Coexistence of Private and Public Sectors

New scotch PolicyFrom Wikipedia, the free encyclopediaJump to navigation, search For the Malaysian New Eco nary(prenominal)ic Policy, see Malaysian New Economic Policy. Soviet Union This article is part of the series Politics and politics of the Soviet Union GovernmentshowConstitutionGovernment MinistriesState CommitteesExecutive OfficerCouncil of Peoples CommissarsCouncil of MinistersCabinet of MinistersState CouncilPresidential Council Communist PartyshowCommunist Party CongressHistoryGeneral Secretary Politburo substitution CommitteeSecretariatOrgburo LeadershipshowLeadersPremiers CabinetsPresident (List) Vice PresidentCollective leadership LegislatureshowCongress of Soviets Central Executive CommitteeSupreme Soviet Soviet of the UnionSoviet of NationalitiesPresidiumCongress of Peoples Deputies Speaker1989 Legislative election JudiciaryshowLaw Supreme CourtPeoples CourtProcurator General Historyshow19171927 RevolutionCivil farming of war19271953 World war II19531964 Khrushche v Thaw19641982 Era of Stagnation19821991 Dissolution IdeologyshowState Ideology Soviet democracyMarxism-LeninismLeninismStalinism EconomyshowEconomy AgricultureConsumer goodsFive-Year PlanKosygin reformNew Economic PolicyScience and technologyEra of StagnationMaterial fit planning SocietyshowCulture DemographicsEducationFamilyPhraseologyReligionTransportRepre ssion CensorshipCensorship of imagesEconomic repression spacious purgeGulag systemCollectivizationHuman rightsMass killingsIdeological repressionSuppressed research governmental abuse of psychiatryPolitical repressionPopulation transferPropagandaRed Terror Atlas USSR Portal view talk edit The New Economic Policy (NEP) (Russian , , Novaya Ekonomicheskaya Politika) was an economic policy proposed by Vladimir Lenin, who c all(prenominal)ed it enjoin capitalism.Allowing some private ventures, the NEP allowed small animal businesses or smoke shops, for instance, to reopen for private profit while the state continued to contro l banks, foreign trade, and striking industries. 1 It was officially decided in the course of the 10th Congress of the All-Russian Communist Party. It was promulgated by decree on 21 March 1921, On the heir of Prodrazvyorstka by Prodnalog (i. e. , on the replacement of foodstuffs requisitions by fixed foodstuffs tax). In essence, the decree required the farmers to give the government a specified amount of raw rustic product as a tax in kind. 2 Further decrees refined the policy and expanded it to include some industries.The New Economic Policy was replaced by Stalins First Five-Year Plan in 1928. Contents hide 1 Beginnings 2 Policies 3 Disagreements in leadership 4 Results 5 End of NEP 6 See overly 7 Multimedia 8 Further reading 9 Footnotes 10 External links edit Beginnings This section requires expansion. The NEP replaced the policies of War fabianism. Whilst some leading Bolsheviks were opposed to it, it seemed infallible due to circumstances to allow limited private commerc ialism in the form of the NEP. edit PoliciesThe laws sanctioned the coexistence of private and world sectors, which were incorporated in the NEP, which on the another(prenominal)(prenominal) hand was a state oriented mixed economy. 3Rather than repossess all goods produced, the Soviet government took only a small percentage of goods. This left-hand(a) the peasants with a marketable surplus which could be exchange privately. 4 The state, after starting to use the NEP, migrated away from Communist persuasionls and started the modernizing of the economy, but this time, with a more free-minded way of doing things. The Soviet Union stopped upholding the idea of nationalizing certain parts of industries. Some kinds of foreign investments were expected by the Soviet Union under the NEP, in order to investment firm industrial and developmental projects with foreign exchange or technology requirements. 5The move towards modernization rested on one main issue, transforming the Soviet U nion into a modern industrialized society, but to do so the Soviet Union had to reshape its preexisting structures, namely its agricultural system and the class structure that touch it. The NEP was primarily a bracing agricultural policy. 6 The Bolsheviks viewed traditional village life as conservative and backward. The old way of village life was reminiscent of the czarist Russia that had supposedly been thrown out with the October Revolution. With the NEP, which sought to repudiate the old ways, methods were put in place which promoted the pursuit by peasants of their self-interests. However, the state only allowed private landholdings because the idea of collectivized farming had met with much opposition. 7 edit Disagreements in leadershipLenin considered the NEP as a strategic retreat. 8 However, he justified the NEP by insisting that it was a different type of capitalism. He insisted that this form of state capitalism was the last stage of capitalism before socialism evolved . 9 Leon Trotsky and Joseph Stalin disagreed over how to develop the Soviet Economy after the World War and the Civil War. 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. Trotsky believed that the state should repossess all output to invest in capital formation.On the other hand, Stalin supported the more conservative members of the Communist Party and advocated for a state run capitalistic economy. Stalin managed to wrest control of the Communist Party from Trotsky. After defeating the Trotsky faction, Stalin reversed his opinions about economic policy and implemented the First Five-Year Plan. 10 edit ResultsAgricultural production increased greatly. Instead of the government taking all agricultural surpluses with no compensation, the farmers now had the option to sell their surplus yields, and therefore had an incentive to produce more grain. This incentive co upled with the dissolution of the quasi-feudal landed estates not only brought agricultural production to pre-Revolution levels but surpassed them.While the agricultural sector became increasingly reliant on small family farms, the heavy industries, banks and pecuniary institutions remained owned and run by the state. Since the Soviet government did not yet pursue any policy of industrialization, and did not allow it to be facilitated by the analogous private incentives that were increasing agricultural production, 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.This fall in prices of agricultural goods and sharp overdress in prices of industrial products was known as the Scissor crisis (from the shape of the graph of relative prices to a reference date). 