A different world altogether
Even if it is clear that the current situation will lead to rising unemployment and general stagnation, one should not assume that it will deteriorate to the horrifying proportions of the 1920s and 30s.
The scope of the present global financial crisis, and the requisite comparisons to the crisis of the 1920s and '30s, beg the question of whether the political ramifications will also be similar. Indeed, the crisis then contributed to the rise of Nazism and other fascist movements, which in turn led to World War II.
The question is a fair one, but the political realities of today differ on numerous fronts. Thus it would be reasonable to assume that the outcome will be different.
The first difference is the rapid response of Western governments today, including the Bush administration, which prior to this crisis had fanatically championed the principle of governmental nonintervention in the market economy. The response not only indicates that the lessons of the '30s have been internalized, but also that at present, governments possess the political and legal tools that enable them to intervene quickly and quite effectively in market developments.
In the 1930s, governments were helpless in the face of collapsing economies, mass unemployment and precipitous declines in industrial production. The principles of welfare economics as espoused by John Maynard Keynes, ideas that were developed following the crisis back then, have now been adopted in practice by most Western governments. Even if it is clear that the current situation will lead to rising unemployment and general stagnation, one should not assume that it will deteriorate to the horrifying proportions of those days.
The other difference is that in the '30s, there were a number of fascist movements that were subsequently brought from the political fringes to the center by the crisis. In Italy, there was Mussolini's Fascist Party, which came into power in the 1920s. The collapse of the liberal market economy and mass unemployment provided additional legitimacy to the authoritarian principles of fascism, which was viewed as an effective alternative to unbridled capitalism and Soviet-style communism.
Such fascist movements do not exist today in any European country. There are indeed extreme right-wing movements in Austria, France and Italy, which draw sustenance from racist xenophobia. None of these movements, however, possess the ideology or the apparatus to enlist the support of the masses - a distinguishing asset of the fascist parties of the last century. In addition, given their racist character, not one of these extreme right-wing movements threatens the very principle of democratic rule. It would appear that European governments today have more effective tools at their disposal to deal with criminal activity perpetrated by these elements.
Thirdly, there are no viable communist movements in Europe at present. Indeed, in the 1930s, no communist factions succeeded to garnering significant power, despite the fact that the crisis of capitalism seemingly vindicated Marxist theses. However, in a few European states - Weimar-era Germany is a classic example - democratic rule waned during the financial meltdown by virtue of the two-pronged attack launched by the Nazis on one side and the communists on the other.
One of the more tragic aspects of history was the fact that many communists believed back then that the Nazis' hold on power would be fleeting, and that the victory of the proletariat revolution was guaranteed. This was one of the more bizarre forecasts offered up by communism, and it contributed to its followers' inaction in the face of the Nazi consolidation of power. As such, communism contributed - unwittingly and certainly contrary to its principles - to the rise and the strengthening of the Nazi movement in particular and European fascism in general.
Today, the communist movement is not an influential political factor in Europe, and democracies do not find themselves in the "crosshairs" of both the right and the left. The disintegration of the Soviet Union, the patron of the communist movement in Europe, removes what is regarded as a viable, ideological-strategic threat from the equation, pushing many to the ranks of the radical right.
It was Karl Marx, of all people, who once said that seemingly similar conditions yield different outcomes when one thoroughly examines the specific realities in which these events unfold. Despite the resemblance to the 1930s, from a political standpoint we find ourselves in a different world altogether, the gravity of the financial crisis notwithstanding. As Heraclitus, the father of dialectic philosophy, once wrote: "You cannot step into the same river twice."