1. Political and Economic Change 1920s- Present

2. Postwar WWI Economic Problems
Europe loses status as financial and credit center
Europe in debt to each other and the US
The Bolsheviks had cancelled Russian war debts to France
Germany could not pay war debts
US did not demand reparations from Germany, but did demand the repayment of debts from other Allies
Europe’s infrastructure, (bridges, roads, factories, hospitals), had been damaged or destroyed by the war.
US became less dependent of European production and was a major competitor.
Slow postwar economic growth and an overall decline of economic activity lowered international demand for European goods.

3. New Roles for Government and Labor
Prominence of labor during the war gave unions a greater role in national government.
Government could not ignore labor
Wages fell after the War, but workers generally were paid better than pre-war conditions
Collective bargaining agreements would remain
Middle classes became more conservative and more concerned about Communism

4. The Soviet Experiment Begins
The creation of the Soviet Union was the most important transforming event in post-WWI Europe.
Existed from 1917 until 1991
The Communists were neither a mass party or nationalists (less than 1% early on)

5. War Communism
The Bolsheviks rapidly developed authoritarian policies in response to internal and foreign military opposition
Controlled by Leon Trotsky and the Red Army
formed the Cheka, a new secret police
political and economic administration became highly centralized.
Economic policy of war communism,
Took control of all the major industries that included financial and transportation.
Seized grain for the Red Army and city workers
War Communism aided the victory of the Red Army over their rivals
Created domestic opposition
Strikes occurred in 1920 and 1921
Baltic fleet mutinied

6. New Economic Policy Lenin’s strategic attempt to regain control
Private property tolerated- peasants could grow food for profit
NEP made the economy more stable
No consumer goods
Caused disagreements in the Politburo (governing body of the communist government)

7. Stalin vs. Trotsky Lenin dies in 1924
two factions emerged in struggles for leadership of the party
Leon Trotsky and Joseph Stalin were on opposite sides
Trotsky
The “left wing”
Urging agricultural collectivism, rapid industrialization, and new revolutions in other nations.

8. Stalin began to gain power
A right-wing faction
Nikolai Bukharin as its representative and Stalin manipulating the group that called for continuation of Lenin’s NEP and slow industrialization.
Stalin began to gain power
Mid-1920s, he supported Bukharin and denounced Trotsky for his vision of international revolution, endorsing the doctrine of “socialism in one country.”
Stalin defeated Trotsky and controlled the Soviet state.

9. Third International
In 1919, the Soviet Communists founded the Third International of the European Socialist movement, known as the Comintern.
In 1920, the Comintern imposed the Twenty-one Conditions on any Socialist party that wanted to join it.
Effort to destroy democratic socialism
Split every major European Socialist party
Divided the political left, and created a vacuum of power, (no political voice) for right-wing politicians
led to the rise of Fascists and Nazis.

10. France After WWI- a new conservative government is elected
Clemenceau loses bid for president
Versailles seen as too lenient
Clemenceau did not establish a separate Rhineland state
New government wanted to security against Germany and Russian Communism
Few domestic reforms
Many changes in ministers

11. Great Britain

12. Economic Confusion
1918- British electorate expanded to all men above 21 and women above 30
Disagreements between PM Herbert Asquith and David Lloyd George split the Liberal Party
George maintained a coalition between Labour and the Liberal Parties
British economy remained depressed in the 1920s
High unemployment
Government expanded insurance to unemployed workers, widows and orphans
Did not create new jobs

13. The First Labour Government
In 1922, the first Labour government in Britain was headed by Ramsay MacDonald.
The Labour party was socialistic in its beliefs but democratic and non-revolutionary,
its rise in English politics caused the decline of the English Liberal party.
Macdonald had been against WWI
Macdonald’s plan for reform
Social reform
Established the Labour party as a viable party

14. The General Strike of 1926 Stanley Baldwin returned as Conservative PM
Government returned to the gold standard
Hoped to stabilize the monetary system
Set rate too high, raised price of British goods
In attempt to lower prices- cut wages
Coal industry most directly effected
1926 went on strike
Sympathetic workers from other industries joined them
Workers lost argument, high unemployment made unions weak
Government attempted to help workers with new housing and reforming poor laws.

