What is Orwell suggesting about the animals by positioning the reader to understand what is happening on Animal Farm before the animals realize it themselves?

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Orwell is suggesting that the animals on the farm are behaving like the masses of people have usually behaved during great revolutions, such as the French Revolution and especially the Russian Revolution. The animals are ignorant and gullible, easily led with slogans, music, and propaganda. The reader understands what is happening before the animal characters do because the modern reader knows the history of the Russian Revolution. Like the animals, the people of the Soviet Union believed that all animals were going to be free, equal, and prosperous. They worked hard and accepted collectivization. They didn't realize that some animals who were more greedy and more cunning than the others would take over power and create conditions that were just about as bad as they had been under Mr. Jones, the representative of feudalism and capitalism. The most telling detail occurs in Chapter VII, when Napoleon's vicious dogs (i.e. Russian soldiers and secret police) attack the animals and Napoleon forces a number of them to confess to various crimes against the collective (an event corresponding to the so-called "Show trials" in which many people confessed to crimes they hadn't committed to escape further torture.

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