New Economic Policy 1921–1924

Going Deeper

The following links will help you widen your knowledge:

Old Bitesize - simple intro (pdf)

Kronstadt Rebellion

Was the NEP a success?

How far do you agree that the Bolshevik survival in power 1918-24 was even more surprising than their seizure of power in 1917?  - essay by Prof Christopher Read

   In what ways were the lives of Russians affected by the New Economic Policy?

YouTube

Clear, basic account - History Pod

So: Who was more important: Lenin or Trotsky?

A.  Causes of the NEP

1. 'War Communism' had failed

• The Bolshevik policies of 1917-21 had helped win the Civil War, but were enormously unpopular.  In the countryside, peasants avoided the Prodrazverstka by simply not creating a surplus, or sowing in secret.  This in turn led to food shortages in the cities, which in turn led to strikes and unrest.  It also harmed industry as many industrial workers left their jobs and returned to the countryside. 

• The economy was in ruins: industrial output was minimal, the railway system gad all-but ground to a halt, money was worthless and people had reverted to barter. 

• Bolshevik rules were also widely ignored; illegal 'black markets' ('bazaars') where peasants bartered (swapped) their goods were taking place openly all over the country, and were proving impossible to stop.

• Opposition was growing: The Mensheviks were beginning to take over the Soviets, and a 'Workers' Opposition' led by Shliapnikov and Kamenev was demanding trade union freedom.  There was growing unease about the excesses of the Cheka.

• At the Tenth Party Congress, in March 1921, Lenin reported "a whole number of profound discrepancies, erroneous calculations or plans" that needed a change of policy.

   

2. Tambov Rebellion, 1920-21

In 1920 the peasants in the village of Khitrovo (about 300 miles south of Moscow) beat up an army requisitioning unit and marched on the local capital, Tambov.  Repulsed by machine gun fire, they formed the 'Union of Working Peasants', led by Social Revolutionaries who opposed the Bolsheviks.  They demanded free trade, an end to the Prodrazverstka, and an end to the CHEKA, and waged an underground war against the Bolsheviks.  Peasant revolts spread across the country – during the next year, 200 grain collectors were assassinated. 

The rebellion was brutally suppressed; 100,000 people were sent to kontslargerya (containment camps), villages were burned to the ground, 15,000 people were executed.  Nevertheless, Lenin in a pamphlet of April 1921 wrote that: "the political situation in the spring of 1921 was such that immediate, very resolute and urgent measures had to be taken to improve the condition of the peasants and to increase their productive forces".

  

3. Kronstadt Naval Base mutiny

   In 1921, the sailors at the Kronstadt Naval Base mutinied. 

   They demanded free speech, free elections, free trade unions and an end to war communism.  Trotsky’s Red Army put the mutiny down, but only with great losses. 

   The Kronstadt mutiny especially scared the Bolsheviks, because the Kronstadt sailors had been their greatest supporters!  Lenin said later that the rebellion was "like a flash of lightning which threw more of a glare upon reality than anything else" – he realised that he was pushing the people too far too fast.

   So he abandoned the policies of 1917-21 and brought in the NEP.

  

4. End of the Civil War

   By the end of 1920 the Civil War was over – the last White Army had been defeated, and peace had been made with Poland.  This eased Bolshevik fears of being destroyed, and freed them to look to the crisis within Russia.  It removed any excuse for oppressive 'war-communism' policies.

  It also brought 5 million soldiers back into society; many of them went straight back to their villages to lead revolts.

  

5. Ideology

   When Karl Marx had formulated his theories of Communism, he had stated that the revolution would come from the 'proletariat' (the politically-educated urban working class).  However, even in 1917 there had been no more than 3½ million industrial workers in a population of 125 million.  By 1920, this had fallen to 1½ million – many had gone back to their villages when the factories closed during the civil war, others (particularly the keen Bolsheviks) had gone to fight (and die) in the Civil War.  So there was a problem: how do you have a proletarian revolution without a proletariat? 

   • Many 'Old Bolsheviks' wanted to continue the terror and compulsion of war communism (but that was clearly not working);

   • Trotsky wanted to provoke revolutions in other European countries and make it a 'world revolution' (there were some rebellions – eg in Germany – but they failed);

   • Lenin's policy is outlined in the last paragraph of Source A: pause, and educate the working classes of Russia in communist ideology → the NEP.

B.  Lenin's New Economic Policy

National freedoms

1. Lenin allowed freedom to national and Muslim cultures. 

2. In the Ukraine, although the Bolsheviks were in power, the Ukrainian language was allowed in government and business, and children could be taught it in schools. 

3. In the Muslim areas of central Asia (such as Uzbekistan and Turkmenistan) bazaars were allowed to reopen, mosques were taken from Soviet control, the Koran was restored, and native languages were encouraged. 

Enterprise [BASHER]

'War Communism' was dismantled:

1. Banking:
   In 1921 a State Bank (Gosbank) was created.  In 1924, the currency was reformed and pinned to gold to stop inflation – a gold coin, the 'chervonet' (later called the rouble) replaced the old worthless sovnaks at the rate of 1 gold rouble = 50 billion sovnaks.  In June 1921 the limits on sums that could be held by individuals or organisations were abolished while deposits in saving banks were guaranteed against confiscation. 

