First, the war cost Europe its system of international security. 

That system had depended upon a balance of power among the five great powers (Germany, France, Russia, the Austro-Hungarian Empire, Britain) and on the managed decline of the Ottoman Empire. 

The Ottoman Empire collapsed.  France got Syria and Lebanon; Britain got Iraq, the Trans-Jordan, and Palestine; the Greeks tried to seize much of Turkey and got a bloody nose.  Who would now organize the Middle East? 

The Austro-Hungarian Empire collapsed.  Poland, Czechoslovakia, Yugoslavia, Hungary, the remnant of Austria, and an enlarged Rumania emerged out of the ruins.  Post-war Central and Eastern Europe was made up of weak, quarrelsome “Potemkin” countries.  Ethnic minorities were scattered throughout the new countries and territorial disputes festered.  “Ruthenia, Land That We Love.”  The collapse of a single large market gave way to competing national economies.  Who would now organize Central Europe? 

The tsarist empire collapsed and the borders of Russia were driven back hundreds of miles.  Poland, Lithuania, Latvia, Estonia, Finland, and an enlarged Rumania (Bessarabia) all emerged from the ruins.  Russia went through a revolution, civil war, and famine.  Russia sought to export revolution to other countries by force of arms and by conspiracy.  Russia repudiated its international debts.  Communist Russia became a rabid dog of a country. 

Britain turned toward near-isolation in Europe as it dealt with domestic problems and imperial issues.  The British economy slumped soon after the end of the war, leaving it with a million men unemployed for many years.  The “staple industries” of pre-war British prosperity were ruined: cotton-spinning, ship-building, coal.  Rebellion broke out in Ireland and the British were too stupid to do the obvious thing.  Imperial security was threatened through conflicts with France over Europe and the Middle East, with Japan over the Far East, and the US over economic issues.  In Europe, Britain wanted a restored prosperity and stability. 

France emerged from the war “bled white,” without reliable allies, and fearful of German revival.  The population structure of France had long differed from that of other European countries, so the casualties of the war had a different effect.  Twenty years after the First World War, France would enter the “hollow years” of few draftees.  The French tried to replace their lost Russian alliance by negotiating treaties with Poland, Czechoslovakia, and Yugoslavia.  This was like trying to replace a sumo wrestler with circus dwarves.  The refusal of the American Senate to ratify the Versailles Treaty ended the Anglo-American security guarantee offered to the French in exchange for concessions on the treatment of Germany. 

Germany emerged from the war with its military power and territory significantly reduced, and with a heavy reparations burden imposed on its economy, but with its real power relative to every other country greatly increased, and a deep sense of grievance against virtually everyone.  German population rebounded from the war losses much faster than did that of France.  To the east and south Germany was bordered by small, weak countries in need of foreign investment and technical expertise.  Germans were enraged by the war’s outcome. 

Second, the war cost Europe its dominant position in the world. 

The foundations of European economic leadership were ruined. 

During the war European industries had shifted from producing consumer goods (for either the domestic or the export market) to producing military goods.  Foreign producers had expanded their own industry to take up the slack.  For example, Japan captured the Asian textiles market.  Indian, Latin American, and North American producers had done similar things.  They also had exported goods to a Europe that could not provide for itself.  How were Europeans to re-gain these markets after the war? 

Wartime losses of gold and the liquidation of foreign investments had transferred wealth from Europe to other countries.  Japan and the United States were the big winners here.  However, the income from “invisibles” (income from foreign investments, interest on loans, fees for insurance, merchant shipping income) had long covered a European payments deficit.  Now these were all gone. 

The war left behind a huge tangle of debts.  All the Allied belligerents had borrowed from Britain, then from the United States.  Britain also had borrowed from the United States.  How were these debts to be re-paid after the war? 

Germany owed reparations to the victors.  Initially, these reparations were supposed to cover actual damage to property (mostly in France and Belgium).  Subsequently, they were expanded to include pensions to widows, orphans, and disabled veterans, and separation allowances to the troops (generally one year’s pay).  This massively increased the sum of reparations, but there was no way to calculate the exact amount or figure out a payments scheme until 1921. 

