War Communism and NEP

Bolshevik policies during the Civil War had contributed greatly to the economic collapse. Intent on immediately establishing a socialist economic order and at the same time providing food for the Red Army and the starving Russian cities, the Bolsheviks introduced harsh economic policies that went under the name of War Communism.

Backed by armed units, Bolshevik officials descended on villages like locusts and confiscated grain from the peasants for government use. Individual peasants were allowed to keep only about thirty pounds of grain a month for themselves. To aid in these confiscations, the party organized Committees of Poor Peasants (komnezamy) whose members received priority in the distribution of land, exemption from taxes, and 10–25% of the “take.” Most peasants and workers responded by stopping all production. As the shortfalls in foodstuffs increased, drought hit large parts of southern Russia and Ukraine. The result was the famine of 1921–22 that took hundreds of thousands of lives in Ukraine and even more in the Volga region of Russia.¹ But unlike its behavior a decade later, the Soviet government acknowledged the famine of 1921–22 and organized a massive domestic and international relief effort to aid the hungry.

The catastrophic economic conditions gave rise to a ground swell of dissatisfaction with the Bolsheviks, manifesting itself in military mutinies, violent workers’ strikes, and huge peasant uprisings that engulfed Russia and Ukraine in 1921. Although the Red Army and the Cheka ruthlessly suppressed these rebellions, Lenin was forced to admit that War Communism was a failure and that concessions would have to be made, especially to the peasantry.

Once more Lenin’s vaunted tactical skill, his willingness to take one step back in order to move socialism forward two steps later – the famous Lenin tango – came into play. On 21 March 1921, at the Tenth Party Congress, he persuaded his reluctant associates to accept the New Economic Policy (NEP) – but only after the dangerous Kronstadt revolt (which occurred at the time of the congress) vividly demonstrated how unpopular current Soviet policies were. This policy was a compromise, a temporary retreat from socialism, a chance for the country to recuperate from the Civil War. The main feature of NEP was the attempt to appease the peasantry and to provide it with incentives for raising food production. Instead of requisitioning grain, the government imposed a moderate tax on the peasantry. After paying the tax, the peasant could sell his surplus grain at whatever price the market would bear. Poor peasants did not have to pay a tax at all. The policy of creating collective farms was also abandoned. In Ukraine most of the lands the Central Rada had nationalized back in 1918 were now redistributed to the poorer peasants.

To invigorate other segments of the economy, NEP removed government controls over internal trade, leased small factories back to their former owners, and even encouraged foreign investment. However, although Lenin was willing to compromise with capitalism temporarily, he had no intention of abandoning his dream of creating a socialist economy. Therefore, the government retained control of the “commanding heights” of the economy, such as heavy industry, banking, transportation, and foreign trade.

Map 22 Soviet Ukraine during the interwar period

NEP proved to be a great success. Assured that they could sell their produce to hungry urban dwellers at good prices, Ukraine’s 5 million peasant farms quickly raised their productivity. By 1927, there was already 10% more land under cultivation than in 1913. Meanwhile, the consumer-oriented industry, invigorated by the so-called NEP-men or small entrepreneurs who operated with government permission, also reached prewar levels. Only the government-controlled heavy industry lagged behind. As prosperity returned and memories of the nightmarish Civil War years faded, the Ukrainian peasant began to make his peace with the Bolshevik regime that he had previously viewed with such great mistrust.