What was the purpose of the New Economic Policy?
The New Economic Policy reintroduced a measure of stability to the economy and allowed the Soviet people to recover from years of war, civil war, and governmental mismanagement. The small businessmen and managers who flourished in this period became known as NEP men.
What did the New Economic Policy do quizlet?
It was introduced to provide "breathing space" for Russia's depleted and war ravaged economy. The main feature of the NEP was to relax the severe restrictions and grain requisitioning imposed on Russia by war communism. The NEP also permitted capitalist activity in the lower levels of the economy.
What was the impact of the New Economic Policy?
This is the first time that the entire economy has been opened up in this manner. Under the New Economic Policy, this administration cut import taxes, opened up the private sector, and devalued the Indian rupee to stimulate exports.
What was the effect of Lenin's 1921 New Economic Policy?
Farmers and factory workers were ordered to produce, and food and goods were seized and issued by decree. While this policy enabled the Bolshevik regime to overcome some initial difficulties, it soon caused economic disruptions and hardships.
Was the New Economic Policy a success?
The NEP seemed a success. It returned the economy to pre-1914 levels and gave the Communist Party the breathing space it needed to survive: Production figures show the NEP was success. By Lenin's death in 1924 marked recovery on all major industry.
What is New Economic Policy in simple words?
New Economic Policy refers to economic liberalisation or relaxation in the import tariffs, deregulation of markets or opening the markets for private and foreign players, and reduction of taxes to expand the economic wings of the country.
What are the benefits of the new economy?
It symbolizes the shift from a manufacturing and commodity-based economy to a technology-enabled and service-based economy. It allows firms to operate more efficiently and provide customers with faster service.
What were the 3 main features of the New Economic Policy?
The three principal features of the New Economic Policy are Liberalisation, Privatisation and Globalisation.
What were three impacts of the New Deal?
Based on the assumption that the power of the federal government was needed to get the country out of the depression, the first days of Roosevelt's administration saw the passage of banking reform laws, emergency relief programs, work relief programs, and agricultural programs.
Why was the NEP a failure?
In the first view, NEP was abandoned because it was inconsistent with any further industrial development of a socialist kind, and its abandonment was therefore a rational economic decision.
How did Lenin's New Economic Policy work quizlet?
At the 10th Congress of the Communist Party between 7-16th March 1921, Lenin introduced his New Economic Policy, He described it as 'state capitalism' that would re-introduce a free market and capitalism, but subject to state control.
What were the New Economic Policy reforms quizlet?
What were the New Economic Policy reforms? The reforms allowed peasants to sell their surplus crops instead of turning them over to the government. Government kept control of major businesses and means of communication but let some small businesses operate under private ownership. It also encouraged foreign investment.
How did Lenin's New Economic Policy work quizlet?
At the 10th Congress of the Communist Party between 7-16th March 1921, Lenin introduced his New Economic Policy, He described it as 'state capitalism' that would re-introduce a free market and capitalism, but subject to state control.
What were the 3 main features of the New Economic Policy?
The three principal features of the New Economic Policy are Liberalisation, Privatisation and Globalisation.
What was the New Deal and what did it do quizlet?
FDR's New Deal involved social programs to aid the unemployed, elderly, farmers and businesses. The result was a massive shift from a federal government unwilling to directly address the needs of the people to one that created jobs, paid unemployment benefits and provided social security after retirement.
What was the NEP called?
The NEP created a new category of people called NEPmen (нэпманы) ( nouveau riches ). Joseph Stalin abandoned the NEP in 1928 with the Great Break .
What was the NEP policy?
The NEP represented a more market-oriented economic policy (deemed necessary after the Russian Civil War of 1918 to 1922) to foster the economy of the country, which had suffered severely since 1915. The Soviet authorities partially revoked the complete nationalization of industry (established during the period of War Communism of 1918 to 1921) and introduced a mixed economy which allowed private individuals to own small and medium sized enterprises, while the state continued to control large industries, banks and foreign trade. In addition, the NEP abolished prodrazvyorstka (forced grain-requisition) and introduced prodnalog: a tax on farmers, payable in the form of raw agricultural product. The Bolshevik government adopted the NEP in the course of the 10th Congress of the All-Russian Communist Party (March 1921) and promulgated it by a decree on 21 March 1921: "On the Replacement of Prodrazvyorstka by Prodnalog ". Further decrees refined the policy. Other policies included monetary reform (1922–1924) and the attraction of foreign capital .
