(g) Lenin and the economic problems: New Economic Policy-1921

  • From early 1921 Lenin faced the formidable task of rebuilding an economy shattered by the First World War and then by civil war.
  • War communism had been unpopular with the peasants, who, seeing no point in working hard to produce food which was taken away from them without compensation, simply produced enough for their own needs. This caused severe food shortages aggravated by droughts in 1920-21.
  • In addition, industry was almost at a standstill. In March 1921 a serious naval mutiny occurred at Kronstadt, the island naval base just off St Petersburg: This was suppressed only through prompt action by Trotsky, who sent troops across the ice on the frozen sea.
  • The mutiny seems to have convinced Lenin that a new approach was needed to win back the faltering support of the peasants; this was vitally important since peasants formed a large majority of the population. He put into operation what became known as the New Economic Policy (NEP):
    • The co-existence of private and public sectors were incorporated in the NEP. The NEP represented a move away from full nationalization of certain parts of industries.
    • Small industries and trade in their products were also restored to private ownership, though heavy industry such as coal, iron and steel, together with power, transport and banking, remained under state control.
    • Lenin also found that often the old managers had to be brought back, as well as such capitalist incentives as bonuses and piece-rates. Foreign investment was encouraged to help develop and modernize Russian industry.
    • The NEP had new agricultural policy. With the NEP, the state allowed private landholdings because the idea of collectivized farming had met with much opposition.
    • Peasants were now allowed to keep surplus produce after payment of a tax representing a certain proportion of the surplus. This, plus the reintroduction of private trade, revived incentive, and food production increased.
    • NEP labor reforms tied labor to productivity, incentivizing the reduction of costs and the redoubled efforts of labor. Labor unions became independent civic organizations.
    • NEP reforms also opened up government positions to the most qualified workers. The NEP gave opportunities for the government to use engineers, specialists, and intelligentsia for cost accounting, equipment purchasing, efficiency procedures, railway construction, and industrial administration.
    • A new class of “NEPmen” thrived. The NEPmen were business people who took advantage of the opportunities for private trade and small-scale manufacturing created by the New Economic Policy (NEP). These private traders opened up urban firms hiring up to twenty workers. NEPmen also included rural artisan craftsmen selling their wares on the private market.

There is the usual debate among historians about Lenin’s motives and intentions.

  • Some Bolsheviks claimed that the Kronstadt mutiny and peasant unrest had no bearing on the decision to change to NEP; that in fact they had been on the point of introducing an earlier version of NEP when the outbreak of the civil war prevented them.
  • To confuse matters further, some of the other communist leaders, especially Karnenev and Zinoviev disapproved of NEP because they thought it encouraged the development of kulaks (wealthy peasants), who would turn out to be the enemies of communism. They saw it as a retreat from true socialism. Trotsky, supported by left-wing members of the Communist Party, believed that socialism in Russia would only survive if the state controlled the allocation of all output.
  • Did Lenin intend NEP as a temporary compromise (a strategic retreat from socialism) – a return to a certain amount of private enterprise until recovery was assured or did he see it as a return to something like the correct road to socialism, from which they had been diverted by the civil war?
    • It is difficult to be certain one way or the other. What is clear is that Lenin defended NEP vigorously: he said they needed the experience of the capitalists to get the economy blooming again.
    • In May 1921 he told the Party that NEP must be pursued ‘seriously and for a long time – not less than a decade and probably more’.
    • They had to take into account the fact that instead of introducing socialism in a country dominated by industrial workers – the true allies of the Bolsheviks – they were working in a backward, peasant-dominated society. Therefore NEP was not a retreat – it was an attempt to find an alternative road to socialism in less than ideal circumstances. It would require a long campaign of educating the peasants in the benefits of agrarian co-operatives so that force would not be necessary; this would lead to the triumph of socialism.
    • Roy Medvedev, a dissident Soviet historian was convinced that these were Lenin’s genuine intentions, and that if he had lived another 20 years (to the same age as Stalin), the future of the USSR would have been very different.

