Causes of the Russian Revolution and the Global Economic Crisis
Why was there a revolution in Russia?
A: AN AUTOCRATIC EMPIRE: In the early 20th century, the tsars ruled a vast empire where the system of absolute monarchy continued. Politically, tsarism was an autocracy. The tsar had absolute power: he ruled by decree, was not subject to any constitution and did not have to answer to a parliament. A loyal bureaucracy and a powerful army controlled the empire, while the Orthodox Church was one of the great ideological pillars of the regime.
B: FEUDAL AGRICULTURE AND DEPENDENT INDUSTRY: The economy and social structures of the Russian Empire were the most backward in Europe. Agriculture was the main economic activity, and land was controlled by an immensely powerful and wealthy aristocracy. Feudalism, which had disappeared from most of Europe, continued in the Russian Empire. The majority of the population were peasants and lived in miserable conditions. Personal servitude lasted until 1865 and, although the power of the landed nobility was abolished, it remained intact. In some areas (Moscow, St. Petersburg, the Urals, etc.), industrialisation had begun, driven largely by foreign capital. A large industrial proletariat had emerged who worked in large factories. Almost half of all workers worked in companies with more than 500 workers, for very low wages.
C: OPPOSITION TO TSARISM: Opposition to the regime first developed among the peasants but did not offer any clear alternatives. Marxist ideas spread among industrial workers. In 1898, the Russian Social Democratic Labour Party was founded led by Vladimir Ilyich Ulyanov (Lenin). The party soon split into two wings, the Mensheviks who were unconvinced by the tsar’s reforms and favoured a revolutionary path. In the early 20th century, bourgeois liberal parties like the Constitutional Democratic Party (Kade) began to appear in Russia. Further to the left, the Socialist Revolutionary Party (the SRs or Esers) was influential among the peasants.
The 1905 revolution: In 1905, a revolution broke out demanding the end of autocracy. A peaceful demonstration (Bloody Sunday). Peasants and soldiers organised themselves into Soviets.
D THE CRISIS OF THE FIRST WORLD WAR: Russia entered the First World War in 1914, but it was not prepared for such a long, hard and expensive war. Its army was not ready, its transport system was inefficient and its arms industry could not cope with demand. As economic resources were devoted to war, famine appeared in cities, spreading unrest among workers, peasants and soldiers. All of this made Tsar Nicholas II very unpopular. In 1916, at the height of the war, those who opposed tsarism saw the chance to end the regime and take power.
The Russian Revolution
The February Revolution of 1917. The fall of tsarism: On 23 February 1917, there was a large demonstration in Petrograd (present-day St. Petersburg), followed by a general strike and riots in the barracks. The tsar abdicated and a republic was proclaimed. It was headed by a provisional government, which promised to call constituent elections to make Russia a parliamentary democracy. The new government, dominated by the bourgeois parties (Kadet and Esers) initiated a series of political and social reforms. However, they also decided to remain committed to their allies in the war. This made it difficult to improve the living conditions of the population and implement the anticipated land reform. Popular discontent grew, and the Soviets, who wanted to withdraw from the war, began to demand the dismissal of the government. The forces that had united to end the tsar’s rule began to break up, and a duality of power emerged that challenged the provisional government and the Soviets.
