The New Current was a broad leftist social and political movement that followed the First Latvian National Awakening (led by the Young Latvians from the 1850s to the 1880s) and culminated in the 1905 Revolution. The beginning of the New Current is usually given as 1886, when the movement's newspaper, Dienas Lapa ("The Page of the Day"), was founded by Pēteris Bisenieks, who ran the Riga Latvian Craftsmen's Credit Union. Pēteris Stučka, who later headed the Latvian Bolsheviks, became the editor of Dienas Lapa in 1888. From 1891 to to 1896, the paper was edited by Bisenieks and Rainis (the pen name of Jānis Pliekšāns – Rainis became Latvia's foremost dramatist and the literary figure "inseparably linked to the birth of the independent Latvian nation and the struggle for freedom,” [6] was also the leading figure in the New Current). Under Rainis and Stučka -- the latter was again editor in 1896-97 – Dienas Lapa turned to socialism; shut down by the Ministry of the Interior in 1897, the paper took a moderate turn under the editorship of the philosopher and publicist Pēteris Zālīte (formerly an editor of Mājas Viesis) between 1899 and 1903. Despite its moderation under Zālīte, the paper was again shut down by the censors, re-emerging in 1905 as the Social Democratic newspaper before its permanent closure.

The historian Arveds Švābe describes the New Current as "connected to the political awakening of the Latvian working class, its first organizations, and the propagandization of socialist ideas." Most historians point to what the painter Apsīšu Jēkabs called "the beginning of a cleft between the Latvian farmer and his farm hand" in the 1870s, and by 1897 there were 591,656 landless peasants in what is now Latvia (compared to 418,028 smallholders and their dependents). Their partial urbanization led to a growing proletariat, fertile ground for the ideas of western European socialism, and this coincided with a loss of momentum for the Young Latvians, whose ideas had been enfeebled by national romanticism as a gulf grew between the bourgeoisie and the poor, the leading nationalists of the era having been arrested and exiled. Rainis smuggled German Marxist literature into Latvia in two pieces of luggage in 1893: the work of Karl Marx, Friedrich Engels, and Karl Kautsky. This "baggage with the dangerous contents," as the historian Uldis Ģērmanis called it, was the seed of the Latvian Social Democratic Party.

LSDSP (the Latvian Social Democratic Workers’ Party) is the oldest organized political party in Latvia, its roots in the workers' groups of the New Current that were founded as early as 1892, when Latvia was still part of the Russian Empire. The early LSDSP, formally established after various Latvian socialist groups merged on June 20th, 1904, initially had a nationalist as well as a socialist basis and rejected the dictatorship of the proletariat. On June 1st, 1904, together with the more radical Latvian Social Democratic Union, the social democrats had issued a joint proclamation demanding self-determination and the introduction of Latvian as the language of administration and education. LSDSP led the 1905 Revolution in what is now Latvia, organizing strikes in Riga together with the Jewish Bund.

The party became an autonomous regional organization of the Russian Social Democratic Labour Party, renamed the Social Democracy of Latvia (Latvijas sociāldemokratija; LSD) and boasted 16,000 members by 1907, but membership declined sharply due to the imposition of martial law and mass arrests that followed the failure of the 1905 Revolution, to 2000 members in 1911. Industrialization in 1912-13 saw the party grow again – but World War One brought about a second decline, to 500 members in 1916. The Central Committee of LSD came under the control of the Bolsheviks in 1915, but the Mensheviks who had been expelled from the party re-established the democratic LSDSP on June 17th, 1918.

The Red branch of Latvian political activism would prove to be heavy – many Latvians were prominent among the early Bolsheviks. Jēkabs Peters was one of the founders of the Soviet secret police, the Cheka. According to Donald Rayfield, circa 75% of the Cheka’s central management consisted of ethnic Latvians in 1919. The commander of the Red Army, Jukums Vācietis, was a Latvian. Eduards Bērziņš set up Dalstroy, which operated approximately 80 Gulag camps in the Kolyma region of the Russian Far North. Pēteris Stučka – after failing to establish Soviet power in Latvia – would go on to draft the Soviet constitution and lay the foundation of “Soviet law.”

