Labor Systems and Economic Systems 1900 to Present - AP World History: Modern

China's economic liberalization has catapulted hundreds of millions of people into the middle class, but the Communist Party has remained in power.

While economic liberalization has caused some social instability, especially with rising economic inequality, politically the Communist Party has remained in power.

At the end of China's Civil War, defeated warlord Chiang Kai Shek retreated to the island of Taiwan, decades before China's economic liberalization.

The Korean War was in the 1950s, long before China's economic liberalization.

Sino-Soviet border conflict occurred while Mao was still in power, long before China's economic liberalization.

The New Economic Plan (NEP) was instituted by Lenin because he recognized that some of the extreme socialist policies put into place previously under War Communism had eroded the popularity of the Bolsheviks among the Russian people.

The Solidarity Movement broke out in Poland in the 1980s. At the time Poland was under the control of the Soviet Union and a key member of the Warsaw Pact. The Solidarity Movement was a large-scale labor union (at its height it had nearly eight million members) that was extremely anti-communist in nature. It was widely suppressed by the authorities, but contributed heavily to Polish independence and also to the downfall of the Soviet Union.

The European Coal and Steel Community was formed in the 1950s, in the wake of the Second World War. Founding members included France, West Germany, and Italy. Its purpose was to integrate the economies of the Western European powers so closely as to make war not just impractical, but economically impossible. It became one of the founding organizations that would later combine to form the European Union.

Lenin’s New Economic Policy was implemented following the catastrophes of the Russian Civil War (1917-1922), which had devastated the nation’s economy. It brought major industries under centralized government authority, but allowed peasants and small-scale business owners to profit from surplus goods and partial capitalism.

The Works Progress Administration (WPA) was created in 1935 as part of Franklin D. Roosevelt’s New Deal program. The WPA was designed to employ the millions of unskilled American workers who were suffering immensely during the Great Depression. These workers were employed in road and public works construction across the United States. At its peak in the late 1930s the agency employed more than three million Americans.

Under Hitler’s rule Germany’s economy recovered spectacularly in the second-half of the 1930s. When he came to power Germany’s economy had been devastated by the combined impact of the terms of the Treaty of Versailles and the outbreak of the Great Depression. The Nazi Party implemented a series of reforms designed to improve the German economy and standard of living; ensured the viability of a self-sufficient German economy; and focused on rapid industrialization and militarization. By the outbreak of the Second World War the German economy was once again one of the strongest in the world.

The Treaty of Versailles is generally heavily condemned by historians who tend to blame its provisions for the outbreak of the Second World War. The treaty was designed to punish the Germans for their part in the outbreak of the First World War, but ultimately it led to widespread economic depression in Germany and on the European continent, which in turn led to the rise of totalitarian rulers like Hitler and Mussolini.

The United States, Germany, and the United Kingdom all suffered terribly in the Great Depression. These three countries were tied together by the global capitalist market. Japan also suffered as a result of the Great Depression, but less so than the other three countries because Japan was less integrated into the global economy and was still undergoing its period of industrialization and modernizing growth. Only the Soviet Union remained largely unaffected by the Great Depression, indeed Soviet heavy industry grew dramatically during the Great Depression. This is because the Soviet Union was a communist country and the economy was almost entirely isolated from the economy of the rest of the world.

Deng Xiaoping came to power in 1978, following the death of Mao Zedong, and headed the Chinese Communist Party until 1992. His reign is marked by a reversal of the more divisive and destructive aspects of Mao’s rule. Deng Xiaoping was himself targeted during the Cultural Revolution and when he came to power he formally repealed the movement and set about dismantling its many policies. Deng Xiaoping is remembered as a moderating force in the history of the Chinese Communist Party.

Stalin’s first Five Year Plan was aimed at industrializing the Soviet Union and collectivizing farms to reduce the influence of the Kulaks (wealthy peasants). It was successful in dramatically increasing industrial production, but the collectivization of farms led to widespread famine in many regions of the Soviet Union.

When Lenin first came to power he enacted a policy called War Communism. After the end of the Russian Civil War in 1922 he enacted the New Economic Policy. This was designed to ensure the continued nationalization of Russian industry, but allowed minor capitalism in certain areas (such as allowing peasants to sell their surplus crops). After Stalin came to power he replaced the New Economic Policy with the first of his Five Year Plans.

Glasnost and perestroika were two reform policies enacted in the waning years of the Soviet Union. Many historians believe that they contributed directly to the decline and downfall of the Soviet Union. The primary goal of perestroika was to restructure the Soviet political and economic system to allow for a rudimentary free market.

Supply-side economics, a function of capitalism more greatly, became most popular under Ronald Regan and involved the general lowering of corporate and personal taxes, as well as expanded free trade. It grew as a direct response to the shortfalls of Keynesian Theory.

The Bretton Woods System, which was a direct result of the aftermath of WWII, was an agreement among the United States, Australia, Western Europe, Canada, and Japan which cemented the use of available gold to grantee the exchange values of given state's money. It lasted until 1971 when President Nixon took the United States off of the Gold Standard.

In the immediate aftermath of the Soviet Union’s dissolution, Boris Yeltsin – who then became the leader of the Russian Federation – instituted a program known as “shock therapy.” Designed to help the Russian economy transition from socialism to capitalism, Yeltsin’s program involved the removal of price controls, an increase in both taxes and interest rates, the liberalization of foreign trade, and a massive increase in the privatization of state industries. Unfortunately for both Russia and Yeltsin, shock therapy was implemented much too soon and much too swiftly – the Russian economy couldn’t withstand the rapid changes and instead fell into hyperinflation and a severe depression.

The Mexican Revolution led to all of the following except greater control of Mexican industry by foreign corporations. Rather, one of the goals and successes of the Mexican Revolution was that control over Mexican industry returned to Mexican hands. The Mexican Revolution took place in the early twentieth century.

China's economic liberalization has catapulted hundreds of millions of people into the middle class, but the Communist Party has remained in power.

While economic liberalization has caused some social instability, especially with rising economic inequality, politically the Communist Party has remained in power.

At the end of China's Civil War, defeated warlord Chiang Kai Shek retreated to the island of Taiwan, decades before China's economic liberalization.

The Korean War was in the 1950s, long before China's economic liberalization.

Sino-Soviet border conflict occurred while Mao was still in power, long before China's economic liberalization.

The New Economic Plan (NEP) was instituted by Lenin because he recognized that some of the extreme socialist policies put into place previously under War Communism had eroded the popularity of the Bolsheviks among the Russian people.