How Successful Was the New Economic Policy

The New Economic Policy (NEP) was a measure implemented in order to counter the arguably disastrous effects War Communism. The New Economic is controversial. Some historians argue it allowed the Soviet economy to solidify and begin to recover, and also allowed the Bolsheviks to retain control over Russia. Others, like Orlando Figes, state it was ultimately a failure, arguing that under the NEP the peasants grew away from the Bolshevik regime, inviting a future, and brutal, reassertion of central control. This essay will discuss the effectiveness of the NEP economically and politically as well as outlining War Communism and why it failed Michael Lynch argues that ‘By 1921, the grim economic situation had undermined the original justification for war communism. During its operation, industrial and agricultural production had fallen alarmingly. ’ War Communism was first introduced as an extreme economic measure in order to deal with problems created during the Civil War as well as enabling the Army to be fed.

However in accordance with Lynch, the policy did not improve Russia’s productivity or indeed the Bolshevik popularity. The existence of the Cheka and the Red Army enabled Lenin to embark on the policy of centralisation. This resulted in a considerable increase in Bolshevik influence in the factories via the infiltration of the Workers’ committees by political commissars. This development helped prepare the way for issuing the Decree of Nationalisation in June 1918 and within two years it brought practically all major industrial enterprises in Russia under central government control.

Yet nationalism did nothing to increase production due to being imposed at the time of severe industrial disruption caused initially by the strains of World War One but which worsened during the Civil War. Furthermore the military needs were given priority thus denying resources to those industries not considered essential. The situation was made more serious by factories being deprived of man power as a result of conscription into the Red army and flight from urban areas of large numbers of inhabitants who left in search of food or by means of escape from the Civil War.

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This led to the population of Petrograd and Moscow to drop by half between 1918 and 1921 causing a dramatic decrease in Russia’s productivity. Problems were deepened further by hyper-inflation. The scarcity of goods and the government’s policy of continuing to print currency notes effectively destroyed the value of money and by the end of 1920 the rouble had fallen to 1% of its worth in 1917. Ultimately War Communism tightened the Bolshevik’s grip on industry but did not lead to economic growth. Agriculture was also largely affected by War Communism. A major purpose of War Communism was to force the peasants to provide more food.

However peasants were resistant to the government’s demands and this was largely blamed on the Kulaks who the Bolsheviks claimed were hoarding the grain. As a result the government become infuriated by the peasant’s refusal to conform and condemned them as counter-revolutionaries and restored to coercion. Cheka requisition units were sent into the countryside to take the grain by force. In 1920 the order was given to hang one hundred kulaks publically in order to terrify the population however this seemed to have the reverse effect of the one intended.

With the knowledge that any surplus would be confiscated, peasants produced the bare minimum to feed themselves and their family. By 1921 a combination of requisitioning, draught and general disruption of war resulted in national famine with grain harvests in 1920 and 1921 being less than half that gathered in 1913. The matters became so desperate that the Bolsheviks admitted famine and accepted foreign assistance however foreign help was too late to prevent mass starvation. Of the 10 million of the Civil War period over half starved to death.

Although War Communism proved catastrophic in terms of industrial and agricultural output the Bolsheviks saw it as true socialism due to the squeezing of the peasants and the ending of private ownership. Even after the Red Army’s victory in the Civil War, the policy of War Communism was maintained. As a short-term measure the policy produced the results Lenin wanted but severity increased Bolshevik unpopularity resulting in a number of minor outbreaks of resistance during the 1920s. But the Kronstadt Rising of 1921 proved to be highly disturbing to Lenin as he described it as the ‘lightening flash that illuminated the true reality of things’.

Lynch claims that ‘As long as unrest was confined to the peasants and the Bolsheviks’ political enemies it was a containable problem’ but Lenin began to worry over the development of War Communism within the party itself. The two prominent Bolsheviks involved Alexander Shlyapnikov, labour commissar, and Alexandra Kollontai, who led a ‘workers’ Opposition’ movement against the excess of war communism. Kollontai accused party leaders of losing touch with the proletariat and from this, groups of workers in Petrograd went on strike in early 1921 justifying their actions in the proclamation than change is needed in the policies of the government.

