Evidence of the impact of the NEP 1921-26

 Made a rapid recovery as small-scale industry responded quickly to surge in demand

 Factory output rose almost 200% from 1920-1923/ production increase

 Large scale industry took longer to recover, however, by 1926, the industry had recovered to the level it had been in 1913

Electrification also progressed quickly – Lenin believed this was key to modernising the Soviet Union ‘Soviet Union power plus electrification equals communism’

 Private trade flourished – shops, cafes and restaurants reopened and life began to flow back into the cities

 Consumer goods more available and living standards rose

Nepmen (one of the main drivers of private traders) travelled around the workshops buying nails, shoes, clothes and hand tools to sell in the markets -> by 1923 there were over 25,000 of these in Moscow alone 

 Rapid recovery in the villages due to end of grain requisitioning which removed one of the main causes of discontent

 The level of unrest decreased

Amount of grain being produced increased from 37.6m tons in 1921 to 76.8 tons in 1926, almost back to 1913 levels

 Had more incentive to grow grain, had less interference from government

Traditional forms of organisation like the mirs were still much stronger

Began to make money on the side by hand-producing goods to sell to the cities through Nepmen

 Some peasants (Kulaks) grew very wealthy and brought up land and animals, while others remained poor and continued using backward farming methods

1922, new currency introduced to replace old, worthless rouble and this and the NEP created a ‘get-rich-quick society’

Nepmen made huge profits of private trade, showed off this wealth and resembled new, coarse middle class

Prostitution and crime flourished

Moscow Soviet got most of its income from taxes on the gambling clubs

The money-based society encouraged corruption to thrive -> officials accepted bribes and property speculators charged excessive bribes for land and property

Factories run by single managers and bourgeois specialists who earned more than their workers

Wages remained generally low and little protection for workers in industry

First 2 years, employment rose particularly in large state-controlled industries

Cut their workforce to make profit -> women badly hit by this and ended up on the streets

Growing resentment among the workers that the peasants seemed to be doing much better out of the NEP than they were

Many outside Russia thought the NEP marked the end of the Communist experiment -> believed that Lenin’s gov had realised that state-owned industry and food supply could not work and returned to a capitalist path

Foreign powers wanted to encourage this and welcome them back into international economic system: Germany (1922) and Britain (1924) signed new trade agreements which increased Russian exports

 Large scale exchanges of Western industrial goods for Russian oil and other resources

Major economic crisis -> so much food flooding into towns the grain prices started dropping while price of industrial goods rose because they were still in short supply

Meant the peasants reluctant to sell grain

Government response: Changed tax in kind to tax in cash -> encouraged peasants to sell their produce again