When the Great Depression struck the world in 1929, it affected in many ways as a game changer in both world political economy and domestic politics. The question is, when Italy and Germany fell helplessly into fascism and totalitarianism, how Britain, France, and the US could defend the principles of liberal democracy. I believe that each country varied in the way that they dealt with the Depression-induced socio-political instability or the threat of fascism, but basically all can be traced back to one major factor: the social security.
After the successful Bolshevik revolution of 1917, followed by the Russian civil war and foundation of USSR, the very existence of the Red Soviet became one of the most significant political factors in the post World War I era. The existence of USSR and the Comintern gave some kind of guidance to the left wing socialists and communists (whether to follow the steps of Leninist revolutionary history or discard them and pursue moderate parliamentary methodology), and psychological terror to the liberals, right wing conservatives, reactionaries etc. The fascism itself is believed to have been born as a counterbalance to the communism. It denounced the human rationality itself and everything built on it, including democracy, egalitarian liberty, free market, socialism, Marxism, or class consciousness. Instead, it pursued totalitarian (or corporative) state, which intensified state intervention in socio-economic aspects to the extreme within a framework of private enterprise economy.
When the unprecedented Great Depression shook US and large parts of Europe, the fundamental belief in the political system of liberal democracy was largely disoriented and many anti-republicans sought the alternative answer to the problem by admiring the fascism on the right, and the communist revolution on the left. Then, how could three respective states preserve its ‘liberal democracy’ in this disturbed time of history? To look at the United States first, one could say that it was too preoccupied with its shattered hypes of the Stock Exchange and the capitalist system, and with New Deal policy that closely followed. In harsh times, Americans did not seek their answers elsewhere, but within the system. Maybe they were in too much shock or too indulged in “the Roosevelt Revolution” as some scholars named to even get pissed off at the fundamental democratic system (or maybe Americans simply did not care what was going on in Europe when their own asses were on fire), but it is certain that Americans would not have allowed any kind of political movements of anti-democracy. It would be a self-denying action, since the foundation of the United States was based on enlightenment ideas and humane liberty. And of course, the Wagner Act did relieve the industrial or labor tension by improving the working class’s political and social status. The New Deal of 1930s failed solve all the problems induced by the Great Depression, but it has played significant role in relieving the political tension which in similar form had some devastating consequences in Europe.
Britain, even though the Great Depression caused some severe head counting in unemployment, could also successfully defend its tradition of parliamentary democracy. The British are often accused of excessive tendency to preserve tradition and reluctance to face the progressive changes; however, it is not merely because they were too proud of their constitutional history, but because they had already established a series of social fail-safes even before the global beginning of macroeconomics. The economical solution to the Great Depression was basically solving the market failures by restoring the equilibrium of supply and demand through state intervention—mostly in the form of budget deficit. In case of Britain, even before the Depression came, the welfare state was well established. The government provided unemployment insurances (so-called the “dole” payments), along with an expanded old-age pension system, medical aid, government-subsidized housing, and other social welfare measures. So even though the unemployment rate soared and Ramsay MacDonald had to pursue the retrenchment policy when the Depression came, the British public was already being supported by social fail-safe measures so that no critical mass of whom would develop any anti-democratic tendencies.
The French Third Republic was in much bad shape than Britain or the US, but it managed to save the republican regime too. The problem with the France at the time was that the political spectrum was too vastly spread out and too deeply divided. There were a lot of right wing anti-republics (reactionaries, clericals, monarchists, fascists, etc.), and left wing extremists who could not care less about the bourgeois republic. However, when a political and financial scandal caused by Serge Alexandre Stavisky induced a violent riot performed by the right-wing extremists, French liberals and democrats, and socialists were outraged by the threat to the republic. In 1930s, the Comintern was advising the communists in Europe to form ‘the Popular Front’ (a pan-leftist alliance even including liberals) to fight the fascism. Radical Socialists (neither radical nor socialist mild liberals), Socialists, and Communists drew together in a political coalition and won a decisive victory, becoming the leading party in the Chamber. Their chief, Leon Blum pursued a series of policies that he openly spoke of as “French New Deal”, which included 40-hour week labor, vacations with pay, and a collective bargaining law. The fascist armed leagues were, at least in theory, dissolved. The Popular Front government did not last long, but it is important to notice that it successfully defended the republic from the anti-republican fascist movements, and provided social welfare system.
In all of these cases, one can definitely recognize one common factor in them. They coped differently in the face of the Depression, but their liberal democratic political regime could be preserved due to social safety measures. They were able to soothe their unemployed, crisis-stricken citizens through a series of government-led reforms and compensations. Considering the fact that in many parts of Europe the fascism was seriously accepted as a viable alternative to liberal democracy or socialism, it is amazing that how much the public can be reconciled when their democratic government could provide a simple basic social fail-safe. (It may have been possible due to the implications of communist regime on the left.) The historical lesson here, I believe, is that liberal governments should be prepared to protect its citizens and keep them from hitting the bottom when the crisis occurs.