Lenin’s New Economic Policy And The USSR
Mikhail Gorbachev (1931- ) is the second person to establish the concept of Perestroika or the economic restructuring of a communist society through capitalism.
During the Russian civil war (1918-1922) the Bolsheviks enforced what they known as “War Communism” (1917-1921), the militarization of the economy. Between 1916 and 1920, industrial output plunged by more than four fifths. Grain harvests in both 1920 and 1921 disastrously lost, triggering widespread starvation, claiming 5 million lives. A series of rebellions of sailors started, most famously in the Krohnstadt naval base.|In the years from 1918 to 1922, in the midst of the civil war in Russia, the Bolsheviks used a system called “War Communism” in which businesses and industries were nationalized from 1917 to 1921. The scheme had a negative effect in the economy and during 1916 to 1920, the industrial output dropped significantly. Grain production in 1920 to 1921 extremely dropped which led to extensive famine and claimed countless lives. Rebellions and protests broke out; several sailors headed one of the most known uprisings in the naval base of Krohnstadt.|It was during Russia’s Civil War that the Bolsheviks launched what was termed “War Communism”; it was an economic policy expropriating all businesses, implemented in 1917 until 1921. This policy led to the dramatic decline of the economy. The production and also growing of crops from 1920 to 1921 were badly affected as well as its resulting shortage led to nationwide famine and the death toll hit to 5 million. Riots and protests were all over the place; with the Krohnstadt rebellion being one of numerous uprisings led by Soviet sailors.
To reverse the party’s loosening grip on power, Vladimir Lenin (1870-1924) introduced the New Economic Policy (NEP). Trade was liberalized, as were industrial and also agricultural production. Peasants were permitted to sell surplus harvest on the open market and taxes were made proportional to net output.
Farmers were also allowed to rent their land and also hire their own workers, quite in contrast to communist beliefs. Small to medium enterprises were permitted private ownership although the government still retained control over large businesses, foreign trade, transportation, finance, as well as heavy industries or those that were referred to as “commanding heights” during that period.
From 1921 to 1922, Lenin reintroduced the use of money in the economy, an economy that previously consisted of quotas, barter, and state issued orders. In less than 7 years after the NEP’s implementation, the economy slowly regained its ground and reverted to its pre-Bolshevik revolutionary condition. The New Economic Policy continued on for 4 more years after Lenin died in 1924.
It was not a flawless policy at all.
NEP was characterized by inflation and the need to cap the prices of non-agricultural products. Peasants hid grain for speculation purposes. A black market in goods was made by Nepmen – private traders. Communist party General Secretary Joseph Stalin (1879-1953), reinstated agricultural production quotas in 1929, collectivized all arable land, and also criminalized private trading in 1930. In 1928, he promulgated the first Five-Year Plan (1928-1932) and central planning replaced market mechanisms. The NEP was useless.
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