2. Agriculture:
   Where the Prodrazverstka had forced the peasants to hand over their surplus grain – Lenin let them pay a 'tax-in-kind' (the prodnalog) instead, and sell any surplus; thus there was no need to hide any surplus, and they were encouraged to produce more grain.  NB peasants were not given the right to own the land – the Land Code of 1922 said that all land belonged to the state and forbade its sale – but they were allowed to lease land for 12 years, and to hire labour.  Bukharin told the peasants “Enrich yourselves!”

3.  Small factories: were handed back to their owners.  Factory workers were allowed to retain part of their production to barter it for food.  Compulsory labour was abolished (Feb 1922).

4. Heavy industry:
   Coal, iron, steel and railways stayed nationalised – 84% of all industrial workers were still employed in state owned enterprises.  However, the government demanded that state industries bring in proper accounting and pay for themselves.  They had to pay cash wages, buy their raw materials and sell them on the open market.  And the Bolsheviks brought in foreign experts, on high wages, to increase production.  Lenin called this ‘State Capitalism’, and he saw it as a half-way house between private capitalism and socialism. 

5. Exports:
   The government kept control of exports, making a secret arms deal with Germany in March 1921, and commercial treaties with England (March 1921) and other European countries.  At a European Conference in Italy trying to attract foreign investment, the Soviet delegate assured listeners that they would find Communists in Russia, but not Communism.

6. Retail:
   Small traders (who came to be called 'nepmen') were allowed to set up small private businesses.  Markets and bazaars – such as the annual fair at Nizhni-Novgorod – were allowed.

Political Oppression

1. The Tenth Party Congress (1921) demanded the disbanding (on pain of expulsion) of ‘groups with special platforms’ within the Party.  The Workers Opposition (the 'Syndicalist and Anarchist Deviation') was banned.

2. There was a purge of one-fifth of all Party members for not following the strict Party line.

3. Trade Unions were strictly controlled.

4. The leaders of opposition parties such as the Mensheviks and Democratic Centralists were sent to re-education camps or driven into exile – "one party in power and the others in prison" (Bukharin).

5. A Decree in June 1921 forbade the teaching of religion.  Members of the youth organisation Komsomol were encouraged to mock church-goers.  School-children who went to church were expelled.  At Easter 1923, while both the Orthodox Patriarch and the Catholic Archbishop were condemned to death for teaching religion and withholding church property, organised crowds attacked churches, shouting: "Down with the lying bells".

6. By 1922, all opposition newspapers and journals had been shut down

Source C

A 1925 advert for ‘Kalenkin’ beers, sodas and syrups. 

Source D

A poster: ‘You will be able to go anywhere in the world if you win the state lottery’.

C.  Results

1. There was some modernisation in agriculture – arable strips were rationalised, new crop rotations and chemical fertilizers introduced.  By 1926 there were 33,500 farming cooperatives with 6 million members.  As well as grain, farmers were growing market crops such as flax & sugar.  By 1927 agricultural production had reached its 1916 level and the amount of land under cultivation slightly exceeded the pre-World War area.

2. Some peasants became rich (the ‘Kulaks’).  However, this must not be over-stated: the number of peasants with 0-4 hectares of land grew from 59-79% in the period 1917-22 – whilst the numbers both of landless, and larger farmers, declined.

3. By 1928 industrial production had reached the prewar level – production of coal grew 11½-24½ million tons 1923-26; output of cotton cloth from 560 million to 2 billion metres.  The urban workforce grew as peasants began to move into the towns again .

4. 75% of the retail trade fell into private hands.  There was a boom in street-stalls, flea-markets, 'bagging', cafes, night-clubs, cabbies ...  and prostitutes, beggars and pickpockets (see Source H).  Some of the nepmen became very rich and married into the former upper classes.

 

HOWEVER the impression of prosperity was false and not shared by all (see Source H):

5. Agriculture did not grow as much as hoped, and stalled altogether after 1927.  Huge numbers of tiny farms were just not cutting it.

6. The NEP did not prevent a severe famine over much of western Russia in 1921-22, followed by typhus and cholera; as many as 5 million people died.

7. Industrial production grew only very slowly.  Coal production in 1923 was only 44%, and iron ore only 6%, of production in 1913.  Only 100 cars and trucks were produced in the whole of the Soviet Union in 1924, and only 11 tractors.  No other heavy agricultural machinery was recorded until 1930.  In 1927, the Soviet Information Bureau announced that 18 large electric power plants were already in operation, with 12 more under construction, and that production had more than doubled since 1922.  Production of electricity, however, had not passed the 1913 level until 1925.

8. The ‘scissors’ crisis: whilst farming growth reduced the price of agricultural produce, industrial stagnation increased the price industrial goods, so the farmers found it increasingly difficult to afford any tools or machinery. 

9. Social inequality rose.  A 'petty-bourgeoisie' (lower middle class) developed, able to afford the restaurants and shopping.  Meanwhile, however, there was 18% unemployment in the urban workforce and growing poverty.

10. The NEP created significant opposition from Old Bolsheviks who saw it as a betrayal of the principles of the revolution; they found themselves alienated form the Party, and some even committed suicide.

11. Meanwhile, the changes did not grow the proletariat as Lenin had hoped.  In the 1920s, less than half the party officials (the ‘cadres’) and barely a third of the bureaucracy, came from working class backgrounds.  And an increasing number of the Politburo (the inner cabinet of the government) opposed the NEP because it allowed capitalism.