Summary
Summary World Economic History Sessions 7 to 15
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Detailed class notes from Sessions 7 to 15. All covered on the final exam.
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Theme 7What was Russia like socially in the 19th century?
● Russia followed a feudal system until 1861. After 1861, peasants were granted more
freedom but were not entirely free from obligations and ties to their villages (e.g. land
allotment, mobility restrictions)
● In 1897, Russia had 92 million people, while the Russian Empire had 126 million.
○ 80% of Russians were peasants. There was no proletariat as the dimensions
of centralization made capitalism ‘unnecessary.’ However, the number of
proletariats would later increase with industrialization.
● There were no official outlets for dissatisfaction or anger with the government, such
as political parties, trade unions, or legislative bodies like the parliament.
○ There was no middle class that fought for constitutional change. The
peasants were the revolutionaries.
How did Lenin’s ideas differ from Marx’s regarding revolution?
Lenin Marx
● The proletariat needed to pursue ● Capitalism would naturally create
revolutionary action with the the conditions for a spontaneous
leadership of a vanguard party revolution by the proletariat
● A strong state power is necessary to ● A stateless and classless society
establish a “dictatorship of the would eventually emerge after the
proletariat,” led by the vanguards revolution
What did Lenin think of the proletariat?
● Lenin viewed the proletariat as the key agent of revolutionary change, but he
believed that their successful revolution required organization, leadership, and a
clear understanding of their class interests, provided by the vanguard party.
What are the differences between the Bolsheviks and the Mensheviks in the Russian Social
Democratic Workers’ Party?
Bolsheviks (minority led by Lenin) Mensheviks (majority)
● Believed in a small, professional ● Favored a more gradual and
revolutionary vanguard that would inclusive approach to revolution
lead the proletariat in a revolution ● Willing to work within the system
● Prioritized immediate and forceful and were in favor of collaboration
action to overthrow the Tsarist with liberal bourgeois parties to
regime and establish a socialist achieve democratic reforms before
state moving toward socialism
What were the results of the Liberal Revolution of 1905?
● The Liberal Revolution of 1905 was sparked by protests in Russian cities against the
Tsar, the nobility, and the ruling class.
, ● In the October Manifesto (1906), Tsar Nicolas II agreed to grant civil liberties such as
freedom of speech, assembly, and association and establish a legislative State Duma
(the Russian Parliament).
What were the results of the Liberal Revolution of February 1917?
● The Liberal Revolution of February 1917 was a revolution of the proletariat and the
liberals that led to the abdication of the Tsar and the end of nearly 500 years of
autocratic rule in Russia.
● The Duma carried out a coup and took provisional control of the government.
● Trotsky founded the Petrograd Soviet of Workers' and Soldiers' Deputies, a city
council of Petrograd (Saint Petersburg), the capital of Russia at the time.
What did Lenin’s April Thesis proclaim?
● Transition to the Socialist Revolution
● An end to the provisional government; ‘All Power to the Soviets’ (Bolsheviks)
● Land nationalization and redistribution
● Russia’s withdrawal from WW1 (‘imperialist war between capitalists’)
What were the results of the October 1917 Revolution?
● During the Russian Revolution of October 1917, the Bolsheviks launched a coup
against the Duma's provisional government.
○ On October 12, before the actual Revolution, Lenin and Trotsky took control
of the Petrograd Soviet.
○ On October 25, they took control of Petrograd.
● The Bolsheviks took control of the Soviets and formed the government. Lenin was
the head of the Bolsheviks, Trotsky was the Foreign Minister, and Stalin was the
Minister of Nationalities.
● The Bolsheviks called themselves Communists, the ‘dictatorship of the proletariat.’
What did war communism consist of?
● War Communism was an economic and political policy implemented by the
Bolsheviks during the Russian Civil War (1917-1922).
● It was a set of emergency measures aimed at centralizing control over the economy,
industry, and agriculture to support the war effort and secure supplies for the Red
Army fighting against various opposition forces (e.g. White Army, loyalists)
What was the New Economic Plan (NEP)?
● The New Economic Policy (NEP) was an economic policy implemented by the Soviet
government under Lenin’s leadership in the early 1920s.
● It reintroduced a measure of stability to the economy and allowed the Soviet people
to recover from the economic and social challenges caused by WWI, the Russian
Civil War, and governmental mismanagement.
