Confronting the Economic Crisis

As the depression wore on through the 1930s, some governments experimented with ways to solve social and economic crises in a democratic fashion. In the early days of the economic slump, U.S. president Herbert Hoover (1874–1964) had opposed direct help to the unemployed and even ordered the army to drive away jobless veterans who had marched on Washington, D.C. With unemployment close to fifteen million, Franklin Delano Roosevelt (1882–1945), the wealthy governor of New York, defeated Hoover in the presidential election of 1932 on the promise of relief and recovery. Roosevelt, or FDR as he became known, pushed through a torrent of legislation: relief for businesses, price supports for hard-pressed farmers, and public works programs for the unemployed. The Social Security Act of 1935 set up a fund to which employers and employees contributed. It provided retirement benefits for workers, unemployment insurance, and payments to dependent mothers, their children, and people with disabilities.

Programs such as these in the United States advanced a new kind of state taking shape across the West: the welfare state, in which the government guarantees a certain level of economic well-being for individuals and businesses. Although his “New Deal” angered businesspeople and the wealthy, Roosevelt maintained widespread support. Like other successful politicians of the 1930s, he was an expert at using the new mass media, especially in his broadcasts by radio. Unlike Mussolini and Hitler, however, Roosevelt’s public statements promoted rather than attacked democratic rights and government. The participation of First Lady Eleanor Roosevelt sharply contrasted with the antiwoman ideology of Nazis and Fascists, and the Roosevelts insisted that human rights must not be surrendered in difficult times. “We Americans of today . . . are characters in the living book of democracy,” FDR told a group of teenagers in 1939. “But we are also its author.” Racial violence continued to cause great suffering in the United States, and the economy did not fully recover, yet Americans’ faith in democracy was strong.

Sweden also developed a coherent program for solving economic and population problems, assigning the government a central role in promoting social welfare and economic democracy. Sweden devalued its currency to make Swedish exports more attractive on the international market, and addressed the population problem with government programs, but without the racism and coercion of Nazism. Alva Myrdal, a leading member of Sweden’s parliament, believed that boosting childbirth depended both on the economy and on individual well-being. It was undemocratic, she maintained, that “the bearing of a child should mean economic distress” to parents. Acting on Myrdal’s advice, the government introduced prenatal care, free childbirth in a hospital, a food relief program, and subsidized housing for large families. By the end of the decade, almost 50 percent of all mothers in Sweden received government aid, most effectively in the form of a family allowance to help cover the costs of raising children. Because all families—rural and urban, poor or prosperous—received these social benefits, there was widespread approval for developing a welfare state.

The most powerful democracy, the United States, had withdrawn from world leadership by refusing to participate in the League of Nations, leaving Britain and France with greater responsibility for international peace and well-being than their postwar resources could sustain. When the Great Depression hit, British prime minister Ramsay MacDonald, though leader of the Labour Party, reduced payments to the unemployed, and Parliament denied unemployment insurance to women even though they had contributed to the unemployment fund. To protect jobs, the government imposed huge tariffs on imported goods, but these only discouraged a revival of international trade and did not relieve British misery. Finally, in 1933, with the economy continuing to worsen, the government began to take effective steps with massive programs of slum clearance, new housing construction, and health insurance for the needy. British leaders rejected pump-priming methods of stimulating the economy as foolish and thus resorted to them only when all else had failed.

Depression struck later in France, but the country endured a decade of public strife in the 1930s. Deputies with opposing solutions to the economic crisis frequently came to blows in the Chamber of Deputies, Parisians took to the streets to protest the government’s budget cuts, and Nazi-style paramilitary groups flourished, attracting the unemployed, students, and veterans to the cause of ending representative government. In February 1934, the paramilitary groups joined Communists and other outraged citizens in riots around the parliament building. “Let’s string up the deputies,” chanted the crowd. “Let’s beat in their faces, let’s reduce them to a pulp.” The right-wing enemies of democratic government, however, lacked both substantial support and a charismatic leader like Hitler or Mussolini.

Shocked into action by fascist violence, French liberals, socialists, and Communists established an antifascist coalition known as the Popular Front. Until that time, such a merging of groups had been impossible because Stalin had directed Communists across Europe not to cooperate with other political parties. As fascism attracted followers around the world, however, Stalin allowed Communists to join efforts to protect democracy. For just over a year in 1936–1937 and again briefly in 1938, the French Popular Front led the government, with the socialist leader Léon Blum as premier. Like the American New Dealers and the Swedish reformers, the Popular Front instituted social-welfare programs, including family subsidies. Blum appointed women to his government (though women in France were still not allowed to vote). In June 1936, the French government guaranteed workers two-week paid vacations, a forty-hour workweek, and the right to bargain collectively. Working people would long remember Blum as the man who improved their living standards and provided them with the right to vacations.

During its brief life, the Popular Front offered citizens a youthful but democratic political culture. “In 1936 everyone was twenty years old,” one man recalled, evoking the atmosphere of idealism. To express their opposition to fascism, the French celebrated democratic holidays like Bastille Day with new enthusiasm. Not everyone liked the Popular Front, however. Bankers and industrialists sent their money out of the country in protest, leaving France financially strapped. “Better Hitler than Blum” was the slogan of the upper classes. Blum’s government lost crucial liberal support for refusing to aid the fight against fascism in Spain because of antiwar sentiment. The collapse of the antifascist Popular Front showed the difficulties that democratic societies had facing the revival of militarism during hard economic times.

Fledgling democracies in central Europe, hit hard by the depression, also struggled for economic survival and representative government, but with little success. In 1932, Engelbert Dollfuss came to power in Austria, dismissing the parliament and ruling briefly as a dictator. Despite his authoritarian stance, Dollfuss would not submit to the Nazis, who stormed his office and assassinated him in 1934 in an unsuccessful coup attempt. In Hungary, where outrage over the Peace of Paris remained intense, a crippled economy allowed right-wing general Gyula Gömbös to take over in 1932. Gömbös reoriented his country’s foreign policy toward Mussolini and Hitler. He stirred up anti-Semitism and ethnic hatreds and left considerable pro-Nazi feeling after his death in 1936. In democratic Czechoslovakia, the Slovaks, who were poorer than the urbanized Czechs, built a strong Slovak Fascist Party as the appeal of fascism grew during the Great Depression.