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March 01, 2021

New Economic Policy

New Economic Policy
A “pre-holiday market” in 1920.

March 1921

During the early years of perestroika, Soviet leader Mikhail Gorbachev often favorably cited the example of NEP, the long-forgotten New Economic Policy the Soviets had launched in 1921 and terminated in 1928. The Soviet people were not used to seeing NEP cast as anything to be emulated. In the past, if NEP was brought up at all, it was usually as a time of “debauchery” or “frenzy,” when “Nepmen” in sumptuous fur coats raced about town in horse-drawn cabs or even fancy motorcars, going from restaurant to restaurant with their giggling girlfriends, while homeless children or baffled workers looked on with sullen hostility.

NEP had always been regarded as a strange, only vaguely understood, and not very sensible chapter in Soviet history: a pause between the heroic Civil War and the no less heroic Five-Year Plans. Generally speaking, the NEP period really was a hiatus between two eras in Soviet history that were more horrific than heroic.

In Ilf and Petrov’s The Little Golden Calf, an old man comes to Ostap Bender offering to take the fall when a crooked scheme Bender is cooking up unravels. The man, who has made a career out of serving time for other people’s crimes, waxes nostalgic about how business boomed during NEP. Bender was getting ready to set up an office, Horns and Hoofs, as a front, and “Sitzchairman Funt” was prepared to serve as the fictional head, so that when the time came for the fellows actually running the operation to flee with their ill-gotten gains, or when inspectors caught wind of their machinations, the sitzchairman would be the one to go to prison in their place.

I’m Sitzchairman Funt. I’ve sat out jail time since before you were born. I did time under Alexander the Second, the Liberator; under Alexander the Third, the Peacemaker; and under Nikolai the Second, the Bloody... I did time under Kerensky too. Now it’s true that I didn’t do any time at all under war communism, there wasn’t any work. But then, to make up for it, how I did time under NEP! Oh, my, how I did time under NEP! Those were the best days of my life... I don’t ask much: one hundred twenty rubles a month out of jail and two hundred forty in. A one-hundred-percent hardship surcharge.

Quoted from Ilya Ilf and Evgeny Petrov, The Little Golden Calf,
translated by Anne O. Fisher (Russian Life Books: 2009).

That was what NEP represented: a time of “pure commerce,” of entrepreneurial activity that, in the minds of the Soviet people, inevitably involved all kinds of cheating and underhandedness. So, naturally, the fictional Funt had more work during NEP than under the last three tsars and the Provisional Government. NEP was, in the popular imagination, a time of unsavory and convoluted machinations that was rightly brought to a close once the entire Soviet people fell in line and, following the wise leadership of Comrade Stalin, began building huge factories and organizing collective farms. It was not a time for private shops or restaurants. Such fruits of individual initiative were simply quashed by the steamroller of industrialization.

Why did Gorbachev suddenly start talking about NEP? And there’s another question, one raised by Anatoly Strelyany in his biography of Soviet Premier Nikita Khrushchev: why was it that Khrushchev never brought up NEP? The answer is simple. For Khrushchev, whose career as a party leader truly got underway during the first Five-Year Plans, when a sharp break was being made from NEPian economics, even mentioning this chapter in Soviet history brought up questions it was better not to explore. He knew full well that the peasants, whose collectivization-induced pain – I am certain – he felt, lived quite well during the 1920s. For my part, I will add that they probably lived better under NEP than at any other time in Soviet history.

For Khrushchev, however, recognizing that there was anything positive about NEP would ensnare him in a web of contradictions. He could not possibly admit that the peasants were actually better off under NEP than they were in collective farms. It was just a matter of organizing the kolkhozes better, of changing the way they were managed, and – ah, yes! – the peasants had to be given private plots – or no, that wasn’t it – actually, those private plots had better be heavily taxed – no, wait! – what was really needed was to plant corn everywhere – although, actually, the real solution was to call for – to demand! – the overtaking of America in the production of meat and milk. Once we put all our effort toward that and fulfilled all our objectives – then we would really start living!

Gorbachev also started out by just trying to strengthen the system and giving “acceleration” another try. This watchword of the early push for Soviet industrialization was resurrected during the leadup to perestroika.

