After the October Revolution of 1917, the country of the Soviets lay in ruins. Hunger and poverty reigned everywhere. This created social tension. The voice of disgruntled people sounded louder, rebellions began to flare up everywhere.
In such a situation, it was necessary first of all to revive the country's economy, for which the Bolsheviks introduced a new economic policy. The article describes what were the main activities of the NEP. The contradictions and results of the new course in the economy are also briefly presented.
Preconditions for the transition to the NEP
Before answering the question of what were the main activities of the NEP, it is necessary to briefly highlight the main reasons for the economic transformation of the Bolsheviks:
- huge losses as a result of the civil war amounted to no less than 50 billion gold rubles;
- the collapse of heavy industry, which gave products 7 times less compared to 1913;
- human losses amounted to more than 10 million people due to wars, famine, epidemics and emigration;
- a terrible famine in 1921 as a result of the surplus appraisal. Hunger drove people to villages, as a result of the city emptied, in factories there was an acute shortage of labor;
- a peasant war was brewing;
- focal uprisings of workers, soldiers and sailors represented a great danger.
The government issued a series of harsh decrees, but this did not impress the hungry and angry people. Nobody performed them. Then the Bolsheviks understood that their power would end with an economic catastrophe, and an urgent course was taken at the 10th Congress of the Communist Party in March 1921.
What were the main activities of the NEP in agriculture
First of all, it was necessary to feed the hungry people, for which it was necessary to revive the village and the agricultural sector. The food surplus was replaced by a food tax, which meant the seizure of not 70% of the grain, but only 30%. Subsequently, the rate was reduced to 10% of the total net product, and after that it was completely replaced with a monetary form.
Wealthy peasants were liable to a single agricultural tax. This measure seriously hindered the development of agriculture.
It was allowed to rent land, the use of wage labor.
As a result of the revision of pricing policy, prices for grain and basic agricultural products were raised. This made it possible for the peasants to receive sufficient compensation for their labor and to acquire manufactured goods.
The lion's share of peasant households was involved in various forms of simple cooperation.
The impact of the NEP on industry
What were the main activities of the NEP in industry? First of all, she was also swept by the cooperative movement.
Small and medium private entrepreneurship has been revived. A private producer was allowed to rent enterprises and wage workers up to 20 people. Later, the possible number of employees increased.
A wide network of commodity firms was established in the country, which organized the wholesale distribution of finished products.
Trusts took the place of commanders, into which industrial enterprises that were similar in type of production and financially connected were combined. After paying income tax, they had the right to independently manage the remaining funds.
The Bolsheviks temporarily abandoned planned production, leaving the trusts to decide for themselves what and how much to produce, how much to buy raw materials and where to sell products. Such a system is called cost accounting.
The main economic contradictions of the NEP
How thought out were the activities of the NEP? The table briefly describes the main negative results of the new course:
| Agricultural sector | Industry |
| Overproduction, resulting in underestimated prices for agricultural products. | Underproduction of more than 60%, as a result, prices for manufactured goods soared very high. |
| Well-off peasants are taxed, as a result, it became unprofitable to develop the economy. | The bulk of industry and all foreign trade were under state control, which greatly hindered the restoration of this sector of the economy. |
| The seizure of food in order to create food stocks in the country led to hunger. | The lack of guarantees of private capital has led to a massive outflow of investors. |
Such decisions leveled the positive activities of the NEP. The table above confirms that the illiterate economic decisions of the Bolsheviks caused a new crisis in the country and social tensions.
Results of the new course
The economic activities of the NEP were quite controversial. On the one hand, they were aimed at stabilizing the economy, stimulated the revival of the countryside and industry, and provided a short-term increase in the well-being of the population. On the other hand, the new economic policy was based on market relations, while the political goal of the state - building socialism - has not changed. Nationalization has led to a complete outflow of foreign investment.
In the years of the NEP, in order to provide the country with food, the Bolsheviks again began to seize the "surplus" of food in the village, as a result, the peasants reduced the sown area. Why produce so that they will be selected?
The “price scissors” between the agricultural and industrial sectors provoked an oversupply of consumer goods amid food shortages. Difficulties in the sale of manufactured goods led to an unprofitable industry. To cover the lack of financial resources, the Bolsheviks put new money into circulation, which immediately led to hyperinflation.
All these contradictions became the reason for the folding of the NEP in 1928.