Background
- The First World War (1914–1918) reshaped global and hemispheric power dynamics. While the United States emerged as a global industrial and financial leader, Argentina, one of Latin America’s wealthiest nations, experienced both economic disruption and political shifts.
Economic Impact
United States
- The war accelerated the U.S. shift from debtor to creditor nation, as Europe borrowed heavily to finance the conflict.
- Industrial output and agricultural exports soared; U.S. GNP grew by over 20% (1914–1918).
- The government coordinated production through agencies such as the War Industries Board and financed the war via Liberty Bonds.
- By 1918, New York had replaced London as the world’s financial hub, marking a lasting shift in global economic leadership.
Definition
War Industries Board (1917)
A U.S. government agency that coordinated industrial production and standardization during the war to maximize efficiency and output.
Argentina
- Before 1914, Argentina was one of the world’s top exporters of beef, wheat, and wool, heavily dependent on British trade and shipping.
- The British naval blockade and wartime shipping shortages devastated exports, cutting off access to European markets.
- Wartime inflation rose sharply as imports of manufactured goods fell, leading to shortages and labor unrest.
- Argentina began a gradual shift toward industrial self-sufficiency, as domestic industries filled the gap left by disrupted imports.
Definition
Economic Nationalism
A policy emphasizing domestic production and reduced dependence on foreign trade, especially during global disruptions.
Political Impact
United States
- The war strengthened the executive branch, with President Woodrow Wilson exercising unprecedented wartime powers.
- Federal agencies expanded regulation over industry, agriculture, and labor, setting a precedent for future government intervention.
- Postwar politics were marked by a return to isolationism, with the Senate’s rejection of the Treaty of Versailles (1919) and refusal to join the League of Nations.
Argentina
- President Hipólito Yrigoyen (1916–1922) maintained neutrality throughout the war, balancing relations with Britain and Germany.
- Neutrality preserved Argentina’s sovereignty but caused friction with the U.S., which pushed Latin American nations to support the Allies.
- Domestically, Yrigoyen used neutrality to consolidate political support and strengthen the Radical Civic Union (UCR), expanding middle-class participation in government.
Definition
Neutrality Policy
The diplomatic stance of non-involvement in war, adopted by many Latin American nations to protect trade interests and sovereignty.
Social Impact
United States
- The war spurred significant migration and social change. The Great Migration (1916–1930) saw hundreds of thousands of African Americans move north to work in wartime industries.
- Women entered the workforce in record numbers, contributing to the 19th Amendment (1920) granting women suffrage.
- Civil liberties were curtailed under the Espionage Act (1917) and Sedition Act (1918), targeting antiwar activists and immigrants.
Definition
Great Migration
The mass movement of African Americans from the rural South to northern industrial cities seeking jobs and escaping racial violence.
Argentina
- Economic hardship led to urban labor strikes, most notably the Semana Trágica (Tragic Week, 1919), a violent confrontation between workers and the military in Buenos Aires.
- Rising labor movements reflected growing discontent with inequality and elite dominance.
- The government’s repression of socialist and anarchist groups demonstrated the fragility of Argentina’s democracy despite Yrigoyen’s reforms.
Foreign Policy and Hemispheric Status
United States
- U.S. wartime participation elevated it to global leadership and reinforced regional hegemony in the Western Hemisphere.
- Postwar diplomacy emphasized non-involvement in European politics but continued intervention in Latin America (e.g., Nicaragua, Haiti).
- Economic dominance deepened through loans and trade; by 1920, Latin America owed more to U.S. banks than to Britain.
Definition
Hemispheric Hegemony
The dominance of one nation over the political and economic affairs of the Americas. (In this case, the US)
Argentina
- Argentina’s neutrality allowed it to maintain independent diplomacy, emerging as a voice for Latin American autonomy.
- Its wartime position preserved trade ties with both Europe and the U.S., but its reluctance to support the Allies weakened its influence at the Versailles Peace Conference.
- After 1918, Argentina sought to balance relations between the declining British Empire and the rising U.S., maintaining a semi-independent foreign policy within the hemisphere.
