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Déjà Vu The 1930s Are Coming Back
From the September 2012 Trumpet Print Edition »
What happens after a globe-shaking financial crisis? We are stumbling through one right now, and we all want to know what we are in for next. Fortunately—and unfortunately—this situation is precedented.
Early last century, the globe’s First World War extinguished lives, torched economies and left Europe smoldering with grievances. Afterward, the world was rocked by the most violent financial earthquake in modern times—the Great Depression.
The nations were churning: brutal dictators were rising, anti-Semitism was becoming mainstream, civil war erupted in Spain, Japan invaded Manchuria, Italy invaded Ethiopia. But instead of facing the challenges, Britain and America turned increasingly inward, focusing on their own wounded economies, slashing their militaries and pointedly ignoring the world outside.
Decades after World War iii, will historians be writing something similar? The nations were churning. Radical dictators were rising, anti-Semitism was becoming mainstream, Germany conquered the Balkans, Russia invaded Georgia, civil wars erupted in the Middle East, China built a military powerhouse, a new strongman arose in Russia, a crafty emperor arose in Europe. But instead of facing the challenges, Britain and America turned increasingly inward, focusing on their wounded economies, slashing their militaries and pointedly ignoring the world outside.
The tremors of the Great Depression brought down governments around the world. Other factors amplified the shaking, the absence of Britain and America being one. But the Depression was perhaps the single greatest factor that pushed the world into smoldering ruins—and the chaos that followed. The most infamous would-be empire of modern times rose out of its ruins: Nazi Germany.
The lesson: Financial quakes can cause political fires, and even worldwide conflagrations.
“Current Crisis Shows Uncanny Parallels to Great Depression,” Spiegel proclaimed in 2009. The statistics are undeniable. Since the crash of 2008, unemployment rates have reached levels no one has seen since the 1930s.
“One can only guess at the long-term political impact of today’s crisis,” Spiegel wrote. “The reason the comparison with the Great Depression is so horrifying is that the world economic crisis led not only to the impoverishment of large segments of the population in Germany and elsewhere, but also to a political catastrophe.”
Three years later, we have not broken away from those ominous parallels. “When mainstream leaders are incapable of offering solutions to apparently intractable economic problems, extremists will step in,” Stephen Glover wrote in April in the Daily Mail. “That is what happened in Europe in the ’20s and ’30s. Looking ahead to years of sclerosis which none of our leaders shows the slightest sign of knowing how to prevent, it would be a brave man who said the same thing could not happen again.”
The world is still following the pattern it did in the 1930s. The question is, what’s to prevent us from smashing into the same horrendous result?
Democratic Gridlock
1930s
After the Wall Street crash in 1929, political systems around the world almost completely broke down. Parties refused to work with each other, and blamed everyone else for the mess. Coalitions, if they formed at all, were short-lived. Germany held parliamentary elections in 1928 and 1930 and then three elections in 12 months during 1932/1933. France had five governments between May 1932 and January 1934. Nations became paralyzed and couldn’t respond to the crisis. In Spain, the division went so deep that the country was torn asunder and civil war broke out in 1936.
Now
Since the financial crisis began in 2008, the governments of Italy, Greece, the Netherlands, Spain, Portugal, Hungary, Finland, the Czech Republic, Slovenia, Slovakia and Iceland have all fallen before their time. Incumbents in France and Ireland lost their scheduled elections, with Ireland’s ruling party suffering its worst defeat in history. The nation that is furthest down the road to financial ruin is also experiencing the worst political fracturing: Last year,
Greek Prime Minister George Papandreou was forced to step down. A grand coalition ruled for six months until Greece held elections in May. No party could form a government,
so Greece held elections again in June.
Meanwhile, European leaders have faced similar gridlock in dealing with the financial crisis at the European Union level. They hold conferences every few weeks, emerging every time with disappointing results, then window-dressing them to look like great solutions.
One reason the Nazis were so successful is that the post-World War i government, the Weimar Republic, never gained popular support. The problem wasn’t just a weak government—the population disliked the whole political system. When a new political power stepped in, they weren’t sorry to see the old one destroyed.
Today, the European Union has proven useless in the face of the financial crisis, and Europeans love their ineffectual supragovernment less with each failed summit. People aren’t just becoming fed up with their political parties, but with the whole system: the vague machinations of the European Parliament, the unelected Eurocrats, and the group photos of national leaders attending the latest failed conference. They’re starting to want something new. Like the 1930s Germans.New Parties Rise
In the 1928 elections, the Nazi Party won 2.6 percent of the vote. It was Germany’s ninth-place party. The Communists did four times better, with 10.6 percent. Just two years later, as financial crisis started to set in, the National Socialists won 18.3 percent and became Germany’s second most popular party. The Communists were third, with 13.1 percent.
In 1932, the Nazis won nearly 40 percent of the vote. The Nazis had been a weird fringe party—until the financial crash.
The sudden rise of these fringe parties in the 1930s wasn’t just a German phenomenon. In Austria, the Heimwehr—a farright group similar to the Nazis, but opposed to unification with Germany—rose in a similar pattern. In Czechoslovakia, the Nazi Sudeten German Party came from nowhere to win a higher proportion of the vote than any other. In Romania, the Iron Guard rose to become the third most popular party, winning 15 percent of the vote in the 1937 elections, after having been banned in the 1935 elections. Other extreme parties, like the National-Christian Defense League in France, rose steadily after the Wall Street crash. France’s far-right Croix-de-Feu league grew from 500 members in 1928 to 400,000 in 1935. After it was banned in 1936, its leader started the French Social Party, which grew to become one of France’s largest right-wing parties. Votes for extreme parties in many other countries also jumped.
Today, Europe is traveling a similar road. In Greece, the two major parties have gone from sharing 70 to 80 percent of the total vote to around 30 to 40 percent. Syriza, the Coalition for the Radical Left, went from receiving 4.6 percent of the vote in 2009 to 26.9 percent in 2012. Even the Greek Nazi party won seats in parliament this year.
In April, National Front’s Marine Le Pen won a record 18 percent of the vote in France. The same month, after steadily gaining popularity in the Netherlands, Geert Wilders’s Party for Freedom toppled the government. Far-right parties have also attracted a significant following in Hungary. In Austria, two neo-Nazi parties control a third of the seats in parliament.
The German Pirate Party has risen in a similar fashion. Polls indicate it could be the third most popular party in the country. It’s not a Nazi or far-right party in any way, but its rapid rise reflects a 1930s-like dissatisfaction with traditional politics—perhaps even with the entire democratic system.
No fringe parties have risen to prominence quite as drastically as Greece’s. Other countries have not vaulted these parties to the same heights because their economies have not taken quite the same plunge. But as their economies slump, the fringers will become the mainstreamers.
