The NEP ( 1921-29) was the economic policy of the Soviet state aimed at restoring the alliance between the workers and the peasants that had been grievously strained by the First World War, foreign intervention, and civil war. It marked a necessary retreat. While keeping the commanding heights of the economy in the state sector, NEP allowed private markets and trade, small capitalist enterprises, and concessions to foreign capital. -THE EDITORS.
“The New Economic Policy is, of course, the major question. This has been the dominant question throughout the year under review. If we have any important, serious and irrevocable gain to record for this year (and I am not so very sure that we have), it is that we have learnt something from the launching of this New Economic Policy. If we have learnt even a little, then, during the past year, we have learnt a great deal in this field. And the test of whether we have really learnt anything, and to what extent, will probably be made by subsequent events of a kind which we ourselves can do little to determine, as for example the impending financial crisis. It seems to me that in connection with the New Economic Policy, the most important things to keep in mind as a basis for all our arguments, as a means of testing our experience during the past year, and of learning practical lessons for the ensuing year are contained in the following three points.
First, the New Economic Policy is important for us primarily as a means of testing whether we are really establishing a link with the peasant economy. In the preceding period of development of our revolution, when all our attention and all our efforts were concentrated mainly on, or almost entirely absorbed by, the task of repelling invasion, we could not devote the necessary attention to this link; we had other things to think about. To some extent we could and had to ignore this bond when we were confronted by the absolutely urgent and overshadowing task of warding off the danger of being immediately crushed by the gigantic forces of world imperialism.
The turn towards the New Economic Policy was decided on at the last Congress with exceptional unanimity, with even greater unanimity than other questions have been decided by our Party (which, it must be admitted, is generally distinguished for its unanimity). This unanimity showed that the need for a new approach to socialist economy had fully matured. People who differed on many questions, and who assessed the situation from different angles, unanimously and very quickly and unhesitantly agreed that we lacked a real approach to socialist economy, to the task of building its foundation; that the only means of finding this approach was the New Economic Policy. Owing to the course taken by the development of war events, by the development of political events, by the development of capitalism in the old, civilised West, and owing also to the social and political conditions that developed in the colonies, we were the first to make a breach in the old bourgeois world at a time when our country was economically, if not the most backward, at any rate one of the most backward countries in the world. The vast majority of the peasants in our country are engaged in small individual farming. The items of our programme of building a communist society, that we could apply immediately, were to some extent outside the sphere of activity of the broad mass of the peasantry, upon whom we imposed very heavy obligations, which we justified on the grounds that war permitted no wavering in this matter. Taken as a whole, this was accepted as justification by the peasantry, not withstanding the mistakes we could not avoid. On the whole, the mass of the peasantry realised and understood that the enormous burdens imposed upon them were necessary in order to save the workers’ and peasants’ rule from the landowners and prevent it from being strangled by capitalist invasion, which threatened to wrest away all the gains of the revolution. But there was no link between the peasant economy and the economy that was being built up in the nationalised, socialised factories and on state farms.
We saw this clearly at the last Party Congress. We saw it so clearly that there was no hesitation whatever in the Party on the question as to whether the New Economic Policy was inevitable or not.
It is amusing to read what is said about our decision in the numerous publications of the various Russian parties abroad. There are only trifling differences in the opinions they express. Living with memories of the past, they still continue to reiterate that to this day the Left Communists are opposed to the New Economic Policy. In 1921 they remembered what had occurred in 1918 and what our Left Communists themselves have forgotten; and they go on chewing this over and over again, assuring the world that these Bolsheviks are a sly and false lot, and that they are concealing from Europe that they have disagreements in their ranks. Reading this, one says to oneself, “Let them go on fooling themselves.” If this is what they imagine is going on in this country, we can judge the degree of intelligence of these allegedly highly educated old fogies who have fled abroad. We know that there have been no disagreements in our ranks, and the reason for this is that the practical necessity of a different approach to the task of building the foundation of socialist oconomy was clear to all.
There was no link between the peasant economy and the new economy we tried to create. Does it exist now? Not yet. We are only approaching it. The whole significance of the New Economic Policy—which our press still often searches for everywhere except where it should search—the whole purpose of this policy is to find a way of establishing a link between the new economy, which we are creating with such enormous effort, and the peasant economy. That is what stands to our credit; without it we would not be communist revolutionaries.
We began to develop the new economy in an entirely new way, brushing aside everything old. Had we not begun to develop it we would have been utterly defeated in the very first months, in the very first years. But the fact that we began to develop this new economy with such splendid audacity does not mean that we must necessarily continue in the same way. Why should we? There is no reason.
From the very beginning we said that we had to undertake an entirely new task, and that unless we received speedy assistance from our comrades, the workers in the capitalistically more developed countries, we should encounter incredible difficulties and certainly make a number of mistakes. The main thing is to be able dispassionately to examine where such mistakes have been made and to start again from the beginning. If we begin from the beginning, not twice, but many times, it will show that we are not bound by prejudice, and that we are approaching our task, which is the greatest the world has ever seen, with a sober outlook.
Today, as far as the New Economic Policy is concerned the main thing is to assimilate the experience of the past year correctly. That must be done, and we want to do it. And if we want to do it, come what may (and we do want to do it, and shall do it!), we must know that the problem of the New Economic Policy, the fundamental, decisive and overriding problem, is to establish a link between the new economy that we have begun to create (very badly, very clumsily, but have nevertheless begun to create, on the basis of an entirely new, socialist economy, of a new system of production and distribution) and the peasant economy, by which millions and millions of peasants obtain their livelihood.
This link has been lacking, and we must create it before anything else. Everything else must be subordinated to this. We have still to ascertain the extent to which the New Economic Policy has succeeded in creating this link without destroying what we have begun so clumsily to build.
We are developing our economy together with the peasantry. We shall have to alter it many times and organise it in such a way that it will provide a link between our socialist work on large-scale industry and agriculture and the work every peasant is doing as best he can, struggling out of poverty, without philosophising (for how can philosophising help him to extricate himself from his position and save him from the very real danger of a painful death from starvation?).”
The full text of the report is at marxists.org.