15. Empire
WWI gave British colonies the increased idea of independence and self determination
India
Self determination movement started by Mohandas Gandhi,
Started discussion with British government
Gained right to impose tariffs to protect its own industry.

16. Economic and Ethnic Pressures in Eastern Europe
No successor states had strong economies
political independence slowed trade between them
Dependant on foreign loans – rural people in industrialized world
Ethnic groups sought power unchecked by politics;
minorities in each state wanted independence –
interwar economic/nationalistic problems would rise again in 1990s;
breakup of Habsburg Empire similar to breakup of Soviet Union, Yugoslavia and Czechoslovakia

17. Economic Hardship and Political Change
The Great Depression
Economic Hardship
and Political Change

18. Toward the Great Depression
Three factors combined for intense severity and length of Great Depression:
1) financial crisis from WWI and settlement
2) crisis in production and distribution of goods in world market
3) west European nations and US didn’t act responsibly and lead others

19. The Financial Tailspin
Most of Europe emerged from WWI with inflation
demand for consumer and industrial goods drove up prices,
Price and wage increases stopped after 1921, but inflation remained haunted governments as source of political and social instability

20. Reparations and War Debts:
France/US determined to get reparations
much of the money European powers got from Germany went to US
1922, Great Britain announced it would receive reparations only to pay US;
war debts made normal business, investment, and trade difficult and expensive for European powers,
currency speculation drew funds away from capital investment

21. American Investments:
1924, Dawes Plan reorganized administration and war debts;
afterwards, private US currency flowed into Europe in short-term loans
1928, this lending contracted as American money was withdrawn from Europe and put into New York stock market
US banks loaned customers money,
they invested in stock market:
huge amounts of money were lost in Oct 1929 stock market crash,
little US money available for Europe

22. The End of Reparations
Credit ran out, financial crisis struck Continent;
Kreditanstalt, major bank in Vienna,
collapsed May1931
Germany couldn’t make next payment,
Hoover announced 1-yr moratorium on all payments
French agreed to moratorium reluctantly;
little alternative
Germany’s economy almost collapsed
Lausanne Conference in 1932 ended era of reparations
1933 debts owed to US settled

23. Problems in Agricultural Commodities
Production and trade went down
less demand meant idle factories/fewer jobs
new wheat farming methods sent world wheat prices to record lows:
good at first for consumers and bad for farmers
farm problems pressing in eastern Europe
new farms were inefficient – German farmers were major source of support for Nazis
Outside Europe
agricultural commodity producers had similar problems
production had outstripped world demand
collapse in agricultural prices/financial turmoil led to stagnation/depression for Europe: depression sustaining itself

24. Depression and Government Policy
People with work always outnumbered people w/o work,
Feared they would be next,
created social discontent
John Maynard Keynes’ General Theory of Employment, Interest, and Money -1936
orthodox economic policy called for cuts in govt spending to prevent inflation
govt involvement in the economy increased rapidly from west to east across Continent
furthered political experimentation

25. America: Causes of European Economic Crisis
Black Tuesday, October 29, 1929
Stock Market Crashes
Panic follows
Run on the Banks
Banks Fail
US investment in Europe stops
1/3 of Americans unemployed
Global Consequences

27. Great Britain Struggles to Recover from WWI
Merchant fleet was devastated
Sale of oversees investments to finance war
Production falls to 80% of prewar levels
New industries require renovation and capital investment, little to be found.
Return to gold standard makes pound to expensive, sales drop in foreign markets

28. Great Britain: A Nation Divided
Ramsey McDonald, Labour Party,
Inexperienced Economic Advisors
American trade and credit dries up
Unemployment Doubled, Labour splits
Conservative Landslide – The National Economy
Cut unemployment, balanced the budget, raised taxes
Macdonald replaced by Conservative Neville Chamberlain
Regional differences, based on industries
Abandoned the Gold Standard, Pound Fell
Leads to a Gradual Recovery
Rise of the Welfare State

