Ideology - New Economic Policy

Ideology - New Economic Policy

1. Economic and ideological problems

   • Communists had anticipated that first successful revolution would take place in advanced industrial economy - Russian economy agricultural.
   • Left wing view: High taxes for peasants to fund industrialisation, encourage collectives and rapid state-funded industrialisation
   • Right wing view - NEP: Low taxes for peasants to fund gradual industrialisation, allow free market trade to ensure popularity of regime and slow state funded industrialisation

2. Trotsky argued passionately for left wing solution of rapid industrialisation, believing it a fully Communist policy compared to the semi-capitalist NEP. Bukarhin was leading advocate of NEP and initially had Stalin, Zinoviev and Kamenev's support..

3. In 1921 introduced NEP and private trade, after Lenin died Trotsky, Kamenev and Zinoviev disagreed with the measure. Stalin and Bukharin initially stayed silent - to their advantage.

4. Grain requisitioning stopped, instead tax-in-kind, buy an sell goods, smaller factories returned to owners.

5. Many Communists angry about something they saw as return to capitalism - did not like making profit as encouragement for business.

6. Nepmen made high profits as 'middlemen' who made money out of others' labour but caused goods to be in shops in quantities not seen in years.

7. Electrification - Lenin envisaged network of power stations and electric light in every home, believing "Soviet power plus electrification equals Communism"

8. Foreign trade: NEP encouraged countries that had refused to trade with Soviet Russia before 1921 to resume trade with Western countries hoping it would mean failure of Communist ideas. Anglo-Soviet trade agreement of 1921 - increased trade with west.

9. Successes and failures of the NEP

   • Was extremely popular in early 1920s, many Communists unwilling to increase taxation as feared backlash from peasants. Created economic growth and increasing production of consumer goods. However in 1927 growth declined (grain 1926 77mn tonne, 1927 72mn) - support decreased
   • Much of the growth in prosperity can be attributed to peace after seven years of war and civil war (1914-1921)
   • Peasants found prices for manufactured goods high and after 1925 unwilling to sell grain for money. Some became rich buying land and animals but many remained poor and continued using backwards farming methods.
   • Many angry about profits of Nepmen (1925 - steps to curb profit)
   • Industrial workers better off but unemployment high especially among young - rise in crime
   • By end of 1920s food supply issue again
   • By 1926 economy had reached pre-1914 levels through investment

10. Food shortages in cities after 1927.

11. Impact on leadership struggle - Initial success ensured popularity of right wing; between 1924 and 1925 all but Trotsky supported policy; Trotsky's arguments did not appeal - NEP was helping Rusisan economy to grow and his idea was untested. Undermined him.

    • 1925 Zinoviev and Kamenev abandoned NEP to attempt to win support of left wing. Continuing success of NEP - this attempt was doomed to fail
      • Stalin abandoned NEP in 1928 once it was learly failing. In this way, his move from right to left wing increased his popularity while Bukharin continued arguing for NEP and lost credibility.