By February 1921 thousands of Petrograd workers crossed the naval base on Kronstadt claiming that Russia should be better, not worse, than Tsarist times ,as the Bolshevik government claimed Russia to be a workers’ state. In an attempt to pacify strikers Lenin sent a team of political commissars to Kronstadt who were greeted with derision. In early March, the sailors and workers of Kronstadt produced a manifesto. It was not the demands that frightened the Bolsheviks but the people who drafted them as the workers and sailors of Kronstadt had been great and popular supporters of the Bolsheviks in 1917.

Shelia Fitzpatrick describes them as ‘The Kronstadters, heroes of the July Days and supporters of the Bolsheviks in the October Revolution, had become almost legendary figures in Bolshevik mythology. Now they were repudiating the Bolsheviks’ revolution, denouncing ‘the arbitrary rule of the commissar’ and calling for a true society republic of workers and peasants’. The danger for the Bolsheviks was that due to their popularity of the Kronstadters revolted the rest of the people would be due to follow. The rising was finally crushed when Trotsky ordered the Red Army to storm the Kronstadt base with violent results.

Lenin took an important lesson from the Kronstadt uprising which was to avoid scandal and embarrassment of another open challenge to his party and government and so decided it was time to soften his severity of war communism leading to the introduction of the NEP in order to tackle the famine and thus prevent further uprising. The majority of historians agree that the NEP was certainly an economic success compared to the catastrophe of War Communism with both Shelia Fitzpatrick and Orlando Figes agreeing that NEP was introduced as ‘an impoverished response to desperate economic conditions’.

Lenin is a pragmatic character and so seeing that peasants could not be forced to produce more food so instead must be persuaded and thus temporarily abandon the idea of War Communism. The success of the NEP can in reality only be measured by its aims. The NEP was set up primarily to stabilise the economy; this included decreasing inflation, increasing agricultural and industrial production and re-establishing trade outside of the country. The other major aim of the policy was to minimise the gap between the worker and the peasant in order to get peasant co-operation and support.

Due to the fact that the NEP was set up as a result of Kronstadt its other aim is to demolish the possibility of such a rebellion happening again. Many reforms took place in Russia due to the NEP. Under the NEP the Government stopped its policy of requisitioning the peasants entire crop and instead began to take only what was needed to meet the minimum requirements of the army and the urban workers. Fixed tax in kind was introduced and although the peasants were forced to pay the tax, they were now allowed to sell the remainder of their crop for profit.

They could sell either privately or to the state. This gave peasants the initiative to grow more crops as a result the grain harvest went up from 37. 6 million tons in 1921 to 72. 5 million tons in 1925. This was a success of the NEP as it increased agricultural production to Russia’s pre-war levels, which helped to stabilise the economy. Nationalisation was minimised with only the large industries remaining under state control. However, this was still a lot as 85% of the workforce worked for state enterprises, the rest for private enterprises or co-operatives.

Also conscription of the workforce was abandoned. Over the course of five years, the NEP allowed industrial and agricultural output to rise to its pre-war levels. In this sense, the NEP did achieve economic recovery. However, the NEP was bitterly disliked by many leading communists who saw it as a reversal of everything they believed which will be discussed later in the essay. Although industrial production increased at a slower pace than agricultural production, which caused many problems such as the scissors crisis in 1923, it did increase. For example, coal in 1921 did not exceed 8. million tons while in 1925, it was around 18. 1 million tons, and steel production increased nearly 10 times from 183 thousand tons being produced in 1921 to 2135 thousand tons in 1925. However industry did not attain the same levels of recovery as agriculture and did not reach the pre-war level. This shows that the NEP was successful in increasing industrial production. However, the increase in heavy industry was not as great as light industry, consequently it suffered in comparison. Trade with foreign countries was also reintroduced, as earlier it had been prohibited.

The ban against free trade was lifted too so the whole population was permitted to trade with one another. The state only had control over 15% of the trade; the rest was under Nepmen or co-operative control. However, the boom in private trade led to a widening gap between rich and poor. This can clearly be seen by the sudden rise in unemployment in the first two years of the setting up of the NEP. There was a lot of anger focused on the Nepmen, who were seen as the ‘new class’, between rich and poor. The workers also felt resentful towards the Bolsheviks as they felt the NEP was sacrificing their class interests in favour of the peasantry.

