The New Economic Policy and the Power Struggle 1921–1928

The period from 1921 to 1928 was one of the most pivotal in Soviet history. The introduction of the New Economic Policy (NEP) represented a dramatic retreat from the radical economics of War Communism, while the power struggle following Lenin's death in 1924 determined the future direction of the Soviet Union. These two stories were intertwined: the disputes over the NEP — how fast to industrialise, what to do about the peasantry, whether market concessions were a betrayal or a necessity — supplied much of the ideological ammunition through which the contest for the succession was fought. Stalin's eventual triumph over his rivals was not inevitable; it depended on political skill, institutional control, and the mistakes of his opponents.

For a breadth study, the years 1921–1928 are best understood as a hinge in the long arc from 1855 to 1964. The NEP shows the Soviet state, like the late tsarist state before it, oscillating between coercion and concession in its handling of the peasantry — a recurring rhythm that connects emancipation in 1861, the Stolypin reforms, War Communism, and collectivisation. The power struggle, meanwhile, demonstrates how the absence of a settled mechanism for transferring power — a problem the Romanovs solved by heredity and the Bolsheviks never solved at all — repeatedly threw the Russian state into crisis at the death of a ruler.

Key Question: Was the NEP a viable long-term path for the Soviet economy, and was Stalin's rise to power the product of structural advantage or personal cunning?

Key Definition: NEP (New Economic Policy) — Lenin's economic policy introduced in 1921, which permitted limited private enterprise and market mechanisms while the state retained the 'commanding heights' of large industry, banking, transport and foreign trade. It was a pragmatic retreat from War Communism designed to revive the economy and preserve Bolshevik power, not an abandonment of the goal of socialism.

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Spec Mapping (AQA 7042)

This lesson belongs to Paper 1, Option 1H: Tsarist and Soviet Russia, 1855–1964 — a breadth study assessed across the full century. The NEP and the succession struggle sit at the junction of the tsarist and Stalinist sections of the specification: they close the period of revolution and civil war and open the period of Stalin's transformation of the USSR.

• AO1 (knowledge and analysis) carries the largest share of marks across the paper. You must deploy precise dates, named decrees and congresses, and statistics, organised around the second-order concepts of change, continuity, cause and consequence.
• AO3 (interpretations) is the headline skill in Section A, where you evaluate the differing views of historians. The viability of the NEP and the inevitability of Stalin's rise are both classic AO3 controversies, dividing totalitarian historians (who stress Stalin's design and the party's coercive machinery) from revisionist historians (who stress contingency, social forces, and structural pressures).
• AO2 (sources) is examined elsewhere in the breadth specification, but the transferable skill — reading a congress resolution, a published policy speech, or a statistical return in the light of its provenance, tone and purpose — is rehearsed here.

Change-and-continuity threads running through the lesson: the state's relationship with the peasantry (coercion versus concession); the problem of succession in an autocratic system; the tension between ideology and pragmatism; and the drive to modernise a backward economy fast enough to survive in a hostile world.

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The New Economic Policy

Why Was the NEP Introduced?

By early 1921, the Bolshevik regime faced an existential crisis. The cumulative damage of the First World War, the revolution, the Civil War and the forced requisitioning of War Communism had brought the economy to the point of collapse, and the political loyalty of the regime's own base was visibly fracturing:

• Industrial output had fallen to roughly 20% of 1913 levels; large-factory output was even lower
• Agricultural output had collapsed, and the 1921–22 famine in the Volga region killed an estimated 5 million people (some estimates range higher); only large-scale American relief (the American Relief Administration under Herbert Hoover) prevented worse
• Peasant revolts were spreading across the countryside; the Tambov rising (1920–21) under Antonov tied down tens of thousands of Red Army troops
• The Kronstadt Rebellion of March 1921 — a mutiny by sailors who had been among the most militant supporters of October 1917 — demonstrated that even the Bolsheviks' core constituency was alienated. Their slogan, 'Soviets without Communists', struck at the regime's legitimacy
• Workers were leaving the famished cities for the countryside; strikes and 'go-slows' were spreading in Petrograd and Moscow

Lenin concluded that War Communism, far from being a deliberate march to communism, had been an emergency improvisation that was now driving the regime towards destruction. At the Tenth Party Congress in March 1921 — the same congress that crushed Kronstadt and banned factions within the party — he introduced the NEP as a strategic retreat, famously characterised as taking 'one step back in order to take two steps forward'.

