transcript

Speaker 1:
[00:11] Economic privation proceeds by easy stages, and so long as men suffer it patiently, the outside world cares little. Physical efficiency and resistance to disease slowly diminish, but life proceeds somehow until the limit of human endurance is reached at least, and councils of despair and madness stir the sufferers from the lethargy, which precedes the crisis. Then man shakes himself at the bonds of custom aloosed. The power of ideas is sovereign and he listens to whatever instruction of hope, illusion or revenge is carried to him on the air. That's John Maynard Keynes, of course, The Economic Consequences of the Peace in 1919. Welcome to We Have Ways of Making You Talk for the second part of our series, The Visionaries, looking at the swirl of events and ideas before and after the Second World War and the way that Presidents Franklin Delano Roosevelt and Harry S Truman responded to those ideas. I think that's the best summary, isn't it, Jim?

Speaker 2:
[01:03] Yeah, I think it's absolutely perfect.

Speaker 1:
[01:04] In our last episode, we dangled you, the ultimate economic cliffhanger, the mother of all crashes. I think synonymous with the idea of economic crashes, in fact, the Wall Street crash because Germany was getting back on its feet, reparations were playing themselves out. The British had done what they could, Winston Churchill. Not good with his personal finances and not brilliant with the nations either, let's be honest now, and tried to get Britain back on the gold standard. The French were doing what they could to cope with the trauma of the First World War, but.

Speaker 2:
[01:39] Germany is recovering very well. Germany is doing really well. I mean, Weimar is thriving. It's progressive, it's liberal, it's cultured, and it's becoming a byword for high quality engineering and manufacturing, and it's getting a growing export market, which is exactly what it needs. So all is fine and dandy.

Speaker 1:
[02:00] One of the consequences of the First World War is that America is now the dominant economy in the world. So what happens in America will affect everywhere else. This is why, you know, when the Wall Street crash happens, it buggers stuff up for everybody else. Let's just say it like that. Why not?

Speaker 2:
[02:17] Yeah, yeah, yeah. Let's just say that. But let's also just contextualize the Wall Street crash a little bit. So it is becoming clear in the 1920s that the US has very much abandoned Wilson's utopian vision for unconditionally cooperative global relations. It's not in the League of Nations. It's this long decades of isolationism is starting to take root. There is definitely a degree of aloofness towards Europe. It's the Anselm regime. You know, Americans got to America because they were trying to escape Europe in the first place after all. But it is also entrenched by now, by new immigration policy, which is much tighter. They don't want lots of people coming in. Much, much tighter immigration laws. There's suddenly a reduced demand for labor. So they have the National Origins Act of 1924, which reduces the immigrant quota from 800,000 per year to just 150,000 per year. And they act on it very quickly. There's none of this sort of political asylum or anything like that. The act also splits the 150,000 into national quotas. And if one national quota isn't filled, the excess can't be picked up by another country, which is going to be important later on in the 1930s. And it denies visa entry to anyone likely to be a significant cost to public finances. And there's no provisions for any religious or political asylum seekers at all. America is changing in the 1920s, I think it's fair to say. There is also legislating protectionism. So in late September 1922, there's the Fordney-McCumber Tariff Act, which hikes up duties on imports. So 38.5 percent for dutiable imports with an average of 14 percent across the board. And this is to protect American industry. But of course, in foreign countries, impose retaliatory tariffs, which of course is always what happens. So France increases tariffs on cars coming into America, for example, from 45 to 100 percent, which is why you don't see large numbers of American cars in Europe in the 1920s and 30s. You know, what you see is Citroens and Renaults and, you know, Austins and Morris's and all the rest of it. Henry Ford is against the tariffs. He comes out in 1928 and insists on the importance of foreign markets. He's absolutely right about all this. American farmers also become discontented because there's no foreign competition, which means the cost of American-made agricultural equipment is doubling, which is stifling progression because most farmers can't afford the mechanization which is coming in. Food and clothing prices are also soaring as well. But cracks are appearing, of course, by the end of the 1920s in this triumph of a booming American economy. White supremacy is gaining strength in the South and there is this growth of the Ku Klux Klan. There's white supremacists, these are the white hoods and all the rest of it and so on. There's over 460 lynchings between 1919 and 1935 or something like that. There is also prohibition has been brought in. This is the age of the gangster and prohibition related crime is also growing. But at the same time, the automobile as we touched on in the last episode is having this transformative effect on the American society and economy. Because of the rise of consumerism means it's easier for even working class people to buy a car on credit, it has to be said. So it's a huge spike in demand for petrol, steel, rubber, glass, paint, leather, more cars, more roads, more mobility, more wealth. Increasingly interconnected and modern America and wages, of course, are rising. They rise 26% from 1920 to 1929. Of course, this means there's more purchasing power for ordinary people to buy company shares. What does this lead to? It means that debt mountain rises steeply.

Speaker 1:
[06:19] Yes, they're storing up some troubles for themselves here. There are some tinglings of warnings. American farmers in early 29, their prices fall due to surplus production. If you're tariffing stuff and over producing, and you can't export, there's going to be a crunch, isn't there? American consumers also start spending less, which again leads to a surplus in manufacturing industries. You could see why Ford wants to sell cars abroad, because basically you can only sell so many cars in America. Wages stagnate as a consequence, and consumer spending starts to slow down.

Speaker 2:
[06:59] I think it's important to say just very quickly, is that banks are unregulated at this stage. They're not going to have any legal issues with that.

Speaker 1:
[07:10] Yeah. On the 24th of October, 1929, investors panic and start selling shares in huge numbers. There's something snaps, just like that. Black Thursday, it's known as. In the sort of panic, bankers and financiers, they try to stabilize the situation, but people keep carry on selling shares funded by loans that they can't afford anymore, because this is the cycle that's now in motion. Banks collapse also with loans that they've taken out, that they can't repay, and 16 million shares are sold on the Wall Street stock market on that day, on the 24th of October, 1929. Billions of dollars of value wiped off the stock exchange.

Speaker 2:
[07:58] 810 billion, in fact.

