The Spectre of 1932

8/2/2019 The Spectre of 1932

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The spectre of 1932: How a loss of faith in politicians and democracy could make2012 the most frightening year in living memoryByDOMINIC SANDBROOKLast updated at 10:47 AM on 31st December 2011

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The dawn of a new year is usually a time of hope and ambition, of dreams for the future and thoughts of a betterlife. But it is a long time since many of us looked forward to the new year with such anxiety, even dread. Here in Britain, many economists believe that by the end of 2012 we could well have slipped into a seconddevastating recession. The Coalition remains delicately poised; it would take only one or two resignations to provokea wider schism and a general election.But the real dangers lie overseas. In the Middle East, the excitement of the Arab Spring has long since curdled intosectarian tension and fears of Islamic fundamentalism. And with so many of the worlds o il supplies concentrated inthe Persian Gulf, British families will be keeping an anxious eye on events in the Arab world.
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The Battle of Cable Street: Mosley's fascists tried to march through the Jewish East End, a scene that could be repeated


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Wall Street Crash 1929: Scenes outside the New York Stock Exchange on the day the stock market crashed may once again become areality

Meanwhile, as the eurozone slides towards disaster, the prospects for Europe have rarely been bleaker. Already theEuropean elite have installed compliant technocratic governments in Greece and Italy, and with the markets now

putting pressure on France, few observers can be optimistic that the Continent can avoid a total meltdown.As commentators often remark, the world picture has not been grimmer since the dark days of the mid-Seventies,when the OPEC oil shock, the rise of stagflation and the surge of nationalist terrorism cast a heavy shadow over theWestern world.

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MAIL COMMENT: The lessons of a year of horrifying violenceFor the most chilling parallel, though, we should look back exactly 80 years, to the cold wintry days when 1931 gaveway to 1932.
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The ultimate warning from history: If our political leaders fail to provide adequate direction the results, as demonstrated 80 years ago, couldbe catastrophic

Then as now, few people saw much to mourn in the passing of the old year. It was in 1931 that the Great Depressionreally took hold in Europe, bringing governments to their knees and plunging tens of millions of people out of work.Then as now, the crisis had taken years to gather momentum. After the Wall Street Crash in 1929 just as after thebanking crisis of 2008 some observers even thought that the worst was over. But in the summer of 1931, a wave of banking panics swept across central Europe. As the German and Austrianfinancial houses tottered, Britains Labour government came under fierce market pressure to slash spending and cutbenefits.

Bitterly divided, the Labour leader Ramsay MacDonald decided to resign from office only to return immediately asthe leader of an all-party Coalition known as the National Government, dominated by Stanley BaldwinsConservatives.Like todays Coalition, the National Government was an uneasy marriage. Sunk in self-pity and spending much of histime flirting with aristocratic hostesses, MacDonald cut a miserable and semi-detached figure. By comparison, evenNick Clegg looks a model of strong, decisive leadership.As for the Tory leader Stanley Baldwin, he had more in common with David Cameron than we might think. A laid-back Old Harrovian, tolerant, liberal-minded and ostentatiously relaxed, Baldwin spent as much time as possible onholiday in the South of France, preferring to enjoy the Mediterranean sunshine rather than get his hands dirty with thenuts and bolts of policy.Meanwhile, far from offering a strong and coherent Opposition, the rump Labour Party seemed doomed toirrelevance. At least its leader, the pacifist Arthur Henderson, could claim to be a man of the people, having hauledhimself up by his bootstraps from his early days as a Newcastle metal worker.Not even his greatest admirers could possibly say the same of todays adenoidal, stammering Opposition leader, thetoothless Ed Miliband.


