New Economic Policy facts for kids
The New Economic Policy (NEP) was a special plan for the economy that Vladimir Lenin introduced in Russia in 1921. It came after a difficult time called War communism, which hadn't worked well and had caused many problems, including widespread famine. The NEP was designed to help Russia's economy recover and bring back some stability.
This new policy was a mix of private businesses and state control. It was needed because many people had lost faith in the previous economic system, and the country was facing serious issues like mass starvation.
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Why Was the New Economic Policy Needed?
Before the NEP, Russia had an economic system called War communism. This system was put in place during the Russian Civil War. Under War Communism, the government took control of almost everything.
Problems with War Communism
- Food Shortages: The government took food from farmers to feed the cities and the army. Farmers often had no reason to grow more food than they needed for themselves, because any extra would be taken. This led to less food being produced.
- Lack of Goods: Factories were controlled by the state, and they often produced goods for the war effort, not for everyday people. Shops were empty, and people couldn't buy what they needed.
- Unhappy People: Many people, especially farmers, were very unhappy with War Communism. They felt their hard work was not rewarded, and they had no freedom to sell their goods. This led to protests and even rebellions.
These problems caused a terrible famine in 1921, which affected millions of people. Vladimir Lenin realized that a new approach was urgently needed to save the country's economy and prevent further unrest.
What Was the New Economic Policy?
The New Economic Policy was a step back from the strict state control of War Communism. It allowed for some elements of capitalism to return to the Russian economy.
Key Features of the NEP
- Farmers Could Sell Food: Instead of the government taking all their crops, farmers were allowed to sell their extra food in the market for profit. They still had to pay a tax to the state, but they could keep the rest of their earnings. This gave them a reason to grow more food.
- Small Businesses Allowed: Small private businesses, like shops and small factories, were allowed to open. People could make and sell goods, which helped to bring more products into the markets. These private traders were sometimes called "Nepmen."
- Money Returned: Under War Communism, money had almost stopped being used. The NEP brought back a stable currency, the chervonets, which was backed by gold. This made it easier for people to buy and sell things.
- State Control of Big Industries: Even with these changes, the government still kept control of the "commanding heights" of the economy. This included large industries like banks, big factories, railways, and foreign trade.
Why Was the NEP Introduced?
Vladimir Lenin saw the NEP as a temporary solution. He didn't want Russia to become fully capitalist again. His main goals were:
- Revive the Economy: To get the country producing food and goods again after the devastation of the civil war and War Communism.
- Gain Public Support: To make the Russian people, especially the farmers, happier with the government. He knew that without their support, the new Soviet state would struggle.
- Prevent Further Rebellions: To calm down the widespread unrest and protests caused by the harsh policies of War Communism.
The NEP successfully helped to revive the Russian economy. Food production increased, and more goods became available in the markets. This helped to end the famine and improve living conditions for many people. However, the NEP was eventually ended in 1928, when Joseph Stalin introduced new economic plans focused on rapid industrialization and collective farming.
Images for kids
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"Nepmen", caricature by Dmitry Kardovsky, 1920's
See also
In Spanish: Nueva Política Económica para niños
