Why was the New Economic Policy introduced?
The early 20th century was a time of tumult for Russia. Tsar Nicholas attempted to expand the Russian Empire and ended up fighting the Japanese in the east, resistance in Finland, and internal rebellion. When the Russian Navy was soundly defeated in the war against Japan, the internal protest and rebellion escalated. On a Bloody Sunday in January of 1905, the Imperial Guard fired demonstrators lead by the priest Georgi Gapon launched revolution of 1905. In May the first Soviet, or council was formed in a textile strike in Ivanove-Voznesenk and the sailors on the battleship Potemkin defected to Romania. Matters calmed down when the government, signed the Treaty of Portsmouth with Japan, but that did not mean the revolution was going away. The October Manifesto expanded civil liberties and established the first State Duma of the Russian Empire. This was a step in the direction that finally led to the Rebellion of 1917 that saw the fall of the Tsarist Regime and the Bolsheviks’ assumption of power. In the intervening years Workers’ Soviets, or councils sprang up and the government called a series of Dumas, or legislative councils until World War I. Entry into World War I did not unite the government with its people, rebellion continued. Rasputin was murdered in 1916. The Russian Revolution was launched in the spring of 1917 when a battalion of solders sent to suppress an uprising in Petrograd instead joined forces with the protesters. In October, the Russian Provisional Government ended when the Petrograd Soviet captured the Winter Palace.
The fall of the Russian Provisional Government triggered the fracturing of the centralization started under Tsar Nicolas at the start of the century. The Finnish Parliament issued a Declaration of Independence. The Ukraine established a separate Soviet Republic in Kharkov and a Muslim Republic was created in central Russian. The end of World War I saw the further breakup of the Russian Empire when it relinquished Belarus, Finland, Estonia, Latvia, Lithuania, Poland, and Ukraine and ceded all territory captured in the Russo-Turkish War to the Ottoman Empire, pursuant to the terms of the Treaty of Brest-Litovsk. As the year progressed, more countries declared their independence from Russia.
In June of 1918 an Anti-Bolshevik government under the protection of the Czech Legion was created in Samara known as the Committee of Members of the Constituent Assembly. They took immediate action to permit landowners to harvest the winter crops and returned all the banks, factories and plants to their former owners. Although they claimed to be reinstating democratic freedoms and they did advance the workers’ causes by establishing an eight-hour workday and permitting workers’ conferences, congresses and unions their actions enabled landowners to recover their confiscated land from the peasants. They were out of power by the end of 1918.
“On November 30 of 1918 the Council of Workers’ and Peasants’ Defense was created to replace the Revolutionary Military. Its members included Lenin, Trotsky and Stalin,” CITATION AHi \p 47 \l 1033 Following that, the Bolsheviks established War Communism in and nationalized the banks, land and shipping. The goal of War Communism was to reduce private ownership to a minimum and foreign trade was declared a state monopoly.
When Lenin realized the Bolsheviks were not ready to take over the whole economy and changed his vision of the “withering away” of the state and set forth the argument that the centralization of power in the state was necessary CITATION AHi \p 47 \l 1033 In June of that year, a decree ended all private capitalism and large factories were taken over by the state. In November of 1920, any factory or industry that employed more than ten workers was nationalized. “Trotsky argued for the militarization of the trade unions” CITATION AHi \p 47 \l 1033 . Osinskii, the longtime Bolshevik, whose Democratic Centralist faction feared the bureaucratization of the party, spoke against both militarization and one person management” CITATION AHi \p 47 \l 1033 . War Communism took control of the distribution of food and set up the Food Commissariat. Known collectively as the Peoples’ Commissariats, These relied heavily on the experience and talents of former ministerial employees. Although there was a “great deal of fluidity within the commissariats there was considerable overlap and friction.” CITATION AHi \p 47 \l 1033 Although Lenin and the Bolsheviks believed that workers would show discipline and the will to work hard under a system where they were working for a cause instead of within a system that made some rich but many poor. The practical application of this was not successful.
