Lenin's Economic Policies Essay

1081 Words Mar 12th, 2015 5 Pages
New economic policy (NEP) NEP era advertizement
It was an idea based on ambition and imagination; an idea that worked so well, it managed to drag an entire country out of starvation and chaos and drive it onto the road to quick economic and industrial recovery. It created capitalism in a socialist state and cabaret-style debauchery under a military-communist regime. And like many other great yet paradoxical projects, perhaps, the Soviet Union’s New Economic Policy of the 1920s was too visionary to remain sustainable for long.
Preconditions
The year is 1921. Russia has just survived two revolutions, WWI and the Civil War. Not only the last royal family but the entire empire is gone, executed and left to deteriorate. Significant
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Back then about 80% of Russia’s population were farmers and so they were nearly the only force capable of supplying the country with food. But it wasn’t long before the enormous taxes started fueling mass anger and uprisings. When this tax was cut by half in 1921, peasants received an incentive to work again and the farming industry began its recovery.
Capitalism in a socialist state NEP in full bloom
The farmers’ tax reduction wasn’t the only measure introduced – the Communists announced they were starting a nationwide New Economic Policy. It was officially planned as a temporary measure and its main goals were to ease social tension, strengthen the communist regime, get out of the economic crisis, rebuild the industry and lay down the foundation for socialism without waiting for the global revolution. What’s interesting, and in some ways paradoxical, especially for those times, was that all of the above was to be achieved through market relations or, in other words, capitalism. So the second major step taken by the communists was to allow private property even though abolishing it was one of the key slogans of the 1917 Revolution.
State monopolies were officially overruled. The authorities eased the rules of registration for private businesses and starting from 1923 foreign companies were allowed to use Soviet state facilities. The project also included a money reform and gave the green light for long-term loans and new banks.

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