Post-Depression Economic Policies: Germany to Scandinavia

Economic Recovery in Germany (1930s)

Germany presented an example of economic recovery achieved within a totalitarian state. This recovery was driven by strong enabling policy interventionism designed to stimulate the growth of heavy industry.

Key economic strategies included:

• Significant expansion of public works programs.
• Strict restrictions on imports.
• A push for economic self-sufficiency (Autarky), aiming to produce internally everything needed, regardless of export performance.

These measures resulted in substantial growth in industrial production and a significant decrease in unemployment. However, this economic success was coupled with:

• Brutal repression of trade union leaders and leftist parties.
• Strong wage restraint imposed on workers.

This aggressive economic policy ultimately contributed directly to the outbreak of the Second World War.

United Kingdom and France: Divergent Responses

The United Kingdom's Traditional Approach

The United Kingdom did not adopt policies similar to the American New Deal. Instead, it relied on traditional anti-crisis measures:

• Devaluation of the pound to encourage exports.
• Resorting to protectionism.
• Establishing preferential trade agreements with colonies, which boosted British exports.

France and the Popular Front

In France, the first steps comparable to American interventionism did not occur until 1936, following the victory of the Popular Front. This government implemented a series of social programs:

• Reduced working hours.
• Higher wages and collective agreements.
• Introduction of paid leave.

Furthermore, the Popular Front initiated public works policies, guaranteed prices for farmers, and devalued the franc to increase exports.

Scandinavian Countries: Demand Stimulation and the Welfare State

Economic recovery in countries like Sweden and Denmark was notably faster, primarily due to the implementation of measures designed to encourage demand.

The key element of this strategy was utilizing the State budget as an active anti-crisis instrument. The state significantly increased its investment to compensate for reduced private investment.

The implementation of these programs was decisively influenced by the strength of social democratic parties, who advocated for measures to improve the situation of workers and secured the approval of plans to aid the unemployed.

These policies marked the beginning of the construction of the Welfare State in Scandinavia, encompassing vital social provisions such as:

• Pensions
• Social Security