What was the purpose of NEP reforms?
NEP economic reforms aimed to take a step back from central planning and allow the economy to become more independent. NEP labor reforms tied labor to productivity, incentivizing the reduction of costs and the redoubled efforts of labor. Labor unions became independent civic organizations.
When was the NEP adopted?
The Bolshevik government adopted the NEP in the course of the 10th Congress of the All-Russian Communist Party (March 1921) and promulgated it by a decree on 21 March 1921: "On the Replacement of Prodrazvyorstka by Prodnalog ". Further decrees refined the policy.
What is the Malaysian economic policy?
The New Economic Policy ( NEP) (Russian: но́вая экономи́ческая поли́тика (НЭП), tr. nóvaya ekonomícheskaya polítika) was an economic policy of the Soviet Union proposed by Vladimir Lenin in 1921 as a temporary expedient.
Why did the Soviet Union use the NEP?
Some kinds of foreign investments were expected by the Soviet Union under the NEP, in order to fund industrial and developmental projects with foreign exchange or technology requirements. The NEP was primarily a new agricultural policy. The Bolsheviks viewed traditional village life as conservative and backward.
How did the New Economic Policy affect agriculture?
After the New Economic Policy was instituted, agricultural production increased greatly. In order to stimulate economic growth, farmers were given the opportunity to sell portions of their crops to the government in exchange for monetary compensation. Farmers now had the option to sell some of their produce, giving them a personal economic incentive to produce more grain. This incentive, coupled with the breakup of the quasi-feudal landed estates, surpassed pre-Revolution agricultural production. The agricultural sector became increasingly reliant on small family farms, while heavy industries, banks, and financial institutions remained owned and run by the state. This created an imbalance in the economy where the agricultural sector was growing much faster than heavy industry. To maintain their income, factories raised prices. Due to the rising cost of manufactured goods, peasants had to produce much more wheat to buy these consumer goods, which increased supply and thus lowered the price of these agricultural products. This fall in prices of agricultural goods and sharp rise in prices of industrial products was known as the Scissors Crisis (due to the crossing of graphs of the prices of the two types of product). Peasants began withholding their surpluses in wait for higher prices, or sold them to " NEPmen " (traders and middle-men) who re-sold them at high prices. Many Communist Party members considered this an exploitation of urban consumers. To lower the price of consumer goods, the state took measures to decrease inflation and enact reforms on the internal practices of the factories. The government also fixed prices, in an attempt to halt the scissor effect.
Who wrote the new economic policy?
Citation information. Title: “The New Economic Policy (NEP)”. Authors: Jennifer Llewellyn, Michael McConnell, Steve Thompson. Publisher: Alpha History.
What was the NEP decree called?
The formal decree that introduced the NEP was called “On the replacement of prodrazvyorstka [grain requisitioning] with prodnalog [a fixed tax]”. Under war communism and prodrazvyorstka, the amount of grain requisitioned was decided on-the-spot by unit commanders. The amount of prodnalog would instead be fixed by the state, allowing peasants to retain whatever surplus they had produced.
Why did Lenin justify the NEP?
Because the NEP allowed elements of capitalism, hardliners in the Communist Party hierarchy viewed it as a retreat towards capitalism – or at least an acknowledgement that socialist policies had failed . Lenin responded by justifying the NEP as a temporary measure.
What was the NEP?
The NEP ended the policy of grain requisitioning and introduced elements of capitalism and free trade into the Soviet economy. This was done, in Lenin’s words, to provide “breathing space” for the Russian people. Under the NEP, Russian farmers were once again permitted to buy and sell their surplus goods at markets.
What was the Bolshevik economic policy?
