Third-worldism is a political concept and ideology that emerged in the late 1940s or early 1950s during the Cold War and tried to generate unity among the nations that did not want to take sides between the United States and the Soviet Union . The concept is closely related but not identical to the political theory of Maoism–Third Worldism .
133-638: The political thinkers and leaders of third-worldism argued that the north–south divisions and conflicts were of primary political importance compared to the East - West opposition of the Cold War period. In the three-world model , the countries of the First World were the ones allied to the United States . These nations had less political risk , better functioning democracy and economic stability , and continue to have
266-489: A financial infrastructure of money and investment that makes possible credit and debt , entrepreneurship , commodification , voluntary exchange , wage labor , production of commodities and services , and a strong emphasis on innovation and economic growth . In a market economy , decision-making and investments are determined by owners of wealth, property, or ability to maneuver capital or production ability in capital and financial markets —whereas prices and
399-520: A " sovietization " of Central Europe. In addition to reparations, Stalin pushed for "war booty", which would permit the Soviet Union to directly seize property from conquered nations without quantitative or qualitative limitation. A clause was added permitting this to occur with some limitations. At first, the Soviets concealed their role in other Eastern Bloc politics, with the transformation appearing as
532-682: A "loophole" through which Eastern Bloc citizens could still move west. The 3.5 million East Germans that had left by 1961, called Republikflucht , totaled approximately 20% of the entire East German population. In August 1961, East Germany erected a barbed-wire barrier that would eventually be expanded through construction into the Berlin Wall , effectively closing the loophole. With virtually non-existent conventional emigration, more than 75% of those emigrating from Eastern Bloc countries between 1950 and 1990 did so under bilateral agreements for "ethnic migration". About 10% were refugee migrants under
665-477: A broader and expanding money-based economy. The system put pressure on both landlords and tenants to increase the productivity of agriculture to make profit; the weakened coercive power of the aristocracy to extract peasant surpluses encouraged them to try better methods, and the tenants also had incentive to improve their methods in order to flourish in a competitive labor market . Terms of rent for land were becoming subject to economic market forces rather than to
798-606: A broader democratic basis in Poland. He stated that the new government's primary task would be to prepare elections. However, the 1946 Polish people's referendum (known as the "Three Times Yes" referendum) and the subsequent 1947 Polish parliamentary election did not meet democratic standards and were largely manipulated. The parties at Yalta further agreed that the countries of liberated Europe and former Axis satellites would be allowed to "create democratic institutions of their own choice", pursuant to "the right of all peoples to choose
931-562: A death sentence and execution. A number of other high ranking Bulgarian officials were also jailed. Stalin and Hungarian leader Mátyás Rákosi met in Moscow to orchestrate a show trial of Rákosi opponent László Rajk , who was thereafter executed. The preservation of the Soviet bloc relied on maintaining a sense of ideological unity that would entrench Moscow's influence in Eastern Europe as well as
1064-419: A distance. In addition to emigration restrictions, civil society, defined as a domain of political action outside the party's state control, was not allowed to firmly take root, with the possible exception of Poland in the 1980s . While the institutional design of the communist systems were based on the rejection of rule of law, the legal infrastructure was not immune to change reflecting decaying ideology and
1197-580: A formal property system where ownership and transactions are clearly recorded. According to de Soto, this is the process by which physical assets are transformed into capital, which in turn may be used in many more ways and much more efficiently in the market economy. A number of Marxian economists have argued that the inclosure acts in England and similar legislation elsewhere were an integral part of capitalist primitive accumulation and that specific legal frameworks of private land ownership have been integral to
1330-618: A higher standard of living . The Second World designation referred to the former industrial socialist states under the influence of the Soviet Union . The Third World hence defined countries that remained non-aligned with either NATO , or the Communist Bloc. The Third World was normally seen to include many countries with colonial pasts in Africa , Latin America , Oceania and Asia . It
1463-423: A large middle class were good for democracy. He also argued that a market economy provided a substitute for government control of the economy, which reduces the risks of tyranny and authoritarianism. In his book The Road to Serfdom (1944), Friedrich Hayek (1899–1992) asserted that the free-market understanding of economic freedom as present in capitalism is a requisite of political freedom . He argued that
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#17330854130551596-505: A large number of sellers nor to a market in final equilibrium . Competition is widespread throughout the market process . It is a condition where "buyers tend to compete with other buyers, and sellers tend to compete with other sellers". In offering goods for exchange, buyers competitively bid to purchase specific quantities of specific goods which are available, or might be available if sellers were to choose to offer such goods. Similarly, sellers bid against other sellers in offering goods on
1729-476: A large-scale party programs to train personnel who would meet political requirements. Former members of the middle-class were officially discriminated against, though the state's need for their skills and certain opportunities to re-invent themselves as good Communist citizens did allow many to nonetheless achieve success. Communist regimes in the Eastern Bloc viewed marginal groups of opposition intellectuals as
1862-690: A late September 1947 meeting of all communist parties in Szklarska Poręba , Eastern Bloc communist parties were blamed for permitting even minor influence by non-communists in their respective countries during the run up to the Marshall Plan. In the former German capital Berlin, surrounded by Soviet-occupied Germany, Stalin instituted the Berlin Blockade on 24 June 1948, preventing food, materials and supplies from arriving in West Berlin . The blockade
1995-619: A less protectionist policy, with the 1846 repeal of the Corn Laws and the 1849 repeal of the Navigation Acts . Britain reduced tariffs and quotas , in line with David Ricardo's advocacy of free trade . Broader processes of globalization carried capitalism across the world. By the beginning of the nineteenth century, a series of loosely connected market systems had come together as a relatively integrated global system, in turn intensifying processes of economic and other globalization. Late in
