What the exam asks
- Economic Systems (ECN): How did different governments respond to the Great Depression, and how did the Soviet Union industrialize through state control?
- Governance (GOV): How did imperial powers maintain or expand their territory after World War I, and how did colonized peoples resist them?
- Reasoning Processes: Compare democratic, fascist, communist, and populist economic interventions; trace the continuity of imperialism through the League of Nations mandate system.
Core ideas
1. State intervention in the Great Depression
Following World War I and the 1929 U.S. stock market crash, laissez-faire capitalism lost credibility. Across the political spectrum, governments took a much more active role in economic life.
| State / Model | Key Policies & Characteristics | Purpose |
|---|---|---|
| United States (Liberal Democracy) | The New Deal under Franklin D. Roosevelt: deficit spending (Keynesian economics), public works projects, banking regulation, and social safety nets (Social Security). | Reform and preserve capitalism without abolishing private property. |
| Italy & Germany (Fascist Corporatism) | State-directed corporatist syndicates uniting employers and state-controlled unions; ban on independent strikes; massive rearmament and public works. | Subordinate private enterprise to extreme nationalism and military expansion while keeping private ownership. |
| Brazil & Mexico (Popular Authoritarian / Populist) | Getúlio Vargas (Brazil’s Estado Novo) and Lázaro Cárdenas (Mexico): import-substitution industrialization (ISI), protective tariffs, labor codes, and nationalization of key resources (e.g., Cárdenas nationalizing foreign oil companies in 1938). | Reduce dependency on foreign exports and build domestic industry with strong popular backing. |
2. The Soviet command economy
Isolated from the global capitalist market, the Soviet Union under Joseph Stalin replaced Lenin’s mixed New Economic Policy (NEP) in 1928 with complete state control through the Five-Year Plans.
- Rapid Industrialization: State planners (Gosplan) set strict production quotas for coal, iron, steel, and electricity, building massive industrial complexes from scratch.
- Forced Collectivization: The state seized private peasant farms to create collective farms (kolkhozy) so grain could feed industrial cities and be exported to pay for foreign machinery.
- Repression and Repercussions: Wealthier peasants (kulaks) who resisted were deported to Gulag forced-labor camps or executed. State grain seizures and mismanagement caused devastating man-made famines (1932–1933), especially the Holodomor in Ukraine, killing millions.