Causes of the NEP
1. 'War Communism' failed
Helped win Civil War but unpopular: peasants avoided Prodrazverstka by hiding grain, leading to city food shortages → strikes, unrest, industrial decline.
Economy in ruins: minimal industrial output, railways failing, money worthless, barter economy.
Bolshevik rules were ignored; illegal black markets ('BAZAARS') widespread & unstoppable.
Opposition: Mensheviks gaining Soviets, Workers' Opposition (Shliapnikov, Kamenev) demanding trade union freedom, unease over Cheka excesses.
Lenin (Tenth Party Congress, March 1921): "profound discrepancies" → need for policy change.
2. Tambov Rebellion, 1920-21
After trouble in the village of KHITROVO: Union of Working Peasants revolted vs Bolsheviks → during 1921 assassinated 200 GRAIN COLLECTORS.
Brutally suppressed: 100k to camps, 15k executed, villages burned.
Lenin (April 1921): urgent need to improve peasant conditions → NEP.
3. Kronstadt Naval Base mutiny, 1921
KRONSTADT sailors (former Bolshevik supporters) mutinied: demanded free speech, elections, trade unions, end to War Communism.
Trotskys Red Army suppressed mutiny at high cost.
Lenin: rebellion "like a FLASH OF LIGHTNING" → admitted pushing people too far.
4. End of the Civil War
Last White Army defeated by 1920 → Bolsheviks felt secure, could address internal crisis → No excuse for War Communism.
5m demobilised soldiers returned to villages → led revolts.
5. Ideology
Marxism required proletariat, but by 1920 only 1.5m industrial workers (down from 3.5m in 1917).
Options:
◦ 'Old Bolsheviks': continue Terror (not working).
◦ Trotsky: spread world revolution (failed in Germany).
◦ Lenin: pause, educate proletariat → NEP.
Lenin's New Economic Policy
1. National Freedoms
Ukraine: Ukrainian language in govt, schools.
Central Asia: bazaars reopened, mosques returned, KORAN restored, native languages encouraged.
2. Enterprise
Banking: Gosbank (1921); 'CHERVONET' (gold rouble) replaced the old worthless currency (1924), deposits guaranteed.
Agriculture:
◦ Prodrazverstka → tax-in-kind (PRODNALOG); peasants could sell surplus → incentive to produce.
◦ Land Code 1922: land state-owned but could be leased for 12 yrs; hiring labour allowed.
◦ Bukharin: "Enrich yourselves!"
Small factories: returned to owners; workers could retain some production for barter; compulsory labour abolished (1922).
Heavy industry: remained state-owned (84% industrial workers); run like a private business, cash wages.
◦ Foreign experts hired.
◦ Lenin: 'State Capitalism' (half-way house in transition to socialism).
Exports: state-controlled; arms deal w Germany (1921), trade w UK & Europe.
Retail: small traders ('NEPMEN'), markets, bazaars.
3. Political Oppression
TENTH Party Congress (1921): banned factions.
Purge: 1/5 of Party expelled.
Trade Unions controlled.
Opposition crushed: Mensheviks, Democratic Centralists exiled or sent to kontslargerya.
Religion: 1921 Decree forbade teaching of religion, schools expelled religious children, clergy executed.
Press censored: all opposition newspapers shut down (1922).
Results
1. Agriculture
Modernisation: new crop rotations, fertilisers, co-ops (33.5k, 6m members by 1926).
By 1927, agricultural production = 1916 levels.
Some KULAKS became rich, but % of small farms (0-4 ha) rose 59-79% (1917-22).
2. Industry
By 1928, industrial output = prewar levels.
Coal: 11.5m → 24.5m tons (1923-26); cotton: 560m → 2bn metres.
Urban workforce grew as peasants moved to towns.
3. Retail & Social Effects
75% retail trade private → boom in stalls, cafes, cabbies, but also crime, prostitution.
Nepmen gained wealth, some married former elites.
Social inequality: new lower middle class vs 18% urban unemployment, poverty.
Problems
1. Agriculture Stalled
Growth slowed post-1927; Many farms too small to be productive.
2. Severe famine (1921-22 ) → 5m deaths from starvation & disease.
3. Industrial Weakness
1923 coal = 44%, iron ore = 6% of 1913 levels.
1924: 100 cars/trucks, 11 tractors; no heavy machinery until 1930.
Electricity production only surpassed 1913 level by 1925.
4. SCISSORS Crisis
Agricultural surplus → lower food prices BUT Industrial stagnation → rising costs THEREFORE Peasants struggled to buy tools & machinery.
5. Social inequality rose ∵ 18% unemployment
6. Opposition from Old Bolsheviks saw it as betrayal of revolution.
7. Proletariat did not grow
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