Result of NEP:


  • The economy began to recover and production levels were improving; in most commodities they were not far off the 1913 levels. Given the territorial losses at the end of the First World War and the war with Poland, this was a considerable achievement.
  • Great progress was made with the electrification of industry, one of Lenin’s pet schemes.
  • Towards the end of 1927, when NEP began to be abandoned, the ordinary Russian was probably better off than at any time since 1914. Industrial workers who had a job were being paid real wages and they had the benefits of NEP’s new social legislation: an eight-hour working day, two weeks’ holiday with pay, sick and unemployment pay and healthcare.
  • The peasants were enjoying a higher standard of living than in 1913. Agricultural production increased greatly. Instead of the government taking all agricultural surpluses with no compensation, the 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, not only brought agricultural production to pre-Revolution levels but also surpassed them.


  • The downside of NEP was that unemployment was higher than before, and there were still frequent food shortages.
  • While the agricultural sector became increasingly reliant on small family farms, the 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 keep their income high, the factories began to sell their products at higher prices. Due to the rising cost of manufactured goods, peasants had to produce much more wheat to purchase these consumer goods which led to an increase in supply and thus a fall in 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 Scissor crisis.
  • Peasants began withholding their surpluses to wait for higher prices or sold them to “NEPmen” (traders and middle-men) who then sold them on at high prices, which was opposed by many members of the Communist Party who considered it an exploitation of urban consumers. To combat 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.

End of NEP:

  • The Great Turn or Great Break was the radical change in the economic policy in the Soviet Union in 1928/1929, which primarily consisted in abandoning the New Economic Policy (NEP) and the acceleration of collectivization and industrialization.
  • By 1924, the year after Lenin’s death, Nikolai Bukharin had become the foremost supporter of the New Economic Policy. It was abandoned in 1928 after Joseph Stalin obtained a position of leadership during the Great Turn. Stalin had initially supported the NEP against Leon Trotsky but switched in favour of Collectivization as a result of the Grain Procurement Crisis and the need to accumulate capital rapidly for the vast industrialization programme introduced with the Five Year Plans.

(h) Political problems were solved decisively

  • Russia was now the world’s first communist state: the Union of Soviet Socialist Republics (USSR): power was held by the Communist Party, and no other parties were allowed.
  • The main political problem now for Lenin was disagreement and criticism within the Communist Party. In March 1921 Lenin banned ‘factionalism’ within the Party. This meant that discussion would be allowed, but once a decision had been taken, all sections of the Party had to stick to it. Anybody who persisted in holding a view different from the official party line would be expelled from the Party. During the rest of 1921 about one-third of the Party’s members were ‘purged’ with the help of the ruthless Cheka; many more resigned, mainly because they were against NEP.
  • Lenin also rejected the claim of the trade unions that they should run industry. Trade unions had to do as the government told them, and their main function was to increase production.
  • The governing body in the Party was known as the ‘Politburo‘. During the civil war, when quick decisions were required, the Politburo got into the habit of acting as the government, and they continued to do so when the war was over. Control by Lenin and the Communist Party was now complete. However, the ‘dictatorship of the proletariat’ was nowhere in evidence; nor was there any prospect of the state ‘withering away’. Lenin defended this situation on the grounds that the working class were exhausted and weak; this meant that the most advanced workers and their leaders – the Communist Party – must rule the country for them.
  • In May 1922 Lenin suffered a stroke; after this he gradually grew weaker, and was forced to take less part in the work of government. He later suffered two more strokes, and died in January 1924 at the early age of 53. His work of completing the revolution by introducing a fully communist state was not finished, and the successful communist revolutions which Lenin had predicted in other countries had not taken place. This left the USSR isolated and facing an uncertain future. Although his health had been failing for some time, Lenin had made no clear plans about how the government was to be organized after his death, and this meant that a power struggle was inevitable.


