Why was it introduced?
At the end of the war, the people were demanding two different things from Lenin:
- share power
- reform the economy
Lenin wasn't prepared to share power, but he thought that if he reformed the economy it may make them less pushy about the power-sharing issue.
The economy was in a mess. Grain was not being produced, factories were not working efficiently, and money was practically worthless.
Lenin created the New Economic Policy (NEP) to sort it out. (1921-1928)
What was it?
- state requisitioning (taking by force) of grain was ended
- peasants had to pay a set tax in grain, but they could sell their surplus and make a profit
- buying and selling of goods was allowed
- people could own their own business with a maximum of 25 employees
- money was restored and a new rouble was issued in 1922
- people were allowed to make a profit
Did it work? - Yes
- production figures rose
- electricity improved
- transport and communication improved
- harvests improved
- life began to return to normal
- standards of living rose
- new class of "Nep-men" formed -- middle class businessmen who had had a success by the NEP
Did it work? - No
- · not true Communism -- criticized by members of the Party
- · although harvest figures rose to start with, it began to level off towards the end. This is because the peasants wanted to hold onto their grain until they were offered a better price for it. However, many people couldn't afford to pay a better price, and so less was planted for the next year. Towards 1928, grain figures were beginning to drop.
Why wasn't it continued?
- NEP was always designed to be a temporary measure, to reform the economy, after which the USSR would return to true Communism
- Lenin died, and Stalin took over. Stalin was not in favour of continuing the NEP.