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The New Economic Policy, or NEP was a system of economic reforms, partly capitalist in form,
that Vladimir Lenin instituted in the Soviet Union in 1921. The policy of War communism the direct conversion to a communist system had failed, and the NEP was introduced in
1921 as an emergency measure.
The NEP restored some private ownership to essential parts of the economy, especially farming. It replaced central planning, whereby the government tried to plan the production and
allocation of goods by means of production quotas and instructions, with a kind of "state capitalism", whereby nationalised
(government owned) industries were allowed to operate autonomously and for profit, in much the same way as private
businesses.
NEP succeeded in creating an economic recovery after the devastating effects on the Russian economy of the First World War the Russian revolution and the Russian civil
war. Most notably, it increased agricultural production enormously and ended the ongoing famine. It was abandoned after
Lenin's death in 1924. The NEP was generally believed to be intended as an interim measure,
and proved highly unpopular with Marxist purists in the Bolshevik party because of its strongly capitalistic elements. They saw the NEP as a betrayal of communist
principles, and wanted a planned economy instead. On the other hand, Lenin has been
quoted as saying: "NEP is for serious (real) and for a long time." Sometimes this has been used to claim that if only Lenin were to stay alive longer, NEP would have continued, the destructive collectivization would have been averted, and all would have been well.
Such claims are debatable to say the least.
Lenin's successor Stalin re-introduced central planning and re-nationalised all
industries, and from the late 1920s onwards introduced a policy of rapid
industrialization. Stalin's collectivization of agriculture has
been his most notable, and most destructive departure from the NEP approach. It is often argued that industrialization could have
been achieved without any collectivization just by taxing the peasants more, much like it has happened in Meiji Japan, Bismarck's
Germany, and in post-war South
Korea and Taiwan.
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