Speaker 1:
[08:01] Yeah, yeah, yeah, yeah, yeah, yeah, it's incredible, isn't it? As we said in the last episode, millionaires meant millionaires back then. That was, you know, some millionaires lose pretty much everything overnight. You know, this is a great big rock of an economic disaster that's being lobbed into the global pool. And so the ripples are going to be immediate and global. And the country that owes the Americans the most money, that's tangled up most in American finance is Germany, of course, because the British are trying, the British have got their own issues with the empire. The French have got their own situation. But Germany is the economy that's needed help. It's gone to the Americans for help. And with the Americans now in the doodoo, Germany has to be the first to be affected because it's basically pours gasoline onto the German situation and sets fire to it. And we intimated this in the last episode. There's a slice of German opinion that thinks that if they did lose the First World War, but it was nothing to do with them, that in fact they didn't lose the First World War, they were winning the First World War. And there are signs to indicate that. In March of 1918, that's the Brest-Litovsk Treaty, where Lenin's brand new Soviet government, basically, to get out of the war and to shut the war down because after all, a big accusation against the Tsarist government is that the war is unnecessary and it's bad at fighting the war and we need to get out of the war. And the Kerensky, the interim government, the Kerensky government doesn't pull out of the war, tries to carry on fighting it. So Lenin throws in the towel and in doing so, gives up tons of territory, a third of its pre-war population and 90% of its coal, lots of its natural resources.

Speaker 2:
[09:46] So this is a huge victory for the Central Powers. It's a huge victory for Germany. And this comes in March 1918. So at the start of 1918, the Germans think they're winning. And you know, there's not very many who would doubt that, to be perfectly honest. And as if to prove the point, they then launched this huge offensive in that same month, March 1918, which pushes back the French and the British, particularly, past St. Quentin and, you know, back across the sol and all the rest of it. And it looks like they're winning. I mean, it really, really does. But they can't make the final breakthrough. They run out of steam, make some vulnerable to the counterattack. There's also massive casualties in the course of this huge offensive. What the French and the British realize, and the British particularly, because they've absorbed the greatest weight of this spring offensive thrust, is that actually the front can be a lot more mobile and flexible than they thought it could be. And by retreating backwards, they're then waiting till the Germans have got to the point of greatest weakness, and then they counterattack. Does that sound familiar, by the way, to anyone who's listened to us talking about the German way of war and the Second World War? It's the exact reverse, isn't it? It's the Germans who are counterattacking the point of greatest weakness, et cetera, et cetera. Anyway, the Allies are able to push back. The Germans, by this point, have just run out of steam. They've lost their opportunity to win. They can't afford it anymore. They're running out of resources, running out of everything. The victory against Russia in the spring has not provided the dividends they wanted. Cut a long story short, they call for an armistice in November, 1918. Which leads us, neatly, to a certain character called Adolf Hitler.

Speaker 1:
[11:32] Well, yes, if you're a corporal in the army and you think things have been going well, and interestingly, he's also made it through the entire thing relatively unscathed, which I think is kind of interesting, isn't it? You know, you'd think it was going all right, right?

Speaker 2:
[11:45] Yeah, a bit of gas, a bit of blindness. That's all right, yeah.

Speaker 1:
[11:48] But he's in one piece, right? And the thing is, if you've endued four years of that, and it turns out you've lost and it was for nothing, and the world is asking you to empty your piggy bank as a consequence, you might have some feelings about that.

Speaker 2:
[12:07] You might not be in a happy place.

Speaker 1:
[12:09] You might not be in your best mood, particularly if all your dreams had been crushed before the war, your dreams of being an artist or an architect. What's interesting, though, is that really, without the Germany has been essentially a military government for the last four years, and the military have been running the war, not politicians. It's been the military that have run the conduct of the First World War on all fronts for the Germans. And it's men like von Hindenburg and Ludendorff who, and it's the Ludendorff Offensive, you know, Operation Michael, which is the German Spring Offensive in March of 1980. He's the Ludendorff Offensive. It's his bloody scheme, right? They get to work on it right away as soon as the war ends, is blame it on everyone except themselves. And it's them that know they have to sue for peace. There's a communist back mutiny in the German Navy at Kiel in November of 1918. And von Hindenburg claims basically that they were stabbed in the back by the socialist government that's incoming, the parliament that exists in Germany. There's a puppet parliament. And obviously, they start pointing at the people who've made money out of the war. And they start pointing at, you know, Germany is an anti-Semitic country before the First World War. Make no mistake. You know, the word anti-Semitism is invented by a German politician in order to sort of make it sound like hating Jews is scientific or rational or something. And he leans hard into that. And this narrative is then sort of turbocharged by the Versailles Treaty, by the War Guilt Clause, which in the last episode I think we emphasized might be something that might upset German Germans. The army, the fact that the army that believes it isn't defeated is allowed, has to be reduced to 100,000 soldiers. They're not allowed any proper shipping. They're not allowed any planes. And also there's a feeling that Wilson came to town all idealistic and that he's let Germany down, betrayed Germany, which is quite, I mean, it's quite the flex, isn't it, for Germany after the First World War to say, we have been betrayed. I mean, this just shows that when people are upset and angry, it doesn't matter what the facts are, their feelings are the facts.

