The New Economic Policy
After the Bolsheviks victory in the Russian Civil War, one of the Bolsheviks main goals they wanted to achieve was to rebuild their shattered economy. The Russian civil war left their nation in pieces, the economy was in ruins and the citizens faced terrible economic hardships. Vladimir Lenin took note of this and knew that he needed to do something to change the economic conditions because they were beginning to see a drastic decrease in support to the Bolsheviks. Lenin got rid of his War Communism policy and knew that he needed to go away from his socialistic policies in order to keep control of the Bolshevik party’s power. He crafted what was going to be known as “The New Economic Policy” and Lenin had called it “State Capitalism.”
The New Economic Policy was introduced by Lenin at the Tenth Party Congress in March of 1921. The New Economic Policy was intended to be temporary and its main goals were to strengthen the economy out of the economic crisis, ease rising social tensions, and strengthen the communist regime. The funny part about this all was they were going to strengthen their communist regime through capitalistic ways. In this market it would end grain requisition, would post a tax on harvests, and have a denationalization of small scale enterprises. Before all of this would take place though the Bolsheviks would outlaw opposing political parties and they had banned party factions. (Freeze, 310)
One of the most important components to The New Economic Policy was based around a tax called Prodnalog. Prodnalog was a tax on food. This tax allowed Lenin to tax people at a low rate of 10%, which was lower than the level of requisition. In using this tax it allowed people to keep the rest of the food that they produced and do what they wanted with it, which most would either sell it or keep it. This allowed the peasants to grow as much as they possibly could because they knew they could make money off the rest of it and not be taxed for it.
The results under the New Economic Policy was in essence a success. The economy did recover after the devastating effects of all the previous wars they had just been through. In one year the people went from famine to no longer being in fear and agricultural production had soared. The New Economic Plan also left the Bolshevik party divided. Many did not like the fact that they had to resort to capitalist policies to get the economy to grow, others believed that their original plan that they had was being thrown away and they would never be able to be a full communist country if they resorted to using capitalist ways. I really do wonder what would have happened to the Soviet economy if Lenin had not died when he did. The New Economic Policy had only been in place for three years and was in many cases thriving considering the situation they were in when it first was put in place. Lenin had never intended for the New Economic Policy to be in place forever it was only what he considered to be an essential stepping stone in turning the economy back into Communism.
- Freeze, Gregory L. Russia: A History. Oxford: Oxford UP, 1997. Print.