Therefore although the NEP allowed free trade and re-established foreign trade, not everyone benefited from it. And in fact this lead to the very thing communism went against class. Nepmen became the new beneficiaries, as they grew rich. Also, the gap between rich peasants and poor ones increased as class, once again became an issue. In addition, a new currency was set up to ease the economic problem. This currency was known as the chervontsy. However, they were in heavy demand and only available in large denominations. The rouble was still legal tender until February 1924.

Inflation can clearly be seen as in January 1921 there was 1,169 milliards of roubles in circulation and by January 1923 there were 1, 9994,464 milliards. This clearly shows that a change in currency was needed. Although this helped the economy as the rate of inflation decreased slightly, it did not do enough to help the people and their financial difficulties. The NEP did minimise the gap between workers and peasants. The policy meant that peasants could make more of a profit as they were allowed to sell their own produce and trade with others. It also encouraged them to work harder.

However, it was the peasants who suffered most due to inflation. Although they made money, it was worth little in industry. In this way the NEP had been partly a success as it had minimised the gap and made things better for the peasants but did not improve everything. As for the NEP’s other aim, that being avoiding another rebellion like Kronstadt, the policy was successful as there was no threat of them ever losing power. Although there were protests against the NEP or some parts of it, overall these were unthreatening to Bolshevik power and were ignored or came to an end after a while.

Aside from economic issues, the NEP also caused dispute amongst the Bolsheviks themselves in political terms. As Fitzpatrick argues ‘From the communist standpoint NEP was a retreat, and a partial admission of failure. Many Communists felt deeply disillusioned: it seemed that the revolution had changed so little. ’ The NEP was a mixture of socialism and capitalism and was referred to as a “step back” for the Bolsheviks as they had just defended socialism in the civil war but was now retreating into capitalism and the “old ways”. A major objection from the

Bolsheviks was the reintroduction of money and private trading had created the Nepmen. It was the profiteering that Victor Serge, a representative of the Left Bolsheviks, had in mind when he described the immediate social effects of NEP: ‘the cities we ruled over assumed a foreign aspect, we felt ourselves sinking into the mire. Money lubricated and befouled the entire machine just as under capitalism’ As the NEP had become such a contentious issue among the Bolsheviks Lenin introduced the banning of factionalism as well as outlawing all other parties except from Bolshevism.

The object of this was to eliminate party disputes and political rivals and to a certain extent this worked. In conclusion, the NEP was successful to a certain extent. Because of the New Economic Policy the Soviet economy revived quickly. There was more food from the farmers; there were goods in the shops and outdoor markets, However many Bolshevik members did not consider the NEP as socialism and thought that it was a betrayal of communist principles. On the whole the NEP was a success. It met most of its aims. The policy helped stabilise the crumbling economy and re-established pre-war levels.

The policy decreased the rate of inflation, it increased agricultural and industrial production, it allowed free trade and re-established foreign trade. However, some of these aims it only met partly. For example although the rate of inflation did decrease it was still very high and the NEP did not stop it completely. Industry production also suffered as a result of the NEP. Although its production increased its prices rose due to the fast increase of agriculture. Trade also caused problems like the re-establishment of classes.

So these aims were only partly successful and created many other problems. The NEP tried to minimise the gap between peasants and workers. Many of the aims in stabilising the economy were for the peasants’ benefits like the end of requisitioning and allowing them to trade. However, the high prices in industry and high inflation left the peasants with money which was not worth as much. However, the policy did try to get peasant support. It was partly successful in bringing workers and peasants together, however many workers felt let down by the party that was supposed to cater to their needs.

The fact no major rebellions threatened the Communists shows that the policy had kept many people happy and those that protested were insignificant or in such small numbers they were unable to mount a decent threat on the party. Thus the NEP was one of the major factors that had enabled the survival of Communism in Russia. The step back from socialism and the reintroduction of capitalism had worked. Peasant uprisings virtually ceased, the economy recovered and the Bolshevik regime was consolidated

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