Speaker 2:
[14:20] Yes, absolutely. And the war guilt clause, which they call a diktat, don't they, is basically, you know, signing the confession when you've just been waterboarded. I mean, that's basically what they're saying. And therefore it doesn't really count. You know, the stab in the back myth is really commandeered by a certain part of the population and those old military war leaders to mars the reality of German hubris and militarism at the beginning of the war, which fueled the disastrous misjudgements and ultimately led to defeat. You know, senior figures like von Hindenburg just simply can't face this truth. And neither can the rank and file, such as Hitler or most of the soldiers who feel they've now suffered for nothing. And the newly formed DAP, which is the Deutsche Arbeitpartei, the German Workers Party, helps disseminate this myth. And it argues that Jews and Bolsheviks are at the center of a global conspiracy that causes German Germany's downfall. And the Jews are also responsible for the Treaty of Versailles too. And the party is based in Munich, in Bavaria, to which Hitler has gravitated after the war, even though he's Austrian and from Linz. And he also observes the rise and swift fall of the Bavarian Soviet Republic, whose leaders were mainly Jewish, as it happens. And Hitler had won an iron cross for his service in the First World War, but emerges from the conflict only at last corporal. And there is intense anger within him and resentment for his own personal failures and those of his countries. He's removed from the army in October 1918, having been temporarily blinded by mustard gas right at the end of the war. And there's some dispute about his blindness, of how much is a physical blindness and how much is a mental one. But anyway, he recovers and he's sent on a propaganda course by a kindly old officer of his. And he's employed to lecture former soldiers on the dangers of Bolshevism. And what he discovers is that this is an outlet to articulate ideas that have been forming for a while. And it's also his first taste of origin. It turns out he's really good at it.

Speaker 1:
[16:36] Well, for once in his life, he's good at something. It's a very odd moment in Hitler's life as he finds something he's actually good at. And the crowds love him. He likes the crowds. I know nothing about what fun it is to have crowds on your side. And it's a long, long time ago. But you know what I mean? He's completely intoxicated by it. And his scapegoating of Jews resonates with people still running for the war. I mean, Deutsche Appartheite, they do amp this myth up, but this is a common idea. This is an idea that's very much got its boots on. And in the party, another nationalist and anti-Semite, Anton Drexler, changes the party's name to the Nationalsozialistische Deutsche Arbeiterpartei, which is the Nazi Party for short, the Nazis.

Speaker 2:
[17:34] And he does that in February 1920.

Speaker 1:
[17:36] And then Hitler, whose success, nothing succeeds like success. So Hitler in the following summer, in July of 21, elbows Drexler aside as party leader. And it's all about being hyper-masculine. It's about a controlling, aggressive ideology, possible compensation on a personal level. We, you know, I guess we'll never know. And his past failures are all part of, part and parcel of how he expresses himself through his politics. It's all about them and us. That there's them, the enemy, Jews and communists. And because Marx is a Jew, he can say that communism is a Jewish idea. This is the intellectual temperature of the racism that Hitler has at the center of his thinking. If someone Jewish thought it up, then it's Jewish. And you know, enough significant players in the Soviet Union who are Jews that he can go, look, you see, I mean, that's the depth of the thinking here. And the us is the us to the them, is white Northern European, racially pure Christian Germans who'd fought in the First World War. That the deal between them and the country has been betrayed and unbetrayed and undercut by the Jews, the Bolsheviks, Woodrow Wilson, the West, Perfidious Albion, the ghastly French, and of course the lurking Bolshevist Slav threat to the East. And of course this horrible upstart Poland thing that is a product of all of those people, agents and circumstances. This is all about the idea of feeling left behind and betrayed and the back of the world's queue when in fact you should be at the front of the world's queue because you're the greatest people on the planet who only lost because you were betrayed, not because you bit off far more than you could chew. And so there's this idea of a people's community, a Volksgemeinschaft, which is the idea of a cultural and ethic beliefs that are shared within a German people. There's an idea of a racial purity that is inherently anti-Semitic as well. There's Jews on one side who are evil and rotten and undermining Germany, at the same time as being brilliantly clever and manipulative. So there's already contradictions in its thinking. Even though Jews have been in Europe, in Germany, for ages, for all time, basically, and they're not new in Germany at all. And in fact, many have vanished effectively and integrated completely. Although of course, that is seen as sneaky in the anti-Semitic mindset. That seems wicked in itself, hiding. Because basically, if you're an anti-Semite, you can come up with a... You can say that's a false flag. And then if someone's found to really be actually anti-Semitic, you say, well, the Jews have made them do it.

Speaker 2:
[20:25] But it's interesting because there's volksgemeinschaft, but then there is this cohesion, which is brought around by the veterans of the First World War, blokes in their 20s and 30s. And this is called frontgemeinschaft, and this is basically an extension of volksgemeinschaft, a community specifically comprising Germans who fought in the war, a sense of military brotherhood, tribalism. You know, the unique kind of awfulness of their experiences brings them together under an entirely false but quite compelling narrative. And Hiller, when he does his talks, it is very clear in his messaging. You know, the Germans are a great people, but their two enemies, the Jews and the Bolsheviks, are at the root of all the evil. A new order would expel these people and offer Aryan genamy and prosperity amongst Liebensraum, this living space, this expansionist idea for for complete national self-sufficiency. And you know, it has a resonance to all this. You know, people want to be part of a gang. They want to feel that the grievances and resentment and anger they're feeling is shared by other people. And here you've got someone articulating it in a very, very compelling way. But it has to be said that the Nazi party is still only very much a fringe force. You know, the Weimar Republic as a social democracy is growing in strength after the stabilization of the currency and the Doors Plan post-1923, end of 1923, which is when it all changes. And they're known as the Golden Twenties, the Goldiners Wannseiger. And, you know, it is amazing to think that the Nazis win 2.6% of the vote in the 1928 election, which is, you know, diddly squat, isn't it? And the Young Plan further enhances Germany's chances, which is sorted out in the early part of the spring of 1929. It spreads the war reparations over an even longer period, until 1988 is when the reparations have to be repaid. So this means that annual payments are reduced, which means there's less injustice, so to speak, for the Nazi rhetoric to exploit. And, you know, all looks swimmingly well. It all looks absolutely fine until the Wall Street crash.

