WWI Aftermath, Economic Crisis & Russian Revolution

Consequences of World War I

Economic problems of peace for belligerent countries of Europe:

• Death and destruction of infrastructure
• Population decline
• Fall in trade
• War debts

For countries that lost (Versailles Treaty):

• Reparations
• Amputation of territories
• Hyperinflation
• Currency devaluation
• Occupation of the Ruhr

Hegemony of the United States Economy

• Decline of the United Kingdom
• Increased production and productivity
• Prosperity and supremacy of the U.S. dollar (the Roaring Twenties)

Large increase in production (technical innovation and work organization), consumer revolution, industrial gains, inequalities in wealth, stock market boom (easy credit, increased demand, and rising share prices).

The Crisis of 1929

Causes of the Depression

• Overproduction
• Credit inflation
• Stock market speculation
• Benefit imbalance between industrial development and share prices

Development: Crack of the NYSE, lack of liquidity, investment implications of bankruptcy.

Implications: Banking bankruptcies, decrease in loans, lower consumption.

Global Expansion of the Crisis

Economy: Decline in demand, stockpiling, closure of industries, rising unemployment, decline of trade.

Social: Rising poverty, inequality, and growth of social unrest.

Global decrease in production and high unemployment due to repatriation of U.S. capital and decreased U.S. investment.

Solutions to the Crisis

Keynesian Economics

State intervention and increased public spending.

United States (New Deal)

• Economic regulation
• Public works policy
• Aid to the unemployed

Europe

• Scandinavia: Welfare state
• Germany: Autarky and rearmament
• UK: Preferential trade with colonies
• France: Popular Front (public investment and social measures)

Tsarist Russia

An immense empire with many nationalities, traditional agriculture, low industrialization, all power held by the Tsar, dominance of the landowning aristocracy, scarce bourgeoisie, mostly rural proletariat, small power of the Orthodox Church, poverty, and lack of freedom.

Tsarism opposition (political liberals and labor unions).

Revolution of 1905

Petitions for a constituent assembly, better living conditions, and land reform. Creation of the Soviets. Result: creation of the Duma, but no major changes.

Revolutions of 1917

February (Liberal Revolution)

Reasons: Participation in World War I, military defeats, misery of the population, political discontent. Participation of all opposition forces to Tsarism.

Output: Resignation of the Tsar, Kerensky's provisional government, liberal reforms, election of a constituent assembly, Russia continues in the war.

October (Socialist Revolution)

Directed by the Bolsheviks.

Output: Power in the hands of the Soviets, Lenin as president, collectivization of property, abolition of the army, nationalized banking, Peace of Brest-Litovsk.

Civil War (1918-1921): Between Bolsheviks and supporters of Tsarism, war communism, triumph of the Red Army.

Construction of the USSR

Lenin Era

Creation of the USSR, power in the hands of the CPSU, persecution and exclusion of other political forces, creation of the Third International (1924), mixed economy (NEP).

Great debate: Stalin and Trotsky opposition.

Stalin Era

Absolute control of power, personality cult, political purges and persecution, forced collectivization of agriculture (sovkhozes and collective farms), industrialization (Five-Year Plans), growth of heavy industry, and shortages of consumer goods.