The New Economic Policy In the USSR

I've completed my numbered series of posts on the occasion of the 100th anniversary of the October Revolution in Russia in 1917. It's been interesting to take a new look at some of those events and to read some of the published articles marking the anniversary.

The Russian Revolution began with the February Revolution in 1917 and really came to an end in 1921 with the conclusion of the longer, difficult, bloody civil war that I described in some of my recent posts.

March 1921 saw a turn from the economic policies of "war communism" to what was called the New Economic Policy (NEP). The most important political aspect of the NEP was that it put an end to the forced requisitions from the peasants that had led to increasing discontent as the civil war drew to an end.

War communism was primarily an emergency measure, though it also involved the kind of nationalizations that had been part of the Bolshevik program prior to the revolution. But it was also a response to the desperate pressure to marshal resources for the civil war that began in 1918, after years of devastation and death in the war with Germany in the First World War. It involved strict requisitioning of grain and the state taking control of even relatively small businesses.

Some sense of that pressure shows in a communication from Lenin to N. Osinsky of March 1, 1921:

Yesterday I saw Ivan Afanasyevich Chekunov. It turned out that he had already been to see me in 1919 on the question of a congress of toiling peasants. Now he says: it is better to start with regional ones.

He Sympathises with the Communists, but will not join the Party, because he goes to church and is a Christian (he says he rejects the ritual but is a believer).

He has been improving his farm. He has toured Nizhni-Novgorod and Simbirsk gubernias. He says the peasants have lost confidence in the Soviet power. I asked him whether we could right things with a tax? He thinks we could. In his own uyezd, he has succeeded, with the help of the workers, to substitute a good Soviet authority for the bad one.

That is the kind of people we must do our utmost to hold on to, in order to restore the confidence of the peasant mass. This is the main political task and one which brooks no delay. My earnest request: see that the “apparatus” standpoint does not run away with you, and do not worry too much over it. Devote more attention to the political attitude towards the peasantry.

The New Economic Policy (NEP) represented a backing off of the extreme control of industry, business and agriculture, especially the latter. This policy was in effect until 1929, when it was succeeded by collectivization of agriculture and what is often called "forced industrialization," i.e., a high-pressure effort to expand the USSR's industrial base.

Jerry Hough and Merle Fainsold sketched out the contours of the NEP this way (How the Soviet Union Is Governed, 1979):

The so-called "commanding heights" of large-scale industry remained under state administration, though even these enterprises, organized in the form of trusts, were to be operated on commercial principles with substantial freedom to buy and sell on the open market and with the obligation to operate on a basis of profitability. In actuality, the "commanding heights" (which included all heavy industry, the transportation system, and the central banking system) did dominate the industrial scene, employing 84 percent of the industrial labor force. However, so far as the consumer was concerned, much of the tone of NEP was set by the private sector. Although small in size, the private industries constituted 88.5 percent of the total number of enterprises, and the trade network was virtually all private. The symbol of the era became the so-called Nepmen who arose to carry on the functions of buying and selling, sometimes through private trading concerns of their own, sometimes concealed as cooperatives, and not infrequently as official agents of the state trading organizations themselves. [my emphasis]

Evaluations and political positioning around the NEP became major factors in the political struggles of the 1920s, including the most significant one, that between Josef Stalin and Leon Trotsky for leadership of the Communist Party.