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For the Malaysian New Economic Policy, see Malaysian New Economic Policy. The New Economic Policy (NEP) (Russian: Новая экономическая политика, НЭП, Novaya Ekonomicheskaya Politika) was an economic policy proposed by Lenin to prevent the Russian economy from collapsing. Allowing some private ventures, the NEP allowed small businesses or shops, for instance, to reopen for private profit while the state continued to control banks, foreign trade, and large industries. It was officially decided in the course of the 10th Congress of the All-Russian Communist Party. It was promulgated by decree on March 21, 1921, "On the Replacement of Prodrazvyorstka by Prodnalog" (i.e., on the replacement of foodstuffs requisitions by fixed foodstuffs tax). In essence, the decree required the farmers to give the government a specified amount of raw agricultural product as a tax in kind. Further decrees refined the policy and expanded it to include some industries.
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Politics and government of the Soviet Union
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1 Beginnings 2 Policies 3 Disagreements in leadership 4 Results 5 End of NEP 6 See also 7 Footnotes 8 Multimedia 9 Further reading
The New Economic Policy (NEP) replaced the policies of War Communism which attempted to obliterate any signs of the market economy in the Soviet Union. War Communism’s policies had made a damaged Soviet economy even worse and thus there was a dire need for reform. While it went against Marxist theory, the best solution seemed to be limited commercialism in the form of the NEP.
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but this time.  Rather than repossess all goods produced. Supreme Soviet Soviet of the Union Soviet of Nationalities Presidium Congress of People's Deputies Speaker 1989 Legislative election Judiciary Law Supreme Court People's Court Procurator General History 1917-1927 1927-1953 1953-1985 1985-1991 Dissolution Ideology State Ideology Soviet democracy Marxism-Leninism Leninism Stalinism Economy Economy Agriculture Consumer goods Five-Year Plan Kosygin reform New Economic Policy Science and technology Stagnation Life and repression Society Demographics Education Family Phraseology Religion Transport Repression Censorship Human rights Great purge Gulag system Propaganda Population transfer Red Terror Lenin considered the NEP as a strategic retreat. The Soviet stopped upholding the idea of nationalizing certain parts of industries. Agricultural production increased greatly.org/wiki/New_Economic_Policy The laws sanctioned the coexistence of private and public sectors. The Bolsheviks’ attitude towards village life was dismal. moved away from Communist ideals and started the modernizing of the economy. namely its agricultural system and the class structure that surrounded it. he justified the NEP by insisting that it was a different type of capitalism. after starting to use the NEP. in order to fund industrial and developmental projects. the farmers now had the option to sell their 2 of 5 11/7/2010 4:30 AM . believed that the NEP was a patriotic and nationalizing mission which would further Soviet grandeur in the international system. the free encyclopedia http://en. Instead of the government taking all agricultural surpluses with no compensation. However. which were incorporated in the NEP. with a more free-minded way of doing things.Wikipedia.wikipedia. However. on the other hand. The NEP was primarily a new agricultural policy. the state only allowed private landholdings because the idea of collectivized farming had met with much opposition. This left the peasants with a marketable surplus which could be sold privately. Some kinds of abroad investments were expected by the Soviet Union under the NEP. The move towards modernization rested on one main issue. which sought to repudiate the “old ways. transforming the Soviet Union into a modern industrialized society. There were also disputes between Trotsky and Stalin as Trotsky believed in a more internationalist approach when revamping the economy. but to do so the Soviet Union had to reshape its preexisting structures.New Economic Policy . the Soviet government took only a small percentage of goods. The state. which on the other hand was a state oriented "mixed economy". The old way of village life was reminiscent of the Tsarist Russia that had supposedly been thrown out with the October Revolution. With the NEP.” methods were put in place which promoted the pursuit by peasants of their self-interests. Stalin. He insisted that this form of “state capitalism” was the last stage of capitalism before socialism evolved.
