The New Economic Policy
- By 1921, Lenin realized that war communism was not causing a recovery
- Introduced the New Economic Policy (NEP)
- Peasants could sell surplus
- Some private trade was permitted
- Small factories could be privately owned
- People had little incentive and therefore there was little production and lack of quality
- Some parts of the industry began to recover
- Used capitalism to get people to believe in communism, did this only until the economy improved.
Summary
Because war communism was not causing recovery, Lenin introduced the New Economic Policy. This policy used small amounts of capitalism so that communism could work. With capitalism introduced, some private trade was permitted and peasants were able to sell surplus, factories could also be privately owned. However there was no quality control of goods and, at this point, no set quota; therefore people had little incentive if they were getting paid all the same.