World History/The Interwar Years
The Second Industrial Revolution
The 1920s saw a period of unprecedented industrial growth, known as the "Second Industrial Revolution". The industrial nations of the world saw the conclusion of a major shift in their primary energy source from coal to oil. As well as providing cheaper and more abundant energy, which greatly stimulated economic growth, this shift had important geopolitical consequences. Britain and France became deeply engaged in the countries of the Middle East to protect their petroleum supplies. Japan similarly found itself dependent on overseas oil, specifically from Indonesian and Malay sources. Russia and the United States were largely self-sufficient in oil during this period. However, tensions and disputes over oil production regions and sea lanes, most notably those of Japan, would have a great influence on the outbreak and course of the Second World War (Adolf Hitler sought to seize Soviet oil fields in the Caucasus, while the Japanese justified their attack on Pearl Harbor by claiming that the United States was moving to choke off its supplies by sea).
Many consumer goods such as cars and radios were produced for the first time on an industrial scale, especially in the United States, where new highways and suburban home developments sprang up to accommodate the growing economic output. The combination of inexpensive chemical fertilizer and mechanized harvesting saw agricultural productivity surge in many regions of the world, providing the basis for the twentieth century's exponential leap in world population. Centralized, industrial agriculture had its dangers, however, as was seen in the Soviet Union, with the Bolsheviks' destruction of the independent peasant farmers and the great famine which Stalin deliberately caused in Ukraine for political reasons.
The Great Depression
One of the worst events of this period was the Wall Street Crash, which took place in 1929. A speculative bubble in stock market prices during the 1920s came to an end and investors (many of whom had borrowed money to buy stock) panicked, causing the US stock market to collapse. Millions were thrown out of work, and thousands of banks collapsed worldwide over the next three years. The simplest explanation for the cause of the Depression was too much industrial output and not enough liquid currency to purchase all the goods produced. There was no destruction of factories or other physical disaster; rather, the losses caused by the stock market crash magnified themselves across the global economy, as companies found themselves unable to sell their output to other firms which had been ruined. Bread lines and economic refugee movements appeared in many countries.
In hard-hit Germany, both Communists and Adolf Hitler's Nazi party assailed the centrist democratic government for failure to deal with the economic crisis and, in Hitler's case, for not restoring Germany to its pre-World War I great power status. Hitler emerged the victor in this political contest, becoming Chancellor with help from high-placed conservatives who thought they could manage and control the Nazis. Within a year and a half, however, Hitler had wiped out most opposition to his rule.
During this period, the Soviet Union, with its closed state-run economy, was insulated from the effects of the free-market crisis. The brutal purges and political repression of dictator Josef Stalin, however, brought misery of a different kind on a great scale. Paranoid and seeing enemies everywhere, Stalin reached unchallenged power by 1929 and soon began herding entire classes of people — peasant farmers, dissident Communists, non-Russian nationals — into the prison camp system known as the Gulag, on various flimsy pretexts. Those who didn't perish from exposure, malnutrition or disease essentially became slaves of the Communist rulers, who needed large amounts of forced labor as they tried to forcibly industrialize the backward Soviet economy to match the West.
Roosevelt and the "New Deal" in the U.S.
Franklin D. Roosevelt was elected as President of the USA in 1932, and promised to sort out the USA's problems with his "New Deal". He introduced a wide range of social and economic policies to stimulate the American economy and raise standards of living through government intervention in the economy. This was a major break with the values, deeply held by many in the U.S., that private business and industry should flourish or fall free from public influence. Although many people criticized the New Deal when it was introduced, it did do a lot to help millions of Americans - for example, hundreds of schools, hospitals and roads were built by the Public Works Administration, one of the new agencies set up by Roosevelt.
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