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(R)evolutions of Capitalism: A look at America & Russia

Updated on March 27, 2014


Russia’s monarchy ended with Tsar Nicholas II forfeiting his right to supremacy by signing the October Manifesto in 1905 in response to the revolution. The Manifesto allowed for greater rights of the Russian people and the creation of the State Duma, which became the prime lawmaking body for the Russian government. This concession gave way to the Marxist led opposition, the Russian Social Democratic Labor Party, divided into two factions, the Bolsheviks and Mensheviks. Led by Vladimir Lenin, the Bolshevik party followed the Marxist belief that capitalism was the exploitation of the working class by the bourgeois class that could only be relieved by a revolutionary party led by a vanguard of professional revolutionists. Once overthrown, a system of democratic centralism must be used to educate the proletariat class and to make decisions within an internal democracy that is supported by all of the proletariat class. In order to pursue this goal, Lenin surrounded himself with men like Leon Trotsky and Josef Stalin to enforce his New Economic Policy. Contrary to Marxism, Lenin believed it would take a forced effort to push the working class towards such a revolution. Stalin furthered these ideas after Lenin’s death with the help of Nikita Khrushchev by annihilating all opposition to his ideals. Additionally, Stalin and Khrushchev gave power to the managers and elite of the industries by subsidizing departments that included benefits for their employees. In his later years, Khrushchev admitted to the atrociousness of Stalin’s ideals and set in motion the movements towards democratization and increased foreign interaction that were later fully developed under Boris Yeltsin, Mikhail Gorbachev and Vladimir Putin.

The United States, in contrast, took an alternative route at the beginning of the 20th century with Theodore Roosevelt at the helm. Through his Square Deal he opened new job markets with the establishment of national parks and the investment in infrastructure. Woodrow Wilson soon took up the torch to increase the economy’s stability with the establishment of the Federal Reserve Board, the Federal Trade Commission and the Department of Labor – all of which helped pave the way for the nation’s success as a capitalist country. Franklin D. Roosevelt and his “brain-trust” of educated scholars later followed with his New Deal policies and the Social Security Act that saved Americans from the Great Depression of the 1930’s. Additionally, F.D.R. worked on a global scale by creating the United Nations.

Leading America and the rest of the capitalist world into the Cold War was President Harry Truman and future President Dwight Eisenhower in their stand against the inhumanity of the Soviet regime, as well as improving foreign relations with the North Atlantic Treaty Organization and later, Eisenhower’s South East Asian Treaty Organization. President Lyndon B. Johnson picked up where President John F. Kennedy’s left off for “A Great Society” with the Civil Rights Act of 1964 and the Voting Rights Act of 1965, opening broader democratic doors to the African American population. Beyond him, Presidents Nixon, Reagan, Bush Sr., Clinton and Bush Jr. began the climb up the slippery slopes of a vast and diverse population which created more demands on the country and the capitalist giant it had become.

Russian President Vladimir Putin, left, and US President Barack Obama, right, separately address the media after a G-20 summit in St. Petersburg
Russian President Vladimir Putin, left, and US President Barack Obama, right, separately address the media after a G-20 summit in St. Petersburg | Source

Policies & Constitutions

The Russian Soviet leaders of the early 20th century began under the 1906 Constitution that disabled Tsar Nicholas the Second and created the Duma. Later, the 1918 Constitution established the sovereignty of the PAN Russian Congress of Soviets, in theory, placing all power on that of Commissar Stalin who would guide the Congress. This fortified Stalin’s power over the economy of Russia and opened doors for him to enact his policy of Stalinism. This policy consisted of four principles: equality and sovereignty of all Russian peoples, right of people to free self-determination including the right to secede from the Soviet Republic, suppression of all privileges or restrictions due to national or religions origins and free development of national minority and ethnic groups in Russian territories. This led to the secession of the Baltic States, Poland, Ukraine, and Yugoslavia among others, reducing the

GNP of Russia until the formation of the union at the 1922 Genoa Convention. Further sinking the country, Stalin and Khrushchev’s agricultural policies forced Russians into agricultural communes that were government owned. Over-employment in the defense and agricultural fields and underemployment in the service and consumer industries eventually led to the collapse of the entire system as production fell. As production fell, rather than reorganize the job markets and educate the skilled laborers in banking and service, the government continued to pay the wages of the large industrial population. Additionally, the communes offered only minimal social welfare to the extensive workforce, creating a less than viable standard of living. These policies were later redirected during Khrushchev’s turn-around in 1952 when he set a course for democratization. Yeltsin later reorganized the process to meet the standards of the International Monetary Fund in order to receive much needed loans. The reorganization merely led to extreme inflation and the worthlessness of the Russian currency as the government used subsidies and loans that were not actually backed by anything to support poor investments, such as defense ministries and agricultural campaigns in harsh regions like Siberia and the Ural mountains that yielded little to no production. Then Gorbachev took office and began the much needed fourfold reform of the Soviet Union which included: the transformation of the political system to a pluralist democracy, the move from a command economy to a market economy, the unification of over 100 ethnic groups into a single nationalized country, and the transformation of Soviet foreign policy in which military dominance and intimidation was set aside to make way for more beneficial relations in order to improve domestic affairs. The result was the rewriting of the Russian Constitution, ratified in 1993, which established the Russian Federation and a parliamentary, albeit paternalistic and autocratic, system. The theory was that these policies set the stage for a more democratic future in which Presidents Vladimir Putin and Dmitri Medvedev could encourage an open economy and better standard of living for all Russians.

