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New Economic Policy

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The New Economic Policy, often called the NEP, was a special plan for the Soviet Union. It began in 1921 when the country was facing very hard times. A leader named V. I. Lenin proposed this plan to help the economy grow again. The country had suffered through World War I and a long civil war. These wars caused many people to lose their homes and food. Lenin wanted to find a way to fix these problems quickly. He called the NEP a temporary way to help the nation recover.

Dmitry Kardovsky - NEPmen
Dmitry Kardovsky - NEPmen

This new plan worked by creating a mixed economy. This means that both the government and private people ran parts of the economy. The state kept control of the biggest things like banks and large industries. However, private individuals were now allowed to own small and medium businesses. One major change was how the government got food from farmers. Before this, the state took almost all the grain by force. Under the NEP, farmers paid a tax called the prodnalog instead. This allowed them to keep and sell their extra crops for profit.

Делец, Гримасы НЭПа, 1922
Делец, Гримасы НЭПа, 1922

History shows that the years before the NEP were very difficult for Russia. During a period called War Communism, the state controlled almost everything by decree. This caused many workers and farmers to stop working because they were not paid fairly. In 1921, a terrible famine hit the Volga region and millions of people starved. Many people even left the big cities to find food in the countryside. In the city of Petrograd, the population dropped by 850,000 people. These hardships made people lose faith in the government's old rules.

Chervonetz 1922
Chervonetz 1922

There were many specific details and numbers that defined this era. After the new tax was started, agricultural production jumped by 40 percent. The government also introduced a new type of money called the chervonets. This was a stable currency backed by gold to help trade. A new group of people emerged during this time known as NEPmen. These were private traders who ran small firms and sold goods. Some of these traders hired up to 20 workers for their businesses.

Dmitry Kardovsky - NEPmen
Dmitry Kardovsky - NEPmen

Even though the NEP helped the country, leaders had many disagreements about it. Some people thought the policy was a step backward from their main goals. Leon Trotsky believed the NEP could help build a foundation for the future. However, Joseph Stalin eventually took control and disagreed with the policy. He believed the country could grow without using capitalist ideas. In 1928, Stalin started his "Great Break" to change the economy again. The NEP was then phased out completely by the year 1931.

Делец, Гримасы НЭПа, 1922
Делец, Гримасы НЭПа, 1922
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File:Chervonetz 1922.jpg
Chervonetz 1922.jpg
File:Dmitry Kardovsky - NEPmen.jpg
Dmitry Kardovsky - NEPmen.jpg
File:Делец, Гримасы НЭПа, 1922.jpg
Делец, Гримасы НЭПа, 1922.jpg
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