After three years, the First World War, at first greeted with enthusiastic patriotism, produced an upsurge of radicalism in most of Europe and also as far afield as the United States (see Socialism in the United States) and Australia. In the Russian revolution of February 1917, workers' councils (in Russian, soviets) had been formed, and Lenin and the Bolsheviks called for "All power to the Soviets". After the October 1917 Russian revolution, led by Lenin and Trotsky, consolidated power in the Soviets, Lenin declared "Long live the world socialist revolution!"Briefly in Soviet Russia socialism was not just a vision of a future society, but a description of an existing one. The Soviet regime began to bring all the means of production (except agricultural production) under state control, and implemented a system of government through the workers' councils or soviets.
The initial success of the Russian Revolution inspired other revolutionary parties to attempt the same thing unleashing the Revolutions of 1917-23. In the chaotic circumstances of postwar Europe, with the socialist parties divided and discredited, Communist revolutions across Europe seemed a possibility. Communist parties were formed, often from minority or majority factions in most of the world's socialist parties, which broke away in support of the Leninist model.
The German Revolution of 1918 overthrew the old absolutism and, like Russia, set up Workers' and Soldiers' Councils almost entirely made up of SPD and Independent Social Democrats (USPD) members. The Weimar republic was established and placed the SPD in power, under the leadership of Friedrich Ebert. Ebert agreed with Max von Baden that a social revolution was to be prevented and the state order must be upheld at any cost. In 1919 the Spartacist uprising challenged the power of the SPD government, but it was put down in blood and the German Communist leaders Karl Liebknecht and Rosa Luxemburg were assassinated. Communist regimes briefly held power under Béla Kun in Hungary and under Kurt Eisner in Bavaria. There were further revolutionary movements in Germany until 1923, as well as in Vienna, and also in the industrial centres of northern Italy.
In this period few Communists doubted, least of all Lenin and Trotsky, that successful socialist revolutions carried out by the working classes of the most developed capitalist counties were essential to the success of the socialism, and therefore to the success of socialism in Russia in particular. In March 1918, Lenin said, "we are doomed if the German revolution does not break out". In 1919, the Communist Parties came together to form a 'Third International', termed the Communist International or Comintern. But the prolonged revolutionary period in Germany did not bring a socialist revolution.
Within a few years a bureaucracy developed in Russia as a result of the Russian Civil War, foreign invasion, and Russia's historic poverty and backwardness. The bureaucracy undermined the democratic and socialist ideals of the Bolshevik Party and elevated Stalin to their leadership after Lenin's death. In order to consolidate power, the bureaucracy conducted a brutal campaign of lies and violence against the Left Opposition led by Trotsky.
By the mid 1920s, the impetus had gone out of the revolutionary forces in Europe and the national reformist socialist parties had regained their dominance over the working-class movement in most countries. The German Social Democrats held office for much of the 1920s, the British Labour Party formed its first government in 1924, and the French Socialists were also influential. In the Soviet Union, from 1924 Stalin pursued a policy of "socialism in one country". Trotsky argued that this approach was a shift away from the theory of Marx and Lenin, while others argued that it was a practical compromise fit for the times.
The postwar revolutionary upsurge provoked a powerful reaction from the forces of conservatism. Winston Churchill declared that Bolshevism must be "strangled in its cradle". The invasion of Russia by the Allies, their trade embargo and backing for the White forces fighting against the Red Army in the civil war in the Soviet Union was cited by Aneurin Bevan, the leader of the left-wing in the Labour Party, as one of the causes of the Russian revolution's degeneration into dictatorship. A "Red scare" in the United States was raised against theAmerican Socialist Party of Eugene V. Debs and the Communist Party of America which arose after the Russian revolution from members who had broken from Debs' party. In Europe,fascist movements received significant funding, particularly from industrialists in heavy industry, and came to power in Italy in 1922 under Benito Mussolini, and later in Germany in 1933, in Spain (1937) and Portugal, while strong fascist movements also developed in Hungary and Romania.
After 1929, with the Left Opposition legally banned and Trotsky exiled, Stalin led the Soviet Union into a what he termed a "higher stage of socialism." Agriculture was forciblycollectivised, at the cost of a massive famine and millions of deaths among the resistant peasantry. The surplus squeezed from the peasants was spent on a program of crash industrialisation, guided by the Communist Party through the Five Year Plan. This program produced some impressive results, though at enormous human costs. Russia raised itself from an economically backward country to that of a superpower. Later Soviet development, however, particularly after the Second World War, was no faster than it was in Japan or the United States under capitalism. The use of resources, material and human, in the Soviet Union became very wasteful. Stalin's industrialization policy was geared towards the development of heavy industry, an emphasis that facilitated Soviet military action in its defence against Hitler's invasion during the Second World War in which the USSR stood on the side of the Allies of World War II.
The Soviet achievement in the 1930s seemed hugely impressive from the outside, and convinced many people, not necessarily Communists or even socialists, of the virtues of state planning and authoritarian models of social development. This was later to have important consequences in countries like China, India and Egypt, which tried to copy some aspects of the Soviet model. It also won large sections of the western intelligentsia over to a pro-Soviet view, to the extent that many were willing to ignore or excuse such events as Stalin's Great Purgeof 1936-38, in which millions of people died.
The Great Depression, which began in 1929, seemed to socialists and Communists everywhere to be the final proof of the bankruptcy, literally as well as politically, of capitalism. But socialists were unable to take advantage of the Depression to either win elections or stage revolutions. Labor governments in Britain and Australia were disastrous failures. In the United States, the liberalism of President Franklin D. Roosevelt won mass support and deprived socialists of any chance of gaining ground. And in Germany it was the fascists of Adolf Hitler'sNazi Party who successfully exploited the Depression to win power, in January 1933.
Hitler's regime swiftly destroyed both the German Communist Party and the Social Democratic Party, the worst blow the world socialist movement had ever suffered. This forced Stalin to reassess his strategy, and from 1935 the Comintern began urging a Popular Front against fascism. The socialist parties were at first suspicious, given the bitter hostility of the 1920s, but eventually effective Popular Fronts were formed in both France and Spain. After the election of a Popular Front government in Spain in 1936 a fascist military revolt led to the Spanish Civil War. The crisis in Spain also brought down the Popular Front government in France under Léon Blum. Ultimately the Popular Fronts were not able to prevent the spread of fascism or the aggressive plans of the fascist powers. Trotskyists considered Popular Fronts a "strike breaking conspiracy" and considered them a impediment to successful resistance to fascism.
When Stalin consolidated his power in the Soviet Union in the late 1920s, Trotsky was forced into exile, eventually residing in Mexico. He maintained active in organizing the Left Opposition internationally, which worked within the Comintern to gain new members. Some leaders of the Communist Parties sided with Trotsky, such as James P. Cannon in the United States. They found themselves expelled by the Stalinist Parties and persecuted by both GPU agents and the political police in Britain, France, the United States, China, and all over the world. Trotskyist parties had a large influence in Sri Lanka and Bolivia.
In 1938, Trotsky and his supporters founded a new international organisation of dissident communists, the Fourth International. In his Results and Prospects and Permanent RevolutionTrotsky developed a theory of revolution uninterrupted by the stagism of Stalinist orthodoxy. He argued that Russia was a bureaucratically degenerated workers state in his work The Revolution Betrayed, where he predicted that if a political revolution of the working class did not overthrow Stalinism, the Stalinist bureaucracy would resurrect capitalism. Trotsky's monumental History of the Russian Revolution is considered a work of primary importance by Trotsky's followers.