NEP Flashcards
For what 3 main reasons did Lenin introduce the NEP?
- Retain political power; Lenin described NEP as economic retreat designed to stop political defeat
- Revive the economy; Lenin needed policy to increase grain production & end famine
- Build Socialism; by 1921, clear that European revolution wouldn’t happen so Russia needed to build Socialism on its own
What did Lenin begin to argue in relation to economic policy as 1921 went on?
That the NEP rather than War Communism was the correct economic foundation on which to build Socialism
What 5 main measures did the NEP introduce?
- Agricultural production was left to the free market; peasants could buy, sell & produce freely
- Grain requisitioning ended & replaced by ‘tax in kind’
- Small factories & businesses denationalised, allowed to trade freely & under private ownership
- Large factories & major industries remained nationalised
- Money reintroduced
What positive results did the NEP have?
- Political & economic stability
- Industrial growth
Explain political and economic stability.
- Ending grain requisitioning was very popular with the peasants
- Free trade encouraged peasants to grow more food; famine ended & all kinds of food available
- Therefore, political opposition from the peasants also ended
Give an example of how agricultural production recovered as a result of the NEP.
Grain harvest:
by 1926; grain harvest had doubled from 40 to 80 mil tonnes
Explain industrial growth.
- Free market stimulated production
- Gov’t invested money from taxing peasants in reopening factories
What did Lenin say about the NEP?
‘build socialism with capitalist hands’
Give an example of how industrial production had recovered.
By 1926, industrial production with exception of pig iron & steel had recovered to 1913 levels
However, how could it be argued that the NEP wasn’t completely successful industrially?
- Merely taxing peasants failed to provide enough money to build new large-scale factories
- So 1926-28; industrial economy plateaued
What were the 2 main consequences of the NEP?
- Scissors crisis
- Inequality and corruption
Explain the scissors crisis.
- Agriculture recovered quickly & more output meant that agricultural prices decreased quickly
- But industry recovered much more slowly
- This created a gap between farmers’ incomes & industrial prices
- This meant farmers could not afford to buy industrial goods & so no incentive for farmers to keep producing large quantities of grain
How did the government temporarily solve the scissors crisis? Why wasn’t this sustainable?
- Subsidising industrial goods to make them affordable to peasants
- But this meant there was less money available to improve the economy
What did the scissors crisis show?
That NEP wasn’t capable of industrialising the economy, and therefore could not build a Socialist economy
Explain inequality & corruption.
- NEP led to emergency of Nepmen class who traded desired goods on the free market & grew rich, while peasants & proletariat remained relatively poor creating inequality
- Corruption grew