The guiding principles of War Communism included that production should be run by the state, the state had control of the labor army, which would include the military army once it could be disbanded, extreme centralization was introduced under the auspices of the Supreme Economic Council, the Vesenkha, which had the right to confiscate and requisition the Commissariat of Transport and the Commissariat of Agriculture. Although this was done to streamline the system and make it more efficient the effect was just the reverse, the state was the sole distributor and producer. War Communism also attempted to abolish money. The Bolsheviks believed in a system of natural economy where all transactions were carried out in kind while the state provided for the basic needs of the citizens. In 1918, the Bolsheviks declared all surplus food was to be given to the state for them to distribute to the workers. The result was that the peasants were angry because they had not understood that while the land belonged to the people they would not be able to keep what they had grown. Meanwhile, in the cities the workers starved. “Vesenkhas’ standing fell. When, in March 1920 the Ninth Party Congress acknowledged the need for an all-embracing plan for economic reconstruction it looked not to Vesenkha but to the Council of Workers and Peasants’ Defense” CITATION AHi \p 47 \l 1033 this system of relying upon the natural industry of the citizens was a failure. Lenin turned to the Unions as a method of drawing the populace into the workings of the state. This proved to be more successful in the urban areas. The peasant farmers were more discontented. Since they could not retain the surplus the farmers did not work to produce any more than what they needed. Even if they had continued to produce at pre-1917 rates, there was no way to more it on an increasingly dysfunctional rail system. Glavpoliput was used to “deregister the recalcitrant railway worker’s union and replace it by a ‘statized’ union.” CITATION AHi \p 47 \l 1033 In addition, an organization of shock troops was enlisted to address urgent labor needs.
It all proved a failure as Workers especially men, moved out into the countryside. “From a high point of 3.5 million, the number of workers in “census” industry dropped to slightly over 2 million 1918 between 1.3 and 1.5 million in 1919 and roughly 1.5 million in the latter half of 1920.” CITATION AHi \p 47 \l 1033 . Even if they had stayed in the cities and factories there would have been little for them to do. Production of raw materials such as cotton and flax dropped to a minimum as the crop lands were increasingly dedicated to food.
As might well be expected, powerful political forces arose to oppose Lenin and the Bolsheviks. The Treaty of Brest-Litovsk had exposed the Bolshevik weaknesses and internal political groups as well as foreign powers attempted to capitalize on it. These powers were known as the “Whites” and the Bolsheviks as the “Reds.” The Whites and foreign powers occupied some of the richest food and fuel production districts. Lenin and the Bolsheviks found themselves not only trying to provide for distribution of food to the urban centers, they also had to provide for an army, because they represented the fighting force “Priority was given to the Red Army in the field” CITATION AHi \p 47 \l 1033 . The death rate soared. Epidemics of typhus, cholera, influenza and diphtheria raged in a population already weakened by deficiency diseases.
With this policy in place, leaving ones job became a desertion and “militarization did not substantially the state’s control over social resources or reverse the decline in labor productivity” CITATION AHi \p 47 \l 1033 The divide between the urban workers and the peasant farmers grew greater and all attempts to find a unifying solution failed. It was obvious some kind of unifying force was needed. The solution was found by granting greater autonomy to the Trade Unions and the peasant farm workers. “The Congress ended by compromising. Trade unions would not be made part of the state administration but would keep a degree of autonomy.” CITATION AHi \p 47 \l 1033 However, compulsory labor would still be imposed. Trotsky kept his military scheme in the transportation system CITATION AHi \p 47 \l 1033 and assumed the post of Commissar of Railroads. But tensions increased as Lenin and the Central Committee pulled back from militarization. At the same time, the peasants were increasing their resistance to the dictatorship. Lenin worked out his own position on the trade unions and united with Zinoviev, Kamenev, Stalin, Tomskii and others who adopted Lenin’s “Platform of the Ten.” “The debate climaxed at the Tenth Party Congress in March 1921, when the variant positions were presented:” CITATION AHi \p 47 \l 1033 “The debate at the congress was fierce, but in the end the vote was overwhelming in favor of Lenin’s Position” CITATION AHi \p 47 \l 1033
Subsequently the trade unions were brought under party control. Tomskii and other union leaders found themselves demoted. “In January 1922 the Politburo resolved that unions were to protect workers against dangers stemming from capitalist influences” CITATION AHi \p 47 \l 1033
At the same time the conflict between the “Whites” and the “Red” continued. In November of 1920 the Red army defeated the White army led by General Wrangel, which represented the last of the counterrevolutionary forces. The demobilization of the Red army added to the misery of the population and resulted in armed bands of solders that searched the farmlands for food; the peasants became mobilized under the Union of Working Peasants and called for the end to seizures of grain full political equality of all citizen and personal economic freedom along with other issues. “Their program was a complete rejection of the Communist economic program.” CITATION AHi \p 47 \l 1033 . With the onset of a particularly cold winter season in 1920-1921, famine spread through the Volga basin.
