New Economic Policy and Industrialization

New Economic Policy (NEP)

The New Economic Policy (NEP) refers to a number of measures taken by the Soviet government after the end of the civil war in order to improve the economy. The NEP was conducted under the Leninist slogan "Learn to trade."

NEP is characterized by the partial denationalization of small industry, the preservation of the private sector in the economy, the partial spread of market trade, that is, the coexistence of state and private property.

Despite the significant successes of the new economic policy in the late 1920s, it became clear that further market reforms in the country would lead to collapse. For example, an attempt to transfer higher education institutions to self-sufficiency and self-financing has jeopardized the very existence of higher education in the country. In addition, despite significant successes in the economy, the country remained agrarian, unable to solve the tasks facing it.

As a result, the NEP was curtailed and industrialization and collectivization began in the USSR.

Industrialization. Western Siberia during the first five-year plans

The most important stage in the economic development of Western Siberia was the years of the first five-year plans. In the first five-year plan, the light and food industries developed in the region. In the south-east, the first large center of the cotton industry in Siberia was created. An important link in the economic rise of Siberia was the construction of the Turkestan-Siberian Railway. Since that time, the use of the Northern Sea Route for the export of timber materials from Siberia and the supply of various cargoes to the regions of the Far North began. At that time, the Ural-Kuznetsk Combine was established — the second coal and metallurgical base in the East of the USSR. The Kuznetsk coking coal was combined with Ural ore at the plant.

A new step in the development of industry in Western Siberia was taken in the second and third five-year plans. The task was put forward to turn Kuzbass into a second Donbass. In 1940, Kuzbass already gave the country 22 million tons of coal. Siberian engineering was developing and traditional industries were growing: forestry, fish, butter, and leather. After collectivization, machine and tractor stations were created.

Implementation of the NEP in the USSR

On March 8, 1921, at the Tenth Congress of the RCP (b), Lenin announced the beginning of the NEP (New Economic Policy).

The first step of the NEP was to replace the surplus with a food tax (March 21, 1921). The food tax was charged in the form of a share of products, based on accounting for the harvest, the number of consumers in the farm and the presence of livestock in it. The tax hit the rich kulak peasants the hardest. The poorest were exempted from the food tax, but the poor situation still had to be proved. The amount of the prodnalog was less than the prodrazvestki. If in 1920 the peasants handed over 367 million pounds of bread to the state, then in 1921 — 240 million pounds. By 1923, they had reached 70% of the pre-war level. By 1924, famine had been defeated. The peasants were allowed to trade.

In industry, it was allowed to open factories, workshops, create cooperatives, partnerships. It was possible to lease enterprises (10% of industrial enterprises were leased from private individuals). The light and food industries were developing.

Monetary reform has been carried out in the field of finance. In November 1921, in his article "On the importance of gold now and after the complete victory of Socialism," V.I. Lenin wrote that in the distant future gold would be used to build toilets, but in the meantime it was too early to cancel the money.

In 1921, Soviet silver coins of 50 kopecks and 1 ruble appeared. Sketches of coins in 10, 15 and 20 kopecks have been developed.

In 1922, a gold chervonets was issued. He weighed about 7.7 grams. The chervonets were exchanged taking into account 1 chervonets = 60 thousand Soviet banknotes. To exchange banknotes for gold coins, it was necessary to sign up in advance, to defend a huge queue in which there were the same citizens with bags and bags of money. By the end of 1923, the chervonets had become a stable monetary asset. The gold piece was valued above the pound sterling and was equal to 5 dollars and 14 US cents.

As a result, the NEP defeated hunger. There have been successes in industry, mainly in light and food industries. But compared with Western countries, the USSR lagged behind in electricity production, fuel extraction, and steel smelting.

As a result of the NEP, a class of the Soviet bourgeoisie appeared — the Nepmans or sovburs (Soviet bourgeoisie). They had money, but there was nowhere to invest it. As a result, the money was simply drunk and eaten away. The image of the Nepmans has firmly entered literature and cinema.

In 1924, V.I. Lenin died. A power struggle has begun within the party. As a result of the struggle, I.V. Dzhugashvili (Stalin) stood out. Back in December 1922, he removed Lenin from power because of his illness. Lenin’s associates, the old Bolsheviks, remained near power. L.D. Trotsky advocated the preservation of the NEP, Stalin — for its early curtailment. The position of the center was occupied by Nikolai Ivanovich Bukharin, who advocated the gradual curtailment of the NEP. As a result of the internal party struggle, Stalin won. In 1929, the complete collectivization of agriculture began.