Key Features of the NEP

Feature	Detail
End of grain requisitioning	Replaced by a tax in kind (prodnalog) — peasants paid a fixed proportion of their harvest and could sell the surplus on the open market; from 1924 the tax was levied in money
Private trade legalised	Small-scale private trade and small businesses (employing fewer than 20 workers) were permitted; private retailers, the Nepmen, came to dominate much consumer trade
'Commanding heights'	The state retained control of large-scale industry, banking, foreign trade, and transport — Lenin insisted the regime kept the levers that mattered
Money reintroduced	The rouble was stabilised with the introduction of the gold-backed chervonets in 1922; the hyperinflation of the Civil War years was brought under control
Concessions to foreign capital	Limited foreign investment was encouraged through 'concessions', though in practice these remained small
Market mechanisms	Supply and demand were allowed to operate in agriculture and small-scale industry, while the state ran heavy industry on a more commercial khozraschot (cost-accounting) basis

The NEP in Practice

The NEP produced a mixed but largely positive economic recovery. The peasant economy, freed from requisitioning, responded quickly; the recovery of large-scale industry was slower because it could not simply be willed back into life.

Successes:

• Agricultural production recovered to roughly pre-war levels by 1926
• Industrial production also recovered, reaching approximately 1913 levels by 1926–27
• The famine ended and food supply to the cities was restored
• A class of prosperous peasants and small traders (the Nepmen) emerged, and consumer goods reappeared in the shops
• Social stability improved; real living standards in the towns rose from their Civil War nadir

Problems:

• The Scissors Crisis (1923) — industrial prices rose sharply while agricultural prices fell, so the 'blades' of the price graph opened like a pair of scissors (the image was Trotsky's). Peasants, finding manufactured goods unaffordable, threatened to withhold grain. State intervention to cut industrial prices contained the crisis but exposed the fragility of the town–country exchange
• Unemployment remained high — by 1926–27, perhaps 1.5 million were registered unemployed in the towns, partly because demobilised soldiers and migrants outnumbered the jobs that recovering industry could offer
• Housing shortages in the cities were acute and persistent
• Many Bolsheviks regarded the NEP as a betrayal of socialist principles — the enrichment of 'Nepmen' and 'kulaks', prostitution and visible inequality seemed to mock the revolution. Some called it the 'New Exploitation of the Proletariat'
• Crucially, NEP-era industrial growth was insufficient to close the gap with the Western powers quickly. Once the easy recovery of idle capacity (the 'restoration' phase) was complete by 1926–27, further growth would require new investment that the market alone seemed unable to generate at the pace the leadership wanted

Exam Tip: The viability of the NEP is a critical analytical question that underpins the whole succession crisis. If the NEP could have continued successfully, then Stalin's forced industrialisation appears as an unnecessary and destructive choice. If the NEP was inherently unsustainable, then some form of radical change was already on the agenda. The strongest answers consider both the economic and the political dimensions of the debate.

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Lenin's Final Years and the 'Testament'

Lenin suffered a first serious stroke in May 1922, a second in December 1922, and a third in March 1923 which left him unable to speak. He died on 21 January 1924. His incapacity from 1922 onwards meant that the contest for the succession effectively began while he was still alive but increasingly unable to control it.

Lenin's Testament (December 1922 – January 1923)

In a series of dictated notes that became known as the Testament, Lenin assessed the leading members of the party, warning above all about the danger of a split between Trotsky and Stalin:

Leader	Lenin's Assessment
Stalin	'Has concentrated enormous power in his hands, and I am not certain he will always use that power with sufficient caution'
Trotsky	'The most able man in the present Central Committee' but suffered from 'excessive self-confidence' and 'too far-reaching a preoccupation with the purely administrative side'
Zinoviev and Kamenev	Their opposition to the October Revolution 'was not accidental' — a pointed reminder of their wavering in 1917
Bukharin	'The most valuable and biggest theoretician in the party' but his views were 'scholastic' and he had 'never fully understood dialectics'

In a postscript of January 1923, Lenin went further and explicitly recommended Stalin's removal: 'Stalin is too rude, and this defect... becomes intolerable in the office of General Secretary. I therefore propose to the comrades that they find a way of removing Stalin from that post.' This was prompted in part by Stalin's rudeness to Lenin's wife, Krupskaya, and by their clash over the 'Georgian affair', in which Stalin had handled the national question with a heavy hand.