2128-555: A modification of Western " bourgeois democracy ". As a young communist was told in East Germany, "it's got to look democratic, but we must have everything in our control". Stalin felt that socioeconomic transformation was indispensable to establish Soviet control, reflecting the Marxist–Leninist view that material bases, the distribution of the means of production, shaped social and political relations. The Soviet Union also co-opted
2261-625: A more just and equitable international order. Several leaders have been associated with the third-worldist movement, including: Theorists include: Eastern Bloc The Eastern Bloc , also known as the Communist Bloc ( Combloc ), the Socialist Bloc , and the Soviet Bloc , was the collective term for an unofficial coalition of communist states of Central and Eastern Europe , Asia , Africa , and Latin America that were aligned with
2394-481: A more radical and revolutionary socialist vision, personified by the figure of Che Guevara . At the end of the Cold War in the late 1980s, Third Worldism began to enter into a period of decline. Third World solidarity is a key tenet of Third Worldism, emphasizing unity and cooperation among countries and peoples of the Global South in the struggle against imperialism , colonialism , and neocolonialism . It embodies
2527-419: A potential threat because of the bases underlying Communist power therein. The suppression of dissidence and opposition was considered a central prerequisite to retain power, though the enormous expense at which the population in certain countries were kept under secret surveillance may not have been rational. Following a totalitarian initial phase, a post-totalitarian period followed the death of Stalin in which
2660-408: A public relations campaign against the western policy change and communists attempted to disrupt the elections of 1948 preceding large losses therein, while 300,000 Berliners demonstrated and urged the international airlift to continue. In May 1949, Stalin lifted the blockade, permitting the resumption of Western shipments to Berlin. After disagreements between Yugoslav leader Josip Broz Tito and
2793-465: A result of the Industrial Revolution. The accumulation of capital is the primary mechanism through which capitalist economies promote economic growth . However, it is a characteristic of such economies that they experience a business cycle of economic growth followed by recessions. The term "capitalist", meaning an owner of capital , appears earlier than the term "capitalism" and dates to
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#17330854130552926-564: A safe environment for investment and capitalism. Similarly, Suharto 's authoritarian reign and extirpation of the Communist Party of Indonesia allowed for the expansion of capitalism in Indonesia . The term "capitalism" in its modern sense is often attributed to Karl Marx . In his Das Kapital , Marx analyzed the " capitalist mode of production " using a method of understanding today known as Marxism . However, Marx himself rarely used
3059-678: A small scale for centuries in the form of merchant, renting and lending activities and occasionally as small-scale industry with some wage labor. Simple commodity exchange and consequently simple commodity production, which is the initial basis for the growth of capital from trade, have a very long history. During the Islamic Golden Age , Arabs promulgated capitalist economic policies such as free trade and banking. Their use of Indo-Arabic numerals facilitated bookkeeping . These innovations migrated to Europe through trade partners in cities such as Venice and Pisa. Italian mathematicians traveled
3192-516: A social system cannot be said to have existed before that date". England began a large-scale and integrative approach to mercantilism during the Elizabethan Era (1558–1603). A systematic and coherent explanation of balance of trade was made public through Thomas Mun 's argument England's Treasure by Forraign Trade, or the Balance of our Forraign Trade is The Rule of Our Treasure. It was written in
3325-564: A unified Soviet command structure. Beginning in 1964, Romania took a more independent course. While it did not repudiate either Comecon or the Warsaw Pact, it ceased to play a significant role in either. Nicolae Ceaușescu 's assumption of leadership one year later pushed Romania even further in the direction of separateness. Albania, which had become increasingly isolated under Stalinist leader Enver Hoxha following de-Stalinization , undergoing an Albanian–Soviet split in 1961, withdrew from
3458-553: A world of democracy and peace". While meeting with Stalin and Roosevelt in Tehran in 1943, Churchill stated that Britain was vitally interested in restoring Poland as a politically independent country. Britain did not press the matter for fear that it would become a source of inter-allied friction. In February 1945, at the conference at Yalta , Stalin demanded a Soviet sphere of political influence in Central Europe. Stalin eventually
3591-416: Is a fundamental threat to repressive political leaders and greatly diminishes their power to coerce. Some of Friedman's views were shared by John Maynard Keynes , who believed that capitalism was vital for freedom to survive and thrive. Freedom House , an American think-tank that conducts international research on, and advocates for, democracy, political freedom and human rights , has argued that "there
3724-619: Is a high and statistically significant correlation between the level of political freedom as measured by Freedom House and economic freedom as measured by the Wall Street Journal/Heritage Foundation survey ". In Capital in the Twenty-First Century (2013), Thomas Piketty of the Paris School of Economics asserted that inequality is the inevitable consequence of economic growth in a capitalist economy and
3857-476: Is an accepted version of this page Capitalism is an economic system based on the private ownership of the means of production and their operation for profit . The defining characteristics of capitalism include private property, capital accumulation , competitive markets , price systems , recognition of property rights , self-interest , economic freedom , meritocracy , work ethic , consumer sovereignty , economic efficiency , profit motive ,
3990-569: Is governed by stable economic laws of its own. In the English language , the term "capitalism" first appears, according to the Oxford English Dictionary (OED), in 1854, in the novel The Newcomes by novelist William Makepeace Thackeray , where the word meant "having ownership of capital". Also according to the OED, Carl Adolph Douai , a German American socialist and abolitionist , used
4123-468: Is no competition. A monopoly occurs when a firm has exclusivity over a market. Hence, the firm can engage in rent seeking behaviors such as limiting output and raising prices because it has no fear of competition. Governments have implemented legislation for the purpose of preventing the creation of monopolies and cartels. In 1890, the Sherman Antitrust Act became the first legislation passed by
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4256-422: Is no profit in making an article, it is a sign that the labor and capital devoted to its production are misdirected: the value of the resources that must be used up in making the article is greater than the value of the article itself". Socialist theorists note that, unlike mercantilists, capitalists accumulate their profits while expecting their profit rates to remain the same. This causes problems as earnings in
4389-582: Is to say the appropriation of capital by some to the exclusion of others") and Pierre-Joseph Proudhon in 1861 ("Economic and social regime in which capital, the source of income, does not generally belong to those who make it work through their labor"). Karl Marx frequently referred to the " capital " and to the "capitalist mode of production" in Das Kapital (1867). Marx did not use the form capitalism but instead used capital , capitalist and capitalist mode of production , which appear frequently. Due to