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The end of Democracy: The dire situation in 1932 led to many threats to the democratic system we so value, including the assassination ofthe French President Paul Doumer

With the politicians apparently impotent in the face of the economic blizzard, many people were losing faith inparliamentary democracy. Their despair was hardly surprising: in some industrial towns of the North, Wales andScotland, unemployment in 1932 reached a staggering 70 per cent.With thousands more being plunged out of work every week, even the National Government estimated that one infour people were making do on a mere subsistence diet. Scurvy, rickets and tuberculosis were rife; in the slag heapsof Wigan, George Orwell saw several hundred women scrabbling in the mud for hours, searching for tiny chips ofcoal so they could heat their homes.

Feeling betrayed by mainstream politicians, many sought more extreme alternatives. Then as now, Britain wasrocked by marches and demonstrations. In October 1932, a National Hunger March in Hyde Park saw bloody clashesbetween protesters and mounted policemen, with 75 people being badly injured.


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Toothless: Ed Miliband can hardly claim to be a man of the people like the pacifist Arthur Henderson

And while Left-wing intellectuals were drawn to the supposedly utopian promise of the Soviet leader Josef Stalin who turned out to be a brutal tyrant thousands of ordinary people flocked to the banners of the British Union of

Fascists, founded in the autumn of 1932 by the former Labour maverick Sir Oswald Mosley. Never before or since has the far Right commanded greater British support a worrying reminder of the potential foreconomic frustration to turn into demagogic resentment.But the most compelling parallels between 1932 and 2012 lie overseas, where the economic and political situationwas, if anything, even darker.Eighty years ago, the world was struggling to come to terms with an entirely new financial landscape. In August 1931,the system by which currencies were pegged to the value of gold had fallen apart, with market pressure forcingBritain to pull the pound off the gold standard.Almost overnight, the system that was supposed to ensure global economic stability was gone. And as internationalefforts to coordinate a response collapsed, so nations across the world fell back on self-interested economicprotectionism.In August 1932, the British colonies and dominions met in the Canadian capital, Ottawa, and agreed a policy ofImperial Preference, putting high tariffs on goods from outside the Empire. International free trade was now a thing ofthe past; in this frightening new world, it was every man for himself.Todays situation, of course, is even more frightening. Our equivalent of the gold standard the misguided folly of

the euro is poised on the brink of disaster, yet the European elite refuse to let poorer Mediterranean nations likeGreece and Portugal leave the eurozone, devalue their new currencies and start again.Should the eurozone collapse, as seems perfectly likely given Greeces soaring debts, Spains record unemployment,Italys non-existent growth and the growing market pressure on Frances ailing economy, then the consequenceswould be much worse than when Britain left the gold standard.The shockwaves across Europe which could come as early as next spring would see banks tottering,businesses crashing and millions thrown out of work. For British firms that trade with Europe, as well as holidaycompanies, airports, travel firms and the City of London itself, the meltdown of the eurozone would be a catastrophe.


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If the eurozone crisis intensifies, then it is no idle fantasy to imagine that Angela Merkel, Nicolas Sarkozy and their Brussels allies willdemand an even greater centralisation of powers


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Vladimir Putin looks almost cuddly in comparison to the rule of dictatorial Stalin in 1932

And as the experience of 80 years ago suggests, the political and social ramifications would be too terrible tocontemplate. For in many ways, the 12 months between the end of 1931 and the beginning of 1933 were the tippingpoint between democracy and tyranny, the moment when the world plunged from an uneasy peace towards hatredand bloodshed.In the East, new powers were already on the rise. At the end of 1931, Imperial Japan had already launched astaggeringly brutal invasion of China, the Japanese armies pouring into the disputed province of Manchuria in searchof raw materials.Today the boot is on the other foot, with China ploughing billions into its defence programme and establishing defacto economic colonies across Africa, bringing copper, cobalt and zinc back to the mother country. Indeed, future historians may well look back and see the first years of the 2010s as the moment when the ChineseEmpire began to strengthen its global grip.In the Soviet Union in 1932, meanwhile, Stalins reign of terror was intensifying. With dissent crushed by the all-powerful Communist Party, his state-sponsored collectivisation of the Ukrainian farms saw a staggering 6million diein one of the worst famines in history.By these standards, the autocratic Vladimir Putin looks almost cuddly.


