APE Weimar & Depression

Hey kids, this is the second half of election we

started last week, but it's going to be pretty important

that we get this talked about before we dive too

deep into the rise of Adolf Hitler.

So we're going to look at too critical events that

contribute to the rise of the nazis and that is

what's going on in Germany in the twenties and early

thirties, in the Weimar Republic and then also the global

Great Depression.

And those two are going to connect in Germany helping

to lead to the rise of the nazis and also

important understand in general.

So if you think about Weimar Germany, that is the

republic that was formed after World War One, you have

a brand new democracy, really, Germany's first real democracy.

Um and the structure was that you had a president

who is ceremonial, although that president would negotiate the formation

of the actual government because like most european countries, you

have a multiparty parliamentary system where you often have coalitions

and the prime minister or chancellor, which is the actual

title, would then run the government.

As long as there was a parliamentary majority or coalition

government, generally throughout the Weimar Republic, you have the social

democrats and the christian democrats as the leading parties, the

centre left and centre right parties, although yet multiple other

parties, including the rise of Communist parties, um and nationalists

and far right parties.

Um The Weimar constitution was fairly liberal.

It had general Equality, free speech, it gave women the

right to vote uh you know, almost two years before

the United States did.

Um however, it was immediately saddled with the the stain

of having signed the treaty of Versailles, which was universally

despised left, right, middle, everybody in Germany hated it.

And in fact the two delegates, the social Democrat, Walter

Roth in all and Catholic Center Party delegate Matias Harris

Burger were both assassinated by 1922.

In addition, Germany is deep into a depression caused by

the war, in the blockade and of course it's saddled

with major war reparations payments.

Almost immediately, riots break out all over Germany and for

a short period of time, the far left spartacus revolt

by communist and radical socialists is able to even sees

Berlin. And in fact, the Weimar nickname comes from the

town outside Berlin, where the government had to hide out

during a variety of revolts.

There's also right wing revolts.

Ultimately, the government gave permission to former soldiers known as

the Free Core to deal with uh the left wing

rioters. And there were a number of frankly just assassinations

and and people being gunned down by these former soldiers

who backed the government, but generally also the Free Corps

had a number of ultra right wing people as well.

In 1920, a German bureaucrat tried to leave a right

wing coup, so called Cop Push in which the left

back, the government sponsoring a general strike, which sort of

just collapsed that attempt.

So from the far left and the far right, the

government is constantly under siege.

In the middle of this recession, they initially respond by

trying to print more money, but this leads to some

of the worst hyperinflation in history, as you can see

illustrated by the photos of the girl burning rock marks

and the kids playing with blocks of bundled currency.

Um and how bad was it?

Well give an idea, 1919 9 Marks, equal dollar, $4.2

trillion marks equal the dollar by 1924.

So this was really rapid and and Terrible hyperinflation.

It was estimated that you could take $100 to Berlin

and stay in the nicest hotels, eat all you want

and party your head off for a week In the

1920s. So Germany's initial experiments of democracy or disaster 1923,

they can't make the reparations payments.

And so the French army marches into the Ruhr Valley

and in response, the government urges german workers in that

area to just strike against the french.

So they say, okay, well you're going to occupy our

factories, were not going to work the french hold equipment

back to France and you know, generally just looted the

region. It's during this time that Adolf Hitler will attempt

a coup in Munich which will fail but will actually

make him popular for his anger against the Weimar government,

which gives you a sense of just how unpopular they

were. However, In 1923, Gustav's Trestman Center, Right Christian Democratic

politician, becomes the chancellor and he will also serve later

as foreign minister and during his time in those two

positions, he is able to save the republic.

He restructures the finances and wins a number of key

loans from the United States which helped restructure the german

economy and stabilised their recession and hyperinflation.

And in fact by 1929, Germany's down to uh sort

of normal unemployment, only about eight or so.

In addition, he negotiates an agreement of the allies to

restructure the loans so they are less significant.

1925, Germany is recognized again as a full nation and

even enters the league of nations stress men and the

weimar government.

Also, we're part of attempts to sign peace treaties such

as the Washington treaty which limited the size of navies

and the Kellogg Briand pact pact which outlawed war.

Although that one was sort of wishful thinking, Stress man,

died in 1929 of a heart attack at age 51.

