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The Crisis of the NEP

"Gorbachev Factor"

The adoption of Stalins model of industrialization, with its emphasis on the rapid expansion of heavy industry, very quickly sharpened the contradictions inherent in the NEP Russia. The transition to rapid industrialization beginning in 1927 was accompanied by massive rouble emission to finance capital investments in large-scale industry. As a result, the Soviet currency depreciated and lost convertibility. At the same time, consumer goods went up, fueling shortages. Almost immediately the government was confronted with difficulties in grain procurements. The problem was that the peasants were losing incentives to sell their grain on the market or to the state, because money could not buy them necessary consumer goods and because the state procurement prices were set too low.  


In 192728, as the cities and the army faced the threat of hunger, the authorities had to reintroduce food rationing. To resolve the food crisis, the government revived the experience of the war communism years, resorting again to the coercive methods of grain appropriation. Grain procurement detachments were once again sent to the countryside to confiscate agricultural produce by force and repression. The countryside responded with the killings of party activists, sporadic revolts, and uprisings, but the grain was collected. In 1929 the crisis situation recurred, as the unwilling peasantry had reduced areas under tillage.  

The failure of state grain procurements not only posed a threat to social stability in the cities by creating food shortages but also undermined the governments grandiose plans of rapid industrialization. To implement its industrial projects, the Soviet Union relied on regular purchases of machines and equipment from abroad. This required additional financial resources that were to be gained by exporting raw materials and agricultural produce. Grain was the countrys chief export commodity. Without sufficient stocks of grain to export, the government would have to either scale down significantly its ambitious industrialization rates or resort to extraordinary measures to squeeze grain out of unwilling peasants. The Communists increasingly perceived the peasantry as an obstacle to their plans of rapid socialist transformation.

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"Great Leap" to Socialism


Soviet Russia

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