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Soviet economy: New Economic Policy NEP Новая экономическая политика
Soviet Economy: New Economic Policy/ Новая экономическая политика (1921-28)
Figure 1.-- The NEP was an adoption of a mixed economy, a shift from the radical War Communism and the abolition of private property. The NEP allowed small-scale capitalism to exist alongside state socialism. Most imoprtantly, the peasantry was allowed to keep most of theur harvest after paying limited taxes. The NEP, however, created a crisis of ideology for many Blosheviks who had seen the Revolution and Civil War era as a heroic struggle against evil capitalisrs and capitalism. Many believed that the achievement of state control of industry was threatened by the NEP. Only Lenin's influence permitted adoption of the NEP which he thought necessary to save the collapsing economy as a result of War Comminism. Here we see peasants selling their fruits and vegetables in the Apraksin Dvor, a market area in Leningrad, at the peak of the NEP. After Stalin ended the NEP Apraksin Dvor became a depot and waerhouse area (1928).
Bolshevik leader Vladamir Lenin adopted the Новая экономическая политика (New Economic Policy -- NEP) to get Russian economy functioning again (1921). The economy was in tatters adter the the Civil War and application of War Communism. A terrible famine set in killing millions. American food relief had prevented famine in Europe after World War I. Lenin refused American food aid until the famine in Russia reached such proportions that in could no longr be ignored. With great reluctancee, he finally allowed the Americans to deliver food relief to his starving people. Throuhout history famines have been primarily the result of weather, mostly drought. This changed in the 20th century with the rise of the great totalitarian regimes. Communism and Fascism (both Socilist variants) became the primary causeof famines. Food aid fronCapitalist countries led by America became the primary source of food for famine stricken countries. American food deliveries as in the rest of Eutope saved millions of starving people in Russia. American food aid did not reinvigotate the economy. The Russian famine was in large measure the result of War Comminism. The Bolsheviks crased food from the peasantry. he peasantry resonded by reducing their oamtings and harvests. Lenin decided on adesperate measure -- turn to capitalism. The NEP was a series of market neasures (i.e. market reforms meaning capitalism) designed as a temporaily reintroduce limited private owenership back into the Russian economy. One might ask, if socailism was such an effective economic system, why were market reforms needed. (The answer of course as the Chinese Communists discovered in the 1970s that socialism destroys wealth and capitalism crerates wealth.) The NEP was designed to attract the capital needed for economic activity. Lenin's plan was to partly restore the capitalist economy at the lowest level until the Russian economy was strong enough to sustain socialism. This of course meant that capitalism was a stronger economic systems as the Asian Tigers and China would would eventually realize. The 10th Congress of the All-Russian Communist Party approved the NEP (March 21, 1921). Here Lenin's support was vital. There was, however, opposition. This came from the left-wing of the Party which was opposed to any reappearance of capitalism which they bfought so hard to destroy. Lenin initated the NEP with the within a month by intriducing the Tax In Kind policy (April 25, 1921). It repalaced the 'surplus-food appropriation' with a fixed tax that would be announced in advance. The tax would be small and affordable. This was vital becaise the economy was primarily based on agriculture. The rural peasantry made up the vast proprtion of the Russian population, but the Revolution had been largely led by the urban proletariat. The NEP allowed small-scale private econoimic activity, but only at the lowest level of economy--small shops and local markets. Foreign trade,and the leasing of enterprises were also permitted. The NEP was a considerable success. The НЭПман (NEPman) was born. This coiuld be a person involved in any kevel of capitalist activity. This could be peasant selling on the local market and little shop owner up to larger merchant activirt in the cities. They became the subject of desire and envy.
Lenin died (1924) He had been the chief propnent and support for the NEP. The fact that the NEP resulted in increased production and relative prosperity does not seem to have entered into Stalin's thinking. Stalin who was gaining control of the Party and Soviet state had other goals in mind, namely the absolute control of the Soviet economy and rapid industrialization. Stalin replaced the NEP with the First Five Year Plan (1928). Stalin assessment was that the NEP was not only a mistake in the first place, but had gone too far with free-market activity. There were others in the Bloshevik leadership that the NEP could have led to a permanent Soviet capitalist economy, anethma to the mkers of the Revolution. Stalin not only terminated the NEP, but alsop most of the Old Bolsheviks who were targetted in the Great Terror.