30. France Generally had recovered from WWI Conservative Government Fails
Maintained high tariffs
Plunged France into the Depression
Conservative Government Fails
Radical Government replaces them
Stavisky Scandal almost leads to civil war
New Coalition of Middle Class and Working Class unite to combat Fascism
The Popular Front (Leon Blum)
Raised Taxes, Cut Spending, Recognized Unions,
40 hour work week, raised wages

31. Germany- the Nazis Depression and Political Deadlock
Weimar Republic hit hard by the Depression
Coalition government could not decide on economic reforms
Hindenburg appointed Heinrich Bruning as chancellor
Governed under emergency decrees
German unemployment rose
Situation benefited the extreme political parties
Nazis gained seats in Reichstag

32. Nazi Economic Policy Destroyed unions
Strikes became illegal
Limited private exercise of capital
Allowed private property and capitalism
Government controlled prices and investment
Created government projects to stimulate the economy
Built the Autobahn
Government farms
Prepared the military for war

33. Italy: Fascist Economics
Began in 1920’s “Battle of Wheat”
Corporatism
Industrial Syndicates
Planned Economy
Government Arbitrators
Corporations
Unified common industries
22 Corporations
Corruption, increased oversight
Shift to War Economy 1935

34. Stalin’s Soviet Union Central Economic Planning
Rapid industrialization
Five Year Plans
Gosplan (State Planning Commission)
Massive investment in infrastructure
Supported by widespread propaganda
Collectivization, assault on the Kulaks
Cost- Millions of innocent lives

35. Urban Struggles and Growth
Peasant flight to the cities
12 Million migrate to the cities
Housing Shortages
Lack of consumer products
The Great Purge
The Soviet Holocaust
Stalin’s Paranoia, targets all enemies
Achieves rapid economic and industrial growth

36. Post WWII Era

37. Marshall Plan Economic Aid plan to rebuild Western Europe
Created by George C Marshall
Only requirement to work together for mutual benefit
Invited the USSR and other communist governments
Finland, Czechoslovakia- willing to join
Poland, Hungary interested- USSR forbid them
1949 Soviets and Eastern Europe
Form Council of Mutual Assistance (COMECON)- integrate economies

38. Stalin – Post WWII
1947- International meeting of all communist parties
Formed the Communist Information Bureau (Cominform)
Dedicated to spreading Communism world wide
Officially ended cooperation with noncommunist parties
February Stalin expelled Democratic members of Hungary’s government
Included Jan Masaryk- son of Czech founder
President Benes forced to resign
Hungary completely controlled by Soviets
Required other E. Europe countries to follow
Caused by Josip Tito freeing Yugoslavia from the Soviets
Stalin wanted to stop other countries from following

39. Post-War Germany
West and Soviets differed on postwar treatment and economic policy
Russia dismantled German industry in the East
Americans rebuilt industry in the West
Didn’t want to economically support Germany
No rebuild- chaos and communism
Soviets feared a strong Germany

40. Khrushchev Domestic Policies
retreat from Stalinism
Wanted to reform Soviet system
Intellectuals freer
Solzhenitsyn (One Day in the Life of Ivan Denisovich)
Reformed economy
More consumer goods,
Removed restrictions on agriculture
Reforms caused grain shortage
1956- Secret Speech
Attacked policies of Stalin and the crimes of purges
Started to remove Stalinist officials
Seen by E.European leaders as easing of restrictions

41. Cold War: Brezhnev and Gorbachev
Supreme Soviet from
The Brezhnev Doctrine: USSR will intervene in all communist countries in the name of preserving the revolution
Brezhnev Stagnation: Economic Recession, Ignored basic economic problems

42. Gorbachev 1989 New Constitution and Elections
Communist economic problems plague the eastern bloc (Poland)
Gorbachev and Perestroika
Attempt at Economic Revival
Glasnost: A Communist Debate
Easing of political and economic restrictions
1989 New Constitution and Elections
Gorbachev’s economic policies fail but he opens the door for future democracy.
Brandenburg Gate Speech

43. The Fall of the USSR Gorbachev recognizes the need for reform
Eliminates the Single Party State
Republics wage a “War of Laws”
Gorbachev allies with the conservatives, Bad Move!
August 1991 the Conservatives attempt a coup and place Gorbachev under house arrest.
The People Speak: the largest protest in the History of Russia, The Communist Party disintegrates
Yeltsin gains favor
December 1991, under a revised constitution the Soviet Union ceases to exist: The Cold War is Over!

