Stalinism and the Wall Street Crash of 1929
Beginnings of Stalinism
Stalinism is a term used to refer to the theory and practice associated with the communist government of Joseph Vissarionovich Dzhugashvili (Joseph Stalin) in the Soviet Union. The system is characterized by certain control procedures, or repression of the population, nationalization or forced collectivization, and a controlled economy with strong monopoly or dominance of the state administration. It included the establishment and consolidation in the various levels of government and institutions of a bureaucratic class, owned or closely linked to the hierarchy of a single party identified with Marxism-Leninism, accelerated industrialization, mass mobilizations and deportation, persecution, and disappearances of political opponents of the same party or group, and any possible opposition.
Other communists, socialists, and capitalists, by similarity, analogy, or implementation of this system, described other regimes as Stalinist, such as North Korea, Albania, and Romania. Stalin turned the Soviet Union into a real world power with a blistering speed that never reached the heads of post-Soviet states, who called it Stalinization. During Stalin’s government, the powers of control by the Central Committee of the Communist Party of the Soviet Union increased, something considered necessary by the party to face the subsequent industrialization and World War II. It is for this reason that some would regard the Soviet Union as a worker’s state with bureaucratic deformations and not a socialist state. Some people go beyond cataloging it, especially in Trotskyist circles, as a form of nationalization or state capitalism.
The Wall Street Crash of 1929
The Crash of 1929 was the most devastating stock market crash in the history of the stock exchange in the United States, taking into account the full scope and long duration of its consequences. The following three terms are often used to describe this collapse of stock values: Black Thursday, Black Monday, and Black Tuesday. The initial crash occurred on Black Thursday, but it was the catastrophic downturn of Black Monday and Black Tuesday that precipitated widespread panic and the onset of unprecedented and long-term consequences for the United States.
In America, the crash coincided with the onset of the Great Depression, a period of economic decline in the industrialized nations, and led to the establishment of financial reforms and new regulations that became a reference point. The crisis of 1929 has probably been the greatest economic crisis that the capitalist system has faced. At the time of the crash, New York City had grown into the largest metropolis, and its Wall Street district was one of the world’s leading financial centers. The New York Stock Exchange was the largest capital market in the world.
The Roaring Twenties were a time of prosperity and excess in the city, and many believed that the market could sustain high levels of price. The euphoria and financial gains of the great bull market were shattered on Black Thursday when the value of the shares on the NYSE collapsed. Stock prices fell on that day and continued falling at an unprecedented rate for an entire month. 100,000 U.S. workers lost their jobs in a period of 3 days. After the crash, the Dow Jones Industrial Average recovered early in 1930, only to reverse again, reaching a low point of the great bear market in 1932. The Dow Jones did not return to pre-1929 levels until late 1954, and on July 8, 1932, it was at its lowest level since 1800.