(^184) › STEP 4. Review the Knowledge You Need to Score High
The Soviet Union in Economic Ruins
By the onset of the 1920s, the bloody civil war between the monarchist “Whites” and the
Bolshevik-led “Reds” was finally over, and Lenin held uncontested leadership of Russia. But
it was a country in ruins, whose people could find neither jobs nor food. In order to deal
with the crisis, Lenin launched the New Economic Plan (NEP), which allowed rural peas-
ants and small-business operators to manage their own land and businesses and to sell
their products. This temporary compromise with capitalism worked well enough to get the
Russian economy functioning again.
In July 1923, Lenin constructed the Soviet Constitution of 1923. On paper it created
a federal state, renamed the Union of Soviet Socialist Republics (USSR), but in practice,
power continued to emanate from Lenin and the city that he named the capital in 1918,
Moscow. Lenin died unexpectedly from a series of strokes in 1924. The man who won the
power struggle to succeed him was the Communist Party Secretary Joseph Stalin. From
1924 to 1929, Stalin used a divide-and-conquer strategy combined with his control of the
party bureaucracy to gain full control of the party and, thereby, of the Soviet Union. In the
autumn of 1924, Stalin announced, in a doctrine that came to be known as “Socialism in
One Country,” that the Soviet Union would abandon the notion of a worldwide socialist
revolution and concentrate on making the Soviet Union a successful socialist state.
In 1928, Stalin ended the NEP and initiated the first of a series of five-year plans,
which rejected all notions of private enterprise and initiated the building of state-owned
factories and power stations. As an extension of the plan, Stalin pursued the collectiviza-
tion of agriculture, destroying the culture of the peasant village and replacing it with one
organized around huge collective farms. The peasants resisted and were killed, starved, or
driven into Siberia in numbers that can only be estimated but that may have been as high
as eight million.
Between 1935 and 1939, Stalin set out to eliminate all centers of independent thought
and action within the party and the government. In a series of purges, somewhere between
seven and eight million Soviet citizens were arrested. At least one million of those were
executed, while the rest were sent to work in camps known as gulags. The end result was a
system that demanded and rewarded complete conformity to the vision of the Communist
Party as dictated by Stalin.The Great Depression
The post–World War I European economy was built on a fragile combination of interna-
tional loans (mostly from the United States), reparations payments, and foreign trade. In
October 1929, the New York stock market crashed, with stocks losing almost two-thirds
of their value. Unable to obtain further credit, trade dried up. The result was an economic
collapse that has come to be known as the Great Depression. Attempts to deal with the
problem in traditional ways—by cutting government expenditures, tightening the supply of
money, and raising tariffs on imported goods—only made things worse. By 1932, the econ-
omies of Europe were performing at levels that were only half those of 1929. Jobs became
scarce as the economy contracted, and large segments of the population fell into poverty.
British economist John Maynard Keynes argued that governments needed to increase
their expenditures and run temporary deficits in order to “jumpstart” the stagnant econ-
omy, but his ideas were only slowly accepted. Europe’s economies recovered very slowly,
and in the interim, parts of Europe succumbed to a new ideology of the desperate and
downtrodden—fascism.22_Bartolini_Ch22_181-194.indd 184 27/04/18 1:56 PM