The economic and political results of the NEP Flashcards
What was the New Economic Policy?
March 1921 - Lenin announced abandonment of compulsory grain requisitioning
- 1st step was introduced of NEP - the transition to the NEP was to complete by the end of 1922
- Overall effect was to create a mixed economy
Define mixed economy.
Some industries owned and run by govt - others privately owned and operated on the basis of the market forces of supply and demand.
What were the 4 main features of NEP?
1) Compulsory grain requisitioning replaced by a ‘tax in kind’
2) Private trading and private ownership of small-scale businesses legalised
3) The ‘commanding heights’ of the economy - as Lenin called them - remain under state control
4) Industries that remain nationalised after 1921-22 expected to trade at a profit - weren’t bailed out by govt
What was the ‘tax in kind’?
- Peasants had to hand over to the state a fixed proportion of grain they produced
- Any surplus left over after tax - could be sold for profit on the open market
- Amount of grain demanded by state - in 1921 - totalled 1/2 the amount requisitioned in 1920
1924 - ‘tax in kind’ replaced by money payments - abandonment of compulsory grain requisitioning took steam out of peasant discontent.
What did the legalisation of private trading and ownership of small-scale businesses lead to?
Many of these were in the service sector - shops, market stalls, cafes - also a significant amount of private manufacturing.
Privately owned manufacturing companies typically produced consumer good such as clothes and footwear.
What did the ‘commanding heights’ include?
Not only heavy industries like coal and steel - but also the railway network and banking system - foreign trade still a state monopoly as well.
One of the consequences of the new regime was an increase in…
unemployment - state-run industries shed surplus workers in order to increase efficiency.
How did Lenin view the NEP he had introduced?
- Called it a ‘retreat’ and ‘a peasant Brest-Litovsk’ - a surrender for the sake of survival
- He insisted it would only be temporary - implied that, at some point in the future, the NEP would would be abandoned in favour of an authentically socialist policy
- How long the NEP would last - unknown - issues unresolved at time of Lenin’s death
What did the NEP surrender in 1921-22?
Socialist principles - the NEP involved the partial restoration of capitalism in Russia
What were the economic results of the NEP?
1) Introduced too late to prevent a major famine
2) After 1921 - economy recovered strongly
3) Economic recovery erratic and uncertain rather than smooth and unbroken
4) The success of the NEP didn’t mean that the issue of how long it should last was put completely to one side
How did a major famine emerge, and when?
Summer 1921:
- Drought in the ‘Black Earth’ region (southern European Russia) - led to major crop failures
- Because of grain requisitioning under War Communism - peasant households left with no reserves of grain to fall back on
- Consequences - famine affecting 25 million people - death toll perhaps as high as 5 million
- In desperation some resorted to cannibalism
What did historian Richard Pipes claim about the 1921 famine?
“The 1921 famine in Russia was the greatest human disaster in European history, other than those caused by war, since the Black Death’.
How did the soviet economy recover after 1921?
By the time of Lenin’s death in 1924 - industrial output was rising sharply and grain production had bounced back from the catastrophically low levels of 1920-21.
In both sectors of the economy, though, output in 1924 remained below pre-1914 levels
How much was industrial production in 1920 and 1926 (1913=100)?
1920 - 14
1926 - 108
How much was coal production in 1920 and 1926 (1913=100)?
1920 - 30
1926 - 95
