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New Economic Policy - Wikipedia, the free encyclopedia

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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.[1] 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.[2] Further decrees refined the policy and expanded it to include some industries.
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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[citation needed] and thus there was a dire need for reform. While it went against Marxist theory[citation needed], the best solution seemed to be limited commercialism in the form of the NEP.

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which on the other hand was a state oriented "mixed economy".[5] The move towards modernization rested on one main issue.” methods were put in place which promoted the pursuit by peasants of their self-interests. which were incorporated in the NEP. The NEP was primarily a new agricultural policy.[8] However.[4] The state. on the other hand. after starting to use the NEP. [3] Rather than repossess all goods produced.Wikipedia. but to do so the Soviet Union had to reshape its preexisting structures.wikipedia. with a more free-minded way of doing things. in order to fund industrial and developmental projects. With the NEP. moved away from Communist ideals and started the modernizing of the economy.[6] The Bolsheviks’ attitude towards village life was dismal.org/wiki/New_Economic_Policy The laws sanctioned the coexistence of private and public sectors. Some kinds of abroad investments were expected by the Soviet Union under the NEP.New Economic Policy . He insisted that this form of “state capitalism” was the last stage of capitalism before socialism evolved. The Soviet stopped upholding the idea of nationalizing certain parts of industries.[9] There were also disputes between Trotsky and Stalin as Trotsky believed in a more internationalist approach when revamping the economy.[7] 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. but this time. the farmers now had the option to sell their 2 of 5 11/7/2010 4:30 AM . transforming the Soviet Union into a modern industrialized society. Instead of the government taking all agricultural surpluses with no compensation. The old way of village life was reminiscent of the Tsarist Russia that had supposedly been thrown out with the October Revolution. believed that the NEP was a patriotic and nationalizing mission which would further Soviet grandeur in the international system. which sought to repudiate the “old ways. the free encyclopedia http://en. However. he justified the NEP by insisting that it was a different type of capitalism. Stalin. This left the peasants with a marketable surplus which could be sold privately.[10] Agricultural production increased greatly. the state only allowed private landholdings because the idea of collectivized farming had met with much opposition. namely its agricultural system and the class structure that surrounded it. the Soviet government took only a small percentage of goods.

Stalin had initially supported the NEP against Leon Trotsky. and the disastrous collectivization would have never happened. the year after Lenin's death. Lenin is quoted to have said "The NEP is in earnest and long-term" (НЭП — это всерьез и надолго). While the agricultural sector became increasingly reliant on small family farms.") Stalin proposed that the grain crisis was caused by the NEP men. the free encyclopedia http://en. unemployment skyrocketed under the NEP and a wider gap was created between classes. 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. Stalin. which meant peasants had nothing to spend their resources on. this created an imbalance in the economy where the agricultural sector was growing much faster than heavy industry. The NEP was generally believed to be intended as an interim measure.Wikipedia. mainly the 'old Bolsheviks' within the party saw the NEP as a betrayal of Communism and Marxism.major transformation was occurring politically. economically. eventually introduced full central planning (although a variant of public planning 3 of 5 11/7/2010 4:30 AM . Some people. or we shall be crushed. 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 . so they wanted a fully planned economy instead.org/wiki/New_Economic_Policy surplus yields. in the wake of Lenin's NEP.. Nikolai Bukharin had become the foremost supporter of the New Economic Policy. the Russian Revolution and the Russian civil war. suggesting that the NEP would slowly morph into something else as soon as the economy was prepared. Ironically. agricultural and industrial production had been restored to the 1913 (pre-WWI) level.[2] They saw the NEP as a betrayal of communist principles. Since the Soviet government did not yet pursue any policy of industrialization. the factories began to sell their products at higher prices. banks and financial institutions remained owned and run by the state. 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. By 1925. thus resulting in the hoarding of their grain. Small-scale and light industries were largely in the hands of private entrepreneurs or cooperatives.[2] By 1925. the heavy industries. To keep their income high. which has been used to surmise that if Lenin were to stay alive longer. The NEP succeeded in creating an economic recovery after the devastating effects of the First World War. The government also fixed prices to halt the scissor effect. or sold them to "NEPmen" (traders and middle-men) who then sold them on at high prices.wikipedia. Peasants began withholding their surpluses to wait for higher prices. which was opposed by many members of the Communist Party who considered it an exploitation of urban consumers. (As Stalin famously proclaimed: "Either we do it. It was hoped that the USSR's industrial base would reach the level of capitalist countries in the West. to prevent them being beaten in another possible war. On the other hand. and they believed it would have a negative long-term economic effect. and therefore had an incentive to produce more 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.. peasants had to produce much more wheat to purchase these consumer goods. However. Lenin had also been known to say about NEP: "We are taking one step backward to later take two steps forward". By 1928. a ". Lenin's successor. or it would have been carried out differently. culturally and spiritually. the NEP created a class of traders ("NEP men") whom the Communists considered to be "class enemies" of the working class. NEP would have continued beyond 1929. It was abandoned in 1928 after Joseph Stalin obtained a position of leadership during the Great Turn. who sold agricultural products to the urban populations for a high price. To combat the price of consumer goods the state took measures to decrease inflation and enact reforms on the internal practices of the factories. In particular. Due to the rising cost of manufactured goods. 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.

