The NEP

After kronstadt rebellion he decided Russia needed a new policy to avoid his government being overthrown.

Noticed how unpopular war communism was.

War communism was relaxed

Smaller industries and facrories were returned to private ownership

What was produced, was sold on the open market

Grain was no longer seized from peasants 

Started taxing products instead

Important industries stayed in state control

It allowed private businesses to keep their own profit

So the more they produce, the more money they get

They thought that returning the idea of profit to trade and businesses was against communist principles (extreme communists)

Felt it was taking a step back and allowing people to get rich again

Labourers wer being exploited

Factories and peasants responded to the change by increasing their production

marked by 7 years of relative stability

Output increased within the 7 years

Some peasants became rich at the expense of others who often hired labourer.

Trade+ Business men 'Nepmen' made profits by buying goods + food cheaply and selling them for more