Lenin's New Economic Policy
At the time of the Bolshevik Communist seizure of power in
October 1917 Russia had, for more than three years, been involved
in the First World War. The turmoils associated with this major
war inevitably produced much economic dislocation and many
shortages of essential items including food, fuel and clothing.
Agricultural and Industrial production were down from the levels
of 1913. Perhaps a third of Russia's working horses had been
diverted towards direct services associated with the war. The
railways were suffering from disrepair and parts shortages.
Wartime inflation had seriously eroded the purchasing power of
the Russian rouble.
The "Red" Bolshevik seizure of power was moreover fiercely
contested by many "White" Russian interests (monarchists and
conservatives), by peasant "social revolutionaries" and by
several nationalisms over several years. Thus the background to
the establishment of a would-be Communist economic system in
Russia continued to be stressed by disputations over the
political direction of society.
Had things been otherwise the Bolshevik administration may not
have intervened overmuch in the economy beyond attempting to
control key areas such as banking (in order to inhibit a
reversion towards outright capitalism), critical war industries,
and the grain trade. Even non Communist European states had
established fairly far-reaching state controls on their economies
in order to further their own war efforts.
As social and political conditions developed in Russia however
there was an increasing tendency towards nationalisation of many
industries including Sugar, Oil, the control of Foreign Trade,
spices, coffee, clothing materials and matches. This tendency, as
institutionalised in a decree of General Nationalisation of June
1918, had two main roots:-
(a) The displacement of those independent workers committees
that had gone beyond the Bolsheviks decree of Workers Control of
November 1917 to closely supervise the operation of privately
(b) The establishment of state control in the hope that this
would facilitate the Bolshevisation of Russia at a time of civil
The term - War Communism - was coined to refer to what
ultimately became a most pervasive system of wartime state
control over productive activity and economic resources that soon
grew up moreso from the seeming necessities of the times than
traditional communist theory.
In rural areas across Russia a Peasant Revolution had taken
place, without particular reference to Marxism, that tended
towards the seizure and reallocation of landed estates and the
establishment of peasant ownership of small plots that would be
worked with limited equipment virtually on a subsistence basis.
This new system however tended to produce less of a marketable
surplus than was required to provide for the needs of the urban
population. A Bolshevik policy (1919) of control over the
peasants newly assumed lands and actual seizure of any marketable
surplus from the peasantry resulted in a complete lack of
incentive to produce any surplus in the first place.
By 1920-21 the levels of production in both the rural and more
particularly in the industrial aspects of the Russian economy
were running well below pre-war levels. There was an actual
flight from the towns as the then urban population (who often, as
individuals, had rural connections) moved away from urban
unemployment and privation and towards a rural existence where
they could have more hope of providing some of the basic
necessities of life through their own efforts.
A serious drought centered on the Volga region exacerbated the
suffering of the Russian people and, as adult males began to be
released in numbers from the Bolshevik forces from the autumn of
1920, following on from a Bolshevik victory in the civil wars
that had been contested since October 1917, it was often the case
that they turned to banditry and defiance of the Bolshevik state.
In the spring of 1921 large areas such as the Tambov region were,
for several months, under the control of peasant forces rather
than those of the would-be Bolshevik state.
Although Bolshevism in Russia depicted itself as a movement of
"Workers and Peasants" when it came down to it the Peasants real
concern was land and its control. The period of peasant apparent
co-operation with the Bolsheviks (1917-1920) was a period where
landed estates were broken up in the interest of the peasants.
Thereafter a underlying difference in aspiration between urban
Communism and rural peasant life became a factor to be reckoned
In March 1921 there was a revolt at the Kronstadt naval base
where sailors and soldiers, who were often peasants recently
drafted into wearing uniforms, urgently sought freedoms of the
peasantry from Bolshevik interferences. Freedoms of speech and of
the press and for trades unionism were also demanded.
This Kronstadt revolt actually took place just prior to the
opening of the Tenth Congress of the Bolshevik Party and some of
the delegates to this Congress were called upon to join, with
soldiers loyal to Bolshevism, in the forcible supression of the
Lenin had already been contemplating the adoption of a new
approach towards the encouragement of production and had even
submitted a draft outline of such a new approach to the Central
Committee of the Communist Party. The serious implications of the
Kronstadt revolt lent urgent political motivation to attempting
to achieve some reconciliation with the peasantry if Russia was
to progress towards the revolutionary goal of Communism.
Given these realities Lenin's draft outline provided the basis
for the development of what became known as Lenin's New Economic
Policy. The early stages of the development of this policy
contemplated how the peasantry could be encouraged to produce
more food for the towns and, in the later stages of planning, was
extended towards encouraging economic exchange between town and
country and to encouraging industrial production.
Lenin was prepared for some adaption of away from any attempt
to immediately establish Communism as he fully accepted that
Russia had not yet gone through the "Bougeois Capitalist" phase
of the ordering of economic relations in society that was held to
be strictly necessary in Marxist theory in order to provide the
right conditions for a large and disaffected proletariat to
demand Communism. Some compromise was therefore to be expected
with the present aspirations of a numerous peasantry.
As far as the encouragement of agricultural production went
the New Economic Policy accepted that peasants should only suffer
the requisition of a graduated proportion of any surplus they
produced. It was implied that the remainder of the surplus was
eligible to be freely marketed to the benefit of the producer.
The return of a free market as countenanced by the New Economic
Policy gave rise, before long, to the emergence of a class of
wholesalers known as the Nepmen who soon controlled the
majority of retail trade in Russia. A recovery of economic
activity in both rural and urban areas and between country and
town was thus facilitated.
Lenin could however console himself, and reassure those who
hoped to work towards Communism, by pointing out that the
Bolshevik's retained control of "the commanding heights" of the
economy - the large industrial plants, banking and foreign
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