4522-573: The Comecon in accordance with Stalin's desire to enforce Soviet domination of the lesser states of Central Europe and to mollify some states that had expressed interest in the Marshall Plan , and which were now, increasingly, cut off from their traditional markets and suppliers in Western Europe. The Comecon's role became ambiguous because Stalin preferred more direct links with other party chiefs than
4655-688: The Derg / People's Democratic Republic of Ethiopia from 1974, and the Somali Democratic Republic from 1969 until the Ogaden War in 1977. Although not Marxist–Leninist , leadership of Ba'athist Syria officially regarded the country as part of the Socialist Bloc and established a close economic, military alliance with the Soviet Union. Many states were accused by the Western Bloc of being in
4788-683: The Republic of Mahabad (1946), as well as the Marxist–Leninist states straddling the Second and Third Worlds before the end of the Cold War: the People's Democratic Republic of Yemen (from 1967), the People's Republic of the Congo (from 1969), the People's Republic of Benin , the People's Republic of Angola and People's Republic of Mozambique from 1975, the People's Revolutionary Government of Grenada from 1979 to 1983,
4921-578: The Soviet Union and existed during the Cold War (1947–1991). These states followed the ideology of Marxism–Leninism , in opposition to the capitalist Western Bloc . The Eastern Bloc was often called the " Second World ", whereas the term " First World " referred to the Western Bloc and " Third World " referred to the non-aligned countries that were mainly in Africa, Asia, and Latin America but notably also included former pre-1948 Soviet ally Yugoslavia , which
5054-662: The Soviet Union by the 1960s. Even though Yugoslavia was a socialist country, it was not a member of the Comecon or the Warsaw Pact. Parting with the USSR in 1948, Yugoslavia did not belong to the East, but it also did not belong to the West because of its socialist system and its status as a founding member of the Non-Aligned Movement . However, some sources consider Yugoslavia to be a member of
5187-676: The Soviet sphere of influence . Lithuania was added in a second secret protocol in September 1939. The Soviet Union had invaded the portions of eastern Poland assigned to it by the Molotov–Ribbentrop Pact two weeks after the German invasion of western Poland, followed by co-ordination with German forces in Poland. During the Occupation of East Poland by the Soviet Union , the Soviets liquidated
5320-619: The Soviets occupied the territories . In June 1941, Germany broke the Molotov-Ribbentrop pact by invading the Soviet Union . From the time of this invasion to 1944, the areas annexed by the Soviet Union were part of Germany's Ostland (except for the Moldavian SSR ). Thereafter, the Soviet Union began to push German forces westward through a series of battles on the Eastern Front . In
5453-656: The Warsaw Pact was formed partly in response to NATO 's inclusion of West Germany and partly because the Soviets needed an excuse to retain Red Army units in Hungary. For 35 years, the Pact perpetuated the Stalinist concept of Soviet national security based on imperial expansion and control over satellite regimes in Eastern Europe. This Soviet formalization of their security relationships in
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5586-740: The World Bank and the IMF ), large institutional investors and a well-funded banking system . A significant managerial class has emerged and decides on a significant proportion of investments and other decisions. A different future than that envisioned by Marx has started to emerge—explored and described by Anthony Crosland in the United Kingdom in his 1956 book The Future of Socialism and by John Kenneth Galbraith in North America in his 1958 book The Affluent Society , 90 years after Marx's research on
5719-410: The neoliberal global economy would have been impossible without the fall of communism . Harvard Kennedy School economist Dani Rodrik distinguishes between three historical variants of capitalism: The relationship between democracy and capitalism is a contentious area in theory and in popular political movements. The extension of adult-male suffrage in 19th-century Britain occurred along with
5852-472: The transatlantic cable , the radiotelephone , the steamship and railways allowed goods and information to move around the world to an unprecedented degree. In the United States, the term "capitalist" primarily referred to powerful businessmen until the 1920s due to widespread societal skepticism and criticism of capitalism and its most ardent supporters. Contemporary capitalist societies developed in
5985-422: The 1620s and published in 1664. European merchants , backed by state controls, subsidies and monopolies , made most of their profits by buying and selling goods. In the words of Francis Bacon , the purpose of mercantilism was "the opening and well-balancing of trade; the cherishing of manufacturers; the banishing of idleness; the repressing of waste and excess by sumptuary laws; the improvement and husbanding of
6118-408: The 16th and 18th centuries. The Industrial Revolution of the 18th century established capitalism as a dominant mode of production , characterized by factory work and a complex division of labor . Through the process of globalization , capitalism spread across the world in the 19th and 20th centuries, especially before World War I and after the end of the Cold War. During the 19th century, capitalism
6251-629: The 18th-century decisively shaped globalization. After the First and Second Opium Wars (1839–60) and the completion of the British conquest of India by 1858, vast populations of Asia became consumers of European exports. Europeans colonized areas of sub-Saharan Africa and the Pacific islands. Colonisation by Europeans, notably of sub-Saharan Africa, yielded valuable natural resources such as rubber , diamonds and coal and helped fuel trade and investment between
6384-402: The 20th century, capitalism overcame a challenge by centrally-planned economies and is now the encompassing system worldwide, with the mixed economy as its dominant form in the industrialized Western world. Industrialization allowed cheap production of household items using economies of scale , while rapid population growth created sustained demand for commodities. The imperialism of
6517-479: The Bloc were instructed to foster intra-leadership conflict and to transmit information against each other. This accompanied a continuous stream of accusations of "nationalistic deviations", "insufficient appreciation of the USSR's role", links with Tito and "espionage for Yugoslavia". This resulted in the persecution of many major party cadres, including those in East Germany. The first country to experience this approach
6650-434: The Comecon's indirect sophistication; it played no significant role in the 1950s in economic planning. Initially, the Comecon served as cover for the Soviet taking of materials and equipment from the rest of the Eastern Bloc, but the balance changed when the Soviets became net subsidizers of the rest of the Bloc by the 1970s via an exchange of low cost raw materials in return for shoddily manufactured finished goods. In 1955,
6783-491: The Eastern Bloc reflected Moscow's basic security policy principle that continued presence in East Central Europe was a foundation of its defense against the West. Through its institutional structures, the Pact also compensated in part for the absence of Joseph Stalin's personal leadership since his death in 1953. The Pact consolidated the other Bloc members' armies in which Soviet officers and security agents served under
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#17330854130556916-517: The Eastern Bloc when they were part of the Non-Aligned Movement . The most limited definition of the Eastern Bloc would only include the Warsaw Pact states and the Mongolian People's Republic as former satellite states most dominated by the Soviet Union. Cuba 's defiance of complete Soviet control was noteworthy enough that Cuba was sometimes excluded as a satellite state altogether, as it sometimes intervened in other Third World countries even when
7049-408: The Eastern Bloc, despite attempts by authorities to jam the airways. Under the state atheism of many Eastern Bloc nations, religion was actively suppressed. Since some of these states tied their ethnic heritage to their national churches, both the peoples and their churches were targeted by the Soviets. In 1949, the Soviet Union , Bulgaria, Czechoslovakia , Hungary, Poland, and Romania founded
7182-793: The Eastern Bloc. Others consider Yugoslavia not to be a member after it broke with Soviet policy in the 1948 Tito–Stalin split . In 1922, the Russian SFSR , the Ukrainian SSR , the Byelorussian SSR and the Transcaucasian SFSR approved the Treaty of Creation of the USSR and the Declaration of the Creation of the USSR, forming the Soviet Union . Soviet leader Joseph Stalin , who viewed
7315-848: The Eastern European countries into its sphere of influence by making reference to some cultural commonalities. Moscow-trained cadres were put into crucial power positions to fulfill orders regarding sociopolitical transformation. Elimination of the bourgeoisie 's social and financial power by expropriation of landed and industrial property was accorded absolute priority. These measures were publicly billed as "reforms" rather than socioeconomic transformations. Except for initially in Czechoslovakia, activities by political parties had to adhere to "Bloc politics", with parties eventually having to accept membership in an "antifascist bloc" obliging them to act only by mutual "consensus". The bloc system permitted
7448-402: The European imperial powers, their colonies and the United States: The inhabitant of London could order by telephone, sipping his morning tea, the various products of the whole earth, and reasonably expect their early delivery upon his doorstep. Militarism and imperialism of racial and cultural rivalries were little more than the amusements of his daily newspaper. What an extraordinary episode in
7581-509: The Geneva Convention of 1951. Most Soviets allowed to leave during this time period were ethnic Jews permitted to emigrate to Israel after a series of embarrassing defections in 1970 caused the Soviets to open very limited ethnic emigrations. The fall of the Iron Curtain was accompanied by a massive rise in European East-West migration. Famous Eastern Bloc defectors included Joseph Stalin's daughter Svetlana Alliluyeva , who denounced Stalin after her 1967 defection. Capitalism This
7714-459: The Mediterranean talking to Arab traders and returned to popularize the use of Indo-Arabic numerals in Europe. The economic foundations of the feudal agricultural system began to shift substantially in 16th-century England as the manorial system had broken down and land began to become concentrated in the hands of fewer landlords with increasingly large estates. Instead of a serf -based system of labor, workers were increasingly employed as part of
7847-468: The Polish rejection of the Plan with a huge 5-year trade agreement, including $ 450 million in credit, 200,000 tons of grain, heavy machinery and factories. In July 1947, Stalin ordered these countries to pull out of the Paris Conference on the European Recovery Programme, which has been described as "the moment of truth" in the post- World War II division of Europe. Thereafter, Stalin sought stronger control over other Eastern Bloc countries, abandoning
7980-526: The Polish state, and a German-Soviet meeting addressed the future structure of the "Polish region". Soviet authorities immediately started a campaign of sovietization of the newly Soviet-annexed areas . Soviet authorities collectivized agriculture, and nationalized and redistributed private and state-owned Polish property. Initial Soviet occupations of the Baltic countries had occurred in mid-June 1940, when Soviet NKVD troops raided border posts in Lithuania , Estonia and Latvia , followed by
8113-503: The Soviet Union as a "socialist island", stated that the Soviet Union must see that "the present capitalist encirclement is replaced by a socialist encirclement". In 1939, the USSR entered into the Molotov–Ribbentrop Pact with Nazi Germany that contained a secret protocol that divided Romania, Poland, Latvia, Lithuania, Estonia and Finland into German and Soviet spheres of influence. Eastern Poland, Latvia, Estonia, Finland and Bessarabia in northern Romania were recognized as parts of
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#17330854130558246-417: The Soviet Union opposed this. Post-1991 usage of the term "Eastern Bloc" may be more limited in referring to the states forming the Warsaw Pact (1955–1991) and Mongolia (1924–1991), which are no longer communist states. Sometimes they are more generally referred to as "the countries of Eastern Europe under communism", excluding Mongolia, but including Yugoslavia and Albania which had both split with
8379-454: The Soviet Union regarding Greece and Albania , a Tito–Stalin split occurred, followed by Yugoslavia being expelled from the Cominform in June 1948 and a brief failed Soviet putsch in Belgrade. The split created two separate communist forces in Europe. A vehement campaign against Titoism was immediately started in the Eastern Bloc, describing agents of both the West and Tito in all places as engaging in subversive activity. Stalin ordered
8512-478: The Soviet Union to exercise domestic control indirectly. Crucial departments such as those responsible for personnel, general police, secret police and youth were strictly Communist run. Moscow cadres distinguished "progressive forces" from "reactionary elements" and rendered both powerless. Such procedures were repeated until Communists had gained unlimited power and only politicians who were unconditionally supportive of Soviet policy remained. In June 1947, after
8645-448: The Soviets had refused to negotiate a potential lightening of restrictions on German development, the United States announced the Marshall Plan , a comprehensive program of American assistance to all European countries wanting to participate, including the Soviet Union and those of Eastern Europe. The Soviets rejected the Plan and took a hard-line position against the United States and non-communist European nations. However, Czechoslovakia
8778-415: The United Kingdom (1979–1990). Public and political interest began shifting away from the so-called collectivist concerns of Keynes's managed capitalism to a focus on individual choice , called "remarketized capitalism". The end of the Cold War and the dissolution of the Soviet Union allowed for capitalism to become a truly global system in a way not seen since before World War I . The development of
8911-428: The United States Congress to limit monopolies. Wage labor, usually referred to as paid work, paid employment, or paid labor, refers to the socioeconomic relationship between a worker and an employer in which the worker sells their labor power under a formal or informal employment contract . These transactions usually occur in a labor market where wages or salaries are market-determined . In exchange for
9044-504: The Warsaw Pact in 1968 following the Warsaw Pact invasion of Czechoslovakia . In 1917, Russia restricted emigration by instituting passport controls and forbidding the exit of belligerent nationals. In 1922, after the Treaty on the Creation of the USSR , both the Ukrainian SSR and the Russian SFSR issued general rules for travel that foreclosed virtually all departures, making legal emigration impossible. Border controls thereafter strengthened such that, by 1928, even illegal departure
9177-407: The West and Tito. Despite the initial institutional design of communism implemented by Joseph Stalin in the Eastern Bloc, subsequent development varied across countries. In satellite states, after peace treaties were initially concluded, opposition was essentially liquidated, fundamental steps towards socialism were enforced, and Kremlin leaders sought to strengthen control therein. Right from
9310-430: The West from 1950 to the present and this type of system continues throughout the world—relevant examples started in the United States after the 1950s , France after the 1960s , Spain after the 1970s , Poland after 2015 , and others. At this stage most capitalist markets are considered developed and characterized by developed private and public markets for equity and debt, a high standard of living (as characterized by
9443-425: The aftermath of World War II on the Soviet-Finnish border , the parties signed another peace treaty ceding to the Soviet Union in 1944, followed by a Soviet annexation of roughly the same eastern Finnish territories as those of the prior interim peace treaty as part of the Karelo-Finnish Soviet Socialist Republic . From 1943 to 1945, several conferences regarding Post-War Europe occurred that, in part, addressed
9576-455: The beginning, Stalin directed systems that rejected Western institutional characteristics of market economies , capitalist parliamentary democracy (dubbed "bourgeois democracy" in Soviet parlance) and the rule of law subduing discretional intervention by the state. The resulting states aspired to total control of a political center backed by an extensive and active repressive apparatus, and a central role of Marxist–Leninist ideology. However,
9709-523: The business of a third party by offering the most favourable terms". It was described by Adam Smith in The Wealth of Nations (1776) and later economists as allocating productive resources to their most highly valued uses and encouraging efficiency . Smith and other classical economists before Antoine Augustine Cournot were referring to price and non-price rivalry among producers to sell their goods on best terms by bidding of buyers, not necessarily to
9842-516: The conversion of the Cominform into an instrument to monitor and control the internal affairs of other Eastern Bloc parties. He also briefly considered converting the Cominform into an instrument for sentencing high-ranking deviators, but dropped the idea as impractical. Instead, a move to weaken communist party leaders through conflict was started. Soviet cadres in communist party and state positions in
9975-458: The core of the system, with their names becoming synonymous with raw power and the threat of violent retribution should an individual become active against the State. Several state police and secret police organizations enforced communist party rule, including the following: The press in the communist period was an organ of the state, completely reliant on and subservient to the communist party. Before
10108-515: The countries aligned with the Soviet Union included Cuba from 1961 and for limited periods Nicaragua and Grenada . The term Eastern Bloc was often used interchangeably with the term Second World . This broadest usage of the term would include not only Maoist China and Cambodia , but also short-lived Soviet satellites such as the Second East Turkestan Republic (1944–1949), the People's Republic of Azerbaijan (1945–1946) and
10241-594: The country's population who had accepted total obedience. Those who secured membership in this selective group received considerable rewards, such as access to special lower priced shops with a greater selection of high-quality domestic and/or foreign goods ( confections , alcohol , cigars , cameras , televisions , and the like), special schools, holiday facilities, homes, high-quality domestic and/or foreign-made furniture, works of art, pensions, permission to travel abroad, and official cars with distinct license plates so that police and others could identify these members from
10374-578: The development of capitalism. Private property rights are not absolute, as in many countries the state has the power to seize private property, typically for public use, under the powers of eminent domain . In capitalist economics, market competition is the rivalry among sellers trying to achieve such goals as increasing profits, market share and sales volume by varying the elements of the marketing mix : price, product, distribution and promotion. Merriam-Webster defines competition in business as "the effort of two or more parties acting independently to secure
10507-754: The development of industrial capitalism and representative democracy became widespread at the same time as capitalism, leading capitalists to posit a causal or mutual relationship between them. However, according to some authors in the 20th-century, capitalism also accompanied a variety of political formations quite distinct from liberal democracies, including fascist regimes, absolute monarchies and single-party states . Democratic peace theory asserts that democracies seldom fight other democracies, but others suggest this may be because of political similarity or stability, rather than because they are "democratic" or "capitalist". Critics argue that though economic growth under capitalism has led to democracy, it may not do so in
10640-634: The distribution of goods and services are mainly determined by competition in goods and services markets. Economists, historians, political economists, and sociologists have adopted different perspectives in their analyses of capitalism and have recognized various forms of it in practice. These include laissez-faire or free-market capitalism , anarcho-capitalism , state capitalism , and welfare capitalism . Different forms of capitalism feature varying degrees of free markets , public ownership , obstacles to free competition, and state-sanctioned social policies . The degree of competition in markets and
10773-457: The economic progress of man was that age which came to an end in August 1914. From the 1870s to the early 1920s, the global financial system was mainly tied to the gold standard . The United Kingdom first formally adopted this standard in 1821. Soon to follow were Canada in 1853, Newfoundland in 1865, the United States and Germany ( de jure ) in 1873. New technologies, such as the telegraph ,
10906-399: The era of merchant capitalism and mercantilism as the origin of modern capitalism, although Karl Polanyi argued that the hallmark of capitalism is the establishment of generalized markets for what he called the "fictitious commodities", i.e. land, labor and money. Accordingly, he argued that "not until 1834 was a competitive labor market established in England, hence industrial capitalism as
11039-484: The expense of another state. During the Industrial Revolution , industrialists replaced merchants as a dominant factor in the capitalist system and effected the decline of the traditional handicraft skills of artisans , guilds and journeymen . Industrial capitalism marked the development of the factory system of manufacturing, characterized by a complex division of labor between and within work process and
11172-522: The following: In free market and laissez-faire forms of capitalism, markets are used most extensively with minimal or no regulation over the pricing mechanism. In mixed economies, which are almost universal today, markets continue to play a dominant role, but they are regulated to some extent by the state in order to correct market failures , promote social welfare , conserve natural resources , fund defense and public safety or other rationale. In state capitalist systems, markets are relied upon
11305-495: The form of government under which they will live". The parties also agreed to help those countries form interim governments "pledged to the earliest possible establishment through free elections" and "facilitate where necessary the holding of such elections". At the beginning of the July–August 1945 Potsdam Conference after Germany's unconditional surrender, Stalin repeated previous promises to Churchill that he would refrain from
11438-503: The former believing Soviet leader Stalin to be a "devil"-like tyrant leading a vile system. When warned of potential domination by a Stalin dictatorship over part of Europe, Roosevelt responded with a statement summarizing his rationale for relations with Stalin: "I just have a hunch that Stalin is not that kind of a man. ... I think that if I give him everything I possibly can and ask for nothing from him in return, noblesse oblige, he won't try to annex anything and will work with me for
11571-471: The future as authoritarian régimes have been able to manage economic growth using some of capitalism's competitive principles without making concessions to greater political freedom . Political scientists Torben Iversen and David Soskice see democracy and capitalism as mutually supportive. Robert Dahl argued in On Democracy that capitalism was beneficial for democracy because economic growth and
11704-419: The late 1980s, Eastern Bloc radio and television organizations were state-owned, while print media was usually owned by political organizations, mostly by the local communist party. Youth newspapers and magazines were owned by youth organizations affiliated with communist parties. The control of the media was exercised directly by the communist party itself, and by state censorship, which was also controlled by
11837-688: The least corrupt, operates largely under a one-party rule. Furthermore, it does not vigorously defend freedom of expression as evidenced by its government-regulated press , and its penchant for upholding laws protecting ethnic and religious harmony, judicial dignity and personal reputation. The private (capitalist) sector in the People's Republic of China has grown exponentially and thrived since its inception, despite having an authoritarian government. Augusto Pinochet 's rule in Chile led to economic growth and high levels of inequality by using authoritarian means to create
11970-406: The least, with the state relying heavily on state-owned enterprises or indirect economic planning to accumulate capital. Competition arises when more than one producer is trying to sell the same or similar products to the same buyers. Adherents of the capitalist theory believe that competition leads to innovation and more affordable prices. Monopolies or cartels can develop, especially if there
12103-567: The liquidation of state administrations and replacement by Soviet cadres. Elections for parliament and other offices were held with single candidates listed and the official results fabricated, purporting pro-Soviet candidates' approval by 92.8 percent of the voters in Estonia, 97.6 percent in Latvia, and 99.2 percent in Lithuania. The fraudulently installed "people's assemblies" immediately declared each of
12236-403: The market mechanism is the only way of deciding what to produce and how to distribute the items without using coercion. Milton Friedman and Ronald Reagan also promoted this view. Friedman claimed that centralized economic operations are always accompanied by political repression . In his view, transactions in a market economy are voluntary and the wide diversity that voluntary activity permits
12369-434: The mid-17th century. "Capitalism" is derived from capital , which evolved from capitale , a late Latin word based on caput , meaning "head"—which is also the origin of " chattel " and " cattle " in the sense of movable property (only much later to refer only to livestock). Capitale emerged in the 12th to 13th centuries to refer to funds, stock of merchandise, sum of money or money carrying interest. By 1283, it
12502-424: The money paid as wages (usual for short-term work-contracts) or salaries (in permanent employment contracts), the work product generally becomes the undifferentiated property of the employer. A wage laborer is a person whose primary means of income is from the selling of their labor in this way. The profit motive , in the theory of capitalism, is the desire to earn income in the form of profit. Stated differently,
12635-477: The older nation-states of Latin America, including pan-Arabism , pan-Africanism , pan-Americanism and pan-Asianism . The first period of the third-worldist movement, that of the "first Bandung Era ", was led by the Egyptian, Indonesian and Indian heads of states such as Nasser , Sukarno and Nehru . They were followed in the 1960s and 1970s by a second generation of third-worldist governments that emphasized on
12768-623: The parties entered into an interim peace treaty granting the Soviet Union a portion of the eastern region of Karelia (10% of Finnish territory), and the Karelo-Finnish Soviet Socialist Republic was established by merging the ceded territories with the KASSR . After a June 1940 Soviet Ultimatum demanding Bessarabia, Bukovina , and the Hertsa region from Romania, the Soviets entered these areas, Romania caved to Soviet demands and
12901-525: The party. Media served as an important form of control over information and society. The dissemination and portrayal of knowledge were considered by authorities to be vital to communism's survival by stifling alternative concepts and critiques. Several state Communist Party newspapers were published, including: The Telegraph Agency of the Soviet Union (TASS) served as the central agency for collection and distribution of internal and international news for all Soviet newspapers, radio and television stations. It
13034-517: The potential Soviet annexation and control of countries in Central Europe. There were various Allied plans for state order in Central Europe for post-war. While Joseph Stalin tried to get as many states under Soviet control as possible, British Prime Minister Winston Churchill preferred a Central European Danube Confederation to counter these countries against Germany and Russia. Churchill's Soviet policy regarding Central Europe differed vastly from that of American President Franklin D. Roosevelt , with
13167-629: The power of the local Communist elites. The port city of Trieste was a particular focus after the Second World War. Until the break between Tito and Stalin, the Western powers and the Eastern bloc faced each other uncompromisingly. The neutral buffer state Free Territory of Trieste , founded in 1947 with the United Nations, was split up and dissolved in 1954 and 1975, also because of the détente between
13300-475: The previous stage of mercantilism, invested capital in the East India Companies and other colonies, seeking a return on investment . In the mid-18th century a group of economic theorists, led by David Hume (1711–1776) and Adam Smith (1723–1790), challenged fundamental mercantilist doctrines—such as the belief that the world's wealth remained constant and that a state could only increase its wealth at
13433-589: The previous stagnant system of custom and feudal obligation. The economic doctrine prevailing from the 16th to the 18th centuries is commonly called mercantilism . This period, the Age of Discovery , was associated with the geographic exploration of foreign lands by merchant traders, especially from England and the Low Countries . Mercantilism was a system of trade for profit, although commodities were still largely produced by non-capitalist methods. Most scholars consider
13566-401: The primary method of Communist rule shifted from mass terror to selective repression, along with ideological and sociopolitical strategies of legitimation and the securing of loyalty. Juries were replaced by a tribunal of professional judges and two lay assessors that were dependable party actors. The police deterred and contained opposition to party directives. The political police served as
13699-516: The principle of mutual support and shared interests among formerly colonized and oppressed nations, seeking to address common challenges such as poverty, underdevelopment, and marginalization. Third World solidarity encompasses various forms of collaboration, including diplomatic alliances , economic cooperation , cultural exchange , and mutual aid . It emphasizes the agency and autonomy of the Global South in shaping its own destiny and advocating for
13832-516: The prior appearance of democratic institutions. When it appeared that, in spite of heavy pressure, non-communist parties might receive in excess of 40% of the vote in the August 1947 Hungarian elections , repressions were instituted to liquidate any independent political forces. In that same month, annihilation of the opposition in Bulgaria began on the basis of continuing instructions by Soviet cadres. At
13965-491: The reason for a business's existence is to turn a profit. The profit motive functions according to rational choice theory , or the theory that individuals tend to pursue what is in their own best interests. Accordingly, businesses seek to benefit themselves and/or their shareholders by maximizing profit. In capitalist theoretics, the profit motive is said to ensure that resources are being allocated efficiently. For instance, Austrian economist Henry Hazlitt explains: "If there
14098-435: The rest of society do not increase in the same proportion. The relationship between the state , its formal mechanisms, and capitalist societies has been debated in many fields of social and political theory, with active discussion since the 19th century. Hernando de Soto is a contemporary Peruvian economist who has argued that an important characteristic of capitalism is the functioning state protection of property rights in
14231-517: The resulting concentration of wealth can destabilize democratic societies and undermine the ideals of social justice upon which they are built. States with capitalistic economic systems have thrived under political regimes deemed to be authoritarian or oppressive. Singapore has a successful open market economy as a result of its competitive, business-friendly climate and robust rule of law. Nonetheless, it often comes under fire for its style of government which, though democratic and consistently one of
14364-608: The role of intervention and regulation , as well as the scope of state ownership, vary across different models of capitalism. The extent to which different markets are free and the rules defining private property are matters of politics and policy. Most of the existing capitalist economies are mixed economies that combine elements of free markets with state intervention and in some cases economic planning . Capitalism in its modern form emerged from agrarianism in England , as well as mercantilist practices by European countries between
14497-478: The routine of work tasks; and eventually established the domination of the capitalist mode of production . Industrial Britain eventually abandoned the protectionist policy formerly prescribed by mercantilism. In the 19th century, Richard Cobden (1804–1865) and John Bright (1811–1889), who based their beliefs on the Manchester School , initiated a movement to lower tariffs . In the 1840s Britain adopted
14630-583: The sharp 1953 increase was fear of potential further Sovietization with the increasingly paranoid actions of Joseph Stalin in late 1952 and early 1953. 226,000 had fled in just the first six months of 1953. With the closing of the Inner German border officially in 1952, the Berlin city sector borders remained considerably more accessible than the rest of the border because of their administration by all four occupying powers. Accordingly, it effectively comprised
14763-624: The soil; the regulation of prices...". After the period of the proto-industrialization , the British East India Company and the Dutch East India Company , after massive contributions from the Mughal Bengal , inaugurated an expansive era of commerce and trade. These companies were characterized by their colonial and expansionary powers given to them by nation-states. During this era, merchants, who had traded under
14896-440: The state of capitalism in 1867. The postwar boom ended in the late 1960s and early 1970s and the economic situation grew worse with the rise of stagflation . Monetarism , a modification of Keynesianism that is more compatible with laissez-faire analyses, gained increasing prominence in the capitalist world, especially under the years in office of Ronald Reagan in the United States (1981–1989) and of Margaret Thatcher in
15029-413: The substitution of autonomous law. Initially, communist parties were small in all countries except Czechoslovakia, such that there existed an acute shortage of politically "trustworthy" persons for administration, police, and other professions. Thus, "politically unreliable" non-communists initially had to fill such roles. Those not obedient to communist authorities were ousted, while Moscow cadres started
15162-420: The term "capitalism" by many authors as "mainly rhetorical, functioning less as an actual concept than as a gesture toward the need for a concept". Scholars who are uncritical of capitalism rarely actually use the term "capitalism". Some doubt that the term "capitalism" possesses valid scientific dignity, and it is generally not discussed in mainstream economics , with economist Daron Acemoglu suggesting that
15295-418: The term "capitalism" should be abandoned entirely. Consequently, understanding of the concept of capitalism tends to be heavily influenced by opponents of capitalism and by the followers and critics of Karl Marx. Capitalism, in its modern form, can be traced to the emergence of agrarian capitalism and mercantilism in the early Renaissance , in city-states like Florence . Capital has existed incipiently on
15428-525: The term "capitalism" while it was used twice in the more political interpretations of his work, primarily authored by his collaborator Friedrich Engels . In the 20th century, defenders of the capitalist system often replaced the term "capitalism" with phrases such as free enterprise and private enterprise and replaced "capitalist" with rentier and investor in reaction to the negative connotations associated with capitalism. In general, capitalism as an economic system and mode of production can be summarized by