And unfortunately the leaders after not only weren't as capable,

but they had to face the onslaught of the Great

Depression. So that brings us to the Great Depression.

And even though this will get us a bit into

the american economy should probably explain it a bit.

United States was the dominant economy and the creditor nation

to the world.

Of course, Germany was relying on them for loans, which

in turn the Germans paid to the british and french,

which helped prop up the british and french economies.

Um but we should point out that there are number

of structural issues beneath the surface of the Great Depression.

For example, even in the mid-20 60 of Americans were

still poor.

And so the depression came in 1929, after the boom

of the 1920s, in which Americans indulged in massive consumerism

for which they also took out loans and which they

tried to fund by gambling on the stock market, which

was unregulated.

But the reality was, is this was a consumer boom

funded by a minority of people in America, and once

that group of consumers had spent everything, they're not going

to spend any more.

The problem was that factories would overproduce during this time

period. Now, there's a lot of arguments about exactly why

the Depression happened and it's probably really multi causal, including

issues of money supply and regime in a theory that

the french manipulating the gold market helped crash the global

economy. But it is true that America was still in

this uh social structure in which most americans are pouring

for, people can only buy so much.

And in fact, depression had already hit farmers about 40

of Americans will still farmers at this time, Food prices

were at a 400-year global low.

The fact of the matter is that mechanization and efficiency

meant that farmers were producing too much.

They literally uh, got so good at farming that they

flooded the market and priced themselves out of business.

And so by 1925 1926, rural areas of America, which

at that point was a substantial part of the American

economy. We're already in trouble.

So what happens next?

Eventually this all catches up and factories realize that they

have overproduced.

And in 1929, the stock market, which was probably inflated

in value collapses as there is a panic and everybody

tries to sell off stock.

The problem is then nobody's buying this freezes the financial

markets of the United States, which in turn cut off

loans and investments in both the domestic and ultimately the

foreign market, 1931 The Great Depression had gone global as

european banks also began to collapse.

So let's see if we can point out some of

the causes of the Great Depression In the 1920s, you

had easy credit.

So banks loan too much money to people that probably

shouldn't have been borrowing to buy the new consumer goods,

the new radios, cars, tractors, for the farms, factories then

kicked up their production, but eventually will overproduce.

And of course, at the time, it looked like many

businesses were a good bet on the stock market.

People could, in those days borrow money and pay a

fraction of the cost of stock on the assumption it

would profit later, and they would be able to pay

off their loan and still walk away with profit.

Course that doesn't happen.

They're stuck with a debt for worthless stock.

As we said earlier, farmers overproduced and there were too

few consumers to really support a long term consumer economy

Add to that the fact that countries begin to raise

taxes on foreign goods in the 1920s, uh, project that

accelerated rapidly after the onset of the depression, but taxing

foreign goods only drove all prices upwards 1929, people just

don't need more stuff.

We can't afford it, which means they stopped buying when

profits dropped.

That means stock prices are going to drop and this

realization hits the market In October of 1929.

Add to that the cut in foreign sales from high

tariffs and you begin to create a downward and perpetuating

spiral which just accelerates like a snowball rolling downhill course.

Also, the fact that some of those bank loans weren't

good and people can't pay it back.

Banks had invested some of their money in the stock

market. So in the stock market collapses, people rush to

the bank to collect their savings, but the banks have

lost it in bad loans and bad investments and so

many people found that the banks simply didn't have the

money anymore.

It was gone.

Now of course today there are things like F.

D. I.

C. To prevent this, but in those days there weren't

lot of safety nets both for the social system or

the financial system banks collapsing.

There's no more credit, no more loans.

So companies begin laying people off and they're certainly not

expanding borrowing money to expand their business and create new

jobs. And this only accelerates as everybody is trying to

pull out their savings, especially if they get laid off

because what are you going to live on?

So all of this leads to the stock market crash,

which isn't the cause of the pressure, but rather the

symptom of all these deeper structural problems that had been

there all along.

This creates a massive collapse of the global economy as

the american crisis ripples out and of course, people stopped

buying foreign raw materials and colonial raw materials to ship

back to England America or France to factories.

So colonial areas, places like Japan and china everywhere is

affected as a global trade is basically dropping bye massive

amounts. Some estimates that global trade dropped by 30-

40 over the depression.

