It is believed that on March 21, 1921, our country switched to a new form of commodity-economic relations: on that day a decree was signed ordering to refuse food surplus and proceed to the collection of the food tax. That is how the NEP began.
The Bolsheviks recognized the need for economic interaction, since the tactics of war communism and terror gave more and more negative effects, expressed in the intensification of separatist phenomena on the outskirts of the young republic, and not only there.
With the introduction of the new economic policy, the Bolsheviks pursued a number of economic and political goals:
- Relieve tension in society, strengthen the credibility of the young Soviet government.
- To restore the country's economy, completely destroyed as a result of the First World War and the Civil War.
- Lay the foundation for an effective planned economy.
- Finally, it was very important to prove to the "civilized" world the adequacy and legitimacy of the new government, since at that time the USSR was in solid international isolation.
Today we will talk both about the essence of the new policy of the government of the USSR, and we will discuss the main reasons for curtailing the NEP. This topic is extremely interesting, since several years of the new economic course have largely determined the features of the country's political and economic structure for decades to come. However, it is far from being the way the creators and founders of this phenomenon would like.
The essence of the phenomenon
As it usually happens in our country, the NEP was introduced in a hurry, the rush to adopt decrees was terrible, no one had a clear plan of action. The determination of the most optimal and adequate methods for implementing the new policy was carried out practically throughout its entire length. And therefore it is not surprising that it could not do without a large number of trial and error. So it is with economic “liberties” for the private sector: their list was expanding, now almost immediately narrowing.
The essence of the NEP’s policy was that while maintaining its authority in politics and managing the Bolsheviks, the economic industry received more freedom, which allowed for the formation of market relations. In fact, the new policy can be seen as a form of authoritarian rule. As we already mentioned, this policy included a whole range of measures, many of which were openly contradictory to each other (the reasons for this were already mentioned above).
Political Aspects
As for the political side of the issue, the NEP of the Bolsheviks was a classic autocracy, in which all dissent in this area was severely suppressed. In any case, deviations from the "central line" of the Party were not exactly welcomed. However, in the economic sector there was a rather bizarre fusion of elements of the administrative and purely market methods of farming:
- The state retained full control over all traffic flows, large and medium industry.
- There was some freedom in the private sector. So, citizens could rent land, hire workers.
- The development of private capitalism was allowed in some sectors of the economy. At the same time, many initiatives of this very capitalism were inhibited by law, which in many ways made the whole idea pointless.
- Allowed the rental of state-owned enterprises.
- Trade has become relatively free. This explains the relatively positive results of the NEP.
- At the same time, contradictions were expanding between the city and the village, the consequences of which are still felt: industrial centers provided tools and equipment for which people had to pay with "living" money, while food requisitioned for the tax was taken to the cities for free. Over time, this led to the actual enslavement of peasants.
- There was limited cost accounting in industry.
- A financial reform was carried out, which largely improved the economy.
- The management of the national economy was partially decentralized, removed from the power of the central government.
- Piecework wages appeared.
- Despite this, the state did not give international trade into the hands of private traders, which is why the situation in this area has not improved dramatically.
Despite all of the above, you should clearly understand that the reasons for the collapse of the NEP were largely rooted in its origins. We’ll talk about them now.
Selected Reform Attempts
The Bolsheviks made the most concessions to farmers and cooperatives (at the beginning of the Great Patriotic War it was small producers that ensured the fulfillment of state orders), as well as small industrialists. But here it should be clearly understood that the features of the NEP, which was conceived and which turned out in the end, are very different from each other.
So, in the spring of 1920, the authorities came to the conclusion that it is easiest to organize direct trade between the city and the village, simply exchanging equipment and other industrial products for food and other goods received in the countryside. Simply put, the NEP in Russia was originally conceived as yet another form of tax in which peasants would be allowed to sell their surplus.
So the authorities hoped to encourage the peasants to increase crops. However, if we study these dates on the history of Russia, it will become clear the complete failure of such a policy. People at that time preferred to sow as little as possible, not wanting to feed the horde of city dwellers, not receiving anything in return. It was not possible to convince the embittered peasants: by the end of the year it became very clear that no increase in gross grain harvest was expected. To continue the NEP, some decisive steps were needed.
Food crisis
As a result, a terrible famine began in the winter, covering regions where at least 30 million people lived. About 5.5 million died of starvation. The country has more than two million orphans. To provide industrial centers with bread, it required at least 400 million pounds, and so much was not there.
Using the most severe methods, with the already "peeled" peasants managed to collect only 280 million. As you can see, two completely opposite at first glance strategies had very similar features: the NEP and military communism. A comparison of them shows that in both cases, peasants in the village were often forced to give the whole crop for nothing.
Even the most ardent supporters of war communism admitted that further attempts to rob the villagers will not lead to anything good. Social tension has increased dramatically. By the summer of 1921 it became extremely clear that a real expansion of the economic freedoms of the population was needed. Thus, the policy of war communism and the NEP (at the initial stage) is much more closely linked than many had imagined.
Correction course
By the fall of that year, when a third of the country was on the verge of a terrible famine, the Bolsheviks made the first serious concessions: finally, the medieval commodity circulation, which passed the market, was canceled. In August 1921, a decree was issued on the basis of which the NEP economy was to function:
- As we said, a course has been taken towards decentralized management of the industrial sector. So, the number of commanders was reduced from fifty to 16.