● Key features:
○ Public, private, and foreign investment
○ State control over big industries
○ Some free market elements (e.g. peasant farmers could sell their surplus)
○ Trade relations
,What are the advantages and disadvantages of central planning of the economy?
Advantages Disadvantages
● Resource allocation ● Risk of market inefficiency due to
● Long-term planning corruption or mismanagement
● Stability and predictability ○ Frequent shortages
● Bureaucratic hurdles
○ Inflation controlled as state
● Lack of motivation, innovation,
controls prices and wages entrepreneurship, and competition
○ Unemployment avoided as ○ No autonomy or incentives
state hires and pays workers ● Information problems
● Lack of elitist attitude ○ Planners don’t have
○ Conspicuous and invidious information to achieve aims
consumption avoided ● Black markets
What is the ratchet effect? What is storming?
● The ratchet effect suggests that once certain elements or structures are established
within a centrally planned economy, they tend to persist and become difficult to
reverse, even if there's recognition of their limitations or inefficiencies.
○ Managers purposefully underproduced to avoid the ratchet effect.
■ If the government saw that managers were able to produce at their
quota with a certain number of resources, it might increase their quota
during the next cycle.
■ Workers had no incentive to work harder due to fixed ‘salaries,’ so
higher quotas were not desirable.
● Storming is the act of rushing to reach certain goals at the end of a planning cycle.
How did Stalin and Trotsky differ in their outlook?
Stalin Trotsky
● Promoted Socialism in One Country, ● Promoted the Theory of Permanent
a Soviet state policy to strengthen Revolution, arguing that the socialist
socialism within the Soviet Union revolution in Russia would need to
rather than socialism globally quickly transform into a global
● Implemented rapid industrialization revolution and spread to advanced
through Five-Year Plans and capitalist countries to ensure its
enforced collectivization of success
agriculture (i.e. highly centralized ● Believed in more democratic
economic planning) methods of economic management
Who were the Kulaks?
● Kulaks were peasants in Russia who were wealthy enough to own a farm and hire
labor. Under Stalin, they were forced to be stripped of their property and land.
● They resisted Stalin's collectivization, causing millions to become arrested, exiled, or
killed.
, What was the aim of collectivization?
● The primary aim of collectivization was to transform agriculture from individual and
family-based farming (private ownership) into collective farming, where land,
equipment, and labor were pooled together in collective or state-owned farms.
● It was largely meant to increase agricultural productivity (to ‘feed the proletariat’).
Theme 8
Why did Germany want to expand before World War I (WWI)?
● Germany sought overseas colonies to establish its global influence, access raw
materials, and create markets for industrial goods to work towards economic growth.
● There was a general ambition to elevate Germany's status as a world power.
Expansion was seen as a way to assert dominance and gain global prestige.
○ Germany aimed to challenge British naval dominance and secure its maritime
interests. Expanding its naval fleet allowed Germany to protect its overseas
colonies and establish itself as a global naval power.
● German nationalism and the desire for territorial unification played a role.
Why did the Central Powers require centralized economic planning?
● WWI placed immense strain on the economies of the Central Powers. To support the
war effort, they needed to mobilize their economies efficiently and effectively to
produce war materials, armaments, and supplies for the military.
○ The war necessitated a massive reallocation of resources towards military
production. Centralized planning allowed the governments to prioritize and
direct resources such as labor, raw materials, and industries.
○ Centralized planning facilitated the coordination and cooperation necessary
among different sectors to support the war effort.
○ Centralized planning enabled governments to exercise measures such as
rationing, price controls, and state control over industries, which aimed to
prevent inflation, manage shortages, and ensure a fair distribution of goods.
Why was the Gold Standard suspended during WWI?
● The Gold Standard was suspended so governments could print more money to
finance the war effort. Without the Gold Standard, governments no longer had to
retain a fixed value of currency for gold.
How did the US economy benefit from WWI and WWII?
● The U.S. economy grew 60% during WWII.
● Americans were at full employment
○ The U.S. supplied allies with various military vehicles (e.g. tanks). Because of
this heightened production, there were 7 million new civilian jobs.
○ Industrial productivity increased by 96%.
○ Average wages increased by 50%.
○ Women entered the workforce.
○ Trade unions became more active.
● The U.S. came out of the war as the global economic and political hegemony.
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