What is the essence of NEP - the economic policy of the USSR in the 1920s?

The new economic policy (NEP) is a set of economic measures taken by the Bolshevik Party to bring the USSR out of the crisis in the 1920s. If we talk about NEP briefly, then this is some revival of private initiative.

The reasons for NEP

The policy of military communism has led to a complete rupture of economic ties between the city and the village. Urban residents were very hard in the sense that they did not receive the proper amount of products from the village. The traditional economic exchange was violated when the city bought food in the village for money. In addition, the peasants began a series of uprisings against the policy of expropriation of food.

Repeatedly recorded cases when military pens were calling in villages and taking away all the grain stocks. As is known, in 1921 there was a very strong famine, so the protest movement of the peasants was caused by objective reasons.

The country was completely destroyed by the First World War and the Civil War, all economic ties with foreign countries were destroyed. The same can be said about diplomatic relations. The leadership of the USSR understood that at this stage, without restoring communication with foreign countries, the country will be very difficult.

Another reason for the rejection of the policy of war communism was the leadership's understanding that an abrupt transition to communism is impossible.

What is the essence of NEP?

The first economic transformations, which can be characterized as a manifestation of NEP, began in 1922-1923. The main activities of NEP (briefly) are actions aimed at improving people's lives.

First, it was necessary to restore the country's monetary system by activating trade in food and industrial goods. The Bolsheviks had to make an unprecedented digression from the planned program in order to bring the economic situation in the country out of a stupor.

To understand what the essence of NEP is, compare it with the policy of war communism.

The main feature of the economic policy during the Civil War was the expropriation of products from the peasants. In simple terms, the army or representatives of government agencies could take their products free of charge. Party leadership understood the need to introduce NEP, a table comparing the periods of 1918-1921 and 1922-1929 will show it clearly.

Measures of NEP

In the framework of the new economic policy, the state carried out certain reforms. Let us consider the essence of the NEP in the financial sector.

As you know, for several years commodity-money relations in the country were practically frozen. In 1922 the monetary reform was carried out. Western countries recognized the new currency (chervonets), so it became possible to conduct currency-exchange operations. Over time, trade resumed both within the country and with foreign partners.

NEP in agriculture

Important changes have affected agriculture. The peasants finally felt relief from the burden of war communism, because in 1921 the surplus-appropriation was abolished. Of course, they were not completely exempt from taxes. A food tax was introduced, but it was less than 2 times higher than the norm of the surplus-appropriation. It was allowed to pay this tax in cash. The poorest peasants were exempted from paying taxes. The peasants immediately realized what the essence of the NEP was. This form of relations suited them, so many did not want to go to the collective farms in 1930-1932.

Development of industry

In industry, NEP's events were also harsh. Private capital again got the opportunity to work in different spheres of production. In those areas where the state did not want to weaken its influence, there were instances of mixed capital in enterprises. Control over the activities of enterprises has decreased, so it became easier to conduct economic activities. Such changes in the course of the state were immediately felt by foreign investors, starting to invest in the creation of new enterprises.

Results of NEP in the USSR

Policy NEP, a table with the results of which before your eyes, other than positive, had some negative results.

Nevertheless, it is difficult to overestimate the importance of the period of the new economic policy in the development of the Soviet state. The country was able to recover after the difficult events of the 10-ies of the 20th century.