1. The impact of the crisis of 1929: economic and social instability

Contents

1. Why the Crash developed into a world-wide economic depression and a political crisis?
2. Was the international climate of economic nationalism the only factor to influence the march of militarism?
3. How much and with what consequences the great democratic powers proved reluctant to defend the liberal order established at Versailles?

Key issues:

Blame for the origins of WWII lies in part with the great democratic powers themselves. How far do you agree with this?
How far do you agree that economic nationalism was the key factor in the slide towards war in 1939?

Key terms:

World-wide economic depression (1930s)
Appeasement

Discussion points:

Hawley Smoot Tariff Act (1930), Manchurian Crisis (1931), US Neutrality Acts (1935-7).

The economic crisis of 1929 marked a turning point in global history, ushering in a period of severe economic and social instability. An era of rapid industrial growth and financial speculation ended abruptly, as the collapse of stock markets in the United States quickly spiralled into a world-wide economic depression. This depression not only affected the global economy but also triggered profound social, political, and diplomatic upheavals.

The sharp decline in economic activity, characterised by falling output, rising unemployment, and a collapse in financial markets, led to widespread economic distress across multiple sectors, and a steep decline in global trade. Social instability soon followed, as this period was marked by widespread societal unrest, high unemployment, growing poverty, and a surge in political radicalisation.

This chapter explores why the Crash developed into a world-wide economic depression and a political crisis. It also analyses how the international climate of economic nationalism influenced the rise of militarism. One of the final aims is to assess why the great democratic powers were reluctant to defend the liberal order established at the Treaty of Versailles, and what consequences this hesitation had on the global stage.

#1. Why the Crash developed into a world-wide economic depression and a political crisis?

#A. The US as the main global creditor

#a) War debt

European countries incurred heavy debt to finance their involvement in World War I, not expecting the conflict to last so long. This left Europe financially strained, with the United States emerging as its main creditor.

During the 1920s, efforts focused on rebuilding war-torn economies. While Britain regained some stability, France relied heavily on reparations from Germany, which was already in economic turmoil. Germany's struggles to meet these obligations created further instability across Europe.

#b) War reparations and the Dawes Plan

Germany was forced to borrow heavily due to the high reparations imposed by the Treaty of Versailles, leading to hyperinflation by 1923. In response, the 1924 Dawes Plan provided American loans to revive Germany's economy and enable reparations payments, which helped France meet its own debts.

While the US emerged from the war as the world's leading power, benefiting economically, it also became more reliant on foreign capital. This global interdependence was summed up by the phrase, “When the U.S. sneezes, the world catches a cold,” reflecting how economic issues in the US could quickly affect other nations.

#B. Overproduction, dependence on credit and speculation in the US

#a) Agricultural and industrial overproduction

In the 1920s, agricultural production surged as farmers, driven by high post-WWI prices, took on debt to expand. However, when global demand fell, prices collapsed, leaving many farmers unable to repay loans, resulting in widespread bankruptcy.

A similar pattern emerged in the industrial sector, where advances in technology led to overproduction, outpacing consumer demand. As goods piled up unsold, businesses saw declining profits. These imbalances in both agriculture and industry contributed to the 1929 crisis.

#b) Consumerism and credit

Middle-class purchasing power grew rapidly in the 1920s, driven by assembly line production and increased productivity. Industrialists like Henry Ford raised wages without sacrificing profits, enabling Americans to buy new consumer goods such as refrigerators, automobiles, and entertainment options like cinema. The number of cars in the US soared from 6 million in 1919 to 27 million by 1929.

To finance these purchases, many turned to credit, fuelling economic growth but also creating vulnerabilities, as households accumulated debt beyond their means. This contributed to the economic fragility before the 1929 crisis.

#c) Speculation and financial bubble

The economic growth of the 1920s led American banks to lower interest rates, encouraging mass borrowing. People took out loans not only for consumption but also to speculate in the stock market. Many investors bought stocks on credit, expecting to repay loans with profits from rising stock prices.

