Things turned out no better with the official Communist Party, devoted as it was to the Stalin regime in the USSR. The February–March 1937 joint plenum of the Central Committee and Central Control Commission of the All-Union Communist Party in the Moscow, which green-lighted a massive avalanche of secret police terror known to history as the Great Purge, changed everything. Baby steps towards multi-candidate elections and the rule of law in the USSR crumbled instantly as show trials, spy mania, mass arrests, and mass executions swept the land. The Trotskyist movement in the USSR was particularly targeted, accused of plotting murder of Soviet officials and conducting sabotage and espionage in preparation for a fascist invasion—seemingly insane charges which were honestly believed by the Soviet elite. Blood flowed like water as alleged Trotskyists and other politically suspect individuals were rounded up, "investigated," and disposed with a pistol shot in the base of the skull or a 10-year sentence in the GULag. Around the world, the adherents of Stalin and Trotsky raged against one another.
In Spain, the country in which the Lovestoneites invested most of their emotional energy as fervid supporters of the Workers' Party of Marxist Unification (POUM), 1937 marked a similar bloodbath, with the Communist Party of Spain achieving hegemony among the Republican forces and conducting bloody purges of their own at the behest of the Soviet secret police. Joint action between Communist oppositionists and the unflinching loyalists to Moscow was henceforth an abject impossibility.
In 1937 Norman Thomas willingly acceded to a request from the League for Industrial Democracy (LID) to author a pamphlet on the topic of "Democracy versus Dictatorship." Thomas pulled no punches about his views of the regime in the USSR:
There are still in both the eastern and western hemispheres many examples of rather crude and primitive military dictatorships.... The preach a nationalism whose benefits, spiritual or material, to some degree are for all the people. They profess a positive and paternal concern for the masses. If they rule them sternly that is for their own good....
In the USSR the dictatorship has been the dictatorship of the Communist Party, but all of its professions and all of its performance has been in the name of the entire working class, and the Communist Party still gives lip-service to a final withering away of all dictatorship, even the dictatorship of the proletariat.
Thomas further noted the Communist Party monopoly of press, radio, schools, army, and government and recalled his own recent visit to Moscow, writing:
The old keenness of political discussion in the party has almost died, at least in so far as policy is concerned. (Criticism of administration is still allowed). A quotation from Stalin is a final answer to all argument. He receives the same sort of exaggerated veneration in public appearances, in the display of his picture, and in written references to him that is accorded to a Mussolini or a Hitler.
Any thought of common-cause with the Communists was now dismissed by Thomas, who indicated that the Communists' fairly recent change of line from fighting the existing trade unions and damning of all political opponents as "social fascists" to attempting to build a "popular front" was merely tactical, related to the perceived needs of Soviet foreign policy in building coalitions with capitalist countries to forestall fascist invasion.
The factional havoc of the move to the "all-inclusive party" paralyzed activity, while the Old Guard's new group, the Social Democratic Federation of America, controlled the bulk of the SP's former property and the allegiance of those best able to fund the organization. The expulsions of the Trotskyists and disintegration of the party's youth section left the organization greatly weakened and gasping for life, its membership level at a new low.