What was going on in Russia when the ‘Great Depression’ began in the United States?

In late October 1929, the New York Stock Exchange crashed. The country entered a protracted economic downturn caused by a crisis of overproduction, widespread financial speculation and a ballooning financial bubble.

Industrial production fell by half, the banking system was paralyzed, farmers went bankrupt en masse and unemployment rose rapidly. The crisis quickly spread across the Atlantic, where it hit Germany particularly hard and became one of the reasons for the Nazis' rise to power.

The USSR, however, with its planned economy and state monopoly on foreign trade, was virtually unaffected by the ‘Great Depression’. The country was implementing its first five-year plan for national economic development (the ‘pyatiletka’) – all resources were thrown into forced industrialization and achieving maximum self-sufficiency "in the face of a hostile capitalist environment".

The economic crisis in the West allowed the USSR to purchase Western equipment cheaply and attract foreign specialists. Thus, between 1929 and 1932, the company of American industrial architect Albert Kahn organized the construction of over 500 industrial facilities in the Soviet Union.

Collectivization – the policy of merging individual peasant farms into collective ones – was a major factor in the transformation of an agrarian country into an industrial one. It allowed labor to be freed up for use in industry. The peasantry often responded to the violent nature of collectivization with uprisings, which were then brutally suppressed by the authorities.