The forty years before the second world war brought far-reaching changes in the ways of life and the standards of living of European peoples. These changes were wrought by historical forces and events which had diverse effects in different countries. When the twentieth century began Europe already fell into three fairly well-defined regions. Europe east of the Elbe remained essentially a peasant Europe, where industrialisation had spread slowly for some fifty years and where national consciousness had developed speedily, often on a linguistic, family or racial basis. Economically and socially eastern Europe lagged well behind most countries west of the Elbe. These, however, fell into two categories. The nations of the north and west—Scandinavia, the Low Countries, Britain, France, Germany, Switzerland—had pressed furthest with industrialisation and with other economic developments which usually accompanied it. They experienced urbanisation, capital accumulation and credit organisation, foreign trade, and higher general standards of living. Areas of the south and south-west—Spain, Portugal, southern Italy and southern Ireland—belonged geographically (and in certain respects historically) to the west, but in economic and social underdevelopment they more closely resembled the countries of the east. Spain and Portugal had won and lost large imperial possessions in the New World: the residue of past glories remained a drag on their modern development.

There were, inevitably, important exceptions to this tripartite division. Some of Austria was almost as industrialised as Germany, whilst parts of south-west France were as underdeveloped as southern Italy. But the three regions preserved broad characteristic differences which greatly affected the impact of twentieth-century changes on their social life. In the general balance of forces in the continent Germany was the pivot on which in their relations with one another the three regions turned.