Speaker 1:
[22:49] Yeah, yeah, exactly. And I think this is a moment that is sort of really quite contingent, isn't it? Is that the Americans don't have to do what they decide to do, could have done something differently, and we maybe would get a different outcome, because the Nazis only winning 2.6% of the vote is the glimmer of hope that all fringe parties must console themselves with when they, you know, after they have a battering at a general election. They all go to the pub together in their costumes, right? And their leather underpants or whatever and say, yeah, yeah, but in 1928, Adolf only got 2.6% of the vote. And look at a few years later, that must be what you do when you're sat around drinking your post-election drug, drubbing drinks. Yeah, you know, there's the glimmer, there's the glimmer. You know, he did it, we can do it. Germany is pregnant with possibility in that there are people who are upset about the war and there are people who have had a rough ride with the hyperinflation. But there's also, it's contingent in Germany too, because what the Americans do is one thing and then how German politicians also respond to it. It's very, very interesting and none of this is fated. I think is the interesting thing about it. So as we said, 8.10 billion US dollars have been wiped out of the stock exchange by the time it closes at three o'clock on Black Tuesday. I'd have shut at noon. I don't know about you, Jim. I wouldn't have waited till three.

Speaker 2:
[24:12] Yeah. So it's basically, there's the first day, which is Black Thursday, then there's a Friday, then there's a weekend, then there's Monday and Tuesday is all over. So it's four days of financial market mayhem.

Speaker 1:
[24:23] Absolute carnage. Banks go under, 100,000 businesses go bankrupt. Unemployment goes from 1.6 million to 14 million by 1933. So one in four of the working population had to work. So the thing is, it's not just that week. It's like a massive, massive, massive shock. There's no confidence in stocks and shares. So credit collapses. No one will lend. No one can borrow. There's not enough cash in circulation because a lot of what was previously circulation was actually debt, was borrowed money. So once you get the pinch on debt and credit, there's no money around. So wages, loans and bills can't be paid. It's a sort of perfect storm really financially. And so if you're the government, Jim.

Speaker 2:
[25:11] You've got a different president from the days of Warren Harding. You've now got President Herbert Hoover. He's a little bit in above his head, isn't he, to put it mildly?

Speaker 1:
[25:20] Yeah.

Speaker 2:
[25:20] Urges businesses not to lower wages. Federal Reserve, which thank God they've even got that, now cuts interest rates. Congress agrees to a 100 million bailout. It's briefly, briefly, briefly helpful. But then they do this terrible, terrible thing, which is sort of, has been talked about in recent times, but has, up until President Trump's tariffs, I think had been kind of consigned to the dustbin of history, comes the Smoot-Hawley Tariff Act, which is passed on the 28th of May, 1930. It introduces agricultural industrial tariffs as protectionist measures for farmers, passed in the House before the crash, and should have immediately been thrown out with a dishwater. But it isn't. And 1028 leading economists sign a petition urging Hoover not to do it. Don't sign the bill, Mr. President. And he is personally against it. But he signs it anyway in the kind of midst of pressure from his cabinet members and also from Congress. And so this tariff war begins. The consequences are just absolutely appalling. I mean, mayhem ensues, it's fair to say, not just within America's borders. I mean, the smootly tariff is a catastrophe for the United States, but it's even worse for those economies, which are just sort of crawling out of the mire of the First World War and the Spanish Flu and starting to make sense of things and get back on track. It is absolutely calamitous.

Speaker 1:
[27:02] Yeah, well, and mayhem ensues. So obviously, many of America's trading partners impose retaliatory tariffs. Of course they do. So Canada, Mexico and Cuba, US imports fall by 66 percent. So from 4.4 billion in 1929 to 1.5 billion in 1933.

Speaker 2:
[27:21] It's quite a draw.

Speaker 1:
[27:22] Yeah, but also no one's got any money to buy anything. So, you know, that's compounded, isn't it? Like you've double dipped here. US exports fall by 61 percent. 5.4 billion to 2.1 billion. I mean, that's going to hurt. And given that we were earlier saying, Henry Ford is saying, can we please export vehicles abroad? Because he knows there's only so many that can be sold in America.

Speaker 2:
[27:45] Anyway, so it is hard to understand how anyone today could think that a trade war would be a good idea. But anyway.

Speaker 1:
[27:52] Well, because, you know, because if you don't understand that the world is an integrated system that's a global system where, you know, you pull one lever in one place and the other governments have agencies, well, you can't just do things unilaterally and expect other people not to go hang on.

Speaker 2:
[28:08] If you don't understand that, problems ensue.

Speaker 1:
[28:12] It's weird that you might not as well. GDP is falling all across Europe between 1925 and 1935. That falls 5% in Britain. You know, and that's considering Britain as a big empire. That is a big drop, 15% in France and in Germany, it's far worse. So production is halved by 1932 and more than one third of the population, 8 million people is unemployed. And a German observer says the whole nation is enveloped in distress. Official interference is of no avail. People live in a veritable hell of meanness, oppression and disease.

Speaker 2:
[28:47] The worst thing of all is that the national banks in Vienna and Berlin collapse.

Speaker 1:
[28:53] And things had been OK. We'd had the we'd had the golden advance ago. We'd just we'd just come out of things being OK. And very often revolutions happen when the good times stop rather than during and necessarily a period of bad times. It's when the when the when things grind to a halt and suddenly life is disrupted that you can get you can get you get a revolutionary disruption. If the Nazis are one thing, they're revolutionaries. So Hoover is ideologically wedded to American individualism because he's come from Iowa. He's been a mining millionaire and all that sort of thing. So he doesn't think that the state should intervene. And America, this is this is the sort of, you know, iconic age of the Great Depression. Kent City, Shantytowns, nicknamed Hoovervilles pop up. Hoover then thinks, right, okay, we need to raise money. So the government needs to raise money. So he introduced the Revenue Act in 1932, which is, you know, austerity measures, raising taxes for everybody. The highest rate is 63% of tax, which is, you know, you want rich in this situation. One thing you might want to do is get rich people spending money to kickstart the economy and they're being taxed heavily. You know, he goes against Keynes' advice for governments, which is to spend more to bolster the economy, boost jobs and growth.

Speaker 2:
[30:12] This is called countercyclical, countercyclical economy. This principle that you spend more to get the whole thing, the ball rolling again.

Speaker 1:
[30:21] And then once the ball's rolling, you can spend less. But Hoover's measures don't work. Then natural disaster exacerbates existing poverty. So you have a drought that starts in 1930 in the Midwest, and the Great Plains, the prairies. There's been better weather in the 20s, so there's been over farming. And it's interesting how the economy and farming sort of mirror one another in this. You know, the better time for farming is when there's a better time economically.

