The GLOBAL ECONOMY Between the World Wars [AP World History Review—Unit 7 Topic 4]

Summary

This video script explores the economic turmoil following World War I and its global consequences. It highlights Germany's hyperinflation due to reparations and debt, the Soviet Union's struggle with its economy under Lenin and Stalin's harsh policies, and the widespread impact of the Great Depression, which originated in the United States. Despite these crises, the U.S. economy initially rebounded under Franklin D. Roosevelt's New Deal. The script emphasizes how governments intervened to address these financial challenges and hints at the global instability that eventually led to World War II.

Takeaways

• 😀 Germany's economy suffered after World War I, primarily due to war reparations, debt, and hyperinflation.
• 😀 By November 1923, 1 US dollar was worth 4.2 trillion German marks, illustrating the extreme hyperinflation.
• 😀 Hyperinflation not only affected Germany but also made it difficult for other nations like Britain and France to repay their war debts.
• 😀 The Soviet Union's economy was devastated by its involvement in World War I, leading to Lenin's New Economic Policy in 1923.
• 😀 Stalin replaced Lenin and implemented brutal economic policies like the collectivization of agriculture to rapidly industrialize the Soviet Union.
• 😀 The collectivization under Stalin led to the arrest and execution of 8 million kulaks (wealthy landowners) and widespread starvation.
• 😀 Ukraine's agricultural collapse due to collectivization resulted in the Holodomor, a man-made famine that caused millions of deaths.
• 😀 The Great Depression, which began with the 1929 stock market crash in the United States, triggered a worldwide economic downturn.
• 😀 The US government's response to the Great Depression was the New Deal, which included infrastructure projects, social security, and medical insurance programs.
• 😀 While the New Deal provided temporary relief, it was World War II that ultimately ended the US's economic struggles.

Q & A

What role did hyperinflation play in Germany's post-World War I economy?

Hyperinflation in Germany was a result of the government printing excessive money to pay for war reparations and debts. This caused the value of the German Mark to plummet, leading to severe economic instability. By 1923, prices skyrocketed, with a loaf of bread costing 200 billion marks, illustrating the dire effects of hyperinflation.

How did the U.S. economy influence Germany's economic recovery in the 1920s?

Germany's economic recovery in the 1920s was largely due to loans from U.S. banks, which helped Germany meet its reparations payments to Britain and France. This inflow of capital allowed the German economy to stabilize and contributed to a broader European economic recovery.

What was the Soviet Union's approach to economic recovery after World War I?

After exiting World War I and the Russian Revolution, the Soviet Union initially adopted the New Economic Policy (NEP) in 1923, which introduced limited free-market elements to revitalize the economy. However, following Lenin's death, Stalin took over and introduced aggressive industrialization policies and collectivization of agriculture through the Five-Year Plans.

How did Stalin's collectivization policies impact Soviet agriculture?

Stalin's collectivization policies merged small farms into large collective farms, aiming to increase food production for urban industrial workers. However, the resistance from wealthier farmers (kulaks) led to widespread arrests, executions, and labor camps. The policy failed to meet production quotas, leading to a devastating famine, particularly in Ukraine, where millions starved in an event known as the Holodomor.

What was the New Economic Policy (NEP) and why did Lenin implement it?

The New Economic Policy (NEP), introduced by Lenin in 1923, allowed limited free-market practices, such as small-scale private farming and private enterprise, to help recover the Russian economy after the devastation of World War I and the Russian Revolution. Lenin adopted this approach to stabilize the economy while still maintaining state control over key industries.

What was the impact of the 1929 U.S. stock market crash on the global economy?

The 1929 U.S. stock market crash led to the Great Depression in the U.S., but since many European economies were dependent on U.S. loans and investments for rebuilding after World War I, the crash caused a worldwide economic downturn, affecting countries that had been recovering from the war.

What was Franklin D. Roosevelt's New Deal and how did it attempt to address the Great Depression?

The New Deal, introduced by President Franklin D. Roosevelt, aimed to combat the Great Depression through a series of government programs. These included job creation through infrastructure projects, Social Security, government-sponsored healthcare, and regulations on the financial sector. The New Deal aimed to provide relief, recovery, and reform to the U.S. economy, though its full effectiveness is debated.

How did the Soviet Union's industrialization under Stalin affect its workforce?

Stalin's industrialization efforts under the Five-Year Plans aimed to rapidly increase Soviet industrial output. This was achieved through forced labor and harsh state control, leading to widespread human suffering, including the forced relocation of peasants, repression of skilled workers, and high mortality rates among those who resisted the regime.

What was the role of colonial governments in the global economic crisis following World War I?

Colonial governments, particularly in Africa, Asia, and Latin America, were heavily dependent on their parent countries' economies. As the parent countries faced economic crises, colonial economies suffered as well, exacerbating the global economic downturn and contributing to the instability in many regions.

Why did Stalin's policies in Ukraine during the Holodomor result in mass starvation?

Stalin's policies prioritized supplying food to urban industrial workers over the needs of the agricultural population, particularly in Ukraine, which was a major grain producer. During the 1932-33 harvest, production was only half of what it had been in previous years, and the food that was produced was exported to feed cities, leaving Ukrainians without enough to survive. Stalin's refusal to allow them to leave their homes resulted in millions of deaths from starvation.