Trade for the United States alone, internal trade was down

by 62 and so unemployment begins to skyrocket Britain and

France were less affected Britain because it had pretty strong

colonial market and they had social safety nets That kicked

in. Still 20 unemployment was rough France was still had

a large agricultural sector and was feeding people so many

of its workers continued to farm.

The americans have, we were heavily industrialized and Japan depended

heavily on foreign trade, Germany also had heavily invested in

industrialization and it was the industrial workers that were hit

the hardest.

And so we see high unemployment and of course, is

that crisis of economics in Japan and Germany that's going

to lead to the rise of fastest regimes.

Some people pointed to, this is the proof that capitalism

was doomed and noted that the soviet union wasn't suffering

from the Depression mostly because the soviet union was just

suffering uh in general because it was Russia and they

didn't have anywhere to go down to.

They were sort of climbing up slowly.

You probably still would have been materially better off in

depression America than the Soviets.

But other countries like Italy suffered even less than France

and Britain.

And so some people thought that fascism had the answer.

Of course, Mussolini was only doing what FDR and Hitler

would later do massive public works programs that kept people

employed based on borrowing and financing things from the government

coffers. Nevertheless, this crisis of the Great Depression accelerated the

numbers of people turning to either Marxism or fascism in

many parts of the world.

In America and europe, however, people begin to realize that

a state that was little involved in the economy left

people at the mercy of the booms and busts of

the system in the United States.

The election of franklin Roosevelt caused the government to turn

towards more active involvement in the economy than it had

under the republicans.

Led by Herbert Hoover, To be fair, hoover, had actually

instituted massive government programs, but only so far as the

government could fund them.

He did not feel it was prudent to borrow money,

whereas FDR engaged in deficit spending, arguing that if the

house is on fire, you worry about how to pay

for it later.

Although many of FDR's policies hurt the economy, many others

helped the economy.

And basically FDR threw everything he could think of at

the problem.

Some things work.

Some things didn't.

Some of his ideas corresponded with the thoughts of john

matter. Keen's a british economist who had advocated a different

way to approach capitalism that involved government intervention in crisis

situations. We'll explore canes in thought in a later lecture

on economic theories of the 20th century and as I

said before, both fascism and Marxism had an appeal for

various people in the West in Britain, the conservative government

cut the budget limited social spending and abandoned the gold

standard, allowing them to print more money and inflate the

money supply.

However, they did maintain the social safety system that was

already in place and Britain actually recovered partially by the

1930s. Although the British, the Americans and the French all

would not reach full recovery until the onset of World

War II, which offered massive employment.

But for the reasons of warfare and weapons production in

Britain, A national unity government meant that the political party

set aside their differences and cooperated between 1929 and 1940.

That unity Government was led by a coalition of Labor,

liberal and conservative politicians.

Labour Leader Ramsay Macdonald was followed by Conservative Prime Minister,

Stanley, baldwin and neville Chamberlain.

As World War Two began, the energy government would continue

under Winston Churchill, and Britain would only return to partisan

politics at the end of the Second World War.

As we said, France was more self sufficient, but was

feeling the sting of the Depression.

It already had a social safety net which was maintained

but not expanded by conservative and centrist governments in France,

which rotated in and out in their parliamentary system with

regularity 1936, the Jewish Socialist Leon Blum led the popular

front, a centrist leftist and communist coalition that expanded relief,

created paid vacations and 40 hour work weeks.

However, the fact that balloon was jewish and that there

was a strong anti Semitic and far right movement in

french politics, especially Croix de feu and action francais meant

that bloom attracted hostility from the far right for his

economic policies and also because of his ethnicity.

Marchers in paris actually chanted better Hitler than bloom.

Still bloom seemed to have strong support, but when he

refused to oppose actively the fastest revolt in Spain under

General Francisco franco, his cooperative coalition in the left collapsed.

As some leftists argue that France should invade Spain in

support of the republic, and others agreed with bloom and

his neutrality with the collapse of the unity on the

left, the center and right return to power and decided

to maintain most of blooms reforms.

But by this time, France was engaged in new economic

activity, trying as fast as they could to rearm their

military With the looming threat of war.

With rising nazi Germany, we'll pick up with the story

of europe in our next lecture with the rise of

Adolf Hitler and the nazis.

APE Weimar & Depression

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