In Britain, both Labour and Conservative governments followed orthodox economic theory. The budget was balanced, spending was tightly controlled, and unemployed workers received barely enough to live. Still, the economy recovered considerably after 1932. By 1937, production was about 20 percent higher than in 1929. In fact, for Britain, the years after 1932 were actually somewhat better than the 1920s, the opposite of the situation in the United States and France.

This performance reflected the gradual reorientation of the British economy. After 1932, Britain concentrated increasingly on the national, rather than the international, market. The old export industries of the Industrial Revolution, such as textiles and coal, continued to decline, but new industries, such as automobiles and electrical appliances, grew in response to British home demand. Moreover, low interest rates encouraged a housing boom.

Because France was relatively less industrialized, the Great Depression came to it late. But once the depression hit France, it stayed. Economic stagnation both reflected and heightened an ongoing political crisis. As before 1914, the French parliament was made up of many political parties that could never cooperate for long.

The French had lost the underlying unity that had made government instability bearable before 1914, however. Fascist organizations agitated against parliamentary democracy and turned to Mussolini’s Italy and Hitler’s Germany for inspiration. At the same time, the Communist Party and many workers opposed to the existing system looked to Stalin’s Russia for guidance. The vital center of moderate republicanism was weakened by attacks from both sides.

Frightened by the growing strength of the Fascists at home and abroad, the Communists, Socialists, and Radicals formed an alliance — the Popular Front — for the national elections of May 1936. Their clear victory reflected the trend toward polarization. The number of Communists in the parliament jumped dramatically from 10 to 72, while the Socialists, led by Léon Blum, became the strongest party in France, with 146 seats. The Radicals — who were actually quite moderate — slipped badly, and the conservatives lost ground to the far right.

In the next few months, Blum’s Popular Front government made the first and only real attempt to deal with the social and economic problems of the 1930s in France. Inspired by Roosevelt’s New Deal, it encouraged the union movement and launched a far-reaching program of social reform, complete with paid vacations and a forty-hour workweek. Supported by workers and the lower middle class, these measures were quickly sabotaged by rapid inflation and accusations of revolution from Fascists and frightened conservatives. Wealthy people sneaked their money out of the country, labor unrest grew, and France entered a severe financial crisis. Blum was forced to announce a “breathing spell” in social reform.

Political dissension in France was encouraged by the Spanish Civil War (1936–1939), during which authoritarian Fascist rebels overthrew the democratically elected republican government. French Communists demanded that the government support the Spanish republicans, while many French conservatives sided with the Spanish Fascists. Extremism grew, and France itself was within sight of civil war. Blum was forced to resign in June 1937, and the Popular Front quickly collapsed. An anxious and divided France drifted aimlessly once again, preoccupied by Hitler and German rearmament.