The New Economic Policy Flashcards
(11 cards)
Why did Lenin introduce the NEP?
To retain political power.
To revive the economy.
To build socialism.
Compromise with capitalism
The NEP ended War Communism by creating a mixed economy.
- Farming was left to the free market - peasants could buy, sell and produce freely, grain requisitioning ended and was replaced by a tax in kind.
- Small factories and workshops were denationalised and allowed to trade freely - many were returned to former capitalist owners.
- Large factories and major industries remained nationalised.
- Money was reintroduced.
Consequences of the NEP
Led to political and economic stability.
It did not lead to rapid industrial growth and was not all popular within the Party.
Farming
Ending grain requisitioning was extremely popular among the peasants.
Free trade also encouraged peasants to grow more food - therefore famine ended and farming revived.
Industry
The NEP also led to industrial growth.
Lenin authorised a major electrification campaign which revived the industry that had been destroyed by the Civil war.
Industrial recovery was slow.
The ‘scissor crisis’
Agriculture recovered quickly but industry recovered much more slowly.
This imbalance led to a fall in the price of food and a rise in the price of industrial goods.
A gap opened up between farmers’ incomes and industrial prices.
The government was forced to step in and impose price cuts on industrial goods.
Inequality
The NEP led to the re-emergence of inequality.
Large farms prospered, whereas small farms did less well.
‘NEPmen’, traders who travelled the country selling highly desirable goods, grew rich.
What did Communists view the ‘NEPmen’ as?
Communists viewed the NEPmen as parasites because they made money without producing anything.
NEPmen were arrested by the Cheka for profiteering from time to time.
Corruption
Gambling, prostitution and drug dealing all took place under the NEP.
Prostitution led to widespread poverty among women in the 1920’s.
Political stability
Peasants began to support the regime due to ending gran requisitioning.
Lenin argued that the Communist government was based on alliance or ‘smychka’ between the workers and the peasants.
Divisions in the Party
The right-wing supported the NEP, arguing that it was a form of state capitalism, and a necessary transitional stage.
The left-wing opposed the NEP, arguing that it was allowing the problems of capitalism to re-emerge.
The centre supported the NEP, arguing that it was helping to rebuild the economy.