Speaker 2:
[30:47] Yes, but also because there's greater demand for food and because people are expanding and there's better means of getting this food around America. So it's less localized, it's more nationalized. So there's greater pressure to produce more food, which means there's greater pressure on the land, which means that when you've got a climate disaster, the pressures on that land suddenly increase in a way that they hadn't when there wasn't a climate disaster. So in other words, the boom years of the 1920s are directly responsible for what becomes known as the dust bowl, which is where the drought causes these massive dust storms that strips the topsoil off its errors and scatters it hundreds of miles away. As far as Chicago and even in DC, in Washington DC, where there is this red fog descends over, coming out of the sky where this soil has been dropped down on it. So huge swathes of land become untenable for farming. It's really worth people just looking up photographs of the dust bowl, because they're half-buried Model T Ford's and wooden farms, up to the second floor and all this stuff. Huge rural poverty ensues. This is the dust bowl. It's just amazing.

Speaker 1:
[32:01] How symbolic the dust bowl is of America's problems. It's a bit on the nose, isn't it? I mean, often we joke on this podcast about the writers have overdone it here. But the dust bowl coinciding with the crash feels like someone's just leaning too hard into the cliches. The problem in Weimar is that for all the success that comes with economic reestablishment of the German economy and of its democratic government, there are some extremely conservative players, institutions, elites within Germany that do not like the democracy that's been imposed on Germany after the First World War. They are not happy about it, especially in the military, which after all has been emasculated by the Versailles Treaty. They're feeling very, very, very, very sore, and in government and in business as well. And there's a sense that party politics isn't working. Democracy isn't the answer. Whatever levers they pull, they don't work. And the depression, the crash makes this far, far worse. That there are enough conservative forces prepared to work in coalition together, to keep the left out, so the left can't come in and do whatever they want to do to solve the problem, or even the centre left. There's a critical mass of conservative voters and politicians that mean that in March 1930, President von Hinböck, with the collapse of a five-party coalition in March 1930, he brings in an economist called Heinrich Brüning. Using his emergency powers, he brings in him as an unelected and independent technocratic chancellor basically.

Speaker 2:
[33:42] Brüning is an economist, and he's been very involved in the Renton Mark, you know, which was brought in in 1923. You know, he is a very sound economist, but the problem is, is, you know, the very rich are all right, because, you know, just let's say, for example, you know, you've you're worth in today's money, five billion and you lose lose one billion, you still got four billion, aren't you? See, you're still fine. It's the people, it's the middle classes and the working classes who aren't fine, because suddenly their jobs are lost and their incomes are being slashed or taken away from them entirely. And that means they've got to sell their house. And there's lots of very, very angry people who are going, here we go again. This this democracy lock isn't isn't working. And they're not very impressed by austerity measures, which he tries to introduce are twice rejected by the Reichstag, which then means he has to dissolve the Reichstag to force them through and force another election, which isn't very democratic anyway. And so suddenly the Nazi vote share rises to 18.3 percent, no longer 2.6 percent. And the German Communist Party, the KPD, becomes this country's second largest party. So this is not good. Bruening pushes through these measures, his austerity measures, nullifying various progressive welfare policies of previous years, and also stresses to the US that Germany can't pay the reparations anymore. So the US agrees to a one-year pause, which is later extended. And this does mean, of course, that the reparations are effectively cancelled from this point. But as the suffering of the people continues, in an echo of that opening statement that we read out, you read out from Maynard Keynes, so the trust in democracy arose. And there is this feeling that when the working class people of any nation are subjugated too far, that is when they rise up and look for alternatives.

Speaker 1:
[35:35] And the fact that the Communist Party is the second largest party is really putting the fear in the conservative elements in German politics and society. You know, yes, the Nazi Party vote share rises to 18.3 percent. The fact that the Communist is the second largest party, if anything is going to like upset people's concern about a possible revolutionary moment, that's it, isn't it? And all you have to do is point at Bolshevik Russia and say, look, look, is this what we want? And this brings Hitler and his rhetoric into alignment with basically people on the mainstream right. Because they know that the last thing they want is this to happen. So Brüning resigns in March 1932, is that enough? And Hitler is exploiting this mass disaffection to rally support. His rhetoric is very, very inflammatory, passionate, angry. But also he always bungs you a note of hope. But if you vote for me, this will all stop. Don't you worry.

Speaker 2:
[36:41] What you get when in democracies, when the economy is not working, people go, well, the traditional conservative way of doing things isn't working for me. This gives a voice to the more fringe. And people go, well, I wouldn't normally try that, but the established political parties aren't working for me. So what have I got to lose from trying something that's a little bit more out there? These commies, I don't really like them, but the Nazis, I mean, Hitler seems to speak a lot of sense to me. And frankly, what a lot of what he's saying I kind of agree with. And OK, maybe his anti-Semitism is a little bit too far. But, you know, all I care about now is getting my job back and having some more money in my pocket. So I'm going to give it a go. And that's basically how it works. And frankly, nothing has changed.

Speaker 1:
[37:30] Even if your qualification is right, though, Jim, because Germany is somewhere quite prepared to go anti-Semitic fully. I think sometimes we make that qualification and maybe we shouldn't, you know. It's part and parcel of his worldview. And if you don't like the Bolsheviks, they're Jewish. And if you don't like the Jews, they're Bolshevists, is how it works in the Nazi mindset. And people are buying it. And also, he projects modernity, doesn't he? Because he's using air transport to get all over the country, make his speeches. He's got a good campaigning machine. And in 1932, in July 1932, they win 37% of the vote in the elections to become the biggest party in the Reichstag, to leapfrog over the communists. We go back to the 2.8% only five years previously. We go to our friends sat in the pub, nursing their baby shams going, you see, maybe one day we can get 30% of the vote. And they do start losing seats, because there's another election in November. They start losing seats, but they're still the biggest party. In 1933, in January 1933, he's made Chancellor in an attempt to bring him to heel. Give him what he wants, the establishment thinks, give him what he wants and then we can contain him. We can fence him in. They don't have the measure of Hitler at all. He immediately dismantles democracy. There's the Enabling Act in July of 1933, it basically gives all powers to the Cabinet and therefore to him. Other parties are banned, the Reichstag is dissolved, they call a snap election and of course, because there are no other parties, they win all the seats.