(a) Lenin remains a controversial figure

  • After his death the Politburo decided that Lenin’s body should be embalmed and put on display in a glass case in a special mausoleum, to be built in Red Square in Moscow. The Politburo members, especially Joseph Stalin, encouraged the Lenin cult for all they were worth, hoping to share in his popularity by presenting themselves as Lenin’s heirs, who would continue his policies. No criticism of Lenin was allowed, and Petrograd was renamed Leningrad. He became revered almost as a saint, and people flocked to Red Square to view his remains as though they were religious relics.
  • Some historians admire him: A. J. P. Taylor clajmed that ‘Lenin did more than any other political figure to change the face of the twentieth-century world. The creation of Soviet Russia and its survival were due to him. He was a very great man and even, despite his faults, a very good man.’
  • Some revisionist historians also took a sympathetic view. Moshe Lewin, writing in 1968, portrayed Lenin as having been forced unwillingly into policies of violence and terror, and in his last years, in the face of ill health and the evil ambitions of Stalin, struggling unsuccessfully to steer communism into a more peaceful and civilized phase.
  • These interpretations are at opposite poles from what some of his contemporaries thought, and also from the traditional liberal view which sees Lenin as a ruthless dictator who paved the way for the even more ruthless and brutal dictatorship of Stalin.
    • Alexander Potresov, a Menshevik who knew Lenin will described him as an ‘evil genius’ who had a hypnotic effect on people that enabled him to dominate them.
    • Richard Pipes can find scarcely a single good word to say about Lenin. He emphasizes Lenin’s cruelty and his apparent lack of remorse at the great loss of life which he had caused. The success of the Bolshevik seizure of power in October 1917 was nothing to do with social forces – it was simply because Lenin lusted after power.
  • Robert Service probably presents the most balanced view of Lenin.
    • He concludes that Lenin was certainly ruthless, intolerant and repressive, and even seemed to enjoy unleashing terror.
    • But although he sought power, and believed that dictatorship was desirable, power was not an end in itself.
    • In spite of all his faults, he was a visionary: ‘Lenin truly thought that a better world should and would be built, a world without repression and exploitation, a world without even a state …. It was his judgement, woeful as it was, that the Dictatorship of the Proletariat would act as midwife to the birth of such a world.’
    • He points out that with the introduction of NEP, the situation began to settle down.
      • ‘The Cheka’s resources were limited and its repressive functions somewhat moderated.
      • Religion was openly practised.
      • Age-old peasant customs were left undisturbed.
      • Whole sections of economic activity were released from state ownership.·
    • Perhaps it was one of the great tragedies of the twentieth century that Lenin died prematurely before his vision could be realized. Nevertheless his achievements make him one of the great political figures of the last century. In the words of Robert Service: ‘He led the October revolution, founded the USSR and laid down the rudiments of Marxist-Leninism. He helped to tum a world upside down.

(b) Leninism and Stalinism

  • One of the most serious charges laid against Lenin by his critics is that he bears the responsibility for the even greater excesses and atrocities of the Stalin era. Was Stalinism merely a continuation of Leninism, or did Stalin betray Lenin’s vision of a society free from injustice and exploitation?
  • During the early years of the Cold War, Western historians held the ‘straight line’· theory – that Stalin simply continued Lenin’s work.
    • It was Lenin who destroyed the multi-party system when he suppressed the Constituent Assembly.
    • He created the highly authoritarian structures of the Bolshevik Party, which became the structures of government and which Stalin was able to make full use of in his collectivization policies and his purges.
    • It was Lenin who founded the Cheka, which became the dreaded KGB under Stalin, and
    • it was Lenin who destroyed most of the powers of the trade unions.
  • Revisionist historians take a very different view.
    • Moshe Lewin, Robert C. Tucker and Stephen F. Cohen argue that there was a fundamental discontinuity between Lenin and Stalin – things changed radically under Stalin.
    • Stephen Cohen points out that Stalin’s treatment of the peasants was quite different from Lenin’s merely coercive policies: Stalin waged a virtual civil war against the peasantry, ‘a holocaust by terror that victimized tens of millions of people for 25 years’.
    • Lenin was against the cult of the individual leader, whereas Stalin began his own personality cult.
    • Lenin wanted to keep the Party bureaucracy as small and manageable as possible, but Stalin enlarged it.
    • Lenin encouraged discussion and got his way by persuading the Politburo; Stalin allowed no discussion or criticism and got his way by having opponents murdered.
    • In fact, during the ‘Great Terror’ of 1935-9. Stalin actually destroyed Lenin’s Communist Party.
    • According to Robert Conquest, ‘it was in cold blood, quite deliberately and unprovokedly, that Stalin started a new cycle of suffering’.
  • Robert Suny provides this clear summing up of Leninism and its relationship to Stalinism:
    • Devoted to Karl Marx’s vision of socialism, in which the working class world control the machines, factories and other sorts of wealth production, the communists led by Lenin believed that the future social order would be based on the abolition of unearned social privilege, the end of racism and colonial oppression, the secularization of society, and the empowerment of working people. Yet within a generation Stalin and his closest comrades had created one of the most vicious and oppressive states in modern history.

