New Economic Policy - End of NEP

End of NEP

By 1925, the year after Lenin's death, Nikolai Bukharin had become the foremost supporter of the New Economic Policy. It was abandoned in 1928 after Joseph Stalin obtained a position of leadership during the Great Turn. Stalin had initially supported the NEP against Leon Trotsky, but switched in favour of Collectivization as a result of the Grain Procurement Crisis and the need to accumulate capital rapidly for the vast industrialization programme introduced with the Five Year Plans. It was hoped that the USSR's industrial base would reach the level of capitalist countries in the West, to prevent them being beaten in another possible war. (Stalin proclaimed: "Either we do it, or we shall be crushed.") Stalin proposed that the grain crisis was caused by kulaks, relatively wealthy farmers who hoarded grain and participated in the speculation of agricultural trade. Soviet economists also asserted that the peasant farms were too small to support the massive agricultural demands of the Soviet Union's push for rapid industrialization and that only the collectivization of farms could support such an expansion. Thus, Stalin imposed collectivization to replace private farms; most of the collectivization process involved the stripping of land from the kulaks in order to distribute it among state farms worked by peasants.

For Lenin and his followers, the NEP was intended as an interim measure. However, it proved highly unpopular with the Left Opposition in the Bolshevik party because of its compromise with some capitalistic elements and the relinquishment of State control. They saw the NEP as a betrayal of communist principles, and they believed it would have a negative long-term economic effect, so they wanted a fully planned economy instead. In particular, the NEP created a class of traders ("NEP men") whom the Communists considered to be "class enemies" of the working class. On the other hand, Vladimir Lenin is quoted to have said "The NEP is in earnest and long-term" (НЭП — это всерьез и надолго), which has been used to surmise that if Lenin were to stay alive longer, NEP would have continued beyond 1929. Lenin had also been known to say about NEP: "We are taking one step backward to later take two steps forward", suggesting that, though the NEP pointed to another direction, it would provide the economic conditions necessary for socialism eventually to evolve.

Lenin outlined his thoughts on the NEP in more detail in his article On Cooperation, published in January 1923:

From the point of view of the “enlightened” European there is not much left for us to do to induce absolutely everyone to take not a passive, but inactive part in cooperative operations. Strictly speaking, there is “only” one thing we have left to do and that is to make our people so “enlightened” that they understand all the advantages of everybody participating in the work of the cooperatives, and organizes participation. “only” the fact. There are now no other devices needed to advance to socialism. But to achieve this “only", there must be a veritable revolution—the entire people must go through a period of cultural development. Therefore, our rule must be: as little philosophizing and as few acrobatics as possible. In this respect NEP is an advance, because it is adjustable to the level of the most ordinary peasant and does not demand anything higher of him. But it will take a whole historical epoch to get the entire population into the work of the cooperatives through NEP. At best we can achieve this in one or two decades. Nevertheless, it will be a distinct historical epoch, and without this historical epoch, without universal literacy, without a proper degree of efficiency, without training the population sufficiently to acquire the habit of book reading, and without the material basis for this, without a certain sufficiency to safeguard against, say, bad harvests, famine, etc.—without this we shall not achieve our object. —

In spite of Lenin's opinion that the NEP should last several decades at least, until universal literacy was accomplished, in 1928, after only nine years of NEP, Lenin's successor, Stalin, eventually introduced full central planning (although a variant of public planning had been the idea of the Left Opposition, which Stalin purged from the Party), re-nationalized much of the economy, and from the late 1920s onwards introduced a policy of rapid industrialization. Stalin's collectivization of agriculture was his most notable departure from the NEP approach.