Rise and Fall of the NEP(and of Stalin’s Opponents)
The New Economic Policy• Introduced by Lenin in 1921, replacing
“War Communism” (which was failing)• Started as a concession to the peasants• Purpose was to increase grain production
– Feed population– Sell surplus overseas for currency
• Most peasants were subsistence farmers, but could sell extra grain for profit
• Rise of the kulaks--
Industry & Consolidation
• USSR inherited a narrow range of industries which were devastated by Civil War.
• Most industry had been nationalized under War Communism– <1% private.
• NEP’s first task was to return the economy to prewar level—succeeded in agriculture at first, but not in industry
• Lenin died in 1924
Path to Industrialization
• No clear blueprint for Lenin’s successors to follow.
• For self-defense & prosperity the USSR needed to industrialize.– How to do it? – How to pay for it?– Who should lead it?
Leftist View: Leon Trotsky(Socialist Accumulation Theory)
• Tax peasants heavily, keep goods prices high, reduce consumption of scarce resources.
• Buy peasant grain cheaply, sell it abroad for money to industrialize.
• Saw NEP as a threat that risked decay of the party and the decline of socialism.
• Favored by left-wing Bolsheviks led by Trotsky
• Lost out in power struggle in the ‘20s
Socialist Accumulation Theory
Rightist View: Nikolai Bukharin (New Economic Policy)
• Encouraged trade between peasants and towns.
• Gradually adjust prices to favor towns and accumulate surplus capital to industrialize.
• Communists should educate and win over the peasants, not exploit them.
• The immediate task was to restore consumer demand and ensure supply of goods
• ‘Moving towards Socialism at the speed of the peasant nag’
New Economic Policy
Problems with the NEP
• NEP ran into a crisis when grain prices fell and goods prices rose.
• In 1925 Bukharin cut grain taxes to help the peasants, which was attacked by the Leftists
• Productivity only rose slowly.
• Many in the Party did not get used to the NEP—resented the power given to kulaks & capitalists
• As General Secretary, Stalin exploited this resentment
Crisis in the NEP
• Government only received half of its expected grain procurement in 1926 even though the harvest was very successful.
• Peasants could not sell as much as before due to low prices (13% of production compared to 26% in 1925)
• Debate in party over how to deal with this—Rightists vs. Leftists
• Stalin shrewdly played both sides
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