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World History – 1400 to Present

The Great Depression hit the world hard, causing economic chaos and political upheaval. Industrialized nations faced massive unemployment and trade collapse, while developing countries saw their exports tank and foreign investment dry up. It was a global crisis that left no corner of the world untouched.

This economic turmoil set the stage for the rise of extreme ideologies and authoritarian regimes. In Germany, Hitler seized power, while Mussolini tightened his grip on Italy. Stalin's Soviet Union pushed ahead with rapid industrialization, all while political freedoms crumbled under totalitarian rule.

Global Impact of the Great Depression

Industrialized Nations

Top images from around the web for Industrialized Nations
Top images from around the web for Industrialized Nations
  • Severe economic downturn and high unemployment
    • U.S. unemployment reached 25% by 1933, leaving millions without work and income
    • Germany's unemployment peaked at 30% in 1932, contributing to political instability and the rise of extremism
  • Decline in industrial output and international trade
    • U.S. industrial production fell by 50% between 1929 and 1932, leading to factory closures and layoffs
    • Global trade decreased by 60% between 1929 and 1932, disrupting international economic relationships and supply chains
  • Deflationary spiral due to falling prices and wages
    • Declining prices and wages led to reduced consumer spending and investment, further deepening the economic crisis

Developing Nations

  • Collapse in demand for primary exports
    • Latin American exports (agricultural products, minerals) declined by 50% between 1929 and 1932, devastating economies reliant on commodity exports
  • Sharp decline in foreign investment and capital flows
    • Reduced investment from industrialized nations hindered economic development and growth in developing countries
  • Increased debt burden due to falling export revenues and currency devaluations
    • Declining export revenues made it difficult for developing nations to service their foreign debts, leading to defaults and financial crises
  • Social and political unrest due to economic hardships
    • Brazilian Revolution of 1930: Economic crisis contributed to the overthrow of the government and the rise of Getúlio Vargas
    • Argentine military coup of 1930: Economic instability and social unrest led to a military coup and the end of democratic rule

Rise of Authoritarianism and Extremist Ideologies

Nazi Germany

  • Adolf Hitler's rise to power in 1933
    • Appointed Chancellor in January 1933, Hitler quickly consolidated power and established a dictatorship
  • Establishment of a totalitarian state
    • Suppression of opposition and individual freedoms (banning political parties, censorship)
    • Centralized control over economy and society (state-directed economic planning, propaganda)
  • Aggressive foreign policy and militarization
    • Rearmament in violation of the Treaty of Versailles, leading to increased international tensions

Fascist Italy

  • Benito Mussolini's rule from 1922 to 1943
    • Appointed Prime Minister in 1922, Mussolini gradually dismantled democratic institutions and established a dictatorship
  • Corporatist economic system
    • State control over industry and labor (government-controlled unions, price and wage controls)
  • Aggressive foreign policy and expansionism
    • Invasion of Ethiopia in 1935, demonstrating Italy's imperial ambitions and disregard for international law

Soviet Union under Stalin

  • Joseph Stalin's consolidation of power in the 1920s and 1930s
    • Outmaneuvered political rivals and established himself as the undisputed leader of the Soviet Union
  • Centrally planned economy and forced collectivization
    • Five-Year Plans for rapid industrialization (focus on heavy industry, infrastructure)
    • Collectivization of agriculture (forced consolidation of individual farms into collective farms)
  • Totalitarian rule and purges
    • Great Purge (1936-1938) targeting political opponents and perceived enemies of the state, resulting in mass arrests, executions, and imprisonment

Economic Instability and Extremist Ideologies

  • Communism
    • Presented as a solution to the inherent contradictions and inequalities of capitalism (class struggle, exploitation of workers)
    • Soviet Union's apparent economic success during the 1930s (rapid industrialization, full employment) enhanced the appeal of communism
    • Appeal to working-class and intellectuals disillusioned with capitalism, seeking an alternative economic and political system
  • Fascism
    • Promoted as a "Third Way" between capitalism and communism, promising to combine the best elements of both systems
    • Promise of national unity, order, and stability in times of crisis (Mussolini's "Corporate State" in Italy, Hitler's "National Socialism" in Germany)
    • Scapegoating of minority groups and political opponents for economic problems (anti-Semitism, anti-communism)
    • Emphasis on nationalism, militarism, and authoritarianism as solutions to economic instability and perceived threats to the nation

Term 1 of 48

Adolf Hitler
See definition

Adolf Hitler was a German politician and leader of the National Socialist German Workers' Party (Nazi Party), who rose to power as Chancellor of Germany in 1933 and later Führer in 1934. His aggressive expansionist policies and totalitarian regime were pivotal during the Great Depression, as he capitalized on the economic turmoil to gain support for his ideology, ultimately leading to World War II and the Holocaust.

Key Terms to Review (48)

Term 1 of 48

Adolf Hitler
See definition

Adolf Hitler was a German politician and leader of the National Socialist German Workers' Party (Nazi Party), who rose to power as Chancellor of Germany in 1933 and later Führer in 1934. His aggressive expansionist policies and totalitarian regime were pivotal during the Great Depression, as he capitalized on the economic turmoil to gain support for his ideology, ultimately leading to World War II and the Holocaust.

© 2025 Fiveable Inc. All rights reserved.
AP® and SAT® are trademarks registered by the College Board, which is not affiliated with, and does not endorse this website.

Term 1 of 48

Adolf Hitler
See definition

Adolf Hitler was a German politician and leader of the National Socialist German Workers' Party (Nazi Party), who rose to power as Chancellor of Germany in 1933 and later Führer in 1934. His aggressive expansionist policies and totalitarian regime were pivotal during the Great Depression, as he capitalized on the economic turmoil to gain support for his ideology, ultimately leading to World War II and the Holocaust.



© 2025 Fiveable Inc. All rights reserved.
AP® and SAT® are trademarks registered by the College Board, which is not affiliated with, and does not endorse this website.

© 2025 Fiveable Inc. All rights reserved.
AP® and SAT® are trademarks registered by the College Board, which is not affiliated with, and does not endorse this website.