7.4 Economy In The Interwar Period

Question: Context of the Great Depression
Answer: World War I led to the deaths of millions of citizens and the spending of tremendous amounts of money in the Allied Nations. The Central Powers (especially Germany) suffered as a result of the Treaty of Versailles, having to pay billions of dollars in reparations.
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Question: How did the Treaty of Versailles impact different countries' economies?
Answer: Germany could not pay the billions of dollars of reparations, so the government printed more paper money which led to inflation. The value of German money decreased. France and Britain had trouble paying loans from the US because Germany was not paying them. The Soviet government refused to pay Russia's debts.
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Question: Causes of the Great Depression
Answer: Agricultural overproduction, US stock market crash, and unpaid debts and reparations following WWI.
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Question: How did the Great Depression impact Germany?
Answer: American investors who had been investing in German banks removed it after the US stock market crash which led to bank failures. It increased discontent with the Weimar Republic.
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Question: How did the Great Depression impact Africa, Latin America, and some parts of Asia?
Answer: Their economies suffered because they depended on imperial nations that were experiencing hardship.
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Question: How did the Great Depression impact Japan?
Answer: Japan's exports were cut in half. In response, Japan devalued its currency so Japanese-made products became less expensive than imports. Overseas expansion also increased the need for military goods which stimulated the economy. This helped Japan recover quickly.
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Question: John Maynard Keynes
Answer: A British economist who rejected laissez-faire economics and concluded that intentional government action could improve the economy. He said governments should use deficit spending and cut taxes to stimulate economic growth.
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Question: Deficit Spending
Answer: A government practice of spending more than it takes in to stimulate economic activity.
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Question: New Deal
Answer: Policies and programs based off of Keynesian economics initiated by Franklin Delano Roosevelt to bring the US relief for suffering citizens (poor, unemployed, farmers, minorities), recovery, and reform to change policies in hopes of avoiding future economic disasters.
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Question: How did the Great Depression continue and end in the US?
Answer: Roosevelt's new deal led to economic growth, but he reversed it because he feared that deficits were growing too large. Then, it ended when the US entered WWII.
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Question: How did the Great Depression impact the global economy?
Answer: 30 million people lost their jobs, international trade declined, nations imposed strict tariffs, and people turned to their governments for help.
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Question: Communism
Answer: The belief that the government should control businesses. It opposed colonialism, called for global worker solidarity, supported political and economic equality, and advocated for atheism.
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Question: Capitalism
Answer: The belief that businesses should be privately owned and compete with one another. It supported political but not economic equality and allowed individual religious liberty.
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Question: Fascism
Answer: The belief that businesses should be privately owned and the government should restrict competition. It supported nationalism, opposed peace, opposed political and economic equality, and used religion to build nationalism.
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Question: Russian Civil War
Answer: A conflict in which the Red Army successfully defended the Bolshevik government against anti-Bolshevik "White" armies. The population faced starvation, many workers went on strike, peasants hoarded food, and industrial and agricultural production dropped.
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Question: New Economic Plan (NEP)
Answer: Lenin's 1921 plan to improve the Soviet economy by taking a temporary retreat from Communist policies. He reintroduced private trade but the government maintained strict political control. It ended when Lenin died in 1924.
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Question: Politburo
Answer: The Communist party's central organization of which Joseph Stalin took control and placed himself in charge.
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Question: Joseph Stalin
Answer: The Communist dictator of the USSR. He took control of the Politburo after Lenin's death and instituted the Five-Year Plan, collectivized agriculture, and punished his political opponents by executing them or sending them to gulags.
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Question: Stalin's Five-Year Plan
Answer: A plan implemented by Stalin meant to transform the USSR from an agricultural nation into an industrial power.
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Question: How did Stalin's vision of collectivized agriculture compare to reality?
Answer: In theory, a collective (kolkhoz) would freely join together to farm a certain portion of land. In reality, he took land from private owners and gave it to collectives to manage and forced the peasants to work on a specific collective. The plan was a huge failure and millions of peasants starved to death.
