Totalitarian Regimes and the 1929 Economic Collapse
Characteristics of the Fascist State in Italy
Foreign Policy
Initially, foreign policy focused on economic progress and stability. Italy signed the Locarno Treaty, accepting the frontiers fixed by the Peace of Versailles.
Mussolini concentrated all powers, implanting the Fascist dictatorship. He refocused foreign policy towards expansion:
- Invasion of Ethiopia.
- Invasion of Albania.
- Military alliances, leading to participation in the Second World War.
Economic Policy: State Intervention and Autarky
The economy was characterized by state intervention aimed at stimulating production and heavy investment in infrastructure.
An autarkic economic policy was pursued, meaning the Italian state attempted to cater to its needs using only its own resources.
Social Control
Social control involved the compulsory enrollment (encuadramiento) of employers and employees into a single, unique union structure (Corporatism).
Characteristics of the Nazi State in Germany
The Nazi state was characterized by:
- Suspension of individual liberties contained in the Constitution.
- Elimination of all political opposition.
- Creation of the state secret police.
- Building of concentration camps.
Expansionist Foreign Policy and Ideology
Driven by the need to find "Lebensraum" (living space) for the German people, the Nazi agenda included the recovery of territories lost by the Treaty of Versailles.
Key expansionist actions included the invasion of Czechoslovakia, the annexation of Austria, and the invasion of Poland.
Extreme nationalism was central. The objective was twofold:
- To unify all territories with significant German minorities.
- The extermination of ethnic or religious groups deemed undesirable, such as Jews and Gypsies.
Economic Policy
Characterized by interventionism and autarky. The primary goal was to solve the severe economic crisis and prepare the nation for war.
Social and Racial Policy
The Nuremberg Laws legalized racial discrimination against Jews. These racial policies consequently led to the exile of many intellectuals, scientists, and artists.
The Crisis of 1929 (The Great Depression)
Causes of the Crisis
The crisis of the 1930s stemmed primarily from two factors:
- Overproduction: Companies were forced to reduce production due to the accumulation of quantities exceeding necessary demand.
- Stock Market Speculation: This was seen as the fastest way to profit—buying shares cheaply to sell them later at even higher prices, inflating asset values artificially.
Black Thursday (October 1929)
In October 1929, a substantial number of shares went on sale on the New York Stock Exchange. The failure of new buyers to materialize generated a wave of panic among shareholders. The value of actions plummeted so rapidly that a stock market crash occurred, causing the ruin of many investments.
Consequences of the Crisis
Economic Consequences
With the closure of banks, customers could not withdraw their deposits of money. Consequently, large companies and industries were forced to halt production.
Social Consequences
The closure of many factories resulted in the unemployment of millions of workers. The only recourse for family survival was often reliance on alms and charity.