NEW ECONOMIC POLICY

BACKGROUND

• Civil war between the Bolsheviks and White Army ruined the Russian state and economy.

BACKGROUND

• Large urban-rural migration caused a lack of factory workers

BACKGROUND

• Famines of 1921 coupled with rebellions, especially of the Kronstadt sailors, convinced Lenin to end the war communism policy

NEW ECONOMIC POLICY

• Greater free trade
• Taxed workers instead of taking their grain

RESULT

• Peasants had more incentive to produce since more crops=more money to be made
• Economic recovery

POINTS TO NOTE

• While agricultural and light industries boomed, heavy industries and financial sectors still controlled by the state did not experience as much of a growth.

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