Modern History Presentation

1. Modern History Presentation Topic: The New Economic Policy By Qais Mohammed

2. Russia in 1921 • With the Civil War over and the Communists victorious, decisions about the economy had to be made. • The Krondstat Mutiny in 1921 coupled with peasant uprisings in the countryside called for the end of War Communism • Russia was in economic chaos

3. Russia’s Economic Situation 1921 • Russia’s industries were in a state of collapse with the mines flooded and the machinery smashed. • Russia’s agricultural situation was serious as the peasants only grew enough crops for themselves to survive which resulted in famine and starvation all over the nation.

4. Background to NEP • War Communism was too hard on both the peasantry and the proletariat • In 1921, there was a serious food crisis leading to widespread famine as the peasants were not sowing enough crops to feed Russia’s population.

5. The Aims of the New Economic Policy (I) • Through what Lenin called a ‘retreat to capitalism’ the New Economic Policy or NEP was to revitalize the economy • Initially an agricultural reform, NEP was expanded to the light industry sector as for the peasants to sell their grain, there must be sufficient demand for consumer goods.

6. Aims of NEP (II) • NEP was to repair the agricultural sector of the economy and prepare it to provide the money to begin a socialist industrialization of Russia. • Since NEP was a retreat to capitalism, Lenin made clear that NEP was only a temporary measure. • NEP was finally a measure to restore the alliance between the peasantry and the proletariat so that the production of food will become stable.

7. The Nature of NEP in Russia (I) • Lenin introduced a tax in kind to replace requisitioning as the form of resource gathering by the government. • Peasants were allowed to sell their surplus of grain to small markets which were allowed to grow again. • This necessitated the government to privatize the small scale manufacturing industry to supply to peasants with consumer goods. • The Russian Ruble was replaced with a more stable currency based on the gold standard

8. Nature of NEP (II) • In economic terms, NEP changed Russia’s economy from being centrally planned to being a Mixed Economy with both the market and government intervention existing • There was an end to all government assistance towards industry in both private and public sectors.

9. Nature of NEP (III) • The state still controlled the “commanding heights” of the economy such as: • Heavy Industry • The transport sector • Banking • Communications • Energy and fuel

10. The Impact of NEP - Russia • In total Russia’s economy began to recover under NEP • While the amount of food being produced just came to be equal of pre-1914 levels, famine was still wide-spread and it was only until 1923 that the emergency began to slow • Industrially, Russia’s economy took longer to recover due to the time it takes to rebuild destroyed machines and retrain workers • The new currency the chervonets replaced the ruble and eventually the tax-in-kind was paid in chevonets.

11. The Impact of NEP – The Party (I) • Lenin introduced NEP in 1921, however, Trotsky introduced a measure just like it in 1920 but was rejected by most of the party including Lenin • After the Krondstat Mutiny in 1921, Lenin was convinced that NEP was a necessary evil and the Central Committee agreed • The lower members of the Communist Party on the other hand, were always against NEP as they viewed it as betrayal of what the party was fighting against

12. The Impact of NEP – The Party (II) • The Continuance of NEP was a key issue during the interregnum debates on Modernity • With Stalin victorious and his position consolidated, he abandoned NEP in 1928 and proceeded along with his Five Year Plans

13. The Impact of NEP – The Peasantry (I) • The peasants benefited the most from this policy as they could rebuild all the things that they had lost during the Civil War and begin to prosper • The tax in kind resulted in the peasants planting more seeds than what was required for themselves and sold the surplus to a profit • The were also allowed to buy consumer goods they could not before – through NEP-men and small markets

14. The Impact of NEP – The Peasantry (II) • The peasantry began to prosper – the majority of the peasantry moved from poor peasants to middle peasants that were producing more than what they needed to survive • Richer peasants or Kulaks who were providing the large majority of the surplus of grain and achieving the large majority of the profits • The agricultural sectors of the economy began to recover however it was not stable as the prices were too low due to an over supply of the market and the peasants were unwilling to sell their surplus

15. The Impact of NEP – The Proletariat (I) • With the end to state subsidies, both state and private companies had to balance their books and make a profit to keep running • This lead to mass unemployment as companies were looking to reduce costs • The industrial economy did not grow as fast as the agricultural economy did which lead to a disparity between food prices and the price of consumer goods

16. The Impact of NEP – The proletariat (II) • This scissors crisis threatened to stop the recovery in agriculture and lead to further famine as the peasants would stop sowing excess grain as their was no substantial profit to be made • However, the government intervened and by combating monopolistic practices, forced down prices for industrial goods

17. Conclusion • Some historians make the statement that NEP was the golden age for the peasants: they had the land and could say how much they wanted to sell • While the soviet economy recovered, there was political turmoil involving the leadership of the USSR

18. Thank You For Listening