The 1920s is a unique period in Soviet history. At this time, the Bolsheviks were forced to allow the existence of market relations and carry out reforms that went down in history under the name of the new economic policy (or NEP). What caused these changes?
Start and background
By the beginning of 1921, power was actually in the hands of the Bolsheviks. Foreign interventionists were expelled, the white movement and national armies defeated. But it was far from complete calm in the country. Anti-Soviet uprisings flared up and down in different regions, threatening the existence of the Soviet regime. One of them, Kronstadt, occurred in March 1921, right during the Tenth Congress of the RCP (B.). The policy of war communism, which was convenient for the Bolsheviks themselves, led to the impoverishment of the rest of the population.
The Soviet leadership also had to think about changes because the hopes for a world revolution had melted away like last year’s snow. It was not possible to force the world proletariat to rise with arms in their hands, moreover, they even had to give up part of the territory of pre-revolutionary Russia, recognizing the independence of the Baltic republics, Poland and Finland. Therefore, it was necessary to strengthen power in their own territory, not hoping for new revolutionary campaigns.
All of these factors led to the adoption by the X Congress of the RCP (B.) Of the decision to move to a new economic policy. The Bolsheviks had to soften their tax policies and allow private enterprise. The work of state-owned enterprises was also being rebuilt, which should have been oriented not to planned indicators, but to profit. Thus, the essence of NEP was that in the economy began to exist, albeit very limited, but still market relations.
The essence of reform
Now briefly about what all these reforms were. In agriculture, the surplus appraisal, which was more like extortion, rather than tax, was canceled. Instead, a food tax was levied on a particular peasant farm. Its size was much smaller. Later, peasants were allowed to rent land and use wage labor. But the new economic policy in the village did not immediately bear fruit. This was prevented by the mass famine of 1921-1923 in the Volga region and in the south of Ukraine, and a large number of taxes that were levied on peasants. In March 1922, rural taxation was streamlined by introducing a single in-kind tax calculated in rye pounds.
In cities, the new economic policy also brought a lot of changes. In particular, free trade was allowed . Numerous commodity exchanges and fairs have appeared. It became possible to create private enterprises - artisanal or craft industries. Small and partially medium-sized industrial enterprises were returned to their former owners. It was also allowed to lease state-owned factories. The right to rent enterprises was obtained not only by Soviet citizens, but also by foreign entrepreneurs. As for the public sector, associations of state enterprises — trusts — were created here. But in cities, too, reforms did not immediately go smoothly. After all, along with market relations came money, and rising prices, and unemployment. Therefore, strikes at enterprises began to arise in the cities of the USSR, as in the countries of capitalism. The first serious crisis erupted in the spring of 1923 due to the so-called price scissors when the cost of industrial goods was higher than agricultural products. As a result, the peasants began to hide their products so as not to give them away for nothing. To prevent unrest in the country, the Bolshevik leadership decided to lower prices for manufactured goods.
Successes and contradictions
And yet, despite a number of contradictions, the new economic policy has borne fruit. By 1925, large-scale industry was able to achieve the pre-war pace of production. The pace of agricultural production has also increased. The introduction of a stable currency — gold-backed chervonets — helped strengthen the economy.
At the same time, throughout its existence, the new policy has been contradictory and limited. The political structure of the state remained unchanged: power, as before, remained in the hands of the Bolsheviks. Entrepreneurs who appeared during the NEP did not have any political rights. And their activities were very limited: all large enterprises, foreign trade, banks, and transport remained under state control. It became increasingly apparent that NEP was simply a temporary measure of the Bolsheviks, and not a stable and long-term policy.