An estimated 70,000 Latvians perished during Stalin’s purges of 1937 and 1938, including many of the prominent old Bolsheviks (some were both executioners and victims). Even so, the prominent political scientist Jānis Peniķis has noted that the remaining Latvian communists continued to play a disproportionately large role; when Latvia was occupied in 1940, the regime was able to draw from a pool of persons who would be utterly subservient to the Kremlin, even into the 1980s.

The division into Bolsheviks and Mensheviks was a complex one that did not take place until long after the 1905 Revolution, however. In 1905, LSDSP was a well-organized and inclusive party, growing rapidly. Ilgvars Butulis writes that "the
role of the social democrats as leaders of the revolutionary movement did give it a much more organised and broader character than in the Russian Empire as a whole." Executive committees were formed in almost every civil parish.

Many would recoil from the sometimes nihilistic destruction of the 1905 Revolution; any possibility of reconciliation between the Baltic Germans and the Latvians was doubtless lost. Violent bank robberies took place not only in Riga and Liepāja but also in Helsinki and London to fund the purchase of weapons; the widespread torching of manors that led even some to nationalists to turn away from the national movement and profoundly disturbed some of the movement's moderate leaders. Circa 350 persons were murdered, and there were 900 cases of arson – 80 of the 350 were Baltic Germans, but revolutionaries also attacked Latvian farmers. About 2600 armed robberies took place.

The extent of the reaction – the summer of graveyards and prisons, 1906 – cannot be underplayed: c. 3000 revolutionaries were killed, 7000 arrested and/or deported, and 5000 forced to emigrate. They didn't simply disappear -- those thrown into the whirlwind include almost everybody who was later important, from Ulmanis on the right to Menders on the left (Ulmanis getting his education in Nebraska, Menders a much higher education in Vienna and Bern, Ozols a doctorate at Harvard, etc.). Publications like Proletārietis, which included the major early theory of the Socialist Revolutionaries, appeared abroad (e.g., in Cleveland, London, and Zurich, but a superficial view that comes to some simple conclusion about a complex event would blind anybody to deep divisions and powerful undercurrents – for instance, many of those who emigrated to the United States very quickly integrated themselves into the American far left, dropping their Latvian identity entirely (when the weren't disrupting Latvian church services or holding off the police in Boston cemeteries). The American communist newspaper The Daily Worker was started by a Latvian, and not a few of the exiles joined the CPUSA (as did many Finnish immigrants to the United States).

The Latvian Social Democratic Union (SDS) – renamed the Revolutionary Socialist Party in 1913 – on the other hand, was an outgrowth of the New Current but soon developed a more radical and nationalistic position in opposition to the much larger Latvian Social Democratic Workers' Party. Many activists from the New Current were arrested in the late 1890s, and many emigrated to Western Europe and the United States. The branches of Miķelis Valters' and Ernests Rolavs' group issued polemics in exile, including Proletārietis ("The Proletarian," a publication printed in Boston in 1902 and 1903 and in Zurich in 1903 and 1904). They were the first to demand full autonomy for Latvia and proposed the transformation of the Russian Empire into a federation of autonomous republics. They also advocated the expropriation of the Baltic German estates in a radical land reform.

Valters, the leader of the SDS, is also credited with formulating the clause in Article I of the Latvian constitution (the Satversme, adopted in 1922) stating that "the sovereign power of the State of Latvia is vested in the people of Latvia" (Latvian: Latvijas tauta) rather than the Latvian people (Latvian: latviešu tauta), and is thus responsible for laying part of the legal groundwork for a multi-ethnic nation-state and "political nation."

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