Niu Shuting: Rethinking the reasons for the end of the Soviet Union’s New Economic Policy

December 2022

Author is professor and researcher in the Soviet Union and Eastern Europe Institute attached to Chinese Academy of Social Sceinces, Beijing

Summary:

The New Economic Policy was an economic policy that the Soviet Union began to implement in March 1921 in order to transit to socialism. Lenin comprehensively summarized the lessons learned from the wartime communism policy and realized that in a backward small peasant country like Russia, the transition into a socialist society can only be achieved through a roundabout or indirect way and not directly. Therefore, at the 10th meeting of the Russian Communist Party (Bolshevik), Lenin proposed to replace the forced way of surplus grain collection system with a grain tax and use state capitalism to carry out socialist construction. The implementation of the New Economic Policy restored the national economy, consolidated the worker-peasant alliance, and consolidated the Soviet regime. However, with the death of Lenin, the contradictions of the New Economic Policy in the later period of its implementation were increasingly exposed due to the internal and external environment and its own theoretical defects, and there were major differences in the views on the New Economic Policy within the Russian Communist Party (Bolsheviks). There are currently many different opinions in the academic community about the reasons for the end of the New Economic Policy. One view is that Stalin ended the New Economic Policy out of his desire for power and political ambition. Another view is that Stalin’s deviation from the essence of the New Economic Policy led to a series of crises in the later period of the implementation of the New Economic Policy, which eventually led to NEP’s end. Under the guidance of the Marxist theory of historical synergy, this article explores the reasons behind Stalin’s ending of the New Economic Policy. By consulting original documents such as Soviet historical archives, this article will analyze the international and domestic environment during the period when the Soviet Union implemented the New Economic Policy. And the article will examine the comprehensive impact of four major factors on the final end of the New Economic Policy from the perspective of historical dynamics. Direct cause: growing tensions in the international situation and increasing external pressure on the Soviet Union from 1925 onwards and Soviet Russia’s International Survival dilemma. Root Cause: Soviet Russia’s serious and severe domestic economic and social crisis beginning in 1926. Main Cause: Intra-Party political struggles and divergent views on where NEP is leading Soviet Union. Important Cause:  Both the remnants of ideas from Tsarist Russia and current influential cultural ideas, the peculiarities of the socialist ideas formed in the Soviet Union and the lack of a systematic theory inherited from Lenin led to the abandonment of NEP. The imperfect nature of the theoretical system of the new economic policy shortened the duration of its implementation.

Chapter I. Growing tensions in the international situation and increasing external pressure on the Soviet Union from 1925 onwards and Soviet Russia’s International Survival dilemma.

 In the mid-1920s, the international situation underwent new changes. The imbalance in political and economic development among capitalist countries became increasingly serious, and Soviet leaders argued that the international community at that time was “prone to the most profound and acute crisis of world capitalism, we are in a crisis which is pregnant with new wars”[1].

1. The Soviet Union faced the joint hostile actions of Western capitalist countries during the New Economic Policy period

In the early 1920s, the world socialist revolutionary movement fell into a low ebb, and capitalist countries were in a period of peaceful development and stability.   In order to win development opportunities, the Soviet Union actively established friendly diplomatic relations with various countries.  During this period, the Soviet Union’s foreign diplomatic relations were relatively harmonious. The resolution of the 14th Congress of the Russian Communist Party (Bolsheviks) pointed out: “In terms of international relations, the ‘breathing period’ is consolidating and expanding.  It has become a whole period of so-called peaceful coexistence between the Soviet Union and capitalist countries. ” [2] 75  However, the international situation is constantly changing, and temporary peace may turn into a crisis at any time.

Especially in the late 1920s, frictions and contradictions between capitalist countries and the Soviet Union occurred from time to time.  The Soviet Union faced joint hostile actions such as economic blockades by Western capitalist countries. When the Soviet Union was in a food crisis, the United States Relief Administration provided it with food and medicine. The seemingly humanitarian aid was actually “famine aid combining humanitarianism with political motives” [3].  The US government attempted to create confrontation between the Soviet government and the masses through aid, thereby accelerating the collapse of the Soviet regime.

2. The international survival dilemma exacerbated the imbalance in the development of industry and agriculture in the Soviet Union and Russia

It was a historical necessity for Soviet Russia to implement industrialization.  Under the dual survival crisis at home and abroad, Soviet Russia had to further expand its industrial scale.  At this time, agricultural production could not solve the sales market and raw material needs urgently needed for industrial development.  Under the influence of the turbulent international situation, Soviet Russia quickly realized industrialization, and finding sources of funds became an imminent top priority.  The economic blockade and suppression of foreign capitalist countries made the isolated Soviet Russia seek the source of primitive accumulation internally.  Agriculture was restored and developed under the new economic policy, but due to the disperseed natüre of the small peasant economy and individual mode operation, it could only slowly deliver the needed raw materials and only slowly give financial support to industrial construction.  Therefore, the new economic policy could not complete the task of high-speed industrialization and capital accumulation in a short period of time.

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