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What is the essence of the NEP, the economic policy of the USSR in the 1920s?

The new economic policy (NEP) is a complexeconomic events of the Bolshevik Party to remove the USSR from the crisis in the 1920s. If we talk about NEP briefly, then this is some revival of private initiative.

The reasons for NEP

The policy of war communism has led to a completethe disruption of economic ties between the city and the countryside. Urban residents were very hard in the sense that they did not receive the proper amount of products from the village. The traditional economic exchange was violated, when the city bought food in the village for money. In addition, the peasants began a series of uprisings against the policy of expropriation of food.

Cases were repeatedly recorded when the militarythe corrals came to the villages and took away all the grain stocks. As is known, in 1921 there was a very strong famine, so the protest movement of the peasants was caused by objective reasons.

The country was completely destroyed by the First World War andCivil war, all economic ties with foreign states were destroyed. The same can be said about diplomatic relations. The leadership of the USSR understood that at this stage, without restoring communication with foreign countries, the country will be very difficult.

Another reason for rejecting the policy of war communism was the leadership's understanding that an abrupt transition to communism is impossible.

What is the essence of NEP?

The first economic transformations thatcan be characterized as a manifestation of NEP, began in 1922-1923. The main activities of NEP (briefly) are actions aimed at improving people's lives.

First, it was necessary to restore the monetarysystem of the country by activating trade in food products and industrial goods. The Bolsheviks had to make an unprecedented digression from the planned program in order to bring the economic situation in the country out of a stupor.

To understand what the essence of NEP is, compare it with the policy of war communism.

Options	Military Communism	New economic policy
Goals in the economy	the urgent construction of communist relations; cancellation of the monetary system; overcoming the consequences of war	restoration of monetary turnover; the resolution of private initiative in a limited amount
Agriculture	surplus; the establishment of consumer communes, which in a regulated manner distributed food; committees of the poor appeared as class organs for fighting the kulaks	the replacement of the surplus-fund by a tax that could be paid in cash; the ability to trade their products; the first common farms appeared in the countryside, which had a voluntary principle of education
Industry	full nationalization of all enterprises; the facilities are directly managed by the main departments (in different years there were from 20 to 50)	partial abolition of nationalization; free trade; opportunity to attract investments from foreign companies

The main feature of the economic policy of the timesThe civil war was the expropriation of products from the peasants. In simple terms, the army or government officials could pick up products for free. The party leadership understood the need for the introduction of NEP, a table comparing the periods of 1918-1921 and 1922-1929 will show this clearly.

NEP events

In the framework of the new economic policy, the state carried out some reforms. Consider the essence of NEP in the financial sector.

Как известно, несколько лет товарно-денежные relations in the country were almost frozen. In 1922, a monetary reform was carried out. The new currency (chervonets) was recognized by Western countries, therefore, it became possible to conduct currency exchange operations. Over time, trade resumed both within the country and with foreign partners.

NEP in agriculture

Important changes affected agriculture.The peasants finally felt relieved of the burden of war communism, because in 1921 the surplus was canceled. Of course, they were not fully exempted from taxes. A food tax was introduced, but it was 2 times less than the surplus rate. It was allowed to pay this tax in cash. The poorest peasants were exempt from tax. The peasants immediately understood what the essence of NEP was. This form of relationship suited them, so many did not want to go to collective farms in the years 1930-1932.

The development of industry

In industry, the NEP events were alsosharp. Private capital again had the opportunity to work in different areas of production. In those areas where the state did not want to weaken its influence, there were cases of mixed capital in enterprises. Control over the activities of enterprises has decreased, therefore, it has become easier to conduct economic activities. Such changes in the state's course were immediately felt by foreign investors, starting to invest in the creation of new enterprises.

Results of NEP in the USSR

The policy of NEP, the table with the results of which before your eyes, besides the positive ones, also had some negative results.

Positive results:	Negative results of NEP:
the revival of trade between town and country; conditions for the construction of industrial enterprises; stabilization of the monetary system of the country; the revival of agriculture; the abolition of the policy of war communism made it possible to create conditions for the formation of large agricultural enterprises; attracting private foreign investment	high unemployment; inflationary processes associated with the global economic crisis; suppression of opposition in society

But still, the importance of the period of the new economic policy in the development of the Soviet state is difficult to overestimate. The country was able to recover from the difficult events of the 10s of the 20th century.