Crisis!

: The Great War, The Great Depression and the Second Great War

1914 - 1919 - WWI - industrialized warfare

Previously unknown carnage (machine guns, tanks, planes, etc.)
Late industrializing states (German Republic, Austrian Empire,
Ottoman Empire) united again early industrialized states (France,
Britain, etc.)
Notion at the time: The War to End all Wars (j/k)
END of Enlightenment Optimism - Promise of Human
Perfection turns to a REALITY of abuse, war, poverty, famine,
genocide

The Versailles Peace of 1919

Germans are beaten, Allies are exhausted (financially, socially)
US increases in economic, political, and military capacity vis--vis
global powers
Expansion in military production
Supplies Allies with armaments and resources purchased from the US
using US loans
England and France demanded Germany to pay Allied war debt
Leads to an intl. banking crisis and to a move into trading blocks with
no country trading with another country outside their block
Instability and stagnation in the global market place = Crisis of global
capital!

 19th Century Latin America National Republicanism against an

Imperially-minded US The Monroe Doctrine (1823)
1917 - Russian Rev. - removes Russia from the world stage - LeninistMarxism (later Stalinist central planning) emerges as a looming
ideological alternative Liberalism in Europe
1923 - Turkey emerges atop the ashes of the defunct Ottoman Empire
1924 Modern Iran forms a Republic to replace the Qajar Persian
Empire
1850 - 1920: MENA Ottoman provinces colonized by Brits/French.
1898 - World Zionist Council - European and Russian Jews
institutionalize a movement for a Jewish state in Palestine - Zionism
(Jewish nationalism) emerges

Post-WWI demand for Global Governance

Woodrow Wilson at Versailles - 14 Points and
the League of Nations
national self-determination of nations - The nation-state is
discursively globalized! Initial move toward a post-colonial
world Rise of 3rd Generation green rights
US Congress votes down the US joining the LON
US opts out - does not emerge to regulate the post-WWI
global economy

1919 - 1939 - Crisis in the Global Economy

Collective security Crisis - Failure of LON - Development
of Imperial Nationalism - cont. Brit/French colonialism in
the MENA
Poorly administered - rise of nationalist movements, low-level
warfare across the MENA

Financial Crisis - Germany owes Allies war reps (terms of

Vers. Peace) - Sets the stage for the rise of German Fascism
- Nazi Party comes to power in 1933 - Hitler: Promises to
get Germans out of Versailles
Currency blocks reduces intl. trade b/c states will only trade in
their own currencies (less risk) - Trade is protected. No intl. Gold
standard! Total decline in world trade!

 1929 - US stock market crash! Great Depression ensues

Challenges to liberalism in practice - Rise of Mass movements
domestically (labor movements and Marxist movements. Suffrage
movements (first wave feminism, civil rights, national slefdetermination movements throughout the world system periphery )
Crisis in the US leads to the rise of FDR and the New Deal - In
Europe, to the rise of social democracy
Both are different means by which the state strives to account for
the contradictions of capitalism - to the necessity for social safety
nets to forestall unemployment, poverty, conflict, etc.

The US New Deal VS. Europe - Varying Welfare State

regimes to deal with crisis
Germany - closes off to the world, focuses internally, stops repaying war debt. Hitler
rearms.
Britain/France in debt - construct social welfare states (Social Democratic
Regime)
Focused on welfare and redistribution, less focus on markets
US - FDR and the New Deal (Liberal regime)- More faith in the market in US
society. 1932: 1/3 of labor unemployed
Rise of the New Deal coalition and the Democratic party (composed of elites
in the American South, labor groups, racial minorities, immigrants.
New Deal assumptions - controlling workers is the key to capitalism - FDR
attempts to stall the radical tendencies of labor
FDIC, CCC, SEC, etc. (Alphabet Soup of social and economic programs)

John Maynard Keynes - The architect of the Welfare State

The battle of Ideas between markets and regulation (Keynes vs. Fredrich
Von Hayek)

Keynesian regulation - First theorized in 1919

- The Economic Consequences of the Peace (1919)
Argued that Britain should NOT demand war reps. from Germany - it will
lead to radical nationalism - prophesized Hitler and the rise of the Nazis

Keynes - A Defender of Capitalism - Argued, however, that waiting for

the natural laws of the market will leave us all dead! (conflict, poverty,
etc.)
-- natural laws/rights dont account for human error! All things ARE NOT
equal - Natural Human Rights ARE NOT Protected by an Unregulated
market - Contradictions must be met with intervention by States - IT IS
THEIR DUTY!

Keynesianism cont.
Advocate for state-centered/directed reform
Primary focus - Employment (get money into peoples pockets,
economies will recover)
1936 - A General Theory of Employment, Interest and Money
Economies go through natural cycles of boom and bust - State should
regulate during busts!
Counter cyclical Spending - Run Deficits DURING down-turns to
stimulate economic growth by providing sources of employment
(increases the state bureaucracy exponentially) - Govts. prime the
pump of national economies
Full Employment is the ultimate goal - Inflation is NOT of central
importance in small percentage.

Divide between conservative and liberal forms

of deficit spending
Conservative - spend on military build-up (produce, blow-up, produce
more to blow up)
Liberal - spend on social programs, healthcare, education, poverty
reduction, infrastructure - gov. employment
Compromise between two trends - a liberal market regulated by a
mixture of gov. speding on welfare and warfare
Led to post WWII BOOM! - and to The Golden Age of Capitalism
(1945 - 1971)

WWII, the Rise of the US and Post-War Devt. - The Golden Age

1941-1945 - WWII - Germany/Italy/Japan versus US,

Britain, and France
1945 - Restructuring of the Global Economy under US
Hegemony
Primary industry in post WWII US boom - AUTOMOTIVES (GM,
Ford, Chrysler, etc)
Public works projects - remove RxRs, lay down interstate Hwy
system - Very capital intensive!
Dramatic increases in real wages
Gov. programs stimulate demand
Massive increase in the globalization of media, trade, and
immigration - all core states are regulated through Keynesian
mechanisms.

Post-WWII Keynesian Alliance

Post-war Independence of former colonial territories - Seeds
planted for contemporary territorial disputes (Israel/Palestine,
Kurds in Iraq/Turkey/Iran/Syria, Pakistan and India, etc.)
Development of a superpower axis between the US-Gold
Standard regulated Keynesian regime & the USSR-led, stateowned Leninist model - The Cold War Emerges!!
Pendulum shift toward state centralization mixed with freemarket competition.
Mixed Economies - state regulation in cycles, NOT state protection!
Political alliances - Labor Unions, intellectuals, progressives, small bus.,
farmers, food subsidy insts, and gov. agencies

The late 20th Century Regime of Universal Human Rights

Political Regulation - United Nations (1948 UNDHR) - International Law
Guarantees human rights to all humans, everywhere
New paradigm of freedom in the context of an emerging ideological
Cold War - despite equality, race, color, religion, etc. despite national origin,
wealth, etc (or so the legend goes)
New universal social contract anchored by the universalization of
national self-determination?: UDHR Article 27: All humans are entitled to
the realization, through national effort, and international cooperation and in
accordance with the organization and resources of each state, of economic,
social, and cultural rights that are indispensable of his dignity and the
development of his personality [emphasis added].
18 original delegates, 30 Articles of the UNDHR - Four Pillars - Dignity,
Liberty, Equality, and Fraternity - Divided between civil, political, economic,
social, and cultural rights