The NEP

Question 1

What was the NEP?

Answer 1

The ‘New Economic Policy.’ It was a compromise that made some use of capitalist ideas.

▪ Lenin realised that the people of Russia had suffered too much under War Communism.
▪ He also realised that the economy and industry had to be strong before implementing communism.
▪ Lenin argued that this policy was a temporary shift to capitalism.
▪ It was more flexible and allowed limited free enterprise.
▪ He thought it would enable a transition to a completely Communist state.
▪ The govt also signed trade agreements, which allowed international trade for the first time in years.

Question 2

How did the NEP approach agriculture?

Answer 2

▪ The peasants were allowed to sell any extra produce on open markets where they could get the best prices.
▪ This produce could only be sold after they had supplied their quota to the state and paid their tax in grain.
▪ This gave the peasants an incentive to produce more for profit.
▪ Peasants could not own land, but rented plots and employed
other peasants to work for them.
▪ A wealthy class of peasants emerged, called the Kulaks

Question 3

How did the NEP approach industry?

Answer 3

▪ The state kept control of large industries, banks and the transport system.
▪ But ordinary people could set up their own small businesses with under 20 workers.
▪ Those who became wealthy through private businesses were called NEP MEN (capitalists).
▪ Workers were paid incentives and bonuses to encourage them to work harder (in the state industries).

Question 4

How did the NEP’s new policies concerning industry and agriculture have an effect on the economy?

Answer 4

• This policy helped to restore the economy.
• It helped Lenin’s govt consolidate their control.
• Many peasants were very happy that they were given the opportunity to create a profit.
• Orthodox Communists were unhappy about this compromise and saw it as creating Socialist inequalities in classes.
• Some of the poor felt resentment towards the Kulaks and NEP MEN for their financial success.

Question 5

What changes did the NEP make? What effect did these have?

Answer 5

• Ended grain requisitioning and replaced it with tax:
  Peasants paid a portion of the tax in grain, which was less than what was taken under grain requisitioning and surpluses could be sold on the open market. Some peasants became wealthy and were known as kulaks.
• Small businesses could operate if they employed under 20 workers:
  Workshops that made shoes, clothes and other consumer goods could keep their profits and NEP MEN became wealthy this way. However, they were taxed heavily.
  Peasants then had an incentive to sell their surpluses to afford these consumer goods.
• Bans on private trade were lifted:
  This gave individuals an incentive to trade and improved food supplies in towns and manufactured goods in the countryside. Rationing was abolished, and people were encouraged to buy goods with cash, thus boosting the economy.

Question 6

Discuss the effects the NEP policies had on various parts of industry versus the war communism policies.

Answer 6