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 to halt the scissor effect.The NEP succeeded in creating an economic recovery after the ravage effects of the First World War, the Russian Revolution and the Russian civil war. By 1925, in the wake of Lenins NEP, a major transformation was occurring politically, economically, culturally and spiritually. low and light industries were largely in the hands of private entrepreneurs or cooperatives. By 1928, agricultural and industrial production had been restored to the 1913 (pre-World War I) level. However, unemployment skyrocketed under the NEP and a wider gap was created in the midst of classes. 2 edit End of NEPBy 1925, the year after Lenins death, Nikolai Bukharin had become the fore about 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 resultcitation needed of the Grain Procurement Crisis and the need to accumulate capital rapidly for the vast industrialization programme introduced with the Five Year Plans. It was hoped that the USSRs industrial base would reach the level of capitalist countries in the West, to prevent them being beaten in another possible war. (Stalin proclaimed Either we do it, or we shall be crushed. ) Stalin proposed that the grain crisis was caused by the NEP men, who sold agricultural products to the urban populations for a high price.An alternative definition for the grain crisis (which is more popular among western historians)citation needed revolves around the focus on heavy industry creating a significant consumer goods shortage which meant peasants had nothing to spend their resources on, and then resulting in the hoarding of their grain. For Lenin and his followers, the NEP was intended as an interim measure. However, it proved highly unpopular with the Left Opposition in the Bolshevik party because of its compromise with some capitalistic elements and the relinquishment of State control. 2 They saw the NEP as a betrayal of communist principles, and they believed it would have a negative long-term economic effect, so they precious a fully planned economy instead.In particular, the NEP created a class of traders (NEP men) whom the Communists considered to be class enemies of the working class. On the other hand, Lenin is quoted to have verbalise The NEP is in earnest and long-term ( ? ), which has been used to surmise that if Lenin were to stay alive longer, NEP would have continued beyond 1929, and the disastrous collectivization would have never happened, or it would have been carried out differently. Lenin had also been known to say about NEP We are taking one step backward to later take two go forward, suggesting that, though the NEP pointed to another direction, it would provide the economic conditions necessary for socialism eventually to evolve.Lenins successor, Stalin, eventually introduced full central planning (although a variant of public planning had been the idea of the Left Opposition, which Stalin purged from the Party), re-nationalized much of the economy, and from the late 1920s onwards introduced a policy of rapid industrialization. Stalins collectivization of agriculture was his most notable and most destructive departure from the NEP approach. It is often arguedcitation needed that industrialization could have been achieved without any collectivization and instead by taxing the peasants more, as similarly happened in Meiji Japan, Otto von Bismarcks Germany, and in post-World War II South Korea and Taiwan. edit See alsoEconomic calculation problem Planned economy edit MultimediaVladimir I.Lenin About Natural Tax (Text of the speech in Russian, Record (helpinfo)) edit Further readingDavies, R. W. (ed. ) (1991). From tsarism to the new economic policy continuity and change in the economy of the USSR. Ithaca, N. Y. Cornell University Press. ISBN 0801426219. Fitzpatrick, Sheila, et al. (ed. ) (1991). Russia in the Era of NEP. Bloomington, IN Indiana University Press. ISBN 025320657X. NEP Era Journal http//www. d. umn. edu/cla/NEPera/main/index. php Nenovsky. N,(2006). Lenin and the currency competition. Reflections on the NEP experience (1922-1924),. International Center of Economic Research Working Paper,Torino, No 22, 2006 edit Footnotes1. Ellis, Elisabeth Gaynor Anthony Esler (2007). Revolution and Civil War in Russia. World History The Modern Era. capi tal of Massachusetts Pearson Prentice Hall. pp. 483. ISBN 0-13-129973-5. 2. a b c Service, Robert (1997). A History of Twentieth-Century Russia. Cambridge, MA Harvard University Press. pp. 1245. ISBN 0-074-40348-7. 3. V N. Bandera New Economic Policy (NEP) as an Economic Policy. The Journal of Political Economy 71, no. 3 (1963). http//www. jstor. org/stable/1828984 (accessed Mar 4, 2009), 268. 4. Sheila Fitzpatrick, The Russian Revolution. New York Oxford University Press, 1984 pg. 95. 5. Fitzpatrick, The Russian Revolution, pg. 96. 6. Vladimir P. Timoshenko, Agricultural Russia and the Wheat Problem. Stanford, CA Food Research Institute, Stanford University, 1932 pg. 86. 7. Sheldon L. Richman War Communism to NEP The Road from Serfdom. The Journal of Libertarian Studies V, no. 1 (1981) (accessed Mar 4, 2009), 93. 8. New economic policy and the politprosvets goals. Lenin V. I. Collected Works v. 44. p. 159 9. Sheldon L. Richman War Communism to NEP The Road from Serfdom. T he Journal of Libertarian Studies V, no. 1 (1981) (accessed Mar 4, 2009), 94. 10. Sheila Fitzpatrick, The Russian Revolution, (New York Oxford University Press, 1984), 115. edit External links