The document discusses the New Economic Policy (NEP) implemented in the Soviet Union in the 1920s as an emergency measure to rescue the struggling economy. The NEP allowed some private enterprise in agriculture and small-scale industry while larger enterprises remained state-controlled. However, the NEP faced criticism from more ideologically driven Communists as it permitted profit-seeking and economic inequality, and it did not fully revive industrial production or resolve issues in the agricultural sector.

1. Industrial and Agricultural
problems of the NEP
"From Russia of the NEP, there will be a Russia of Socialism.“
(Vladimir Lenin)
Toby Attrill

2. The NEP
• An emergency measure introduced 21st March
1921 to rescue the economy, and possibly the
communist regime itself, from collapse.
• Lenin justified it as a halfway house between
capitalism and communism, it allowed some
small businesses whilst large organisations
were still state-controlled.
• A replacement of food requisitioning with a
small tax of foodstuffs.

3. Policies
• Some foreign investment was allowed for
industry although the NEP was a primarily
agricultural issue.
• The NEP allowed individuals to make money
and show initiative whilst, in theory,
protecting the population’s interests by
keeping the means of production and industry
in state hands.

4. Arguments against the NEP
• The arguments for the NEP did not carry much
weight for many more fervent communists who
took Marxist ideology seriously.
• The NEP went strongly against many communist
principles; within this policy some people were
allowed to profit from others’ labour or even
pure speculation.
• This led to economic and subsequently class
divisions. A new bourgeoisie class appeared (or
resurrected), bringing back memories of the old
Russia, for many.

5. • The Marxist world-view sees the bourgeoisie
not as wealth creators to further a communist
society, but as oppressors of the cause and the
people.
• This caused massive political divides, between
the practical and the ideological. Those who
were more practical supported the NEP as a
way to get the USSR onto it’s feet before
becoming truly communist whereas the more
ideological saw it as an insult to Russia herself.

6. Soviet Agriculture 1924-28
• By the early ‘20s soviet agriculture had
suffered greatly from war communism and the
great famine of 1921-2 but, due to the NEP, by
1926 productions were returned to pre-war
levels.
• Many peasant households benefited massively
from the opportunity to sell produce on the
open market after paying their tax.

7. HOWEVER...
• Recovery was uneven across such a vast nation
and the recovery of fruit, vegetable and beet
crops was far more significant than that of grain
production.
• Because wealthier peasants were taxed with
higher levels than poorer ones, based on the size
of their herds and fields, many peasants tried to
hide as much of their property as possible,
meaning only 4/5 of the targets for tax collection
were fulfilled.

8. • Exports fell, meaning lass revenue coming into
the USSR; only a quarter of 1913 levels.
• Most peasant households still farmed in a
primitive way, similar to the methods used in
medieval England, except the village
commune decided what was planted where,
and when. This meant that only freedom
peasants had was to decide what to buy and
sell. It was a system of small-scale individual
farming which could not support ambitious
industrialisation plans.

9. • Between 1924 and 1927 many peasant unions
were set up trying to defend peasants’
interests, worrying the authorities, who
subsequently destroyed them all.

10. The procurement crisis 1927-1928
• Framers had been keeping more and more of
their produce for themselves, twice as much
as 13 years previously (1913).
• This was a major cause of the procurement
crisis, which pushed the regime into
requisitioning grain and later collectivisation.
• There is also some evidence that Stalin
exaggerated the crisis in order to use harsher
methods on the Kulaks.

11. Industry and the NEP
• Industry had slumped during the period of war
communism although the introduction of the NEP
did not create a dramatic change in industrial
organisation because most industry was still
nationalized.
• A money-based economy was introduced after
1921, though this did not help firms which were
inefficient and over-beauracratic.
• As a result of the NEP there were many workers’
strikes in the 1920s.

12. Industrial problems
• Industry did not recover as quickly as agriculture
due to out-of-date machinery and a shortage of
housing, de-motivating workers and subsequently
lowering production.
• Many of the criticisms of Stalin’s five year plans
were also applicable to the NEP. For example the
focus on the quantity of goods rather than quality
and the State covering losses.
• Average wages in state owned industry were
often as low as half what they had been pre-war.

13. • In 1926 the Supreme Council of the National
Economy (VSNKh) was created. In essence it
made more profitable industries subsidise less
so ones. This lead to a shortage of consumer
goods.
• In 1927/1928 there was a government drive
for efficiency in industry though the
production targets were not matched with
wage increases leading to unrest among the
proletariat and subsequent strikes.

14. Strikes
• Strikes were particularly damaging because
the industrial proletariat were supposed to be
the basis of the revolution and thus the Party
itself.
• Instead of being good role models workers
increasingly showed their disillusionment
through many strikes, protests and attacks on
the Jewish community (the traditional
scapegoat).

15. Scapegoat-ing
• Rather than admit its industrial problems the
Party used the bourgeoisie as scapegoats,
calling them class-enemies and saboteurs and
purging (killing/sending to Gulags) them.
• The shifting of blame was to become a
signature of Communism with every section of
society aside from the leader himself being
blamed at some point or another.

16. • The crisis of industry suggested that the NEP
and sate owned industry could not sit
comfortably together. High production costs
due to inefficiency led to high consumer prices
and heavy subsidy.
• The Party realised that the NEP was not
effective and there were calls for it to be
repealed before Stalin implemented the first
of his infamous five year plans

17. Question time.
• What problems were the proletariat causing
for the Party image by striking?
• The Party supported peasant unions. True or
False?
• Which recovered more quickly; agriculture or
industry? Give one reason.