European Economics World War II Term Paper

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The inability of some workers to comply led to absenteeism. More repressive measures were introduced, such as records of tardiness, poor workmanship and charges of sabotage against the Five-Year Plan. Violators could be shot or sent to forced labor on the Baltic Sea Canal or at the Siberian Railway. Stalin's opponents argued that this inequality was an act of betrayal of socialism, which would create a new class system in the Soviet Union. His opponents could not deter him, so that in the 1930s, the gap between the wages of the manual laborers and the skilled laborers had increased (Spartacus).

Stalin's Five-Year Plans were aimed at building the industrial might of the Soviet Union (Kreis 2000). Targets or quotas were constantly announced to give an illusion that the Plans were working. Before one Five-Year Plan was finished, another Five-Year Plan would take its place. His totalitarian regime was a permanent revolution wherein rapid and sustained change would go on indefinitely. The individual would constantly strive for a goal set before him but which remained unreachable. This way, Stalin mobilized his society for continual effort. Stalin wanted to create a new kind of society and a new human personality. He also wanted to build a strong army and a powerful industrial economy. He succeeded in his goal. He built a new society, which existed up to the late 80s. But this society suffered from ruthless and unrestrained police terrorism. Initially inflicted upon the peasant or kulaks in the 20s and the 30s, this terrorism was then used on party members, administrator and then on ordinary people who deviated from the rule. Stalin systematically drained the Communist Party of his opponents (Kreis).

Life in the Soviet Union was characterized by constant propaganda and indoctrination (Kreis 2000). There were purges and trials. Party members lectured to workers in factories and peasants in the field, complemented by media accounts of endless socialist achievements and the evil of capitalism. Art, literature, film and science were all subjugated to the goals of the Party. Stalin ordered the intellectual elite to become "engineers of the human souls" and "craftsmen of culture." He wanted Russian nationalism to be glorified and capitalism to appear and be accepted as the greatest evil. He projected Ivan the Terrible and Peter the Great as his forerunners. He wanted to rewrite history so that he could control the future by controlling the past and the present. Although he hardly appeared in public, his presence was felt everywhere. In general, life in Soviet Russia was hard. The standard of living went down in the 30s despite Stalin's claim of success in modernizing the nation with his Five-Year Plans. The Russian masses had black bread and wore shabby clothes. There were constant food shortages, heavy taxes, poor housing and in short supply. Nonetheless, the average Russian was sold to an ideal of building the world's first socialist society as capitalism began to fall in the West. The Soviet worker received social benefits, such as old pensions, free medical services, free education and day care facilities. Unemployment was technically wiped out and there was some promise of personal achievement. Advancement required specialized skills and a technical education. Stalin's envisioned rapid industrialization under his Five-Year Plans needed vast numbers of experts, technocrats, skilled workers, engineers and managers. This was why the State offered economic incentives to those who would serve it faithfully. The unskilled had to contend with low wages. The Soviet State motivated the growing technical and managerial elite with high salaries and special housing. This elite merged with the "engineers of the human mind" and produced a new social class in a supposedly classless society. Stalin's paranoia and ego mania, deceptions and the purge trials of the 30s would lead to the near destruction of Soviet Russia. Three years after his death, Nikita Krushchev, in his secret speech in 1956, acknowledged the terror, criminality and totalitarian regime of Joseph Stalin (Kreis).

Stalin's predecessor, Vladimir Lenin, concluded that a modern economy required a high degree of power at the center (Kreis 2000). Although the Bolsheviks pledged the self-determination of almost half of the Russian population, Lenin felt that such a policy seriously threatened the survival of the Soviet government. The broken promise of self-determination was only one of the reasons for the resulting unpopularity of Lenin's government in Russia. Lenin's New Economic Policy also allowed some freedom of internal trade and some private commerce and re-established state banks. Factories with less than 20 workers were denationalized but could be reclaimed by former owners. Stalin later supported Lenin's policy as long as only one party state existed. Through this single political party, the government could allow the introduction of small-scale private enterprise. He emphasized that the New Economic Policy was a special policy of the proletarian state intended to only tolerate capitalism while keeping key positions reserved for the proletarian state (Kreis).

Despite the terror and criminality of Stalin's totalitarian regime, it pales in comparison with that of Nazi Germany (Kreis 2000). The Nazis utterly destroyed all independent organizations, mobilized the economy and undertook the systematic extermination of the Jewish and other non-German peoples. It abolished all strikes and unions as illegal. It incorporated all the members of professionals organizations, such as doctors, lawyers, professors and engineers in its Nazi-based organizations. Hitler delivered his promises of work and bread. He launched a massive public works program to lift Germany from the Depression. He rapidly constructed superhighways, office buildings, large stadiums and public buildings. But government spending was focused entirely on the military by 1936 in preparation for the coming War. Although unemployment fell from January 1937 to a year later, there was shortage of labor by 1938. The standard of living went up by 20%. Business profits finally increased. For those who were not victimized by the regime, Hitler's government provided greater opportunity and greater equality. The Nazis tolerated privilege and wealth when it served the Party. Nonetheless, Nazism was guided totally by the main ideas of Lebensraum and race. Hitler formed alliances with other dictators and began expanding. The War of 1939 broke out on account of Hitler's limitless ambitions. His aggression was so strong that nations needed to unite to destroy his growing empire. By the summer of 1943, Germany was in utter defeat and in utter ruins. The prosperity of the Reich was cut short. Stalin's Russia and Hitler's Germany rejected liberal ideas and subordinated everything to the State. They brutalized basic human rights. If Stalin was satisfied with extending control over the Soviet Union, Hitler's goal of territorial and racial aggression was without limit. It was Hitler who made the World War inevitable with France, Britain and Russia and, ultimately, with the United States (Kreis).

The economy of the United States of Europe lagged far behind after World War II and into the 50s (Eichengreen 2007). Its gross domestic product level was barely half American levels per person. The mass production methods in the U.S., which were introduced in the first half of the 20th century were just arriving in Europe at this time. Typical automobiles and modern household appliances in the U.S. were still few and exceptional in Europe. Even 50 years later, Western Europe was still far from the U.S. In terms of per capita GDP. But institutions of European integration wiped this difference in the quality of life so marked 50 years ago. They locked peaceful Germany into Europe so as to unleash its huge industrial might. It was something, which France and other European countries would not have allowed. These institutions created the Common Market, which in turn induced the huge expansion of trade and increased efficiency. Through the Single Market Program set up in 1986, these European institutions created a continental economy, which can now support global champion firms at a scale and a scope that could compete internationally. And with the introduction of the Euro, the inflation problem, which plagued Europe in most of the 20th century, disappeared (Eichengreen).

These institutions of neo-corporation made up the social market economy, which could catch up with that of the United States (Eichengreen 2007). This social market economy assured workers of employment security and an extensive social safety net. The arrangement moderated their wage demand while firms investment their profits. Banks with long-term relationships with industrial clients provided patient finance. Employers associations encouraged firms to invest in training without the fear that their skilled workers would be taken by competitors. These European institutions set to work at a time when growth depended on high levels of investment and on effectively exploiting the backlog of technology of the first half of the 20th century. Without the help of patient banks and cohesive employers' associations, firms would not be able to make extensive investments in vocational and apprenticeship training. And without a system of extensive vocation and apprenticeship training, the advantages of bank-based finance and cohesive employers' associations would be less. These parts of Europe's economic and social model worked this…

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