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The New Economic Policy

Modern History (Year 12) - Bolsheviks in Power

Ben Whitten

Creation and Reasoning Behind the NEP

  • The NEP was an economic policy of Soviet Russia imposed by Lenin – Lenin described it as a progression towards state capitalism within the worker’s state of the USSR – it was a temporary retreat from the previous policy of extreme centralisation and doctrinaire socialism

  • The NEP was announced to help Russia’s economy from falling

  • The Kronshtadt Rebellion of March 1921 convinced the communist party and the leader, Lenin, that they needed to retreat from socialist policies in order to maintain the party’s hold on power

  • The NEP was viewed by the Soviet government as merely a temporary expedient to allow the economy to recover while the Communists solidified power

Effectiveness and Implications of the NEP

  • The NEP reintroduced a measure of stability to the economy and allowed the Soviet people to recover from years of war, civil war and governmental mismanagement

  • The NEP helped Russia recovered from the effects of WWI and the Russian Civil War

  • Many still believed it was a failure – this was mostly as it failed to meet the party’s despite for a socialist, industrial society

  • Although the NEP helped Russia prosper economically, some socialist believed it went too far with its free-market economic style, and it could have aided the Soviet Union into permanently being a capital economy – the original plan was to have capitalism in place until their economy was strong enough to achieve socialism

  • It was a successful temporary solution however, since it replaced war communism

War Communism

  • Measures introduced in 1918 to restore order and discipline to the economy

    • Included these main policies:

    • Nationalisation of industries

    • State control of foreign trade

    • Strict discipline for workers – strikes forbidden

    • Requisition of food, grain, from peasants to feed army

    • Rationing of food

    • No private enterprise

    • Military control of railroads

Why War Communism was Replaced

  • By 1921, War Communism was very unpopular among civilians; their revolts put pressure on the government to make a change

    • Tambov Rising – response from the peasants to the forced requisitioning of their grain to feed the towns and the Red Army

    • Kronshtadt Mutiny – over the increase of Bolshevik power at the expense of the workers; fought by sailors who were previously involved with the Bolshevik cause

  • These uprisings “lit up reality like a flash of lightning” according to Lenin

  • This realisation caused the NEP to come into effect

Lenin and the New Economic Policy

  • Lenin sees the discontinuation of War Communism as temporary but necessary for the Bolsheviks to remain in power

  • Lenin was willing to compromise ideology due to the two revolts that had happened in 1920-1921

  • Reasons for the NEP:

    • Increase food production by giving peasants an incentive to grow more

    • Get the economy going following the Civil War – private ownership provides motivation for small businesses and helps increase industrial production and trade

    • Reduce opposition to the Bolsheviks

    • Relax the unrest of the people

    • Relax economic policies, especially the ones associated with War Communism

War Communism vs. New Economic Policy

Overview of the New Economic Policy

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