War Communism, 1917-1921 Five Year Plans

Stamps featuring occupations

New Economic Policy, 1921-1928

By 1920 the war practically was over, but Russia went through the worst hunger winter since the beginning of World War I in 1914. WAR COMMUNISM obviously had failed, not only indicated by the famine, but also by hyperinflation and the KRONSTADT REBELLION. In 1921 LENIN formulated the NEW ECONOMIC POLICY with the aim of reviving the production, especially in the field of agriculture. The main aim was to secure the food supply necessary to feed Russia's population. Landowning peasant farmers, the so-called KULAKS, were encouraged to produce surplusses. Peasants, however, were encouraged to join collectives called KOLKHOZEs, giving up their farmland in exchange for economic security within the kolkhoze and certain privileges.
This policy was begun with a CURRENCY REFORM (Nov. 2nd 1921) - as prices from now on were fixed, the repetition of hyperinflation was excluded.
The policy was moderately successful. While ration books were to remain a permanent factor in Russian everyday life, Russia was no more to experience famine for the years to come. Russia's agriculture recovered, and harvests increased.
Russia's industry was separated from the world market; factories, domestically or internationally owned, had been nationalized, international banks would not give them credits. On the other hand, the Soviet industry had a guaranteed market. The industry, under socialist administration, generally could answer the domestic demand only partially; the distribution of goods was organized by the state.
As the Communist Party interfered in the management of factories - political commissaries observed management and staff, and management had to follow the rules of a socialist economy, the factories lacked efficiency. Few attempts were made to introduce innovations.

According to communist economic philosophy, unemployment did mot exist; every person had the right (and obligation) to work; it was task of the state to provide him with a job.
The RSFSR / Soviet Union were the PARADISE OF THE WORKERS AND FARMERS; the USSR was symbolized by HAMMER AND SICKLE. Russian society emphasized the importance of the worker. Workers such as, for instance, bus drivers, earned more than for instance medical doctors.

The New Economic Policy, by G. Rempel
Lenin's N.E.P., from J.V. O'Brien, CUNY
Nikolai Bukharin and the New Economic Policy, from N. I. Bukharin, the Guiding Theoretician of Russia
The New Economic Policy, by Louis Proyect
DOCUMENTS Flag of the USSR, and Coat of Arms, from FOTW (Hammer & Sickle)
Silver coins Russia 1921-1924, from S. Sekine's Collection of Russian Coins
Russian Banknotes from S. Sekine's collection : 1922 issues (pre-currency reform), 1922 issues (post-currency reform), banknotes issued 1922-1925, banknotes issued 1926-1932

This page is part of World History at KMLA
First posted in 2000, last revised on Novembr 8th 2004

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