Speaker 2:
[39:09] Genius.

Speaker 1:
[39:10] I know. I mean, it's effective, right? Following this though, and I think that the sort of, the synchronicity here is fascinating. Only six weeks after Hitler becomes Chancellor, Roosevelt is sworn in as President of the USA. And if the irresistible force is about to meet the immovable object, this is the moment where that is set in motion. And we're going to take a break and we'll come back to look at FDR. Welcome back to We Have Ways of Making You Talk with me, Al Murray and James Holland. We ended that half with the synchronicity of Hitler becoming Chancellor and FDR being sworn in as president. And Jim, you absolutely love FDR, don't you?

Speaker 2:
[39:58] Well, you know, he's unscrupulous, he's Machiavellian and all those sort of things, but I think he's coming, you know, he's being Machiavellian and unscrupulous from a good place. And I think he's, and he is unquestionably enlightened. He is forward thinking. He has a vision and an argument. You can say one of the reasons he's able to enact this vision is because he has four terms as president rather than two or even one.

Speaker 1:
[40:24] Yes.

Speaker 2:
[40:24] But anyway, you know, that's a moot point.

Speaker 1:
[40:28] That's part of the by.

Speaker 2:
[40:30] That's part of the by. But anyway, but interestingly, although the elections are the previous November, you then have the transition period. In this period, you take power in March, not January. It becomes January by 1945, but it is March in 1933. And in his inaugural address, he makes a really, really interesting point. It's also sort of thing, you know, we only have, the only fear we have is of fear itself and all the rest of it. So he's trying to give the American people confidence. And there is this confidence that comes in with a new president. But for me, one of the things I think is really interesting is, is the bit that's kind of largely forgotten in his speech, which is about what he calls the good neighbor policy. And he says, on the 4th of March 1933, In the field of world policy, I would dedicate this nation to the policy of the good neighbor. The neighbor who resolutely respects himself and, because he does so, respects the rights of others. The neighbor who respects his obligations and respects the sanctity of his agreements in and with a world of neighbors. Although he has come into power on an isolationist ticket, FDR is an internationalist to his core. And I think this is really important and very, very consequential for world events. So do not be under any illusion that this is a guy who's only thinking in terms of United States internal domestic issues. He is thinking big right from the word go. And I think it's important that we give a bit of context and background to FDR, don't you?

Speaker 1:
[42:11] I mean, so he's born in upstate New York in 1882. He's from a wealthy family. He's had a top draw upbringing and education. He's clever, he's tall, he's handsome, he's good at everything. His internationalist outlook must come from the fact that, he first went to Europe when he was seven. He's aware of it, not afraid of it. He speaks German and French. He went to Harvard, then to Columbia Law School. He becomes a lawyer in New York City. He marries a distant cousin, Eleanor Roosevelt, who's a niece of Teddy Roosevelt, the president, former president. He becomes New York State Senator in 1911, then Assistant Secretary of the Navy under Wilson. And interestingly, advocates for America to enter the First World War because he believes that democracy needs to defeat German militarism and that self-determination was the key to global peace. He's on message with Wilson in that respect. Very well said. He has an affair during the First World War with his secretary, isn't he, Lucy Mercer, that gets found out. And then I think the thing that possibly I think people know about that shapes his life enormously is in 1921, he gets polio, which leaves him dependent on a wheelchair, although he does everything he can to make sure the public don't see him in the wheelchair. And this puts him under enormous personal strain in his day-to-day life, getting about, going to the toilet, having the strength to get things done, standing up to make speeches. It's all very, very hard work for him, the incredibly debilitating disability that he has as a result of his illness. But that doesn't stop him, quite the opposite, he's governor of New York in 1929, he stands for president in 1932, so pretty rapid zip up through the higher ranks of American politics. He hasn't done four years as someone's VP, as he trod water, and the state of American politics in 1932 is the kind that delivers landslide victories, because presidents have failed up to this point, haven't they, in all their efforts, and he wins all but six states, all but six states, that's a proper landslide as well. The following year, the country is still struggling in 33, two-thirds, there's two-thirds less money in the US than before the crash. But Roosevelt's a man of action and with a keen mind.

Speaker 2:
[44:27] And he's charismatic.

Speaker 1:
[44:28] Yeah, and he also knows how to listen, he knows how to take opinion, he knows how to make up his mind. He's very, very, very good at that. He's inscrutable, no one really knows what he's going to do next. He's his own man and his own thinking. And so in the first hundred days, he passes a new banking bill, he brings the country off the gold standard, which means the dollar is no longer static, pinned to an exchange rate that doesn't suit it.

Speaker 2:
[44:53] It's fair to say that in those first hundred days, I mean, it is a time of unprecedented legal action and a raft of legislation that goes through. I mean, it is a period of incredible energizing and dynamism. And it has an impact, I think, it's fair to say.

Speaker 1:
[45:15] And I think what's interesting, isn't it? We said that Hitler is using modern methods of campaigning, like flying around the country and takes to adopt, the Nazis very much lean into radio. Radio is how FDR gets his message across and he uses radio. He's got a calm, soothing voice. He does his fireside chat. The idea is he's like a family member or a friend, or your pastor or your bank manager talking to you in a friendly manner.