This speculative behaviour became widespread, with borrowed money driving stock prices higher, inflating a financial bubble. During this time, businesses recklessly invested their reserves in the stock market, causing stock prices to rise irrationally beyond their true value. Despite declining sales in key sectors like automobiles and construction by the late 1920s, speculative buying persisted, fuelled by the belief that prices would keep rising.

In early 1929, the Federal Reserve warned banks to reduce loans to brokers, which were driving speculation, but these warnings were ignored. Excessive lending and unchecked speculation led to the stock market crash in October 1929, triggering widespread financial collapse and the Great Depression.

#C. From the 'Black Thursday' to a globalised crisis

#a) The Crash

After eighteen months of rapid growth, speculators began to lose confidence in the idea of an ever-rising market. In the days leading up to the crash (18, 19, and 23 October), the first major sell-offs occurred, initially as profit-taking moves, but they soon drove prices down.

On Thursday 24 October—‘Black Thursday’, panic set in as buyers disappeared, and stock prices plunged. Investors rushed to sell, with 12.9 million shares traded, worth $4 billion at the time. Banks briefly intervened, limiting the drop to 2%, but the decline continued. By Tuesday, 29 October—‘Black Tuesday’—the market had crashed, falling by 30% and marking a major turning point in the financial crisis.

#b) Depression in the US

Hundreds of thousands of households who had invested their savings were ruined and became insolvent. The banks they had borrowed from went bankrupt, causing a collapse in credit and consumption. Businesses were severely impacted by the banking and consumer crises, with industrial production dropping by over half in three years (-54%) and prices falling by up to two-thirds. Small farmers, now destitute, were forced onto the roads.

Unemployment surged in cities, and without social security, many relied on public charity. President Herbert Hoover, in office since March 1929, insisted that “prosperity is just around the corner.” By 1933, at the crisis's peak, 13 million Americans were unemployed. The Dust Bowl, a result of intensive farming on infertile Southern plains, caused dust storms that worsened drought, destroying soil and crops, and forcing even more farmers to leave their homes.

#c) Globalisation of the crisis

President Hoover implemented a highly protectionist policy, and on 17 June 1930, a law was passed raising tariffs on 20,000 imported goods. As a result, European, Asian, and South American countries could no longer sell their products in the US, spreading the crisis globally.

By 1932, international trade had dropped by 72% compared to 1929, and the widespread adoption of protectionist measures deepened the global economic downturn. In Europe, the repatriation of American capital caused banks to collapse, especially in Germany, devastating the middle class and contributing to the rise of the Nazi party. By 1933, with six million unemployed, the Nazi party became the largest in the Reichstag, with 230 seats.

Less indebted countries like France were affected later. Under Prime Minister Pierre Laval in 1935, France adopted austerity policies, reducing incomes and consumption, which led to higher unemployment. French entrepreneurs turned to the colonial empire, which absorbed 32% of French exports by 1935, compared to 20% in 1929.

In South American countries, heavily dependent on exporting raw materials and agricultural products, the crisis fuelled the rise of populist and authoritarian parties. In Argentina, José Félix Uriburu took power through a coup in September 1930, followed by Getúlio Vargas in Brazil in October.

In Japan, the crisis worsened an already strained economic and social situation. The closure of foreign markets made it difficult to secure essential raw materials and food, a serious issue given the population's rapid growth of about a million people per year. With rising military influence, supported by major industrialists, Japan pursued colonial expansion, leading to the invasion of Manchuria in September 1931.

#D. Solutions to the crisis

#a) State interventionism and welfarism experiments

When deflationary policies worsened the crisis, some states shifted from liberal economic principles to an interventionist model. Governments began regulating wages and providing subsidies to businesses to stabilise their economies. Public investments were made to boost recovery through government spending. The most notable example is the New Deal in the United States, where large-scale public works, social programs, and financial reforms were implemented to combat unemployment and poverty caused by the Great Depression.

The New Deal marked a significant shift toward government responsibility for citizens' welfare, with social protection spending rising by 160% between 1932 and 1933. Programs like Social Security and unemployment insurance provided a safety net. In Scandinavia, social democracy gained momentum, with strong state intervention in education, the economy, and social services, while maintaining a market economy. These countries built robust welfare states, ensuring social stability and equality through a balance of state involvement and free market principles.

