New Economic Policy (NEP) Flashcards
Why was NEP introduced?
• Retain political power
—> Compromise as was communism
was unpopular
• Revive the economy
—> Stimulate grain production
—> 1/5th pre war levels
• Build socialism
—> European socialism wouldn’t
happen ; needed to build Russia
without foreign aid
What were the measures of NEP?
• Peasants could trade and produce grain freely
—> Tax introduced and ban on private
trade removed
• Factories with less than 20 people denationalised
—> Traded freely
• New currency
—> Chervonets
What were the consequences of NEP
• Popular among peasants
—> Free trade encourage food growth
—> End of famine
• Scissors Crisis
—> Uneven economic growth,
agriculture fast industry slow
—> Gap between income and
industrial prices; couldn’t afford
industrial goods
—> No incentive to produce large
amounts of grain
—> Gov subsidised industrial prices
• Corruption
—> Nepmen made money spotting
gaps in market selling luxury goods
—> grew rich; workers poor
—> arrested by Cheka