Speaker 2:
[45:43] Yeah, so he's using everyday analogies all the time. So he'd say, we're going to do this. And this is a bit like X and Y. And everyone goes, oh, okay, well, I get it now. And it's just genius. I mean, he is absolutely the master of this. He just gets the popular backing for all these various initiatives and stuff. So he's very, very smart. And what he does is he really gets the economy into some kind of shape or starts putting down some pretty good foundations. So he announces the Emergency Banking Act, which is the reopening of federal banks and the guaranteed safety of the cash of it. And the next very next day, deposits exceed withdrawals. At last, stock prices rise by 15 percent, hooray. And one billion dollars of cash is previously in private homes returns to the vaults. And there is the beginning of what becomes known as the New Deal. So prohibition, you know, where alcohol have been banned, is overturned by the 21st Amendment, which is a very, very popular move. I mean, why haven't they fought to do this before? Works programs are created. There's, for example, the Civilian Conservation Corps, the CCC, which is young jobless men employed by the government for projects like clearing marshes, building dams, cutting down lumber, all this kind of stuff. There is the Agricultural Adjustment Act underwrites mortgage farmers and prevents foreclosures. The Federal Emergency Relief Act introduces unemployment benefit for the first time ever. There is also the National Recovery Administration, the NRA, the Public Works Administration, the PWA, and the Works Progress Administration, which is a WPA. These are all known as the alphabet acts, aren't they? The New Deal impact isn't completely totalizing. There's still a high private sector unemployment, for example, but it does bring jobs, it brings purpose and public works to those who need it most. The Democrats actually gain more seats at the midterms, which signals the New Deal's popularity, I would say.

Speaker 1:
[47:50] Subsequently, there's the second New Deal, which includes electricity for farms. The Rural Electrification Administration, they have a heartwarming motto, if you put a light on every farm, you put a light in every heart. I mean, I can't argue with that. Can you argue with that? Of course not. You'd have to have a heart of stone, a dark, a heart of darkness to argue with that. Social Insurance Programme for the Elderly, the Poor and the Sick, National Labour Relations Act, which gives workers the right to organise and unionise, and the number of union members triples by 1938. That's canny politics too, because basically what you're doing is solidifying a group of people who are part of the New Deal politically, aren't they? They're going to vote for you, aren't they? I mean, he's no fool. And this is in such stark contrast to previous, well, you know, the American individual, rugged individual can cope regardless. This is a massive expansion of the state. The CCC, for instance, is likened to communism and German work schemes, Nazi work schemes.

Speaker 2:
[48:48] Oh, by deeds, yeah.

Speaker 1:
[48:50] What's happening, though, is he is he is rebooting the economy. It's beginning to work. So basically, he wins another landslide in 36. To go back to the good neighbor policy, there's the Reciprocal Trade Agreements Act, which he gets through Congress in 34, which means he can overturn the tariffs from the 20s.

Speaker 2:
[49:08] And the Smoot-Hawley Tariff Act, of course, you know, which is kicked into the long grass.

Speaker 1:
[49:12] Previous American, inter-American politics, you know, with the rest of what they see as a sphere of influence. Monroe Doctrine has been the 1898 Spanish Civil War, the Philippine-American War. I mean, that's quite a sphere of influence all the way over to the Philippines, isn't it, from America? That's quite, that's quite strange. That's ugly, entirely imperial. Roosevelt has this corollary idea, which is that the Americans have authority to intervene in Latin American affairs. So, you know, Wilson sends troops to Mexico in 1914, Haiti in 1915, the Dominican Republic in 1916, Cuba in 1917, and then again to Mexico. And there's American soldiers in Nicaragua after the American government, pro-American governments installed there.

Speaker 2:
[49:54] So, yeah, but the point with this is up until FDR and his Good Neighbor Policy, which he announces in his inaugural address in March 1933. American, the American approach to Latin America, Central America and South America has been very aggressive, very dominating. It's our way or the highway. You know, you have the right people. The moment you have a president or someone that we don't approve it, we're going to come in and kick them out. You know, it's all our terms. Very dominant, very bullying. And what Roosevelt says is, we're not going to do that anymore. We're going to be nice to you guys. We're going to help you out financially because then you'll be more prosperous. You'll be more stable. And then guess what? You'll do more trade with us, which then will make us richer. That's basically the principle.

Speaker 1:
[50:40] This leads him, however, to saying with his secretary of state called O'Hull, they say that no more intervention. FDR declares the definite policy of the United States from now on is one and opposed to armed intervention. So they withdraw from Haiti, the Marines from Haiti, and they overturn the Platt Amendment, which is how they justified intervention in Cuba. And FDR is going to apply this globally.

Speaker 2:
[51:08] It's fair to say that FDR makes mistakes in a second term. I mean, particularly at the start of his second term, seven out of nine Supreme Court judges are Republicans. Yeah. I've already struck down various New Deal centerpieces in his first term. And one justice, James McReynolds, once said, I'll never resign as long as I've crippled son of a bitch is in the White House. Even though he actually is a demographic himself, as is FDR. Just as the Supreme Court becomes more accepting of FDR, he then tries to stack the court in his favor by proposing that he can appoint additional judges if existing ones don't retire by the age of 70. This sounds reasonably harmless on the face of it. But it turns out to be a really bad move because it doesn't work and antagonizes lots of political colleagues. And despite the fact that of course the economy recovery is a bumpy one, Roosevelt undeniably transforms the presidency. There's an unprecedented expansion of federal government. The federal policy is more palpable in ordinary people's lives than ever before. And there is the complete overturning of Hooverism. And the positives by 1939 are that suddenly there is a welfare system in the United States. There are successful public works projects. There are food surpluses. There is huge automobile production. 4.45 million vehicles are manufactured in 1936 alone. Ten times more than are produced in Britain, for example. Exports are up. There are the world leader in essential materials, such as iron, steel, coal, cement, and so on. There is also a cultural dominance, which is really emerging. And this is really important because this is soft power. This is soft influence. Hollywood is largely resistant to the depression because movie theatres keep tickets cheap. And by the mid 1930s, over two-thirds of all Americans are going to the movie theatre at least once a week. There is even colour film, Technicolour, by the late 1930s. So Snow White, Gone With The Wind, The Adventures of Robin Hood. It's a justice I hate, not Norman's, with Errol Flynn battling Basil Rathbone on the steps of Nottingham Castle. You know, Los Angeles and New York City are globally renowned centres of modernity and culture. And Hollywood is effectively broadcasting this to the wider world. And the wider world with their hardships and you know, rundownness and difficulties are seeing this glittering neon, seeing this modernity, the modern cars, the Hollywood stars and all the rest of it. And thinking, oh, that looks quite attractive. But there is a shift of emphasis going on in Europe, isn't that?