The Testament was read privately to delegations at the Thirteenth Party Congress (May 1924) after Lenin's death but was suppressed rather than published; it did not appear openly in the Soviet Union until Khrushchev quoted it in 1956. Stalin survived largely because Zinoviev and Kamenev, who feared Trotsky far more, argued that Lenin's fears about Stalin had not been borne out — a misjudgement they would both come to regret.

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The Power Struggle 1924–1928

The power struggle was fought over both personal rivalry and genuine policy disagreement, above all the future of the NEP and the question of how a backward, isolated country should industrialise. It was also, as the historian Robert Service stresses, a struggle over the institutional control of the party machine — and here Stalin held a decisive, often underestimated, advantage.

The Key Contestants

Leader	Position	Policy
Stalin	General Secretary (from 1922)	Initially centrist; 'Socialism in One Country'
Trotsky	Commissar for War; creator of the Red Army	'Permanent Revolution'; rapid industrialisation
Zinoviev	Head of the Comintern; party boss in Leningrad	Initially allied with Stalin against Trotsky; later opposed him
Kamenev	Chairman of the Moscow Soviet	Allied with Zinoviev; initially protected Stalin
Bukharin	Editor of Pravda; leading theoretician	Defended the NEP and gradual industrialisation; urged the peasants to 'enrich yourselves'

Stages of the Power Struggle

Phase 1 (1923–1925): Defeat of Trotsky

• Stalin allied with Zinoviev and Kamenev to form the Triumvirate (troika) against Trotsky, who was widely feared as a potential 'Bonaparte' because of his command of the Red Army
• Trotsky was attacked for his theory of Permanent Revolution, which implied that socialism in Russia could not survive unless revolution spread to the advanced industrial countries — an argument that could be portrayed as defeatist about Russia's own prospects
• Stalin countered with 'Socialism in One Country' — the reassuring claim that the Soviet Union could build socialism by its own efforts without waiting for a world revolution that showed no sign of arriving. The doctrine flattered national pride and gave demoralised party members a positive goal
• Trotsky damaged himself: he failed to attend Lenin's funeral (having been misinformed about the date by Stalin), and his arrogance alienated potential allies. He was removed as Commissar for War in January 1925

Phase 2 (1925–1927): Defeat of the Left Opposition

• Alarmed by Stalin's growing power, Zinoviev and Kamenev broke with him and, in an extraordinary reversal, allied with their former enemy Trotsky to form the United Opposition (or 'Left Opposition')
• They demanded faster industrialisation, pressure on the kulaks, an end to the NEP's concessions, and a restoration of inner-party democracy
• Stalin allied with Bukharin and the 'Right', defending the NEP as the correct, gradual road to socialism, and used the ban on factions to brand the Opposition as illegitimate
• The United Opposition was crushed at the Fifteenth Party Congress (December 1927). Trotsky and Zinoviev were expelled from the party; Trotsky was exiled to Alma-Ata in 1928 and deported from the USSR in 1929 (he was murdered on Stalin's orders in Mexico in 1940)

Phase 3 (1928–1929): Defeat of the Right

• Having destroyed the Left, Stalin abruptly adopted much of their economic programme — abandoning the NEP in favour of forced industrialisation and collectivisation, prompted by the 1927–28 grain procurement crisis
• Bukharin, Rykov and Tomsky (the 'Right Opposition') protested that abandoning the NEP and coercing the peasantry would be catastrophic, but they had no independent power base and were outmanoeuvred and denounced as a 'Right deviation'
• By 1929 — the year of Stalin's fiftieth-birthday celebrations and the launch of the cult of personality — Stalin was the unchallenged leader of the Soviet Union

Stalin's Methods

Stalin's victory owed more to political skill and institutional power than to ideological brilliance: