Researchers have yet to find evidence of Stalin’s reaction to this malfeasance. The absence of major shake-ups in the wake of the monetary reforms suggests that he maintained a fairly condescending attitude toward this blatant corruption. This stance was nothing new. Stalin consistently demonstrated tolerance for the moral failings of his faithful underlings. He cared about political loyalty and administrative competence.
While the currency reform cast a spotlight on many of the Stalinist system’s flaws, it also had a positive impact on the country’s economic development. Ambitious reconstruction plans for 1948 were surpassed. Having taken so much money out of people’s pockets, the government could print more without risking inflation, a move that was a great help in making up budgetary shortfalls. The relative financial stability achieved in early 1949 enabled wholesale pricing reform in heavy industry, which in turn created the preconditions for industrial development. Economic indicators for 1948 suggested that the most damaging consequences of the war had been overcome and that the main objectives of postwar recovery had been met. The end of the devastating famine of 1946–1947 was especially important. In 1948 the gross grain yield came close to prewar levels, and the production of potatoes (a staple of the Soviet diet) broke all prewar records. In the words of Donald Filtzer, the Soviet Union had entered a period of “attenuated recovery.” Nevertheless, Stalin-style industrialization was able to meet only the most basic needs of the population.61
While this economic recovery was under way in the USSR, neighboring countries were still roiled by political instability. In early 1948 the liberal democratic government of Czechoslovakia was overthrown in a coup, making Czechoslovakia the last East European country to join the Communist bloc. Establishing Communist control of these countries was, however, just the first step. They had to adopt the Stalinist model of internal development, pledge to be loyal satellites of the USSR, and unquestioningly submit to Stalin as the supreme leader of the bloc. A number of obstacles stood in the way. Despite repression, the presence of the Red Army, the suppression of educated segments of society, and the expansion of state control of the economy, for some time the newly Communist countries retained a degree of socioeconomic, cultural, and political diversity. Furthermore, the majority of East Europeans opposed the Communists, and power struggles within the Communist parties prevented the emergence of the kinds of dictatorial leaders needed to implement Stalinist socialism. Worse, a number of East European leaders showed signs of unacceptable “liberalism,” preferring a more flexible model of socialism over the Soviet model.62
One “bad example” for any wavering Communists was Yugoslavia’s Josip Broz Tito. In the spring of 1948 he became embroiled in a conflict with the Soviet Union that quickly escalated. Stalin was confronted with a worthy adversary. Tito was a born dictator who, unlike some other Communist leaders, had not simply been placed in power by Moscow but had earned it fighting the Nazis. His hand was further strengthened by the absence of Soviet troops in Yugoslavia. Tito pretended to political independence and aspired to be a leader of the Communist bloc, and he translated these pretensions into actions. In short, he ignored one of the key principles of Stalinization: total submission to Moscow.
Stalin’s hope that severe public accusations would drive a wedge through the Yugoslav leadership and spark mutiny against Tito was disappointed. Tito made quick work of the Kremlin’s Yugoslav clients and emerged from the showdown stronger. This defeat was a painful blow for Stalin. For the first time since the struggle with Trotsky, he was being opposed by a major leader within the Communist movement. And unlike Trotsky, Tito had real power and forces capable of protecting him from the ice picks of Stalin’s professional killers. Tito’s insubordination was not simply a blow to Stalin’s self-respect, but also a dangerous precedent and a crack in the monolithic Soviet bloc. Others might follow Tito’s lead.
The dangers of Titoism intensified confrontations with the West. The first serious standoff in Germany between the USSR and its former allies also came in 1948. The Soviet blockade of the Western sectors of Berlin was met with determined resistance. The system used to supply the Western zone by air—the Berlin Airlift—not only demonstrated the effectiveness of the Western bloc, but also promoted its consolidation. In April 1949 the agreement that established NATO was signed. The following month Stalin was forced to lift the blockade, and that autumn, Germany was formally divided into two separate states.
These foreign policy setbacks ignited Stalin’s suspicions and insecurity and strengthened his resolve to force Stalinization in the East European Communist bloc. Moscow intensified its interference in the internal affairs of its satellites, and demands for accelerated sovietization became more implacable and impatient. Using his familiar methods of purges and fabricated political charges, Stalin initiated and oversaw a campaign against “enemies” within the leaderships of the socialist countries. In late 1948 he succeeded in getting rid of Poland’s unyielding leader, Wladyslaw Gomulka. In Hungary, advisers from Moscow helped orchestrate a case alleging a far-reaching espionage organization, supposedly led by the country’s former minister for internal affairs, Laszlo Rajk. In September 1949 Rajk was convicted and given the death sentence. In December, after a lengthy process of fabricated charges (again with the help of Soviet security advisers), the former secretary of the Bulgarian central committee, Traicho Kostov, was put to death. Stalin kept a close watch over all these cases and sanctioned both the falsification of evidence and the death sentences. Rajk’s and Kostov’s trials prompted arrests in other Communist countries.63 These tactics brought about a concentration of power in the hands of dictators entirely dependent on Stalin and ready to implement any policy he liked.
While overseeing the Stalinization of the Communist bloc, the Soviet dictator still found time to consolidate his power at home—or rather to preempt any possibility that it could be undermined. Setting an example for his satellites, Stalin launched yet another wave of domestic purges. The themes and victims depended to some extent on random developments. One such development was the death of Stalin’s close comrade Andrei Zhdanov in August 1948. Zhdanov’s duties as Stalin’s deputy for party affairs and as head of the Central Committee apparat were taken over by Georgy Malenkov, a shift that upset the balance of power within Stalin’s inner circle. Having lost their patron, the Leningrad group, most prominently represented by Gosplan chairman Voznesensky and Central Committee secretary Kuznetsov, found itself weakened, and the group’s rivals, Beria and Malenkov, were now stronger. Such shifts prompted a new bout of behind-the-scenes struggle. The combination of these intrigues, international tensions, and Stalin’s political calculations spawned the Leningrad Affair, the last purge to roil the upper echelons of power in the USSR. Before it was over blood had been spilled.64
Through the efforts of Malenkov and Beria, who probably did not expect their actions to be as damaging as they proved to be, Stalin received compromising materials against the Leningraders. The infractions these materials exposed were relatively minor. In one instance a decision was made to hold a major trade fair in Leningrad without consulting all of the proper authorities. In another, Voznesensky’s agency, Gosplan, made certain errors in putting together plans and misplaced some documents—common occurrences in the highly bureaucratic Soviet system. There were also several instances when regional leaders, mostly Leningraders, attempted to use Voznesensky and Kuznetsov for patronage, but such attempts too were nothing out of the ordinary. They were all the sort of typical rule-bending that Stalin could simply ignore or use as ammunition. He chose to do the latter.