Simply put, Khrushchev made a very enthusiastic attempt to grease the rusting wheels of communism in the belief it would then run more smoothly, while Gorbachev tried to install a new motor. The latter was more decisive, but just as doomed to failure.

The New Economic Policy was introduced by Lenin after the country was bankrupted by the brutal Civil War, epidemics, and the Bolsheviks’ loony economic policies, which had mandated the elimination of private property, the requisitioning of the peasants’ crops, the banning of all private commerce, and the abolition of money. Except, instead of the expected communist heaven-on-earth came a brutal famine and peasant uprisings. When it reached the point that even the sailors of Kronstadt – one of the citadels of the revolution – rose up, the Bolsheviks were compelled to loosen the reins.

In an autobiographical story by Fazil Iskander, his tipsy uncle raises the question: “And what did Lenin say about NEP?” At the mere mention of NEP, the narrator’s grandmother is instantly transformed and orders his uncle (her son) to immediately shut up. “Naturally, not only did he not shut up, but he was spurred on.” At that point the grandmother brought in her other son, who grabbed the troublemaker, lifted him into the air, and carried him out of the room. “‘Seriously and for a long time! That’s what Lenin said!’ cried my poor uncle, as he struggled in Uncle Kolya’s mighty grip.”

In the Stalin era, when Iskander’s story takes place, this famous quote from Lenin (expressing approval for the idea that NEP would have to be implemented in earnest and for an extended period) was, of course, dangerous. Soon after inaugurating NEP, Lenin was incapacitated by illness and the implementation of the New Economic Policy wound up being neither serious nor prolonged. All the Bolsheviks really needed was a few years to calm the peasants, feed the workers, offer hope to the intelligentsia, and even seduce a large portion of emigres, who soon began talking about a liberalization of the regime. After that, the screws were tightened, the peasants were relegated to a hungry collective-farm existence, private enterprise was crushed, and the first show trials were staged. The Great Terror was right around the corner.

When, early in his rule, Gorbachev extolled NEP, he was probably telling himself that he was resurrecting a Leninist policy “seriously and for a long time,” one that would strengthen the financial situation, improve the economy, and create “socialism with a human face.” Perhaps he had already read Andrei Platonov’s brilliant Chevengur, which had been strictly banned in Soviet times and was first published during perestroika. The protagonist of this tragic and prophetic book wanders the steppe during the Civil War in search of communism and finds a town where the residents every day physically pick up their houses and relocate them to prevent private property from taking root. These people derive their energy from the sun, apparently having no other form of sustenance. And when the protagonist returns, he witnesses a miracle:

At first, he thought that the Whites were in the city. The train station had a refreshment stand with no lines where buns were for sale and no ration cards were required. Nearby the station, outside the gubprodkom [Provincial Food Committee], there hung a crude sign with lettering that was swollen due to the poor quality of the paint. On the sign was succinctly and amateurishly printed: “EVERYTHING FOR SALE TO ALL CITIZENS: PREWAR BREAD, PREWAR FISH, FRESH MEAT, OUR CUSTOM-MADE PICKLES.”

Unable to believe his eyes, the protagonist steps into the shop, where he sees “the ordinary accoutrements of commerce” and throngs of people, who are not so much buying food items they have long since forgotten as staring at it in amazement. When a starving old woman attempts to buy food using her ration cards, the shopkeeper explains to her that there are no more ration cards. “We’ve lived to see the day?” she asks. The marvelous reply she hears is: “We’ve lived to see the day: Lenin taketh away and Lenin giveth.”

Gorbachev probably saw NEP as just such a miracle. and he intended, through perestroika, to perform a similar miracle. He might have done well to read Doctor Zhivago, where the protagonist arrives in Moscow “at the start of NEP, the most ambiguous and artificial of all Soviet periods.”

NEP was an attempt to liberalize economic policy while preserving the power of a single party and communist ideology. The two don’t mix. One of the two had to triumph: either the freedom to do business would lead to other freedoms, or tyranny would crush it all – including the economy.

Maybe modern China can find some strange concoction that blends freedom and dictatorship, but in Russia, we’ve tried it several times, and it always seems to turn out the same.

Stores in 1920
Soap, bread, and meat stores, 1920.

 

Tags: economysoviet eraleninnep

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