#b) Authoritarianism and totalitarianism

The economic crisis led to an authoritarian shift in South American countries, strengthening populist and military regimes. In Japan, the crisis bolstered the existing military dictatorship, as the government sought control over essential resources.

In Germany, 1933 saw the banning and repression of communism, with Nazism rising to power. The Nazi ideology demanded the sacrifice of individual freedoms for the State, which was seen as a political entity superior to its citizens. Hitler aimed to make Germany self-sufficient, while also pursuing massive rearmament, blatantly violating the terms of the Treaty of Versailles.

#c) Case study: the New Deal in the US

By the November 1932 election, the U.S. had 13-14 million unemployed, and industrial production had halved. President F.D. Roosevelt's New Deal introduced economic intervention. Keynesian economics later provided a theoretical framework for some New Deal policies. From March to June 1933, FDR passed laws reshaping U.S. traditions, including public works under the CWA (Civil Works Administration), the Glass-Steagall Act separating banks, and the Agricultural Adjustment Act supporting farmers. By 1936, industrial production recovered, but premature austerity led to a 40% drop in production. Unemployment only ended with World War II's rearmament efforts.

#d) Case study: the Popular Front in France

In 1936, a coalition of Radicals, Socialists (SFIO), and Communists formed the Popular Front in France, with Léon Blum becoming Prime Minister on 4 June. Upon taking power, France was hit by widespread strikes, pushing the government to mediate between unions and employers. The Matignon Agreements, signed on 7 June, resulted in wage increases, union rights, and collective agreements, ending the strikes.

Blum's government also introduced major social reforms, including two weeks of paid holiday, a 40-hour work week, and improved cultural access. Economically, they created the Wheat Office to stabilise prices and reformed the Bank of France.

However, by 1937, economic challenges, opposition from the right, and business resistance slowed further reforms. The Popular Front began to unravel as the Radicals distanced themselves, and the Communist Party criticised the halt in social progress and the lack of support for Spanish Republicans. In April 1938, Blum resigned after the Radicals left the coalition and joined the right to form a new government.

#2. Was the international climate of economic nationalism the only factor to influence the march of militarism?

#A. Economic nationalism and militarism

#a) Economic nationalism and self-sufficiency

Economic nationalism played a pivotal role in driving militaristic expansion during the 1930s as nations sought self-sufficiency in response to the global economic crisis. As protectionist policies and the collapse of international trade exacerbated domestic economic woes, countries began to turn inward, focusing on national survival and strengthening their economic independence.

This economic nationalism was intertwined with militarism, as several aggressive states used military force to secure essential resources, protect their economies, and assert their influence.

#b) The Manchuria crisis

Japan’s expansion in Manchuria in 1931 exemplifies how economic nationalism and militarism converged. Japan, a resource-poor island nation, relied heavily on foreign imports, particularly raw materials such as oil, coal, and iron, to sustain its industrial economy. The global economic depression severely impacted Japan’s economy, leading to a sharp decline in exports and creating domestic economic instability.

Japan sought to secure new territories that could provide the resources necessary for self-sufficiency. The Japanese invasion of Manchuria was driven by this need for economic survival. After the Mukden incident, Japan pretended to secure regional stability but it was only a militaristic move to occupy the resource-rich region of northeastern China, Japan could access valuable raw materials such as coal and iron ore, ensuring its industrial base remained functional.

#c) Italy’s invasion of Abyssinia in 1935

As a direct response to the internal pressures caused by the global economic downturn, Italy was grappling with high unemployment, a struggling economy, and a need to rally national unity. Economic nationalism in Italy had been promoted through the idea of restoring the glory of the Roman Empire, with Mussolini advocating for territorial expansion as a means of solving Italy’s economic problems.

Abyssinia, one of the few remaining independent countries in Africa, became the target of Mussolini’s ambitions. By invading and occupying Ethiopia, Mussolini hoped to distract the Italian public from the economic crisis, secure new markets and resources for Italy’s industries, and boost national pride. The invasion was also part of Mussolini’s broader strategy of asserting Italy’s place as a major power, but it underscored how economic difficulties pushed Italy towards militaristic solutions.

