The Russian Revolution and the Great Depression
The Russian Revolution
The February Revolution
The First World War created the conditions in Russia for a revolutionary outbreak. Neither the economy nor the Russian military and political organization were prepared for such a long, hard, and costly war. Consequently, there were military disasters. The mobilization of millions of farmers led to the decline of agricultural production at a time when most financial resources were dedicated to war. As a result, there was hunger in the cities and widespread unrest among the workers and peasants.
This discredited Tsar Nicholas II and his government, which showed an inability to redress the situation. The population was demoralized and began to organize Soviets (workers’, peasants’, and soldiers’ councils). They demanded that the Tsar withdraw from the war and end the autocracy. The political opposition, both bourgeois parties and workers and farmers, demanded his abdication.
The Fall of Tsarism
In February 1917, a revolution broke out in St. Petersburg, causing the fall of Tsarism. Power passed to an interim government led by Kerensky and supported by the liberal parties of the Duma, which began a series of reforms. Russia became a democratic republic.
The October Revolution
The slow pace of agrarian reform and Russia’s continued involvement in the war increased popular discontent and the influence of the Bolsheviks, who wanted to overthrow the provisional government and establish socialism. The Bolsheviks aspired to form a government of workers’ and peasants’ soviets. Their program promised peace, the distribution of land among peasants, worker control of factories, and the nationalization of banking and transport.
On October 25th, the Bolshevik-led Soviets seized power and overthrew the provisional government in ten days. With support from the Congress of Soviets, Lenin formed a worker’s government. The new Soviet government established the first revolutionary measures: land was expropriated and divided among farmers, and factories were placed under the control of worker committees. A peace treaty was signed with Germany at Brest-Litovsk, which resulted in major territorial losses for Russia.
The Struggle for Power
Lenin, the undisputed leader of the revolution, died in 1924 during a struggle to consolidate the revolution. Various party leaders, especially Stalin and Trotsky, clashed over the future direction of the country. Stalin advocated for “socialism in one country,” transforming the Soviet Union into a great power that would be the cradle of future revolutions. Trotsky, on the other hand, wanted to export the revolution to other countries.
Stalin, who had become Secretary-General of the Communist Party, consolidated his power by 1927 and became the main leader of the USSR. Trotsky, his rival, was exiled in 1929 and assassinated in 1940 on Stalin’s orders.
The Great Depression
The Wall Street Crash
Many shareholders were aware that the value of stocks was much higher than their actual worth and could not continue rising indefinitely. Mistrust spread among investors, and on October 24, 1929, a large wave of selling hit the New York Stock Exchange. Suddenly, everyone wanted to sell shares, and nobody wanted to buy. The massive stock offering caused prices to collapse, leading to the Stock Market Crash of 1929. Many investors were ruined, and panic spread among citizens who rushed to their banks to withdraw their money.
Banks closed due to a lack of funds. Consequently, they could not collect loans made to individuals and businesses, leading to widespread ruin. The stock market crash precipitated the collapse of many banks. Within a few years, the stock market crisis spread to much of industry, commerce, and agriculture, leading to a widespread economic recession.
Consumption was curtailed due to the belief that difficult times were approaching, and many factories closed because they could not sell their products. The number of unemployed rose to 13 million in 1932, and many families fell into poverty and had to rely on public charity.
Global Impact
The crisis in the U.S. spread to the rest of the world. American banks withdrew funds deposited in European banks, and American companies reduced their investments in other countries. Furthermore, U.S. imports fell sharply, leading to a recession in world trade, which contributed to the global diffusion of the crisis.