Introduced by Vladimir Lenin in 1921, the New Economic Policy (or NEP) was a radical shift in Bolshevik economic strategy. It eased the harsh restrictions of war communism, the Bolshevik economic policy during the Civil War, and allowed the return of markets and petty trade. The NEP was controversial within the Bolshevik party, where some saw it as a backdown or retreat from socialism.
What was the Bolshevik Party's economic strategy?
The Bolshevik Party desperately needed a role to play; it needed a reaffirmation that it was leading Russia and not simply waiting for the conditions to arise when the socialist offensive could resume.”. 1. The New Economic Policy, or NEP, was a revised economic strategy, developed and introduced by Lenin in early 1921.
What allowed the return of capitalist behaviours such as buying and selling for profit?
3. The NEP allowed the return of capitalist behaviours, such as buying and selling for profit and produced the emergence of new kulak and Nepmen classes.
Economic Policy
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Total Taxable Resources
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Why did Vladimir Lenin start discussing the new economic policy?
During the 2nd Congress of the Political Education Departments in October 1921 Vladimir Lenin began discussing the New Economic Policy and the need for its immediate application, due to the devastating effects of War Communism. It was concluded that the mistake was made when the Bolsheviks decided to resort right to Communism within the first months of victory, although the goal was to use capitalism as a kind of bridge between the petty bourgeoisie economic policy and the Communist economic policy.
What was the purpose of the N.E.P.?
The N.E.P. was a way to manipulate capitalism so as to ensure that capital would be a result of labors, but Imperialism would not be able to infiltrate the system and regain power. Aside from the Socialist twist, the New Economic Policy was intended for the Soviet Union to experience a temporary taste of capitalism in order to improve the economy so as to successfully introduce Communism. The New Economic Policy meant restoring capitalism considerably. As mentioned previously, the food appropriation system and food requisitioning policy would be abolished. In return, the peasants would be allowed to sell freely (for profit) that which they had left over after the tax had been collected (that tax would be small and affordable). Foreign trade and the leasing of enterprises would now be permitted as well (Lenin, 64).
What was Lenin's economic policy?
As stated by Lenin, “economically and politically speaking the New Economic Policy completely ensures to us the possibility of building the foundation of a socialist economy .” It was meant to be based off of the existence of capitalism. Basically it would be a combination of the capitalist economy and the communist politics. Large businesses would still be nationalized, in order to ensure that the “petty bourgeoisie,” or the capitalist Imperialists, would not gain too much power over or get in the way of the growing Socialist society. Lenin believed that capitalism would lead to Imperialism, which is the entity which they had only just eliminated.
What was the first thing that was put into place during the Soviet Union?
The first thing that was put into place was something called “War Communism.” The reason it was called this was because it was meant to be an economic method utilized during the Civil War, but in reality began before the war and remained in effect after the war until 1921. Right away, when the Bolsheviks seized power, Lenin underestimated the problems within the country, not only economically but socially as well. Within the first few months following the Revolution, all that could be changed was changed (Lenin, 5). The most profound of the changes to be made in those first months of the Soviet Union was the taking of private property from the capitalists: farmland, factories, mills, railroads, banks, and other properties with no compensation (Lenin, 5).
What was Vladimir Lenin's response to the poor economy?
His response to the poor economy he adopted and how he planned to improve it was called the New Economic Policy, or the N.E.P., which got its name from the fact that it was “new,” in comparison to ...
What was Lenin's mistake?
Lenin made the mistake of taking what was the current government and its people and diving right into full-blown Communism, not realizing that they all were economically unequipped for such a conversion just yet (Caplan). Along with this, the unemployment rate sky-rocketed.
What was Vladimir Lenin's new economic policy?
Lenin's New Economic Policy: What it was and how it Changed the Soviet Union. By the time 1921 came around, Russia’s economy had been maimed by the effects of War Communism. Socialism had not begun on a good note, and Vladimir Lenin was becoming concerned with the unfortunate state of the economy. His response to the poor economy he adopted ...
Why is the NEP bad?