- Enterprises were given some freedom in the field of self-marketing of products.
- Non-leased enterprises should have been closed.
- In all state-owned enterprises, a real material incentive for workers was finally introduced.
- The leaders of the Bolshevik government were forced to admit that the NEP in the USSR should become truly capitalist, allowing it to improve the country's economic system through effective commodity-money, and not at all in-kind circulation of funds.
To ensure the normal provision of commodity-money relations, the State Bank was established in 1921, cash desks were opened for issuing loans and accepting savings, as well as compulsory payment for travel by public transport, utilities and telegraph was introduced. The tax system has been fully restored. To strengthen and fill the state budget, many costly items were deleted from it.
All further financial reform was aimed strictly at strengthening the national currency. So, since 1922, the release of a special currency, the Soviet chervonets, was begun. In fact, it was an equivalent (including in terms of gold content) replacement of the imperial top ten. This measure had a very positive effect on confidence in the ruble, which soon gained recognition abroad.
At ¼ the new currency was provided by precious metals, some foreign currencies. The remaining ¾ was provided by bills of exchange, as well as some goods of high demand. Note that the government strictly prohibited the extinguishment of the budget deficit by the Chervonians. They were intended solely for securing operations of the State Bank, for conducting certain foreign exchange transactions.
NEP contradictions
One simple thing needs to be clearly understood: the new government has never (!) Set itself the goal of building some kind of market state with full private property. This is confirmed by the famous words of Lenin: "We do not recognize anything frequent ...". He constantly demanded that his comrades tightly control economic processes, so that the NEP in the USSR was never truly an independent economic phenomenon. It was because of the absurd administrative and party pressure that the new policy did not produce even half of the positive results that could have been expected otherwise.
In general, the NEP and war communism, a comparison of which is often cited by some authors in the purely romantic aspect of the new policy, were extremely similar, no matter how strange it seemed. Of course, they were especially similar in the initial period of the development of economic reforms, but subsequently the common features could be traced without much difficulty.
Crisis phenomena
Already by 1922, Lenin declared that further concessions to the capitalists should be completely stopped, that the days of the NEP had passed. Reality has adjusted these aspirations. Already in 1925, the maximum permitted number of employees in peasant farms was increased to one hundred people (previously no more than 20). Kulak cooperation was legalized, landowners could lease their allotments for up to 12 years. The prohibitions on the creation of credit partnerships were lifted, and the exit from the community households (cuts) was also completely allowed.
But already in 1926, the Bolsheviks headed for politics, the purpose of which was to curtail the NEP. Many of the permits that the people received a year ago were completely canceled. The fists again came under attack, so that the small industries were almost completely buried. Pressure on private business executives inexorably increased both in the city and in the countryside. Many of the results of the NEP were practically nullified due to the fact that the country's leadership lacked experience and unanimity in matters of political and economic reform.
Collapse of the NEP
Despite all the measures taken, the contradictions in the social and economic sphere became more and more serious. It was necessary to decide what to do next: to continue to use purely economic methods or to curtail the NEP and return to the methods of military communism.
As we already know, the supporters of the second method, headed by I.V. Stalin, won. To mitigate the consequences of the grain harvest crisis in 1927, a number of administrative measures were taken: the role of the administrative center in managing the economic sector was again significantly strengthened, the independence of all enterprises was practically abolished, prices for industrial goods were significantly increased. In addition, the government resorted to an increase in taxes, all the peasants who did not want to hand over the bread were tried. During the arrests, property and livestock were confiscated.
Dispossession of owners
So, only in the Volga region more than 33 thousand peasants were arrested. Archives indicate that approximately half of them lost all their property. Almost all agricultural machinery, which had been acquired by some large farms by that time, was forcibly seized in favor of collective farms.
Studying these dates on the history of Russia, it can be noted that it was in those years that lending to small industries was completely stopped, which led to very negative consequences in the economic sector. These events were held throughout the country, sometimes reaching the point of absurdity. In the years 1928-1929. large-scale farms began curtailing production, selling livestock, equipment and machinery. The blow inflicted on large farms for political purposes, to demonstrate the alleged futility of conducting a single farm, undermined the foundations of the productive forces in the country's agricultural sector.
conclusions
So, what are the reasons for the collapse of the NEP? This was facilitated by the deepest internal contradictions in the leadership of the young country, which were only exacerbated by attempts to stimulate the economic development of the USSR by conventional but ineffective methods. In the end, not even a dramatic increase in administrative pressure on private owners, which by that time had already seen special prospects in the development of their own production, did not help.
You need to understand that the NEP was not completed in a couple of months: in the agricultural sector, this happened already at the end of the 1920s, industry was out of work around the same period, and trade continued until the beginning of the 1930s. Finally, in 1929, a decision was made to force the country's socialist development, which predetermined the decline of the NEP era.
The main reasons for curtailing the NEP are that the Soviet leadership, wanting to quickly build a new model of social structure, provided the country was surrounded by capitalist states, was forced to resort to excessively rigid and extremely unpopular methods.