New economic policy of the 1920s: 7 positive aspects for the country

2023 Author: Richard Flannagan | [email protected]. Last modified: 2023-11-26 05:58

On December 27, 1927, Joseph Stalin, speaking at the All-Union Conference of Agrarian Marxists, made his famous speech, which actually meant the end of the NEP and the transition to the accelerated construction of socialism. It was in this speech that the leader of the peoples sounded: "Eliminate the kulaks as a class!"

On March 14, 1921, by the decision of the X Congress of the RCP (b), the policy of "war communism", which was pursued during the Civil War, was replaced by an anti-crisis program called the "new economic policy" (NEP). Its essence was to use the organizational and technical experience of the capitalists to create a multi-structured economy and to preserve the "commanding heights" of the Bolshevik Party. The ideologists of the NEP were V. Lenin, N. Bukharin, Yu. Larin and G. Sokolnikov, who developed the tactical goals of the NEP.

Cancellation of surplus allocation

On March 21, 1921, a decree was issued abolishing the tax in kind, which amounted to 20% of the "pure product of peasant labor." This made it possible to relieve social tension to a certain extent. Now the hardworking peasants were no longer responsible for the less diligent fellow villagers. A person got the opportunity to dispose of surplus products at his own discretion: exchange, for example, for inventory in state shops or bazaars. True, the necessary things could often be purchased in cooperatives and in the markets, since it did not work out with government supplies (especially from abroad). It is worth noting that wealthy peasants were subject to a "luxury tax" - they handed over more grain.

Reforming industry and restoring cash wages

In the early 1920s, there was a need for a radical reform of industry. Independent trusts appeared, which united enterprises of the same industry. The management of the trusts made independent decisions on what to produce, where and how to form a sales market. The enterprises that were part of the trust were left without state support and completely switched to self-financing, i.e. could, having paid a fixed contribution to the state budget, independently dispose of income. The syndicates became another new entity. They united trusts on a voluntary basis and were engaged in wholesale trade. All this made it possible to restore monetary wages in the country, eliminate “leveling” and restrictions on changing jobs, and abolish compulsory labor service. From 1924 to 1929 the number of employees and workers in the country increased from 5.8 million to 12.4 million.

By the mid-1920s, the success of the NEP in reviving the domestic economy became obvious. Agriculture has reached the level of pre-war production. State purchases of grain from peasants in 1925 amounted to 8, 9 million tons. On average, the growth rate of agriculture in the period from 1922 to 1927 was 12-14%, and industrial production - 30-40%.

The ruble has become a convertible currency

In 1922, a new monetary unit was issued in Russia - a chervonets, backed by gold. It replaced the depreciated Soviet banknotes. Already by 1924, the sovznaks were withdrawn from circulation and new treasury notes were issued (10 new rubles = 1 ducat). In world currency markets, chervontsy were exchanged for world currency and for gold at the pre-war exchange rate of the tsarist ruble. For 1 US dollar they gave 1.94 rubles.

The credit system has been restored

In 1921, the State Bank was created in the country, and it became possible to lend to industry on a commercial basis. Thus, the commodity-money relations expelled during the "war communism" triumphantly returned. By 1924, 17 independent Russian banks were already offering various forms of lending. This gave an additional impetus to the development of industry and agriculture. In five years, the GDP has tripled, the volume of agricultural production has doubled, and the increase in industrial production in 1927 was 13%.

Entrepreneurship development

In 1921, the universal labor service law was repealed, which allowed people to engage in entrepreneurship. Store shelves began to quickly fill with food and a wide variety of goods. Torgsins opened in large cities, the forerunner of the later Soviet "Birch"where you could buy very expensive things, but only for foreign currency or for gold.

For many it became a temptation - people dug up their deposits and carried jewelry to "Torgsins". True, very soon the employees of the GPU became regulars in these stores, who showed a genuine interest in where citizens got their currency or gold, which had been ordered to surrender long ago. For many, a visit to "Torgsin" turned into a search and arrest with release after the voluntary surrender of currency and gold. “Gentlemen, you bought gold for a rainy day. The black day has come! Hand it over to the state!”- reads the directively coordinated appeal of the GPU to the“NEPmen”that has gone down in history. And it is worth noting that many, realizing the seriousness of the moment and being guided by the principle of “life is more valuable,” surrendered everything.

Nevertheless, any citizen who has reached the age of 16 could obtain a license to rent buildings and premises, means of transport, production equipment, to trade any items or products, to open consumer services, cafes, shops, restaurants. The main condition is the timely payment of taxes and non-participation in illegal trade, financial and other operations.

The revival of stock exchanges

One of the positive achievements of the NEP is the revival of exchanges that stimulate trade and help to establish equilibrium prices. First, the commodity exchanges were restored. Incidentally, they have received the greatest development. On October 20, 1922, by a decree of the Council of People's Commissars, stock exchanges were organized to carry out operations with securities. By the end of 1926, there were 114 stock exchanges in Russia, of which 8,514 individuals and commercial and industrial enterprises were members. At that time, the exchanges became centers for the development of commercial initiatives, although free trading was just in its infancy.

NEP contributed to the development of the press

In 1922, several humorous satirical magazines began to be published in Moscow at once: Smekhach, Satyricon, Krokodil, Splinter, a little later - Prozhektor (under the Pravda newspaper), Ekran and the monthly 30 days . In the press, in addition to news from working life, there are cartoons, humoresques, parody poems, funny unpretentious stories. With the end of the NEP, by the way, the publication of almost all of these magazines was discontinued. Since 1930, Krokodil has remained the only all-Union satirical magazine.

It should be noted that the rich Nepmen, not preoccupied with the revolutionary spirit of universal happiness and opportunistic considerations, were of little interest in classical art. Light genres reigned in drama theaters, and the main entertainment was going to restaurants and cabarets.

Of course, the NEP, like any innovations, had significant disadvantages: unemployment, aggravation of the housing problem, agrarian overpopulation, a shortage of industrial goods, and an increase in prices for goods. But the trace of this free and riotous time in Russian history has remained forever.