Sailors mutinied at the Kronstadt naval base that started with a workers’ rebellion on the morning of February 24 1921, in Petrograd. By February 25 it had spread throughout the entire city. The Bolsheviks responded immediately crushing the worker organizations. This initially served to inflame the populace further. :In particular, it affected the sailors at the Kronstadt naval base. CITATION AHi \p 47 \l 1033 Many of these sailors came from the peasant villages. They had seen firsthand how cruelly the current system treated their own families. They served as the link needed between the workers and the peasants. They knew them both, and the hardships they were trying to survive. The movement of sympathy and support for the Petrograd workers at Kronstadt began among the sailors of the battleships Petropavlovsk and Svastopol, docked in Kronstadt” CITATION AHi \p 47 \l 1033 Because unlike Petrograd, Kronstadt was an island and not so easily suppressed the rebellion on Kronstadt had to time to formulate a statement as to the changes needed. While the rebellion was eventually crushed, with 15,000 rebels killed the incident and the essential changes it propounded led to the New Economic Policy. CITATION AHi \p 47 \l 1033 l
The revolution was failing just as the tide was starting to turn in the civil war of the Whites against the Reds. Everywhere the populace was calling for a return to the 1917 democracy. The conflicts between these forces continued to tear Russia apart until March of 1921 when the Treaty of Riga ended the Russian Civil War and secured the Communist Government in Russia under Lenin This union of worker and peasant was symbolized by the linking of the hammer and the sickle on the Soviet flag.
The adoption of the New Economic Policy was an admission of failure. Lenin’s dream of citizens who would work for the common good did not materialize and faced with a starving populace and a dysfunctional infrastructure there was nothing left to do but revise the system. CITATION AHi \p 47 \l 1033
“The New Economic Policy was a concession to the peasantry, giving them incentives to plant, expand production, and to market their grain.” CITATION AHi \p 47 \l 1033 “The heart of the change was a tax in kind” CITATION AHi \p 47 \l 1033 Henceforth the farmers would contribute a portion of their grain as a tax in kind, instead of having it seized from them. CITATION AHi \p 47 \l 1033 Land tenure was granted and although they did not own it, peasants could not be forcibly dispossessed. By instituting a tax, Lenin was brought to concede that there was taxable personal property. The New Economic Policy was a major change from the War Communism, which set forth that all property was held by the state for the common good. “The substitution of a tax for requisitioning was followed by other reforms that dismantled the economic system of war communism and introduced a new order.” CITATION AHi \p 47 \l 1033 The New Economic Policy was introduced to stabilize the economy and to inspire the peasants and workers alike to greater production. It also served to establish a method of exchange between the cities and the countryside. Workers were enabled to produce extra goods and peasants were encouraged to grow more crops than what was needed for the maintenance of their families. In particular, the growth of crops tied to industry, such as cotton and flax, which had subsided most dramatically in the preceding years, resumed. Once again, the factories received the raw materials necessary to resume production. Prior to the New Economic Policy, there was no benefit to the peasant farmers to produce these crops in amount sufficient for industry. Once the reform had passed, they became valuable trade goods that permitted them to satisfy the requirements of the tax in kind that had been instituted by the adoption of the New Economic Policy. The policy was also necessary to bring together the urban workers and the rural peasants. Only by finding a common ground in the economic policy could they learn to work together to move the country forward.
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