I have recently read an article on Lenin's New Economic Policy, and I was wondering if there were two sides to the story. What were some of the complications of this policy? In addition to this, was it advantageous to the Russian economy or not?
Lenin's NEP was the Bolshevik controlled Soviet State's turn to capitalism. (Pirani) Inside the Soviet economy a number of critical crises occurred simultaneously in late war communism. The Soviets—a system of predominantly geographical councils monopolised by the Bolsheviks and Left SRs as a bourgeois revolutionary state—had thoroughly alienated rural proletarians, largely by direct massacre and suppression of their revolutionary organs (Makhno, etc.). The peasantry was significantly alienated by the food requisition system. The urban working class was thoroughly demoralised, and their workplace Soviets, largely independently controlled if by pro-Bolshevik workers in a majority of workplace Soviets, demanded access to food and consumer goods. Pirani has found through workplace soviet minutes that urban workers conspired with the Bolsheviks to remove any revolutionary political power residing in the working class.
Simultaneously with this process a right-wing, traditionalist Marxism within the Bolshevik Party managed to mobilise sentiment around a period of Capitalist development in the Soviet Union. (Bukharin) This involved the idea that Russia was fundamentally backwards (in contrast to any economic history of development since 1890...). The conception was that the Soviet Union would need to march through Captialism under control of the Bolshevik State, itself controlled by a party dominated by intelligentsia. The NEP was a natural outgrowth of the Bolshevik Party's substitutionalism. (Lenin)
Finally, the rural and urban production crises spurred the State, ie: the leadership of the party, to react to the crisis of production. They did this by reintroducing capitalism management in the factories (Kollontai), destroying the power of the workplace soviets, the only remaining revolutionary organ of the working class, replacing it with one man management. By legalising trade in rural commodities and "encouraging" private capitalist development of agriculture.
This has the effect of increasing the price of rural commodities, and of taking the price of this out of the standards of living of the urban working class. In trade the urban working class got access to food. The immediate results of this was a miniature terror within the left against revolutionaries who clearly saw NEP as a crushing of the revolution. See, for example, Kronstadt's "all-party" revolutionary soviet. Yes even including bolsheviks.
The long term effect was to set up the "scissors" crisis, where as capitalism caused the price of agricultural commodities to decline, small holding peasants simply stopped producing for market, causing the price of industrial commodities to rise, causing further small peasants and now small rural capitalists to stop producing for market.
The crisis of the NEP was that the countryside was neither run by socialist revolutionary communities, nor by capitalists who would respond to price decline by increasing productivity and intensification of capitalisation. Instead, the peasantry went on strike (again) in the NEP. This lead to a shift to the "left" in the urban working class and eventually the organs of the party, when Stalin moved "left." (Conquest). The results of the ending of the NEP by the reintroduction of urban confiscation of food are notorious.
As far as "advantages" and "disadvantages":
The New Economic Policy was Lenin's version of China's "capitalism under Communism." Under NEP, state control was relaxed in certain areas, and individuals were allowed to have private ownership of "small" enterprises (of up to 20 people), while the state maintained control of the economy, banking system, and larger enterprises. Similar reforms were instituted in agriculture, with "collective farm" peasants being given small private plots.
The problem with the New Economic Policy was that it was "neither fish nor fowl," and therefore displeased people on both sides of the debate. That is, "capitalists" thought that it didn't go nearly far enough, while hard-line Communists resented giving up any party control to independent owners. What was missing on both sides were what William Penn called people with "moderate expectations," who would be happy with a little of one and little of the other.
It was "advantageous" to the Russian economy, insofar as it allowed that economy to improve relative to its former (Communist) self. But as a capitalist, I'd say that it didn't go nearly far enough.