The United States began its move towards capitalism with the establishment of the 1890 Sherman Antitrust act, which was later fortified by Roosevelt’s presidency. The 1902 lawsuit against railroad conglomerate Northern Securities for violating the Antitrust Act allowed Roosevelt to reinforce his anti-monopoly stance, solidifying the style of capitalism America would take part in. The 1906 publication of Upton Sinclair’s The Jungle prompted the creation of the Food and Drug Administration creating better working conditions and enforcing worker’s rights. Wilson pounded out capitalist maintenance reforms such as the Federal Reserve Act of 1913 which helped control interest rates and the government’s money supply, as well as the creation of the Federal Trade Commission that was authorized to investigate cruel, unfair or corrupt business practices among the free market. F.D.R. then followed in the wake of the Depression with the New Deal, which created the Social Security System standing up for those who could not join the work force, Civil Conservation Corps which successfully relieved unemployment, the National Industry and Agricultural Recovery Acts which subsidized industries and farms and the Home Owners Loan Corporation giving homeowners a chance to avoid losing their houses to foreclosure. Capitalism took a global stance in the form of the Truman Doctrine that fought subjugation of pro-Western free market economies from Communism. Eisenhower improved foreign policy and the global trade economy with NATO and SEATO leading to increased U.S. presence and an economy allowing the opportunity for J.F.K and L.B.J.’s welfare reforms to begin; reforms which pulled half of the impoverished population into the consumer economy, growing the U.S. GDP and securing healthy lifestyles for a majority of the American population.
Effects of War

The 1917 Russian Revolution brought Lenin to power and the Communist Party into existence, which set the tone for a quarter of a century of national masochism. World War II allied Russia with Germany and the Axis through the Hitler-Stalin Pact leading to the alienation of Russia from the Western governments. Hitler’s violation of the pact and invasion of Russia nearly led to the bankruptcy of the nation due to overspending on military industry. The arms and industrial technology race with America led to the Cold War, which isolated the Russians further. Several disputes with China’s Communist leader Mao also distracted the Soviet Union from domestic advancement. The Egyptian takeover of the Suez Canal, and Khrushchev’s alliance with Egyptian President Nasser led to the offence of France and Britain. The Soviet Union’s choices of allegiance left it estranged from the democratic communities that were rising as super powers.

The U.S., on the other hand, originally issued a stance of neutrality in World War II in an attempt to not further disputes with Germany and Russia. Things changed with the bombing of London and sinking of U.S. ships by German U-Boats off the British Isles, the culmination of which was the atomic attack on Japan after the devastation of Pearl Harbor, solidifying America’s dominance. U.S. lending of funds towards the recovery of French and British economies and infrastructures concreted its position. The Cold War gained support for the U.S. from other democratic countries as it succeeded in being first to produce the atomic bomb and first to send a man to space. The Korean War led to Eastern alliances that later offered support in the Vietnam War. The failure of the Vietnam War, however, left a tragic wake of disapproval regarding American intent and capitalist dominance. Today’s current War on Terror, led by the U.S., has only added to the growing disappointment of the U.S.’s military policies.

Marxian Prophecy

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Thanks to the steps of the Khrushchev era and the fall of the Soviet communist era, Russia is taking its new federal status to new levels of self-improvement. Ex/Current-President/Ex-Prime Minister, Vladimir Putin has led a fatherly reconstruction of the system, allowing the Russian population to finally have a say in their own lives (disputably at the end of a gun barrel). While still reminiscent of some Soviet controls, daily freedoms and a more open market have been built with increased democratization, privatization and improved education. Today, the current Duma still has a long road ahead having lost most of its power to the restructuring of Putin, but will most likely support the improvement of the Russian Federation through the deliberations of the President.

The United States’ capitalist economy has climbed to the peak of power though successfully balanced campaigns for a free market and social reform. From “Trust-buster” Teddy Roosevelt to the current recession, capitalism’s extremes have been realized. The threat of over-privatization has blossomed in the form of the mortgage and lending crisis on a global level. The democratic process has brought forth a changing of the guard that was highly inspired in its first term, with President Barack Obama, but with the waxing and waning of the majority in the American Congress and the inability to rally unification as previously he could do, his effectiveness in representing American's actual stance on global policy remains to be seen. The next stage of transition will be the quelling of increasingly divided upper and lower class and the redirection of the government’s stance on capitalist economy - a step Obama feels he took with his healthcare overhaul, a nod to Marx.



Currently, there is no better time than now to find out if Karl Marx was correct about Communism being the final stage of Capitalism. We now live and breathe the comparisons of the two ideologies as the U.S. market falls and Communist China’s market rises. Perhaps with both Russia and America’s past war-time experiences and failures and success of leadership, both nations will be able to continue rising in a free market global economy or perhaps its leaders will be its ruin. Corruption runs rampant in both Congress and the Duma so the real question will be whether the special-ops commando running Russia will bring in a new pseudo-Communism era to match China's growing markets or will our American peace-talking, idealist lawyer be able to pour a cup of coffee and settle him back into our capitalistic fold. Neither leader will have look to have the majority of their country behind them, but that is to be expected for late term leaders so it should be interesting to see how the dust settles before their terms are up. The bigger question will - of course - be whether it will be the leaders, the policy or the pure nature of people and change that drives the directives of the next decades of state development, or (heaven forbid) destruction.


All information gathered from legitimate, primary sources and texts.


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    • raymondphilippe profile image

      Raymond Philippe 3 years ago from The Netherlands

      This was an interesting analysis read it. Despite the great historical differences between Russia and the USA, there are also similarities. I do not think that capitalism will be be followed by communism per se. One thing though seems clear. Both the unbridled capitalism and strict communism seem untenable. I think I'll but my money on a mixed the rise of a mixed system.