The New Economic POlicy

History: KS3, topic 17.5.7

New Economic Policy (1921-1924)

War communism failed. By 1921, Russia was facing economic collapse. The Bolsheviks introduced new economic policies to try to fix these problems.

War communism failed.
Peasants destroyed their own crops so that the Cheka (secret police) could not seize them.
There were large food shortages, particularly in rural areas.
There was a peasant uprising in Tambov Province.
The Bolshevik leaders did not give workers an active role in decision-making and this caused discontent.

The New Economic Policy tried to fix these problems.
Money was reintroduced and so were some other aspects of free markets (capitalism).
Small businesses flourished (did well) across Russia, and it was acceptable for private businesses to employ workers.
Peasants no longer had grain seized from them. They now had to pay taxes, first in goods, then in cash.
The peasants could then sell their grain and keep the money from this. Those who were successful were called the “NEPmen”.

Some communists were disappointed with the NEP. They felt that it betrayed their principles.
Trotsky was one of these opponents.
There were more and more cases of suicide in the Bolshevik party.

There was growth in agriculture and industry (although it was slow).
Whilst food prices were affordable, the price of factory-made goods increased because of communist policies.
Inequality also increased.
Some groups made more money than others from the new system and trade with other countries remained lower than 1913 levels.
As before, the ‘Commanding Heights’ (banks and major industries) stayed nationalised. Russia also remained a one-party state.

When was New Economic Policy introduced?
What was the crisis called when food prices fell but factory made good increased in price?