What was Lenin's “New Economic Policy” and what complications did it have?

Question

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?

Answer 1

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 NEP kept the economy firmly in the hands of the Bolshevik controlled state, and made this state yet more bourgeois. Effectively the NEP cemented the power of the Bolsheviks as a permanent committee of public safety.

• The NEP allowed the temporary production of surplus agricultural commodities by peasants and small rural capitalists, this solved an immediate food supply crisis for urban workers, this is normally considered a good thing

• The NEP utterly smashed the revolutionary political power of urban workers, and instituted a system that would slowly crush any remaining revolutionary industrial power they possessed. The NEP reintroduced wage labour, alienation, value circulation, and profit within what returned to being a "firm." From the perspective of the revolutionary working class this was a nightmare, and some fought, and they died. From the perspective of the mass of the working class, they got to eat. From the perspective of international capitalism, in the form of their local representatives in the majority line of the Bolshevik Party and some Left SRs (etc.) this was a triumph.

• The NEP produced a long term problem in goods pricing in the Soviet Union due to the strength of the peasantry. The peasantry was not alienated from the means of production, unlike the English rural working class in 1789. The peasantry would effectively go on strike using market signals until the early 1930s when they were liquidated as a class through mass dispossession and systematic starvation. (And even then, they kept striking).

• From the perspective of the rural proletariat, such as in the Ukraine where even Lenin recognised the signs of rural capitalism, the NEP was a nightmare. However, many of these workers could benefit from moving to the cities under the NEP, and from the graft networks of the Bolshevik state. It would be the newly created rural proletarian, the NEP rural proletariat, who would suffer most under the NEP economically.

• Given that the NEP was effectively forced on the working class by their weakness, evaluating their choice is the same as evaluating the general choice to wage labour by workers—starve or die. (Pirani)

• Given that the peasantry was utterly alienated from power (Tambov), evaluating their choice about the NEP is impossible. They had no choice.

• So we can only really evaluate the choice of the Bolshevik party here. The fact that the left of the Bolshevik party tried to organise a rank and file revolt against this crap, and had to be shut down by Lenin in open factional warfare is indicative. The ban on factions dates to exactly this period—the one thing Bolsheviks were refused to allow to debate in the 1920s was whether they were simply a bourgeois party of capitalism. (Kollontai)

Sources:

• Pirani: http://www.isj.org.uk/index.php4?id=687&issue=128

• Bukharin: http://www.columbia.edu/~lnp3/mydocs/economics/nep.htm

• Lenin: What is to be done? (1905) is a typical expression of Bolshevik substitutionalism. Workers are too dumb for socialism, bourgeois intellectuals will need to prod them in a military style party.

• Kollontai: Kollontai's Red Love is good on this period.

• Conquest: Rob Conquest's Great Purge gives a typical account of the senior party leadership's manoeuvres, unfortunately Conquest is a political historian, not a social historian, so he misses the involvement of the urban working class in demanding agricultural "extractions."

• Tambov: look up the Tambov rebellion.

Answer 2

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.