The October Revolution brings the Bolsheviks to power: By then, most of the Soviets supported the Bolsheviks. Their leader, Lenin, returned to Russia from exile, and published his new ideas in the April Theses. He wanted to establish a government of worker and peasant Soviets and to sign a peace treaty with Germany. He advocated distributing the land among the peasants, giving workers control of the factories, nationalising the banks and recognising the nationalities of the Russian Empire. The Bolsheviks, with the support of the Soviets, had created their own armed militia, the Red Guards, and prepared for an insurrection on 25 October 1917. The rebels occupied Petrograd, took the Winter Palace and overthrew the provisional government. The revolution quickly spread to Moscow and industrial regions. The Second All-Russian Congress of Soviets, which met in Petrograd, proclaimed a workers’ government led by Lenin, which included Trotsky and Stalin. In November 1917, elections were held for the Constituent Assembly, convened by the provisional government. The Bolsheviks got only 25% of the seats, although they won a majority in cities and industrial regions. Fearing that groups opposing the revolution could take over the Duma, Lenin dissolved the Assembly and put an end to political pluralism in the new Soviet Russia. The new government decreed the first revolutionary measures: land was expropriated to distribute among the peasants, and workers’ committees were given control of factories. In the Treaty of Brest-Litovsk with Germany (1918), Russia accepted territorial losses in exchange for peace.
THE CIVIL WAR AND FORMATION OF THE USSR: In early 1918, those who supported the return of tsarism (landowners, army officers and privileged groups) or the maintenance of a liberal political system (the bourgeoisie) took up arms against the Soviet government. With the help of French, British, Japanese and American troops, the White Army confronted the Red Army, which was led by Trotsky and the Bolsheviks. The Civil War lasted three years and brought great misery to the people, who suffered food shortages and a high number of casualties. In 1921, the Red Army won the war. The conflict had contributed significantly to the hardening of the Soviet regime.
What problems led to a new world war in just
GLOBAL ECONOMIC IMBALANCES: The United States benefitted hugely from the First World War. None of its land had been destroyed, its human losses were relatively small and sales of food, weapons and industrial products to the allies had benefitted it enormously. The United States had become the world’s leading economic power. Its agricultural production was very high and its industrial production represented 44.8% of global production. International markets to its products, which invaded the global markets that had previously been dominated by European industries. In addition, many European countries were indebted to the United States as a result of the war loans. The First World War had impoverished the countries of Europe, whose agricultural and industrial production was declining and which had to cope with war loans and the devaluation of their currencies. The United States was the greatest economic power at the time. When it was shaken by a terrible economic crisis in 1929, the entire global economy, which was linked to USA’s economic depression. Unemployment and poverty led to a severe social crisis.
THE EFFECTS OF THE RUSSIAN REVOLUTION: The economic difficulties caused a serious social crisis, which was sometimes revolutionary in nature. In 1919 and 1920, there were strikes in Great Britain, France, Germany, Italy, etc. The demonstrations were suppressed by the police and the army, and trade union rights were limited. However, the unions and socialist and communist parties became stronger by reminding workers that the Russian Revolution had led the working classes to power. All of this led to intense opposition of democracy by the proletariat, who were dissatisfied with the repression of their rights, and the bourgeoisie, who feared a revolution.
THE CRISIS OF DEMOCRACIES: THE RISE OF TOTALITARIAN REGIMES: In the light of the economic crisis and social unrest, countries with strong roots in parliamentarianism and democracy integrated the emerging socialism through universal suffrage and political coalitions. This was the case of Great Britain, France, Belgium, the Netherlands, etc. However, in countries with little parliamentary tradition, the liberal parties were powerless in the face of social unrest and ended up imposing authoritarian political systems, which promised to combat the spread of socialist and communist ideas.
The United States: from prosperity to crisis
The Roaring Twenties: Economic growth in the United States continued for the decade following the end of the war (1918-1929). It was the decade of prosperity, the Roaring Twenties, in which the American way of life and the values that underpinned it, which guaranteed the wealth and wellbeing of its citizens, became a model for the whole world. Economic growth was based on a comprehensive transformation of goods manufacturing processes, which were dominated by technical innovation. Taylorism and Fordism helped increase productivity and reduce costs. The rise in workers wages, advertising campaigns, hire purchase and bank loans paved the way for an era of mass consumption. Huge stock market boom. A rise in demand for shares, whose value rose steadily.