#d) Germany’s militaristic expansion

Germany was similarly driven by economic nationalism and a rejection of the constraints imposed by the Treaty of Versailles. The treaty had severely restricted Germany’s military capabilities and economic sovereignty, leaving the country humiliated and economically weakened. The global depression further crippled Germany, with the withdrawal of American funds (Dawes Plan) leading to mass unemployment and hyperinflation, which fuelled public discontent.

Hitler capitalised on this discontent and the NSDAP gained one third of the seats of the Reichstag. He was appointed Vice-Chancellor in January 1933 and continued to consolidate his power until he could become the Führer in August 1934. He promoted the idea of Lebensraum, or vital space, which called for the expansion of German territory to secure resources and provide room for the growing German population.

Hitler’s rearmament campaign, which began in the mid-1930s, violated the Treaty of Versailles but was justified as necessary for Germany’s economic survival and self-sufficiency. By rebuilding Germany’s military strength and pursuing territorial expansion in Europe, Hitler aimed to break free from the economic and political constraints imposed by the Versailles Treaty, secure essential resources, and restore Germany to its former glory.

#B. Failures of collective security

#a) Weaknesses of the League of Nations

The League of Nations seemed to be flawed from the start. It was initiated by Woodrow Wilson but rejected by U.S. Senators, who deemed it incompatible with the American Constitution. Wilson, who had overestimated the support he would get, was not re-elected, and the United States returned to a semi-isolationist stance.

The absence of a key power as the United States weakened the League, as did the absence of Germany (until 1926) and the USSR before it was recognised by the international community.

Resolutions could only be adopted with the unanimous agreement of the Council, which hindered potential sanctions. It had no army at its disposal.

#b) Ineffectiveness and decline of prestige of the League of Nations in the 1930s

In response to Japan's invasion of Manchuria in 1931, the League of Nations commissioned the Lytton Report to investigate the situation. The report, published in 1932, acknowledged Japan’s economic interests in Manchuria but condemned the invasion as an act of aggression, recommending that Japan withdraw its forces. However, the League lacked the means to enforce this recommendation.

When Italy invaded Abyssinia (Ethiopia) in 1935, the League of Nations condemned the act and imposed economic sanctions. However, these sanctions were weak, excluding vital resources like oil and coal, which could have impacted Italy’s war effort. Britain and France, fearing a closer alliance between Mussolini and Hitler, hesitated to take stronger action. The League’s failure to stop Italy’s aggression further discredited its role in maintaining peace.

Thus, several key members left the League. Japan withdrew after the League's condemnation of its actions in Manchuria, followed by Germany, which left under Hitler’s leadership in 1933, after the disarmament conference, rejecting the League's principles and the post-World War I international order. Italy, dissatisfied with the League's criticism of its imperialist ambitions in Africa, also withdrew in 1937. The Soviet Union, which had joined the League in 1934, was excluded in 1939 after its invasion of Finland, during the early stages of World War II.

#C. Political, geopolitical and ideological factors

#a) Fascist and Nazi ideologies

Fascism and Nazi ideology, unlike economic nationalism alone, were rooted in a belief in the inherent superiority of certain races or nations and promoted the idea that war and conquest were necessary for national rejuvenation.

Fascism, as seen in Italy under Mussolini, emphasised the glorification of the state and sought to unite the people under a dictatorial leader through expansion and militarism.

Similarly, Hitler's Nazi regime used the concept of Lebensraum to justify the aggressive expansion of German territory. This policy was framed not merely as a way to secure resources, but as a racial and national imperative for the survival and dominance of the Aryan race. While economic concerns were present, these ideologies emphasised military conquest and racial superiority as central justifications for expansion.

#b) Leadership ambitions

The personal ambitions of leaders like Mussolini, Hitler, and Japanese military elites went beyond the economic nationalism of securing resources for self-sufficiency. These leaders were driven by a desire for empire-building, aiming to restore what they saw as their countries' rightful status as great powers.