Speaker 1:
[54:00] Well, yes. I mean, so in Europe, it's the events I think we're all really, really, really familiar with. The failure of the Munich agreement, the failure of what gets called appeasement. If you've listened to this podcast long term, you probably know that there's kind of more to it than that, than the sort of simply sketched version of the Chamberlain government getting everything wrong and being outfoxed at every turn. Britain is rearming. It's still not ready yet for the war. It expects it will have to fight against the Germans, which of course turns out to be very different to the one it ends up fighting. And Chamberlain and de Ladier are still hanging on in there in 1938, in the autumn of 1938. They haven't caved yet to Hitler. They've given him a green light for expansionism. And of course, this is a moment one can argue that had Britain and France sort of been a bit tougher, Germany might have, Hitler might have come undone. But we will never know, of course. FDR makes it clear in October 1938 that they're not interested. We covet nothing save good relations with our neighbours. And we recognize that the world today has become our neighbour. So the idea of the good neighbour policy is it's global. He reiterates his call for universal self-determination and that the Americans have no claim over any other territory. Of course, the issue with self-determination after the Versailles Treaty is that it's a thing the Nazis can play on after all. That because Germany has been dismembered and slices of the German population have been given to these new, new post-Austria-Hungarian Empire statelets, that the Germans could say, well, I thought Nazis can say, well, what about self-determination? Because Germans in Czechoslovakia, they're German. They belong to us. They belong to Germany. They want to belong to Germany. And it's a real, it's the Achilles heel of the Versailles Treaty for Western politicians. It's that they can't, they're hypocritical if they deny Hitler's call for German self-determination in this respect. And you know, Roosevelt's in line with that in essence, isn't he, politically. And then not long after this, you have Kristallnacht on the 9th, 10th of November, 1938, which is the massively radicalizing moment of antisemitism in Germany, where Jewish homes, synagogues, businesses are ransacked, destroyed. 30,000 Jews are arrested and sent to concentration camps. Jews are expected to pay for the damage done. They're told they have to pay for the damage done by rampaging Nazis. The fact that the state doesn't do anything about this is a test by the Nazi regime to see what they can get away with in terms of antisemitism. And there's international outcry. You know, The Times says no foreign propagandist bent upon blackening Germany for the world could outdo the tale of burnings and beatings on defenceless, innocent people, which disgraced that country yesterday. But basically, the Nazi government's trying it on with its own population to see what it can get away with and also putting two fingers up firmly to world opinion.

Speaker 2:
[57:03] But FDR is now thinking, oh, hang on a minute, this isn't looking good. And there's a lot of people in America thinking, we don't really care. I mean, that's in Europe, it's the other side of the Atlantic, wants to worry about it. But Roosevelt is thinking, well, I think we do need to worry about this. So he calls a meeting in the Oval Office in the White House to increase the size of the US Army Air Corps. Four days, this happens four days after the Crystal Act, to 20,000. Well, that's great. I mean, that means nothing, doesn't it? I mean, he sees expansion of the military as a potential deterrent against Nazi aggression, but the mood is not there for this. And he can't sell this through the public. He'd run and won two elections on an isolationist ticket. So what does the midwestern farmer care if totalitarian governments are becoming more aggressive on the other side of the world? They don't care about Japan invading China or Italy wanting to conquer East Africa, let them. So there is a big group of influential isolationist lobbyists in the US. And this also includes Charles Limburg, who's one of the great heroes, the most famous people in America. He's the guy who's flown solo across the Atlantic in 1927. But it is a very fact that he's flown solo across the Atlantic in 1927, that gives Roosevelt such a pause for concern, because he's thinking, well, that was then, here we are kind of, you know, more than 10 years on. The Atlantic is no longer the great military barrier than it once was. And also, you know, in America, despite widespread American sympathy for German Jews, many of the vast majority of Americans, polls and popular opinion suggests, want to uphold the immigration limits of the National Origins Act, which we discussed earlier, you know, which back in the 1920s, and in other words, prevent more Jews than the quota allows from fleeing to the US. So, you know, then in the mid-30s, Japan and Italy reneged on the London Naval Treaty of 1930, which limits the size of navies. And Germany announces the existence of the Luftwaffe in February 1935. So it increasingly looks like the US will need to compete technologically and militarily to exert any kind of resistance against totalitarianism. Yeah. And there are some signs of this in the mid 1930s, you know, which is interesting, the development of the B-17 Flying Fortress Bomber, you know, which comes in in 1935, I think it is. There is a new civilian airliner, the Douglas DC-3, which as we all know, will become the C-47, you know, it will drop. Easy company over D-Day in June 1944. America also has the biggest automobile industry in the world, bar none, and therefore lots of mechanics, lots of people who know how to drive, lots of garages and so on, and the industrial strength to be able to kind of transport that into military buildings should they want to. But the big thing that's missing is the willingness of the American public and more importantly, in many ways, the legal framework to make this happen.

Speaker 1:
[60:23] And in our next episode, we'll be looking at just that. Because it is one of the great political backflips of all time, is American entry into the, I mean, it's truly astonishing. You know, we have our own narrative of the British government having to figure it out and Winston Churchill waiting off stage for his moment. Roosevelt is center stage and manages to turn things around completely, which is really rather amazing. So in our next episode, we'll be looking at that. If you want to hear that episode straight away, go to our Patreon, become a We Have Ways of Making You Talk Patreon. For the price of, I mean, not even, it's not even probably two-thirds of a pint now. I mean, we were talking about hyperinflation in the last episode. What's happened to the British pint? Discuss. Anyway, and with live casts and ticket offers for our We Have Ways Festival this September, which we would love to see you at for much of this kind of War Waffle. We will see you very soon. Thank you for listening. Cheerio.

Speaker 2:
[61:23] Cheerio.