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Question: Kolkhoz
Answer: A group of peasants who freely joined together to farm a certain portion of land.
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Question: What were the impacts of Stalin's Five-Year Plan and his attempts to collectivize agriculture?
Answer: Farmers were enraged at the forced redistribution of supplies and the government seizing food so they burned crops, killed livestock, and moved to cities. Millions of peasants starved to death, but heavy industry grew and there were many factory jobs.
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Question: Why is Stalin condemned today?
Answer: He silenced his opponents by executing them or sending them to Gulags, millions of Soviet citizens starved to death, and his atrocities went unreported because he controlled the press.
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Question: Institutional Revolutionary Party (PRI)
Answer: A strong corporatist political party that dominated Mexican politics. It claimed favors for its constituents.
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Question: Lázaro Cárdenas
Answer: A Mexican president who distributed land to peasants and nationalized the oil industry through PEMEX.
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Question: PEMEX
Answer: Mexico's powerful state-owned oil monopoly.
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Question: Corporatism
Answer: A theory based on the notion that the sectors of the economy are seen as separate organs of the same body.
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Question: How did the vision of corporatism differ from the reality of it?
Answer: In theory, each sector was free to organize itself as it wished as long as it supported the whole. In reality, the fascist state imposed its will on all sectors of society creating a totalitarian state.
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Question: Totalitarian State
Answer: A state in which the government controls all aspects of society.
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Question: How did Mussolini gain power?
Answer: Mussolini and his allies took control of the parliament and he became a dictator, suppressing all opposition. Militaristic propaganda infiltrated all aspects of society.
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Question: How did Mussolini conquer parts of Africa?
Answer: He seized Libya and colonized Italian Somaliland but faced resistance from Abyssinia. In 1934, Mussolini called for the complete conquest of Abyssinia and the Italian army conquered the region.
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Question: Why was the Spanish Civil War globally significant?
Answer: It represented the struggle between democracy and fascism.
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Question: Spanish Republic
Answer: Formed in 1931 after King Alfonso VIII abdicated. Citizens elected the Popular Front (left-wing parties) to lead the government. The Popular Front promised land reform which angered conservatives.
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Question: How was the Popular Front resisted?
Answer: Conservative forces opposed the changes like land reform. Spanish troops in Morocco conducted a military uprising which marked the beginning of the Spanish Civil War.
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Question: Spanish Civil War
Answer: A civil war in which Francisco Franco led the insurgents (Nationalists) against the Republicans (Loyalists), who defended the new Spanish Republic. Hitler, Mussolini, and Salazar supported the Nationalists. The USSR, Britain, the US, and France supported the Loyalists. The Nationalists won.
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Question: Guernica
Answer: A town in Northern Spain's Basque region that was bombed by Germans and Italians during the Spanish Civil War. It may have been a military exercise for the Luftwaffe (Germany's air force) and many civilians died.
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Question: How did the Spanish Civil War end?
Answer: Franco's forces defeated the Loyalist army. He ruled Spain as a dictator until 1975.
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Question: How did Brazil's economy change?
Answer: It shifted from an agricultural to an industrial economy. Large landowners dominated the economy and workers suffered during the Great Depression which led to a 1930 coup that installed Getulio Vargas as president.
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Question: Hypernationalism
Answer: A belief in the superiority of one's nation above all others and the single-minded promotion of national interests.
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Question: Getulio Vargas
Answer: The president of Brazil who implemented pro-industrial policies but stripped away individual political freedoms. His Estado Novo program censored the press, abolished political parties, imprisoned his opponents, and advocated for hypernationalism.
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Question: How did policies in Brazil differ from European fascist policies?
Answer: Brazil's government did not praise or rely on violence to achieve and maintain control.
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Question: What was the impact of Brazil's siding with the Allies in WWII?
Answer: It made Brazil look less like a dictatorship than it actually was. It also led people to promote democracy.
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