Mussolini’s ambition was to recreate the Roman Empire, while Hitler sought to establish a Third Reich that would dominate Europe for a thousand years. Japanese military elites, too, aimed to expand their empire across Asia. These personal and nationalistic ambitions prioritised military expansion and the reassertion of national pride, often overriding purely economic motivations.

#c)Geopolitical grievances

Geopolitical grievances, particularly dissatisfaction with the post-World War I treaties, also played a key role in motivating militarism.

The Treaty of Versailles, which imposed harsh penalties on Germany, created a sense of injustice and humiliation that Nazi propaganda exploited. Italy and Japan, despite being on the winning side of World War I, felt they had not received the territorial rewards they deserved. These revisionist goals—focused on reversing the perceived wrongs of the post-war settlement—were not merely about securing resources but were driven by a desire to reshape the international order and regain lost prestige. This differs from economic nationalism in that it was primarily about overturning geopolitical outcomes rather than achieving economic self-sufficiency.

#D. Appeasement and German expansion

#a) Neville Chamberlain’s approach

Neville Chamberlain, Britain’s Prime Minister from 1937 to 1940, strongly believed that diplomacy could prevent another world war. He viewed Hitler as a leader who could be reasoned with, under the assumption that Germany’s grievances could be addressed through negotiations.

Chamberlain, along with France, believed that making concessions to Germany might satisfy Hitler’s territorial ambitions and prevent further aggression. This diplomatic approach, known as appeasement, was pursued in the hopes that it would maintain peace in Europe and avoid the devastating consequences of war.

#b) Motivations for Appeasement

The policy of Appeasement was primarily driven by the trauma of World War I, which was still vivid in the minds of European leaders. The massive human and economic toll of the conflict created a strong aversion to another large-scale war.

Many British politicians believed that the financial and military terms of the Treaty of Versailles were too harsh on Germany. The Anglo-German Naval Agreement of 1935 allowed Germany to build a navy up to 35% of the size of the British navy. This agreement was part of Britain's broader policy of making concessions in an attempt to maintain peace and counter the perceived threat of communism.

In addition, both Britain and France were militarily and economically unprepared for immediate conflict in the 1930s. Appeasement was thus seen as a way to buy time for rearmament, allowing these countries to strengthen their military capabilities while hoping that diplomacy might prevent further escalation.

#c) Key events in German expansion

Despite the short-term peace it achieved, Appeasement ultimately emboldened Hitler to continue his aggressive expansion, as he perceived the Western powers’ reluctance to act as a sign of weakness.

Plebiscite in Saar: In 1935, a plebiscite was held in the Saar region, which had been under the administration of the League of Nations since World War I. The people voted overwhelmingly to reunite with Germany, giving Hitler a significant boost in domestic and international confidence, as it was perceived as a legitimate expression of popular will.
Remilitarisation of the Rhineland: In 1936, Hitler took the bold step of sending German troops into the demilitarised Rhineland, a direct violation of both the Treaty of Versailles and the Locarno Treaties (1925). Despite this clear act of aggression, neither Britain nor France responded with military action, further emboldening Hitler to continue his expansionist policies.
Anschluss and annexation of the Sudetenland: In March 1938, Hitler successfully achieved Anschluss, the unification of Austria with Germany, without facing any resistance. This move was part of Hitler’s broader goal to unite all German-speaking peoples under one Reich. Later in 1938, Hitler demanded the annexation of the Sudetenland, a region of Czechoslovakia with a significant German-speaking population. The Munich Agreement, brokered by Chamberlain and attended by France, Italy, and Germany, allowed this annexation without consulting Czechoslovakia. This agreement is often seen as the high point of the appeasement policy, as it effectively ceded territory to Hitler in the hope of avoiding further conflict.

#E. Spanish civil war

The Spanish Civil War allowed Hitler and Mussolini to test new units and weapons. For Stalin, it was about protecting the Spanish communists.

The Spanish Republic, established in 1931, was highly unstable. The monarchist right and the bourgeoisie were terrified by the presence of numerous anarchists and communists seeking a proletarian revolution. A fascist party, the Falange, emerged. In February 1936, the victory of the Popular Front, which united the entire left, including the communists, led to an outbreak of violence between the extremes. A military rebellion, led by General Franco, erupted in Spanish Morocco in July 1936, quickly dividing Spain in two.

