Economic Crisis and the Rise of Soviet Communism

Policies to Combat the Economic Crisis

The only thing that seemed clear was that the era of classical liberalism and confidence in the U.S. market had ended. Franklin D. Roosevelt won the 1933 elections with a New Deal program that included government measures to combat the widespread poverty caused by the disaster. Meanwhile, the Soviet Union experienced remarkable economic growth, a circumstance that contributed to the prestige of communism. Fascism, with Hitler in power and armament factories, prepared for war by employing the jobless.

Keynes argued that the state should intervene to correct market imbalances and spur economic activity, for example, by investing in public works that would provide contracts to companies, which in turn would employ workers. Thanks to public spending, the market would grow.

The NEP and the Founding of the USSR

In 1922, the Supreme Soviet approved the treaty founding the Union of Soviet Socialist Republics (USSR). The NEP (New Economic Policy) was introduced, which admitted a small market and tolerated small-scale private businesses.

Socialism in One Country

Following the death of Lenin in 1924, a struggle for succession ensued. Stalin, who controlled the party machinery, emerged victorious against Trotsky. The ideological differences between the two characters were related primarily to tactics:

• Trotsky: The USSR should be the platform from which to extend the revolution to the world.
• Stalin: The proletarians of the world should contribute primarily to the consolidation of communism in Russia.

The Third International or Comintern

In 1919, the Third International, or Comintern, was founded. The parties that joined were officially called communists.

Stalinism, Purges, and the Gulag

• Personality Cult: The glorification of the leader.
• Police Terror: The expansion of state-sponsored terror.
• Gulag: A system of forced labor camps.
• The Great Purge: Stalin eliminated the party's old guard.
• Manipulation: Historical records were systematically manipulated.

In 1928, Stalin decreed the end of the NEP and replaced it with five-year plans aimed at rapid industrialization. This led to forced collectivization and famine. He blamed the kulaks (wealthy peasants), who were systematically exterminated. Ultimately, the Soviet Union became a major industrial power.