks to the following factors:

• A Mixed Electoral System: Candidates who obtained an absolute majority in each constituency were elected automatically. This system encouraged the formation of coalitions before elections, with the intention of achieving a majority in each district. However, governments were often unstable.
• The Union of the Left: From 1932, the impact of the economic crisis and the impotence of successive governments led to efforts to stem the fascist movement. Socialists and Communists joined the bourgeois left to prevent a fascist dictatorship, forming the Popular Front, which won the 1936 elections.
• Attempts to Boost Purchasing Power: The government formed in 1936, chaired by the Socialist Léon Blum, successfully negotiated the Matignon Accords between workers and employers. These accords reduced the working week to forty hours and increased wages.

These achievements were undermined by 1938 due to France's poor financial conditions, inflation, a lack of cooperation from management, and internal contradictions. Following these failures, the possibility of establishing an authoritarian regime arose, particularly during World War II.

United States: Post-WWI Ascendancy and the New Deal

The U.S. emerged stronger after the First World War, acquiring international political leadership and becoming the greatest industrial power of the moment. During the 1920s, the United States experienced significant economic prosperity, and its political regime remained stable. This stability was made possible by:

• Relative Isolation from European Problems: The U.S. largely avoided direct involvement in European political turmoil.
• The Republican Party's Political Dominance: Republicans held sway until 1933, promoting pro-business policies.
• The Development of Consumer Society: A booming consumer culture fueled economic growth.

However, this period of prosperity was abruptly halted by the Great Depression. In 1933, Franklin Delano Roosevelt, a Democrat, became president. He led the country without interruption until 1945 and applied effective measures to address the crisis, precluding any possibility of revolution or authoritarian solutions.

All economic and social policies adopted were collectively known as the New Deal, a covenant by which the President pledged to the citizens. The New Deal tested a new economic model: the state actively intervened in the economy, seeking, above all, to strengthen demand as an engine of growth and combat unemployment and the social consequences of the crisis. As a result, the state budget deficit began to grow, and employers, the press, and the Courts protested against excessive interventionism. But Roosevelt had great popular appeal and promoted his actions with greater intensity.

His accomplishments were significant, though not without errors. Roosevelt's policy introduced an innovative principle: the active intervention of the federal state and the presidency in the economy. Thus, classical economic liberalism was challenged. The USA became the pioneer of state-interventionist economic policy, a model later adopted in Europe after 1945.