The NEP is also criticised for not dealing directly with issues of wealth distribution and economic inequality; that it no longer helps the poor but is instead an institutionalised system of handouts for the largest ethnic community in Malaysia as the NEP does not discriminate based on economic class. Bumiputras of high and low economic standing are entitled to the same benefits. The statistical problems of categorising wealthy and disadvantaged Bumiputras in one group also meant that the NEP's goal of having 30% of the national wealth held by Bumiputras was not indicative of a median 60% of Bumiputras holding 28% of the national wealth, but could theoretically translate into one Bumiputra holding 29% of the national wealth, with the remaining Bumiputras sharing 1%. Some have alleged that because of this imbalance, some Malays remain economically marginalised. Criticisms also arose from the fact that there was no planned assistance for Malaysian Chinese and Indian communities to achieve their 40% goal during the actual implementation of the NEP.
What is the overarching principle of the Malaysian Policy?
The overarching principle of the Policy was the creation of "a socio-economic environment in which individual Malaysians find self-fulfilment within a system which provides for proportional participation, management and control in the economic life of the nation".
When did the NEP end?
Officially the term of the NEP ended in 1990. However, much of it remained in effect through other governmental policies; the New Straits Times reported that this was because as of 2007, "the government believes the aim of having 30 per cent Bumiputera equity has yet to be achieved". In 2006, it was reported that the NEP would be reinstated under the Ninth Malaysia Plan, the ninth in a series of five-year economic plans. Originally, the NEP was replaced by the National Development Policy (NDP), which ran from 1990 to 2000. The NDP was supposed to have then been replaced by the National Vision Policy (NVP), which would reportedly have lessened the aggressive affirmative action of the NEP and NDP. However, UMNO later called for the NEP to be reinstated.
Why did the Chinese accept the NEP?
The Chinese community in Malaysia accepted the NEP as a necessary evil to avoid Indonesian-style aggression, which the ruling party consistently instigate and deemed appropriate as their threat based policy. Furthermore, the Chinese community generally moved away from the public sector and set up businesses in the private sector, where the impact of the NEP was less pronounced.
What was the poverty rate in Malaya in 1970?
The poverty rate up to 1970 was high at 49%, with the indigenous communities holding less than 3% of the national economy.
Why did non-Malays leave Malaysia?
In simple words, a lot of non-Malays (Chinese, Indian) have left Malaysia to seek greener pastures (other developed countries) that does not practice policies that favors one race over the others in political, economical, and social context. This is believed to have led to the shortage of skilled workers, that directly causes the inability of Malaysia to pursue rapid economic development during the early 1960s until 1990s, during which the East Asian Tigers have done so.
Is Bumiputra equity disputed?
The calculation of Bumiputra-held economic equity has been frequently disputed, with a number of allegations from some quarters that the government intentionally underestimated the share of Bumiputra equity to justify the NEP and its related policies. Although many affirmative action measures of the NEP were continued under the National Development Policy which ran from 1990 to 2000, and later by the National Vision Policy set to run from 2000 to 2010 – leading many Malaysians to refer to the NEP in the present tense – the official Bumiputra equity share remained less than the original 30% target.
Overview
The New Economic Policy (NEP) (Russian: новая экономическая политика (НЭП), tr. novaya ekonomicheskaya politika) was an economic policy of the Soviet Union proposed by Vladimir Lenin in 1921 as a temporary expedient. Lenin characterized the NEP in 1922 as an economic system that would include "a free market and capitalism, both subject to state control," while socialized state enterprises would operate on "a profit basis."