15561-507: The term "private capitalism" in 1863. Other terms sometimes used for capitalism are: There is no universally agreed upon definition of capitalism; it is unclear whether or not capitalism characterizes an entire society, a specific type of social order, or crucial components or elements of a society. Societies officially founded in opposition to capitalism (such as the Soviet Union ) have sometimes been argued to actually exhibit characteristics of capitalism. Nancy Fraser describes usage of
15694-526: The term in his first work, What is Property? (1840), to refer to the owners of capital. Benjamin Disraeli used the term in his 1845 work Sybil . Alexander Hamilton used "capitalist" in his Report of Manufactures presented to the United States Congress in 1791. The initial use of the term "capitalism" in its modern sense is attributed to Louis Blanc in 1850 ("What I call 'capitalism' that
15827-446: The three corresponding countries to be "Soviet Socialist Republics" and requested their "admission into Stalin 's Soviet Union". This formally resulted in the Soviet Union's annexation of Lithuania, Latvia, and Estonia in August 1940. The international community condemned this annexation of the three Baltic countries and deemed it illegal. In 1939, the Soviet Union unsuccessfully attempted an invasion of Finland , subsequent to which
15960-442: The vestiges of democratic institutions were never entirely destroyed, resulting in the façade of Western style institutions such as parliaments, which effectively just rubber-stamped decisions made by rulers, and constitutions, to which adherence by authorities was limited or non-existent. Parliaments were still elected, but their meetings occurred only a few days per year, only to legitimize politburo decisions, and so little attention
16093-410: The word being coined by socialist critics of capitalism, economist and historian Robert Hessen stated that the term "capitalism" itself is a term of disparagement and a misnomer for economic individualism . Bernard Harcourt agrees with the statement that the term is a misnomer, adding that it misleadingly suggests that there is such a thing as " capital " that inherently functions in certain ways and
16226-524: Was Albania , where leader Enver Hoxha immediately changed course from favoring Yugoslavia to opposing it. In Poland , leader Władysław Gomułka , who had previously made pro-Yugoslav statements, was deposed as party secretary-general in early September 1948 and subsequently jailed. In Bulgaria , when it appeared that Traicho Kostov, who was not a Moscow cadre, was next in line for leadership, in June 1949, Stalin ordered Kostov's arrest, followed soon thereafter by
16359-479: Was also sometimes taken as synonymous with countries in the Non-Aligned Movement , connected to the world economic division as "periphery" countries in the world system that is dominated by the "core" countries . Third-worldism was connected to new political movements following the decolonization and new forms of regionalism that emerged in the erstwhile colonies of Asia, Africa, and the Middle-East as well as in
16492-612: Was caused, in part, by early local elections of October 1946 in which the Socialist Unity Party of Germany (SED) was rejected in favor of the Social Democratic Party, which had gained two and a half times more votes than the SED. The United States, Britain, France, Canada, Australia, New Zealand and several other countries began a massive "Berlin airlift", supplying West Berlin with food and other supplies. The Soviets mounted
16625-421: Was convinced by Churchill and Roosevelt not to dismember Germany. Stalin stated that the Soviet Union would keep the territory of eastern Poland they had already taken via invasion in 1939 with some exceptions , and wanted a pro-Soviet Polish government in power in what would remain of Poland. After resistance by Churchill and Roosevelt, Stalin promised a re-organization of the current pro-Soviet government on
16758-560: Was eager to accept the US aid; the Polish government had a similar attitude, and this was of great concern to the Soviets. In one of the clearest signs of Soviet control over the region up to that point, the Czechoslovakian foreign minister, Jan Masaryk , was summoned to Moscow and berated by Stalin for considering joining the Marshall Plan. Polish Prime minister Józef Cyrankiewicz was rewarded for
16891-511: Was effectively halted in the early 1950s, with the Soviet approach to controlling national movement emulated by most of the rest of the Eastern Bloc. However, in East Germany , taking advantage of the Inner German border between occupied zones, hundreds of thousands fled to West Germany, with figures totaling 197,000 in 1950, 165,000 in 1951, 182,000 in 1952 and 331,000 in 1953. One reason for
17024-444: Was effectively impossible. This later included internal passport controls , which when combined with individual city Propiska ("place of residence") permits, and internal freedom of movement restrictions often called the 101st kilometre , greatly restricted mobility within even small areas of the Soviet Union. After the creation of the Eastern Bloc, emigration out of the newly occupied countries, except under limited circumstances,
17157-568: Was frequently infiltrated by Soviet intelligence and security agencies, such as the NKVD and GRU . TASS had affiliates in 14 Soviet republics, including the Lithuanian SSR , Latvian SSR , Estonian SSR , Moldavian SSR . Ukrainian SSR and Byelorussian SSR . Western countries invested heavily in powerful transmitters which enabled services such as the BBC , VOA and Radio Free Europe (RFE) to be heard in
17290-496: Was largely unregulated by the state, but became more regulated in the post– World War II period through Keynesianism , followed by a return of more unregulated capitalism starting in the 1980s through neoliberalism . The existence of market economies has been observed under many forms of government and across a vast array of historical periods , geographical locations , and cultural contexts. The modern industrial capitalist societies that exist today developed in Western Europe as
17423-510: Was located in Europe. In Western Europe , the term Eastern Bloc generally referred to the USSR and Central and Eastern European countries in the Comecon ( East Germany , Poland , Czechoslovakia , Hungary , Romania , Bulgaria , and Albania ). In Asia , the Eastern Bloc comprised Mongolia , Vietnam , Laos , Kampuchea , North Korea , South Yemen , Syria , and China . In the Americas ,
17556-460: Was paid to them that some of those serving were actually dead, and officials would openly state that they would seat members who had lost elections. The first or General Secretary of the central committee in each communist party was the most powerful figure in each regime. The party over which the politburo held sway was not a mass party but, conforming with Leninist tradition, a smaller selective party of between three and fourteen percent of
17689-759: Was used in the sense of the capital assets of a trading firm and was often interchanged with other words—wealth, money, funds, goods, assets, property and so on. The Hollantse ( German : holländische ) Mercurius uses "capitalists" in 1633 and 1654 to refer to owners of capital. In French, Étienne Clavier referred to capitalistes in 1788, four years before its first recorded English usage by Arthur Young in his work Travels in France (1792). In his Principles of Political Economy and Taxation (1817), David Ricardo referred to "the capitalist" many times. English poet Samuel Taylor Coleridge used "capitalist" in his work Table Talk (1823). Pierre-Joseph Proudhon used
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