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Barack Obama cuts a similarly impotent, indecisive and isolationist figure. The difference is that in 1932, one of the greatest statesmen of thecentury, the Democratic politician Franklin D. Roosevelt, was waiting in the wings

And yet we should not forget that Putin himself described the fall of the Soviet empire as one of the greatestcatastrophes of the century and that half of all Russian teenagers recently told a survey that Stalin was a wise andstrong leader.By comparison, Europes democratic leaders look woolly and vacillating, just as they did back in 1932. Indeed, for the

democratic West, this was a truly terrible year. Democracy itself seemed to be under siege. In France, President Paul Doumer was murdered by an assassin. InPortugal, the authoritarian, ultra-Catholic dictator Antonio Salazar launched a reign of terror that would last i nto theSeventies. And in Italy, the Fascist leader Benito Mussolini strengthened his grip, consolidating Italian power in thelooted colonies of Albania and Libya.Eighty years on, we have no room for complacency. Although the far Right remains no more than a thuggish andeccentric minority, the elected prime ministers of Greece and Italy have already been booted out to make way for EU-approved technocrats for whom nobody has ever voted.In the new Europe, the will of the people seems to play second fiddle to the demands of Paris and Berlin. And if theeurozone crisis intensifies, then it is no idle fantasy to imagine that Angela Merkel, Nicolas Sarkozy and their Brusselsallies will demand an even greater centralisation of powers, provoking nationalist outrage on the streets of Europescapitals.Sadly, there seems little point in looking across the Atlantic for inspiration. In 1932, President Herbert Hoover,beleaguered by rising unemployment and tumbling ratings, flailed and floundered towards election defeat.

Today, Barack Obama cuts a similarly impotent, indecisive and isolationist figure. The difference is that in 1932, oneof the greatest statesmen of the century, the Democratic politician Franklin D. Roosevelt, was waiting in the wings.Today, American voters looking for alternatives are confronted only with a bizarre gaggle of has-beens, inadequatesand weirdos, otherwise known as the Republican presidential field. And to anybody who cares about the future of theWestern world, the prospect of President Ron Paul or President Newt Gingrich is frankly spine-chilling.


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In Italy, the Fascist leader Benito Mussolini, pictured with Hitler, strengthened his grip, consolidating Italian power in the looted colonies ofAlbania and Libya

Above all, though, the eyes of the world back in 1932 were fixed on Germany. As the Weimar Republic staggered

towards oblivion, an obscure Austrian painter was setting his sights on supreme power.With rising unemployment eating away at the bonds of democratic civility, the National Socialist Party was withintouching distance of government.And in the last days of 1932, after the technocrats and generals had failed to restore order, President Paul vonHindenburg began to contemplate the unthinkable the prospect of Adolf Hitler as Chancellor of Germany.We all know what happened next. Indeed, by the end of 1932 the world was about to slide towards a new dark age,an age of barbarism and bloodshed on a scale that history had never known. Eighty years on, it would be easy to sit back and reassure ourselves that the worst could never happen again. Butthat, of course, was what people told each other in 1932, too.The lesson of history is that tough times often reward the desperate and dangerous, from angry demagogues toanarchists and nationalists, from seething mobs to expansionist empires.Our world is poised on the edge of perhaps the most important 12 months for more than half a century. If our leadersprovide the right leadership, then we may, perhaps, muddle through towards slow growth and gradual recovery. But if the European elite continue to inflict needless hardship on their people; if the markets continue to erode faith inthe euro; and if Western politicians waste their time in petty bickering, then we could easily slip further towards

discontent and disaster.The experience of 1932 provides a desperately valuable lesson. As a result of the decisions taken in those 12 shortmonths, millions of people later lost their lives.Today, on the brink of a new year that could well prove the most frightening in living memory, we can only pray thatour history takes a very different path.

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The Spectre of 1932