The paradox of prosperity: The period of prosperity in the 1920s did not benefit everyone equally, and a series of events between 1926 and 1927 led to a crisis. Agricultural prices were increasing less rapidly than industrial prices, and many farmers, who had borrowed money to acquire new land and machinery and thus increase production, realised that the market could not absorb all their production. Stock accumulated, prices fell and many farmers lost everything they owned. Traditional industries stagnated and entire regions missed out on modernisation. The rise in wages was much lower than corporate profits and production, and people had little purchasing power. Overproduction was becoming a problem for the US economy.
The Wall Street Crash of 1929: Many shareholders knew that the prices of shares were much higher than their real value. Mistrust spread among investors, and on 24 October 1929 (Black Thursday), a huge selling wave hit the New York Stock Exchange. Suddenly, everyone wanted to sell their shares and no one wanted to buy them. Their value plummeted and triggered the Wall Street Crash (the Stock Market Crash) of 1929. Many investors were ruined and panic spread among the citizens who flocked to the banks to withdraw their money. The banks were forced to close due to a lack of funds, since they could not collect loans provided to individuals and insolvent businesses. The Wall Street Crash led to the failure of many banks. In a few years, the crisis affected many industries, trade and agriculture, causing a widespread economic recession (the Great Depression). As unemployment increased, consumption declined and many factories closed, as they could not sell their products. Unemployment rose to 13 million in 1932. Many families fell into poverty.
The fight against the crisis the New Deal
The US and most European countries adopted measures to reduce the effects of the widespread crisis and promote economic recovery. President Franklin D. Roosevelt, elected in 1932, introduced the New Deal a series of political programmes based on the ideas of the economist J. M. Keynes, who advocated state intervention in the economy. Its main areas of action were:
- Economic: The government helped private companies in difficulty, created public companies in sectors without incentives for private investment and ordered agricultural stock to be destroyed. The state also established stricter control over banks by monitoring their deposits and forcing them to offer low-interest loans.
- Social: To fight unemployment, the state promoted a major public works programme (roads, reservoirs, etc.), encouraged companies to increase wages and reduced the working week to 40 hours.
1929: the capitalist economy in crisis
A CYCLE OF PROSPERITY: Prosperity in the United States in the 1920s was caused in large part by the profits generated by high product sales during the First World War and the huge number of high-interest loans that had to be repaid by European countries. It was logical that company shares, which were making huge profits, increased in value on the stock market. However, after a while, neither agriculture nor industry could sell so many products, partly because the wages of workers made it impossible for the steady growth in consumption to continue, despite the use of credit.
STOCK MARKET SPECULATION: What took place was a speculative bubble – in other words, a disconnection between the real economy and the productive economy. The increase in share value occurred due to the conviction among investors that they could obtain significant profits during this period simply by buying and reselling. There was a lot of money to invest, but people could also turn to credit to invest in the stock exchange. Brass plate companies were created, and their complex operations led to rumours that their shares were in high demand, so their value rose immediately. If these shares were sold within a few months, huge amounts of money were earned without anyone realising what they did, what they sold and that they were not actually producing any goods.
FROM STOCK MARKET CRISIS TO ECONOMIC CRISIS: As we have seen, the first consequence of the stock market collapse in October 1929 was a banking crisis. The capitalist system relies on money in circulation and credit. Banks do not have clients’ deposits in cash. They invest it in the stock market or lend it to individuals (investors, companies, etc.) with interest. When the money disappears, either because they have lost it or they cannot recover it, the whole economic system collapses and an industrial, commercial and agricultural crisis occurs.
THE GLOBALISATION OF THE CRISIS: The crisis spread from the USA to the rest of the world. The banking crisis in the United States immediately caused credit to be reduced, funds deposited in European banks to be withdrawn and American companies to reduce their investments. US imports plummeted, so world trade suffered a major recession. The US crisis of the 1930s dragged down many countries in Europe and the rest of the world, which caused banks to go bankrupt in many places, a decline in production and trade and a rise in unemployment.