Lenin’s New Economic Policy (NEP)

The Original Communist Plan

When the communist took over Russia, they immediately declared that all land, shops, factories, and machinery belonged to the state. In this manner, the state would own all the wealth in Russia. It would then be up to the state to distribute all the wealth equally among the people, so that there would no longer be individuals who were rich or poor. To distribute wealth, each person received a ration card that granted them food and clothing from the state run stores.

All land and machines were to be administered by a state official (communist party member) to ensure the system was fair. Although this seemed like a reasonable idea in theory, in practice it was a terrible failure. The communist party members running the factories and farms did not understand how they worked, and production fell causing starvation and suffering. The people began to demonstrate and riot against the communist government. These demonstrations were easy to control in the urban centers, but in the rural areas, resistance grew.

The New Economic Policy

Lenin realized that Russia was not ready for the pure communism as set forth by Marx. He understood the need to relax the harsh policies and allow some capitalist behaviors to continue. The decision to allow peasants to own farms and keep what they produced (after paying taxes to the state) created support for his policies and generated more trade. By allowing people to own small business and farms, production increase and caught up to pre-war levels. With the economy beginning to stabilize, Lenin turned his attention to how to govern the massive nation of Russia.

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