pg. 86. no.d. Richman "War Communism to NEP: The Road from Serfdom. ^ a b c Service. pg. W. 1984). Bismarck's Germany.umn. 7.Torino. 483. See Terms of Use for details. 6. No 22. Record ) Davies.New Economic Policy . R. 4.org/wiki/New_Economic_Policy had been the idea of the Left Opposition. (New York: Oxford University Press. the free encyclopedia http://en. 268.Y. no. ^ Vladimir P. 3. Agricultural Russia and the Wheat Problem. 8. as similarly happened in Meiji Japan. IN: Indiana University Press. „Lenin and the currency competition. re-nationalized much of the economy. A History of Twentieth-Century Russia.I." The Journal of Libertarian Studies V. Fitzpatrick. From tsarism to the new economic policy: continuity and change in the economy of the USSR. The Russian Revolution. and in post-World War II South Korea and Taiwan. The Russian Revolution. 124–5. Stalin's collectivization of agriculture was his most notable and most destructive departure from the NEP approach. Russia in the Era of NEP. N (http://www. Text is available under the Creative Commons Attribution-ShareAlike License.) (1991). MA: Harvard University Press. 2006 Retrieved from "http://en. ^ Ellis. Economic calculation problem Central Planning 1. 2009). ^ Sheldon L. et al.pdf) . pp.: Cornell University Press. 5. ISBN 0-074-40348-7.“ (http://www. ^ Sheila Fitzpatrick. 1984.wikipedia. which Stalin purged from the Party). 95. N. (ed. 44." The Journal of Libertarian Studies V. NEP Era Journal: http://www.wikipedia. Bloomington. 10. ^ Sheldon L. and from the late 1920s onwards introduced a policy of rapid industrialization. Reflections on the NEP experience (1922-1924). Timoshenko. ISBN 0-13-129973-5. ISBN 0801426219.) (1991).Wikipedia. ^ New economic policy and the politprosvet's goals. (ed. Sheila. The Modern Era.International Center of Economic Research Working Paper.edu/cla/NEPera/main/index. ^ Fitzpatrick. 94. 93. Stanford. Stanford University. New York: Oxford University Press. Bandera "New Economic Policy (NEP) as an Economic Policy.(2006). Vladimir I.com) . ^ V N. Lenin V. Cambridge.org/stable/1828984 (accessed Mar 4. The Russian Revolution. Lenin: About Natural Tax (Text of the speech in Russian. It is often argued[citation needed] that industrialization could have been achieved without any collectivization and instead by taxing the peasants more. CA: Food Research Institute.nikolaynenovsky. 4 of 5 11/7/2010 4:30 AM . 1 (1981): (accessed Mar 4. 2009). Ithaca. Boston: Pearson Prentice Hall. 2009). 115. 1932. 96.php Nenovsky.it/docs/wp2006 /ICERwp22-06. 159 9. Anthony Esler (2007). World History. Robert (1997). no. 2." The Journal of Political Economy 71. "Revolution and Civil War in Russia". 3 (1963):.icer. pg.org/wiki/New_Economic_Policy" Categories: 1921 establishments | 1928 disestablishments | 1920s economic history | Economy of the Soviet Union | History of the Soviet Union and Soviet Russia | Soviet phraseology This page was last modified on 6 November 2010 at 13:16. http://www. Elisabeth Gaynor.jstor. pp. ISBN 025320657X. additional terms may apply. p. Collected Works v. Richman "War Communism to NEP: The Road from Serfdom. 1 (1981): (accessed Mar 4. ^ Sheila Fitzpatrick.

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