Assessing Bolshevik Russia:

  • After the October Revolution, the Bolsheviks had very little planning in place, and their rule got off to a rough start when they came in behind the SRs in the elections of the Constituent Assembly. The working class was still a minority in Russia; the Bolsheviks would change that in time, but at the outset their rule could be maintained only by force.
  • The Bolsheviks faced major opposition from within Russia and for many different reasons.
    • Among the most contentious issues was Russia’s costly exit from World War I. Though many had wanted out of the war, they did not approve of Lenin’s readiness to lose vast amounts of territory.
    • In addition, the Bolsheviks’ sudden dismissal of the Constituent Assembly and their silencing of all other political voices was offensive to many as well. The result was the Russian civil war, which would be horrifically painful for the country and that, in the end, would cost even more lives than had World War I.
    • The years following, with the violence of Joseph Stalin’s purges and forced collectivization of Russia’s lands, would not be much better.
  • Russian Revolution and Communism is unique in the sense that this was first real experience with Marxism and unlike Chinese, Russia had no prior example to learn from.
  • Unlike in China where Mao lived long enough to see ad guide the path of Communism in China, Lenin died soon (in 1924).

Creation of USSR

  • A we have seen earlier, the Russian Soviet Federative Socialist Republic (Russian SFSR or RSFSR) commonly referred to as Soviet Russia was established on November 7, 1917 (October Revolution) as a sovereign state. The first Constitution was adopted in 1918.
  • On 28 December 1922, a conference of plenipotentiary delegations from the Russian SFSR, the Transcaucasian SFSR, the Ukrainian SSR and the Byelorussian SSR approved the Treaty on the Creation of the USSR and the Declaration of the Creation of the USSR, forming the Union of Soviet Socialist Republics.
  • These two documents were confirmed by the 1st Congress of Soviets of the USSR and signed by the heads of the delegations on 30 December 1922.
  • On 1 February 1924, the USSR was recognized by the British Empire. The same year, a Soviet Constitution was approved, legitimizing the December 1922 union.

Positive and Negative Effects of the Russian Revolution:

Impact on Russian:

  • end of an autocratic rule
  • new government tried to build a technologically advanced economy through planing (Stalin onward)
  • establishment of a socialist government
  • educational reforms
  • industrial growth and economic development
  • withdrawal of Russia from the World War
  • emergence of Russia as a major power of world
  • equal rights to all nationalities
  • Censorship of press, speech and assembly far more rigorous that Czarist regime.
  • Bolsheviks outlawed all political parties and other socialist parties and democracy died even before taking real birth.

Impact on World:

  • spread of communism in the whole world
  • increasing global tensions
  • blow to imperialism; boost to freedom movements
  • The Russian Revolution sponsored a great ideological conflict in the International Sphere. It struck terror in the mind of people in capitalist state. The establishment of third international confirmed their suspicion that the revolution was not going to confine itself within its natural boundaries.
  • division of world into two factions: communist and capitalist.
  • eventual formation of the Soviet Union

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