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Difficulty: Very hardEconomy in the Interwar Period

Source: Grigory Grinko, Soviet Commissar for Finance, The Five-Year Plan of the Soviet Union, 1930

'We must construct a socialist economy. We cannot wait for the capitalist world to recover from its present collapse, nor can we rely on their credits. We must build our own tractors, our own locomotives, our own steel mills. The capitalist nations are experiencing a crisis of overproduction and mass unemployment, proving that their free-market system is failing. Our planned economy will show the world that production for human need, directed by the state, is superior to the anarchy of capitalist competition.'

Grinko's argument in the passage concerning the Soviet Union's economic strategy is best understood as a response to which of the following global interwar developments?

  1. The widespread shift toward increased government intervention and state control over national economies in response to global economic instability.Answer
  2. B
    The immediate realization of Karl Marx's stateless, classless society through the complete abolition of all industrial wage labor and monetary systems.
  3. C
    A return to early modern mercantilist policies designed to maximize the accumulation of gold and silver bullion through state-chartered monopoly trading companies.
  4. D
    The immediate political unification of urban workers and rural peasants that directly triggered the overthrow of the Romanov dynasty in the February Revolution.

Answer

The widespread shift toward increased government intervention and state control over national economies in response to global economic instability.
The correct answer is correct because the global economic instability of the 1930s, triggered by the Great Depression, led to a general disillusionment with laissez-faire capitalism. Consequently, governments around the world—ranging from the United States with the New Deal to fascist Italy and Germany with corporatist state controls—increasingly intervened in and directed their national economies, a trend also represented by the Soviet Union's command economy and Five-Year Plans.

Step-by-Step Solution

1
Analyze the source text to identify the author's primary economic argument and the temporal context.
The Soviet Commissar for Finance is arguing for a state-directed, planned economy (the Five-Year Plan) in 1930, citing the failure and collapse of the Western capitalist free-market system.
This establishes that the Soviet policy of rapid, state-led industrialization was framed as a direct alternative to the failing global capitalist system during the Great Depression.
2
Connect the specific Soviet policy to broader interwar global economic trends.
The interwar period, particularly after the onset of the Great Depression in 1929, saw a widespread retreat from laissez-faire capitalism and a significant rise in state-led economic planning and intervention across capitalist, fascist, and communist nations alike.
This links the local Soviet context to the global development described in the correct answer.
3
Evaluate the distractors against historical evidence and eliminate those that represent conceptual errors.
Identify that the Soviet state did not abolish wages or the state (eliminating the option regarding Karl Marx's stateless society), did not pursue early modern mercantilist bullion accumulation (eliminating the mercantilism option), and that the 1917 February Revolution was a separate, earlier historical event (eliminating the Russian Revolution option).
This confirms that the only historically accurate and contextually relevant trend is the global rise in state intervention.

Key Concept

State-directed economic policies and increased government intervention in response to global economic crises during the interwar period.
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Topics

Economy in the Interwar Period

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