Lenin is quoted to have said "The NEP is in earnest and long-term" (НЭП — это всерьез и надолго). and proved highly unpopular with the Left Opposition in the Bolshevik party because of its compromise with some capitalistic elements and the relinquishment of State control. which was opposed by many members of the Communist Party who considered it an exploitation of urban consumers. The government also fixed prices to halt the scissor effect. Nikolai Bukharin had become the foremost supporter of the New Economic Policy. in the wake of Lenin's NEP. or it would have been carried out differently. Ironically. which has been used to surmise that if Lenin were to stay alive longer. Some people. culturally and spiritually. peasants had to produce much more wheat to purchase these consumer goods. and the disastrous collectivization would have never happened. banks and financial institutions remained owned and run by the state.. the heavy industries. to prevent them being beaten in another possible war. suggesting that the NEP would slowly morph into something else as soon as the economy was prepared. However. which meant peasants had nothing to spend their resources on. Since the Soviet government did not yet pursue any policy of industrialization. This fall in prices of agricultural goods and sharp rise in prices of industrial products was known as the Scissor crisis (from the shape of the graph of relative prices to a reference date).New Economic Policy . Stalin had initially supported the NEP against Leon Trotsky. By 1925. It was abandoned in 1928 after Joseph Stalin obtained a position of leadership during the Great Turn. On the other hand. The NEP succeeded in creating an economic recovery after the devastating effects of the First World War. or sold them to "NEPmen" (traders and middle-men) who then sold them on at high prices. thus resulting in the hoarding of their grain. in favour of Collectivization which came as a result of the Grain Procurement Crisis and the need to accumulate capital rapidly for the vast industrialization programme introduced with the Five Year Plans..") Stalin proposed that the grain crisis was caused by the NEP men.wikipedia. who sold agricultural products to the urban populations for a high price. a ". This incentive coupled with the break up of the quasiOther countries · Atlas feudal landed estates not only brought agricultural production USSR Portal to pre-Revolution levels but surpassed them.Wikipedia. The NEP was generally believed to be intended as an interim measure. While the agricultural sector became increasingly reliant on small family farms. economically. To keep their income high. and therefore had an incentive to produce more grain. so they wanted a fully planned economy instead. Stalin. Small-scale and light industries were largely in the hands of private entrepreneurs or cooperatives. In particular. By 1925. Lenin had also been known to say about NEP: "We are taking one step backward to later take two steps forward". Due to the rising cost of manufactured goods. this created an imbalance in the economy where the agricultural sector was growing much faster than heavy industry. eventually introduced full central planning (although a variant of public planning 3 of 5 11/7/2010 4:30 AM . They saw the NEP as a betrayal of communist principles. NEP would have continued beyond 1929. It was hoped that the USSR's industrial base would reach the level of capitalist countries in the West. the free encyclopedia http://en. (As Stalin famously proclaimed: "Either we do it. Peasants began withholding their surpluses to wait for higher prices. or we shall be crushed.major transformation was occurring politically. the NEP created a class of traders ("NEP men") whom the Communists considered to be "class enemies" of the working class. Lenin's successor. agricultural and industrial production had been restored to the 1913 (pre-WWI) level. the year after Lenin's death.org/wiki/New_Economic_Policy surplus yields. and they believed it would have a negative long-term economic effect. mainly the 'old Bolsheviks' within the party saw the NEP as a betrayal of Communism and Marxism. An alternative explanation for the grain crisis (which is more popular among western historians) revolves around the focus on heavy industry creating a significant consumer goods shortage. To combat the price of consumer goods the state took measures to decrease inflation and enact reforms on the internal practices of the factories. unemployment skyrocketed under the NEP and a wider gap was created between classes. the Russian Revolution and the Russian civil war. the factories began to sell their products at higher prices. By 1928.
5 of 5 11/7/2010 4:30 AM .New Economic Policy . Inc.Wikipedia.wikipedia. a non-profit organization. the free encyclopedia http://en.org/wiki/New_Economic_Policy Wikipedia® is a registered trademark of the Wikimedia Foundation..
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