Beginnings
In November 1917, the Bolsheviks seized control of key centres in Russia. This led to the Russian Civil War of 1917–1922, which pitted the Bolsheviks and their allies against the Whites and other counter-revolutionary forces. During this period the Bolsheviks attempted to administrate Russia's economy purely by decree, a policy of the War Communism. Farmers and factory workers were ordered to produce, and food and goods were seized and issued by decree. While this policy ena…
Policies
The laws sanctioned the co-existence of private and public sectors, which were incorporated in the NEP, which was a state oriented "mixed economy". The NEP represented a move away from full nationalization of certain parts of industries. Some kinds of foreign investments were expected by the Soviet Union under the NEP, in order to fund industrial and developmental projects with foreign excha…
Disagreements in leadership
Lenin considered the NEP as a strategic retreat from socialism. He believed it was capitalism, but justified it by insisting that it was a different type of capitalism, "state capitalism", the last stage of capitalism before socialism evolved. While Stalin seemed receptive towards Lenin's shift in policy towards a state capitalist system, he stated in the Twelfth Party Congress in April 1923 that it allowed the "growth of nationalistic and reactionary thinking..". He also states that in the recent …
Results
After the New Economic Policy was instituted, agricultural production increased greatly. In order to stimulate economic growth, farmers were given the opportunity to sell portions of their crops to the government in exchange for monetary compensation. Farmers now had the option to sell some of their produce, giving them a personal economic incentive to produce more grain. Th…
End of NEP
By 1924, the year of Lenin's death, Nikolai Bukharin had become the foremost supporter of the New Economic Policy. The USSR abandoned NEP in 1928 after Joseph Stalin obtained a position of leadership during the Great Break. Stalin was initially noncommitted to the NEP. Stalin then enacted a system of collectivization during the Grain Procurement Crisis of 1928 and saw the need to quickly accumulate capital for the vast industrialization programme introduced with the Five Y…
Influence
Pantsov and Levine see many of the post-Mao economic reforms of the Chinese Communist Party's former paramount leader Deng Xiaoping away from a command economy and towards a "socialist market economy" during the 1980s as influenced by the NEP: "It will be recalled that Deng Xiaoping himself had studied Marxism from the works of the Bolshevik leaders who had propounded NEP. He drew on ideas from NEP when he spoke of his own reforms. In 1985, he op…
See also
• Capital accumulation
• Corporatism
• Dirigisme
• Family in the Soviet Union
• Hyperinflation in early Soviet Russia
Summary
Background
- Lenin’s decision to introduce the NEP followed three years of civil war, social disruption, economic deprivation and famine. This only increased opposition to the Bolshevik regime which, in turn, increased the risk of rebellion or counter-revolution. By early 1921, the Soviet regime had been rattled by the Kronstadt rebellion, peasant revoltsin the provinces, angry food queues in the citie…
Ending Requisitioning
- The formal decree that introduced the NEP was called “On the replacement of prodrazvyorstka [grain requisitioning] with prodnalog [a fixed tax]”. Under war communism and prodrazvyorstka, the amount of grain requisitioned was decided on-the-spot by unit commanders. The amount of prodnalogwould instead be fixed by the state, allowing peasants t…
Kulaks and Nepmen
- The replacement of requisitioning with a fixed tax and free markets gave Russian farmers an incentive to work harder and produce more. Helped by the end of the Civil War and stabilisation in conditions, agricultural production began to rise significantly. Those peasants who produced more began to acquire surplus goods, bought more land and hired labour. A new group of afflue…
Outcomes
- In comparative terms, the NEP was a success. It did not solve all of Russia’s economic problems, however, nor did not produce immediate results. Russia’s agricultural production remained stagnant through 1921, the worst year of the Great Famine, but production began to increase significantly in 1922 and beyond. By the mid-1920s, Russia’s agricultural output had been restor…
Trouble in The Party
- Because the NEP allowed elements of capitalism, hardliners in the Communist Party hierarchy viewed it as a retreat towards capitalism – or at least an acknowledgement that socialist policies had failed. Lenin responded by justifying the NEP as a temporary measure. The NEP, he argued, was intended to provide “breathing space” for the Russian people and their economy, which was …
Criticisms
- Whatever his justifications, the NEP did seem like a concession that earlier policies had failed. Much like Pyotr Stolypin’s land reforms of 1906-7, the NEP encouraged and increased class divisions by allowing some peasants to enrich themselves. The NEP disillusioned many young Bolsheviks who were eagerly awaiting the transition to socialism. Writing in 1921, Alexandre Bar…