44. Yeltsin and Putin Yeltsin- First president of Russia
Opposed by Parliament
1993 -He suspended it
Parliament tried to lead uprisings
Military supported Yeltsin
Oct Yeltsin ordered tanks to stop rioters- established his authority
West supported him
December New constitution
1994- War with Islamic province of Chechnya
1990s – Process of dismantling Soviet economy and government
Created small groups of very rich individuals
1998- Yeltsin replaced by Vladimir Putin
Renewed war on Chechnya
Supported US in Afghanistan in 2001
Has sought to regain central control over independent states

45. The most important accomplishment of the European Community was the launching on January 1, 1999, of the Euro, a single monetary unit that replaced the national currencies of most of its member nations. In Frankfurt, Germany people crowded around a symbol of the new currency.
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46. Welfare States
William B. Beveridge – British thinker who believed if medical care, old-age pensions, and other benefits were available to all, there would not have to be a redistribution of income
Britain becomes first welfare state under Labour Party’s Clement Attlee, who creates the National Health Service after World War II
France and Germany do not follow suit until the 1970’s

47. Resistance to the Welfare State
Three economic states in Europe since World War II:
Reconstruction from 1945–1950
1950s to late 1970s – period of economic growth
Inflation in the late 1970s to a period of low growth and high unemployment from the 1990s to the present .

48. Margaret Thatcher – British prime minister wanted to make British economy more efficient and competitive
Privatization of industries
Cutting the power of trade unions

49. Welfare assistance in Europe to help the sick, the injured, the unemployed, and the elderly, meet resistance for higher costs and taxes
Even left-of-center political parties in Europe have curbed welfare benefits

50. Communism in Western Europe
Disillusionment with communism – (four events)
Stalin’s purges
The Spanish Civil War
Nazi-Soviet Pact of 1939
Soviet invasion of Hungary in 1956

51. A Consumer Society
Western Europe has enjoyed a vast expansion of consumer goods and services
People in Eastern Europe, seeing the success of the West, became discontented and helped bring down communism

52. European Unification
European Economic Community – members known as the Common Market (1957) out of the European Coal and Steel Community
Goals
Elimination of tariffs,
Free flow of capital and labor,
Similar wages and benefits for workers of all countries
Original six members – (France, West Germany, Italy, Belgium, Netherlands, and Luxembourg)
1973 – Great Britain (despite protest from France), Ireland and Denmark become members
1982 – Spain, Portugal and Greece apply to join
Norway and Sweden refuse

53. European Union – 1993 – Treaty of Maastricht turns the EEC into the European Union with a common currency for twelve of the member nations – the Euro
Membership in union rises to twenty-five countries in 2004
Many former Soviet bloc countries need economic aid from the Union

54. The Copenhagen Opera House The New Opera House opened in Copenhagen, Denmark in The structure has come to symbolize free enterprise in the European Union because its full cost was covered by private, rather than government, funding.
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55. Discord in the Union
Proposed European Constitution of 2004 involved a bill of rights and complex economic and political agreements between nations, transferring considerable power from individual nations to a central power
France and the Netherlands defeat the treaty, while Britain postpones voting on it
Several factors contribute to the Treaty’s defeat:
Gap between European elite and voting public
Stagnant economies
Small European nations felt ignored by Britain and France
Many nations believed the Euro put them at an economic disadvantage
Reluctance to cede national sovereignty and authority to a bureaucracy
The controversy over possibly admitting Turkey a poor, mainly Muslim state to the Union

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57. New Financial Crisis Key Events of 2008: Russian invasion of Georgia
Worldwide financial crisis

58. Barack Obama shakes hands with supporters in Berlin, Germany, on July 24, 2008, following a speech he gave before a crowd of tens of thousands at the Victory Column in Tiergarten Park.
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