International Reactions to Crisis


The Communist Party gained significant influence during the DepressionInternational reactions to the economic crisis of the thirties varied widely. Despite a considerable gain of influence by the communist party, the American political system coped with the depression through reforms within the frame of democracy. On the other hand, totalitarianism mushroomed globally.

Also, policy choices among other European nations differed considerably from the American way of dealing with the turmoil.

Historic Developments before the Thirties

Some developments evolved parallely in Europe and America; the industrialization processes at the ending of the 19th century had brought a number of radical social changes in all nations affected by the rapid technological advances of the time. Around the world, social tension and unrest followed in the wake of the industrial revolution. New managerial classes had come up, and bureaucratic corporate and political organizations had changed the institutional landscape.

The institutions formed by this process, however, shaped out differently across nations, laying out the basis for the crisis during the thirties, when old social tensions which had been covered up during the twenties in the United States forcefully clashed around the world.

Radical right regimes were less likely to occur in societies with inherited entrepreneurial ideals and liberal democratic values, or in countries with respected labor movements in which consential solutions were favored over confrontational ones. The rise of facist regimes was more likely to occur in industrialized countries that had maintained pre-industrial values and social strata. Nations in which there still was a military caste and in which a middle class had evolved, favored policies of repression to those of consensus. This was the ground-work for the formation of powerful right-wing coalitions which led to radical changes.

Grounds for Totalitarianism

Italy and Germany are fair examples of the formation of such a structural frame. Despite many differences in detail, the existing frame favored the empowerment or the maintenance of power by right oriented coalitions, which then assumed far-reaching control. In Italy, for example, facist 'revolutionaries' and ultranationalists produced a fascism which helped industrial magnates control competition and social discipline. In the modernized but tradition-minded Japan, the business world relied on state support. Opposing this side were anti-capitalistic militarists and traditionalists, which led to a clash between the two models. In Germany, it was easy for a right wing government to seize power as inflationary pressures mounted, because of the lost war and as radicalism prevailed within the workers' movement. Tensions existed between models of cartel business structures favored by the industrial elite, ideals of middle-class socialism, and the political goals of national socialist leaders. Despite the differences in institutions and other details, the mentioned countries shared the tendency to split up the organized economy and to integrate industry into the state-controlled war industry.

Moderate Solutions 

In other countries, where radical right solutions were less feasible, other models developed. In France, for example, where bureaucratic centralism faced tendencies of political polarization and a lesser drive towards industrial concentration, policies oscillated. Supply-side oriented economic policies shifted towards those favoring labor. Until the military defeat in 1940, however, no radical movements could seize power. In Scandinavian countries with their influential but less radical labor unions and a strong dedication towards consensus, policies of tariff agreements, planning of investment, and extensive welfare programs were chosen. Great Britain, the cradle of entrepreneurial capitalism, was caught in a tug-of-war between traditional models of the conservative and the labor party. The former clinged to classic concepts of economic policy, while the latter opted for democratic socialism. The two ideals tended to prevent any significant shifts in policy, and also prevented new models from being introduced into discussion.

    Table of Contents