The war took on international significance as both sides sought arms from friendly governments. Germany and Italy used the conflict to test their equipment (tanks, planes) and tactical methods (dive-bombing, etc.). This included the first air raids on defenceless civilian populations, with the Condor Legion responsible for bombing thousands of civilians fleeing combat in February 1937 and Guernica on a market day in April 1937.

The Republicans received support from the USSR and the International Brigades, comprising 35,000 volunteers from 50 nations, mostly communists. In France, Léon Blum had to abandon his promised support due to opposition from the right, the Radicals, President Lebrun, and the United Kingdom. Soviet aid mainly consisted of weapons and the deployment of NKVD military experts, who imposed terror as a political police force over the International Brigades.

In April 1939, after the fall of Barcelona and Madrid, Franco won the war, and his government was recognised by France and Britain.

#F. Nazi-Soviet pact

The signing of the Nazi-Soviet pact (or Ribbentrop-Molotov pact) happened in August 1939. With Hitler already set on his plan to invade Poland, the only significant threat that remained was the possibility of Soviet intervention. To neutralise this risk, Ribbentrop convinced Hitler to form a non-aggression pact with the USSR despite their ideological enmity.

For Stalin, the chances of an alliance with France and the United Kingdom were effectively dead after the Munich Agreement of 1938, which had demonstrated Western Europe's reluctance to confront Hitler. The pact was not just about avoiding immediate conflict with Germany but also about buying time, about two years, according to Stalin's closest advisers, to prepare for an inevitable confrontation. Furthermore, Stalin sought to eliminate the threat from Japan, which had signed the Anti-Comintern Pact in 1936, aligning itself with Nazi Germany and Italy against communism.

The non-aggression pact included a secret protocol to divide Poland between Germany and the Soviet Union, effectively sealing Poland's fate. The pact signalled the collapse of any remaining hope for maintaining peace in Europe. Hitler, now free from the risk of Soviet opposition, invaded Poland on 1st September 1939, triggering World War II. The pact thus stands as the final diplomatic blow that ended the precarious peace of the Interwar period.

#3. How much and with what consequences the great democratic powers proved reluctant to defend the liberal order established at Versailles?

#A. A liberal order rooted in Wilson's 14 Points

#a) Wilson’s 14 Points

Wilson's vision, as outlined in his 14 Points, was centred on key elements such as open diplomacy, free trade, national self-determination, and the establishment of the League of Nations as a framework for a new liberal international order. These ideals aimed to replace traditional power politics with a system of international cooperation. Central to this vision was the principle of national self-determination, which sought to prevent future conflicts by allowing ethnic groups to form their own nation-states, thereby addressing the root causes of territorial disputes and fostering lasting peace.

#b) The Treaty of Versailles

The Treaty of Versailles sought to incorporate elements of Wilson’s liberal vision, but it also imposed harsh reparations on Germany, which many believed would destabilise the peace. From the outset, the treaty faced challenges due to these punitive measures leaving the newly established liberal order fragile and vulnerable to future crises.

#B. Reluctance of the great democratic powers to defend the liberal order and its consequences

#a) United States

The U.S. Senate's refusal to join the League of Nations marked a significant retreat from international engagement, undermining the system of collective security that Wilson had envisioned. This shift was further compounded by the US's turn towards protectionism, exemplified by the Hawley-Smoot Tariff of 1930, which deepened the global economic crisis and represented a clear departure from the liberal principles of free trade. The passage of the Neutrality Acts between 1935 and 1939 reinforced American isolationism, restricting involvement in foreign conflicts and signalling the US's growing unwillingness to support the liberal international order.

The absence of the US in global security frameworks weakened the League of Nations, diminishing its credibility and effectiveness in handling international crises. Protectionist policies, such as the Hawley-Smoot Tariff, contributed to the collapse of global trade, exacerbating the economic depression and creating conditions that authoritarian regimes exploited. Additionally, US isolationism emboldened aggressor nations, as the failure to engage internationally left a power vacuum that destabilised the global order and encouraged further aggression by regimes like Nazi Germany and Imperial Japan.

