The growing instability of the modern industrialized world from the period of the build up to the Great war of 1914-8, through to the inter-war period had brought two conflicting theories for governance of societies - Liberal Democracy and Authoritarian Rule.
The Great War of 1914 to 1918 had brought a general lack of confidence in the existing structure of Post-industrial rule. Some had wanted stronger authority to stabilize the weaknesses of modern industrial societies, while others had called for increased democracy to give sovereignty to the wider population from the discredited Monarchical or Colonial rulers. This argument between the two ideologies also existed in anti-colonial movements, providing a sharp contrast between those who believed post-colonial Liberal democracy and those who supported the authoritarianism of Fascism or Communism to aid the rapid modernization needed after colonialism. In India such a contrast existed between the Indian National Congress and Hindu and Muslim Nationalist movements, including the Hindu RSS movement which openly admired Hitler’s anti-liberal stance. The increasing advancement of technology had left a general unease among rulers and general public, due to the adoption of modern industrial techniques to warfare that had lead to an unprecedented level of carnage and death. The war involved a larger amount of conscription than any previous conflict and involved entire societies in fighting and arms production.
Technology had also produced new mass media, such as Radio and Film aiding the creation of a ‘mass culture’. This was originally favourable to ruling elites who used it to galvanize populations for the war effort, though post-war had given an intimacy between consumer and producer capable of spreading ideas and images faster and wider than existing media or culture printing press. The reason this induced fear among ruling elites is that the Great War had shown that state power was increasingly dependent on public support. Clear examples of this are the withdrawal from the war and overthrowing of existing monarchies in Germany and Russia as a direct result of public revolt from mass hunger, general poverty and disease. Within the British empire there were signs of the status quo undergoing a challenge that was directly linked to such societal changes - the change in status of women had been a concession needed for a reserve pool of labour in retaining the war economy. Resentment in India at the massacre of civilian protesters at Punjab was also widely reported in the media, as was Gandhi’s salt march. The power of such new medium was also to be exploited by authoritarian regimes, in order to retain their power through propaganda. The clearest example of this is the introduction of the Volksempfanger by the Nazi regime in Germany, its purpose was to make radio reception technology affordable to the general public.
Two key events - the Great War and the Wall Street Crash - greatly reduced confidence in the ruling system and gave rise to anti-capitalism, anti-colonialism, anti-democracy and anti-autocracy in political views across the globe. The Great War resulted in the destruction of empires and monarchies within Europe and shifted the balance of industrial power, in 1913 the U.S.A. and Japan had been in debt to European powers by 1920 the situation reversed. The fact that the Great War started in Europe, but lead to millions conscripted in Asia, Africa, Australasia and Canada, plus fighting over colonial territories fuelled anti-colonial sentiments among subjects who were lead to question Europe’s ‘civilising’ influence. The example of liberal democratic economic success post-1918 had been the United States, considered a ‘model modern economy’, with blue collar workers aspiring to a middle-class lifestyle, democratic political system and ‘mass production-mass consumption’ ethos typified by it’s rapidly developing automobile industry and mass culture.
Due to the over-production of its industry however, the New York stock exchange collapsed and thus lead to Great Depression. This incident had further discrediting effects on liberal capitalist parliamentary democracy. It had further repercussions for Europe which had been financially dependent on the U.S. economy for post-war rebuilding and war debts, as well as Japan hit by imposed trade barriers in the U.S. and China. The mass poverty and unemployment which resulted, aided authoritarian ideology which offered more short-term security than liberal ideology in the form of social welfare programmes and full employment schemes. The authoritarian regimes continued a vow to deliver the promises of modern industrial development, which Liberal regimes after the Great War and Great Depression could not.
Examples of such assurances that the authoritarians gave included Nazi Germany’s re-introduction of militarization, which was prohibited by the Versailles treaty and public work schemes building autobahns and dams. The soviets under Stalin introduced the ‘five year plan’ to further industrialisation and eliminate unemployment. Japan under military dictatorship also created huge business conglomerates that were founded to safeguard the economy and employment by government direction, including a terror campaign against unco-operative businessmen. Latin American governments were also called on to create a more interventionist role in the economy with the backing of middle-classes, intellectuals and workers. Trade Unions, peasant associations and minority organisations all operated with state sponsorship creating a bridge between elites and the masses. Such an example of this was Brazil under the Vargas military regime which had outlawed competitive political parties for corporatist representation, in which trade unions had a platform to bring their collective demands.
Therefore it can be seen that a dangerous element within the lack of faith in the existing order came from the popular conception of liberal parliamentary democracy and free market economies being indistinguishable from each other. Therefore as liberal market capitalism descended into chaos parliamentary, democracy was also undermined. This was especially so in a post-1918 established democracy, such as the Weimar republic after 1929. The fear of liberal democratic capitalist countries was that these models would give further fuel to similar parties within their own countries to discredit the existing system in the eyes of the general public. Therefore countries dedicated to the continuation of Democracy and Capitalism had attempted to divorce the link between Liberal Market and Liberal Democracy by introducing more state interventionist policies, to save rather than destroy capitalism.
The U.S.A. during the 1920’s boom had re-elected successive Republican government who adhered to the free market ideology, this enthusiasm declined post-1929 as Democrat Franklin Roosevelt won a landslide in the 1932 election. Roosevelt implemented the ‘New Deal’ which included old age pensions, unemployment insurance and the Federal Emergency Relief Administration to assist the poor, though privately owned enterprises continued to dominate. This method became known as Keynesian economics and was based primarily upon the theories of British economist John Maynard Keynes.
In his work ‘The General Theory of Employment, Interest, and Money’ published in 1936, Keynes openly acknowledged the state had to stimulate the economy by increasing capital and employment in times of market failure, though his theories were not widely implemented in his homeland until the foundation of the welfare state until after the second world war. The pressure on democratic governments to bring in more state interventionist policies had came indirectly from the authoritarian regimes that started their own schemes intended to provide employment and further industrial aims.