Case study
The United States – From Neutral Power to Global Leader (1917–1929)
From Neutrality to Involvement (1914–1917)
- At the outbreak of the First World War, the U.S. maintained neutrality, consistent with its long-standing tradition of isolationism. President Woodrow Wilson urged Americans to remain “impartial in thought as well as in action.”
- Despite neutrality, American trade increasingly favored the Allied Powers, as Britain’s naval blockade restricted commerce with Germany. By 1916, U.S. exports to the Allies had risen fivefold compared to 1914.
- The sinking of the Lusitania (1915) and Germany’s resumption of unrestricted submarine warfare (1917) turned public opinion against Germany.
- The Zimmermann Telegram, revealing German attempts to ally with Mexico against the U.S., provided the final spark.
- On April 6, 1917, the United States declared war on Germany, marking a decisive shift from isolation to active participation in global conflict.
War Mobilization and Economic Transformation (1917–1919)
- The U.S. entry into the war mobilized the economy on an unprecedented scale. Under the War Industries Board, factories converted to wartime production, while agricultural output surged to feed Allied troops.
- The government raised over $30 billion through Liberty Bonds, and the Selective Service Act (1917) conscripted more than 2 million men into the American Expeditionary Force (AEF) under General John J. Pershing.
- Wartime demand created a boom in industries such as steel, oil, and shipbuilding, establishing the U.S. as the world’s largest industrial power.
- The war’s end left Europe heavily indebted to American banks, transforming the United States from debtor to global creditor.
- The Federal Reserve and Wall Street assumed global prominence, with New York replacing London as the financial center of the world.
Postwar Leadership and Global Influence (1919–1929)
- At the Paris Peace Conference (1919), Wilson sought to shape the postwar world through his Fourteen Points, emphasizing self-determination, open diplomacy, and the creation of the League of Nations.
- Despite Wilson’s vision of liberal internationalism, the U.S. Senate rejected the Treaty of Versailles, reflecting domestic divisions and a return to isolationist sentiment.
- Economically, the U.S. emerged as the dominant creditor and exporter, controlling much of the world’s gold reserves and financing European reconstruction through private loans.
- The 1920s, known as the “Roaring Twenties,” saw a period of prosperity fueled by mass production, consumer goods, and technological innovation.
- The U.S. also reshaped hemispheric relations: through loans, investments, and military occupations (e.g., in Nicaragua and Haiti), it reinforced its position as the economic engine and political hegemon of the Americas.
| Theme | United States | Argentina |
|---|---|---|
| Global & Regional Role | War involvement transformed the U.S. into a global power, shifting from isolationism to international leadership; established economic and political dominance across the Western Hemisphere. | Maintained regional independence through neutrality; emerged as a voice for Latin American autonomy and resistance to U.S. influence. |
| Economic Impact | Experienced industrial expansion and became the world’s largest creditor and exporter, fueling modernization and consumer growth in the 1920s. | Adopted early import substitution as European trade collapsed; wartime shortages encouraged local industry and reduced dependence on Britain. |
| Social Impact | Saw increased inclusion through women’s suffrage (19th Amendment, 1920) and the Great Migration, which reshaped urban labor and demographics. | Faced rising class conflict and labor unrest, culminating in the Semana Trágica (1919); highlighted inequalities under the elite-controlled Old Republic. |
| Overall Significance | Consolidated global and hemispheric leadership, symbolizing modernization and the beginning of American global influence. | Demonstrated an alternative path of neutral modernization, balancing economic adaptation with political independence in Latin America. |
Exam technique
- Frame the essay as a comparison of two models: intervention (U.S.) vs. neutrality (Argentina).
- Use specific examples of wartime economic policy (War Industries Board vs. trade disruption).
- Discuss both domestic consequences and hemispheric relations for higher-level analysis.
Common Mistake
- Treating Latin American nations as passive observers. Emphasize agency and strategic neutrality.
- Ignoring postwar legacies (industrialization, nationalism, and U.S. dominance).
Theory of Knowledge
- Knowledge and Perspective: How do neutrality and participation in war reveal different ways nations define progress and power within shared historical contexts?
Self review
- Compare and contrast the impact of the First World War on the economic and political development of two countries of the Americas.
- Assess how the First World War transformed hemispheric relations between the United States and Latin America.
- To what extent did neutrality shape the wartime and postwar trajectory of Argentina?