#b) United Kingdom and France’s reluctance

Britain and France, while outwardly supporting the League of Nations, prioritised their own national security and economic recovery over collective security, weakening their commitment to upholding the liberal order. This focus on national interests was evident in their appeasement policies during the 1930s, as both countries hesitated to enforce the Treaty of Versailles and confront the growing threat of authoritarianism in Germany. Additionally, their continued maintenance of colonial empires directly contradicted the principle of national self-determination, a core tenet of the liberal order they had helped establish.

The focus on national interests and the Appeasement , such as during the remilitarisation of the Rhineland, allowed Hitler to strengthen his position without facing significant resistance, undermining the Treaty of Versailles. The failure to confront Italy’s invasion of Abyssinia and Germany’s territorial expansion further signalled to authoritarian regimes that the democratic powers lacked the will to defend the international order. Additionally, Britain and France’s maintenance of colonial empires, combined with their reluctance to act decisively, discredited their commitment to the ideals of self-determination, accelerating the unravelling of the liberal order established after World War I.

#c) Failure of collective security mechanisms

The failure of the League of Nations to prevent aggressive actions by Japan, Italy, and Germany was exacerbated by the lack of coordination and effective action from other diplomatic efforts, such as the Stresa Front. The League was often bypassed (Stresa Front, Anglo-German Naval Agreement, both in 1935) and secret negotiations still took place. This lack of unified, decisive action outside the League further weakened the collective security framework and emboldened authoritarian regimes, contributing to the collapse of the Versailles order.

The weakness of these institutions and diplomatic initiatives exposed a fractured international system, where major powers failed to act in unity against rising threats. This failure of collective security, combined with the pursuit of national self-interest, directly contributed to the erosion of the liberal order and set the stage for the outbreak of World War II.

#C. Historiography debates

The collapse of the liberal order established at Versailles has been the subject of extensive historiographical debate, with historians offering various perspectives on the causes and implications of the reluctance of democratic powers to defend it.

Zara Steiner argues that the liberal order was fragile from the outset, primarily due to the inability of the US to commit to global leadership and the structural weaknesses of the League of Nations. In her view, the failure of the U.S. Senate to ratify the Treaty of Versailles and join the League of Nations significantly weakened the collective security system that Wilson had envisioned, leaving the international order vulnerable to authoritarian challenges.

John Maynard Keynes, in his influential work The Economic Consequences of the Peace, critiqued the Treaty of Versailles for its harsh reparations on Germany, arguing that these punitive measures would lead to economic instability and political unrest. His argument suggested that the treaty itself, rather than just the reluctance to enforce it, sowed the seeds of future conflict by creating resentment and hardship in Germany.

A.J.P. Taylor offers a different perspective in The Origins of the Second World War, where he controversially claims that the appeasement policies of Britain and France were pragmatic responses to the limitations imposed by the Treaty of Versailles. Taylor contends that these powers were constrained by economic difficulties and public opinion, making appeasement a rational, albeit ultimately ineffective, strategy to avoid another war. He argues that the collapse of the liberal order was inevitable, given the contradictions within the Versailles Treaty and the shifting balance of power in Europe.

E.H. Carr, in The Twenty Years' Crisis, critiques the idealism of Wilsonian liberalism, arguing that it ignored the realities of power politics. Carr asserts that the failure of the liberal order was due to its reliance on moral principles and international law, without recognising the importance of military and economic power in maintaining peace. He believes that the liberal order failed because it could not reconcile the desire for peace with the need to address national interests and power dynamics.

Finally, Margaret MacMillan, in Paris 1919, emphasises the complexity of the peace negotiations and the difficulty of implementing Wilson’s vision in a world still reeling from the devastation of World War I. She highlights how the compromises made at the Versailles Conference, particularly regarding colonial territories and self-determination, undermined the liberal order’s moral authority. MacMillan argues that while the treaty had its flaws, it was the reluctance of the democratic powers to enforce its terms and act decisively in the face of aggression that ultimately led to the breakdown of the postwar order.