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Summary A* pros/cons of NEP
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Russia revolution and dictatorship analysis of NEP
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That kind of depends on your definition of success. The NEP led to sharp rises in agriculturalproduction that kept millions from either starving or revolting or both while the Soviet
government consolidated power and pursued other goals. But it did so at the expense of
communist ideals, so it couldn't last forever.
When Lenin announced the New Economic Plan in 1921, the country was in tatters. The Civil
War had been bloody, and the Bolsheviks had employed tactics like forced grain requisition
in addition to having nationalized all of the private industry. And that came after the
collapse of the Romanov Dynasty and Russia's foray into World War I. Things were so bad in
Russian cities that those who could leave left - the rich and talented fled for new lives
abroad, hundreds of thousands of others left to live among the peasantry and tradesmen in
the countryside. The factories were short of workers, the transportation networks needed
repair and development, and the people producing food and cottage industry products -
about half of the economy - were using an inefficient barter system. Add a drought in
Southern Russia, tough winters and a famine that killed millions and the Bolsheviks' core
support - factory workers - were in danger of leaving the Party and joining populist revolts.
With the Tsar, two revolutions and a civil war in recent memory, Lenin desperately needed
to consolidate power and make changes that would allow his government to survive.
The NEP was never seen as a proper policy for a socialist state, it was much more of a
strategic retreat in economic policy that would be fixed later. Essentially the NEP kept some
industries under state control - banks, heavy industry, etc. - and let much of agriculture
privatize and pay a tax - in raw product until 1924 - rather than give up everything they
produced and receive only what they needed. As farmers were able to pay the tax and sell
the surplus, an incentive to produce more food was created and agricultural output grew
sharply - as much as 40% in a single year.
Toward that end, it was wildly successful. Farms produced more food, and food prices fell.
The Tsarist-era landed gentry and other economic models had fallen, and output exceeded
the best days of the Romanov era. Some Soviet NEPmen even became rich, and other
economic sectors saw dramatic growth through privatization and NEP policies that
encouraged and rewarded efficiency, innovation and increased production.
The failure came in two forms - the Scissor Crisis and the knowledge that NEP's success
came at the expense of communist ideals. The Scissor Crisis was a product of one half of the
economy growing while the other half fell - the two diverging lines on the graph looked like
a pair of scissors. As farmers' income and buying power grew, industry simply raised prices
to maintain their position. Farmers then needed to produce more grain to buy the things
they needed and wanted, which led to holding back product, selling it to speculators, and a
general rise in inflation. That had to be fixed. At the same time, urban consumers - all of
them good Bolshevik factory workers - all knew that NEP policies led to - gasp! - capitalism.
It wasn't so much that the NEP wasn't a success, because it was. But the NEP didn't deliver
the ideological and industrial gains the Soviets really needed. Though the Soviet economy
surpassed pre-WWI output by 1928, the needs of industrialization under Stalin's leadership
and a 1928 grain acquisition crisis led to the end of NEP- a completely state-run economy,
the collectivization of agriculture and the deaths of millions of people.
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