Non-European states saw their power greatly increased.  Japan rose as a power in the Far East by seizing the German colonies north of the Equator, by seeking to dominate a China in the midst of civil war and revolution, and by expanding its navy.  Even more importantly, the United States revolutionized its position in the world.  From 1914 to 1918, the United States went from being the greatest debtor nation in the world to being the greatest creditor nation.  During the war the Americans set out to build a “Navy second to none.”  In short order the Americans had raised and trained an army of four million men.  After the war the United States began to muscle its way into Latin American markets that Britain had long dominated.  

Nationalism in the non-western world greatly increased.  Turkey emerged out fo the ruins of the Ottoman Empire, driving out French, Greek, and British forces, then compelling the wartime victors to negotiate a new peace treaty with the Turkish Republic.  In the Middle East Arab nationalism appeared.  Egypt gained a nominal independence that did not satisfy the desires of the Egyptians.  In India, Gandhi began his campaign to force the British to leave.  While they were trying to fend off Japanese imperialism, the Chinese nationalists also adopted an anti-Western stance.  Even in the “White Dominions” (Australia, New Zealand, South Africa, Canada), the British found the members of the Empire pushing back against London’s authority after the war.  The Chanak Crisis in 1922 led to the fall of prime minister Lloyd George. 

Third, the war cost Europe its stable society based on bourgeois values. 

Middle- and upper-class supporters of Enlightenment values (sometimes called Modernism) were gravely weakened.  Casualty rates had varied by social class.  In terms of percentage, not absolute numbers, the upper and middle classes had born the brunt of the war in all countries because they had provided the bulk of the junior officers. 

The upper and middle classes had suffered huge economic losses during and after the ar.  No country had universal social welfare systems.  Members of the industrial working classes were covered in some places.  However, the middle and upper classes depended upon a lifetime of savings and inherited wealth to pay for a middle-class lifestyle, retirement, the education of their children, dowries for daughters and setting sons up in business or the professions.  Wartime and post-war inflation, taxation, and the shift in income distribution had undermined the resources of many of these people. 

      The middle ground of politics thinned out as post-war politics was radicalized and polarized.  The political middle ground, where people could find a basis for compromise, thinned out.  On the left, Communist parties following Russian Bolshevik orders competed with Socialists, who were discredited by having supported the war effort.  This pulled one wing of politics toward the extreme left.  On the right, fascist parties competed with traditional conservative parties.  This pulled the other wing of politics toward the extreme right.  The big losers here were the traditional “liberal” parties of left and right.  Individual liberty, a small government, and a free market offered few attractions in post-war politics.  Certainly, young people and veterans were not much attracted to such parties. 

            Before the war widely-accepted conventional liberal views had held that humans were governed by reason, that compromise offered the best solutions to political issues, that history was a story of continuing progress, that science served mankind, and that one could regard the future with optimism.  Before the war, a few thinkers had argued that people were driven by the sub-conscious, by impulse, and by individual assertiveness more than by rational thought and a co-operative spirit, and that there were limits to human understanding.  The ideas of Einstein, Freud, and Nietzsche, among others, were known to a relatively small number of well-educated people willing to entertain radical ideas and their racy implications.  However, these ideas were not generally accepted.  After the war, however, the pre-war “fringe” thinkers began to look like prophets of the new age.  These views, usually in a popularized form, became fashionable. 

            Furthermore, wartime governments had systematically violated the tenets (NOT “tenants”) of liberal doctrine.  Free trade had been abandoned for import and export controls imposed by the government.  Passports had been introduced to regulate the movement of people from one country to another.  A gold-backed money supply had been replaced by freely-printed paper currency.  Individuals had been conscripted for military service or for industrial labor.  Governments had closed small, inefficient companies to shift their labor and machinery to larger, more efficient firms in order to better support the war effort.  Censorship hid many truths from people, while propaganda sought to whip up the emotions, rather than appeal to reason. 

            Most of all, looking at the casualty totals, who could believe in Reason or Progress?