During the twenty-year crisis between the wars, an already authoritarian government in the Soviet Union became a virtual dictatorship, though one of the left rather than the right. From 1914 Russia had been in turmoil. By 1921, with the end of civil war, industry and agriculture were crippled, distribution was near a breakdown, and the communist regime was perilously near the loss of public support.
When a large-scale anarchist revolt broke out early in 1921 and could not be suppressed until mid-1922, Lenin remarked that he was, at last, deeply frightened for the future of his nation. The mutiny of sailors at the Kronstadt naval base near Petrograd in March 1921 triggered a change in policy.
The mutineers called for “soviets without communists,” to be chosen by universal suffrage and secret ballot, for free speech and assembly, for the liberation of political prisoners, and for the abolition of grain requisitioning.
Trotsky now realized that the proletariat itself was opposing the dictatorship of the proletariat and needed educating. Furthermore, revolution was not going to sweep Europe; Russia would be, for a time, an island of revolutionary socialism in a sea of capitalism. Trotsky therefore used the Red Army to crush the rebellion while Lenin embarked upon economic reform.
The Kronstadt mutiny led directly to the adoption of the New Economic Policy (always referred to by its initials as the NEP). But the underlying reason for the shift was the need for reconstruction, which seemed attainable only if militant communism were at least temporarily abandoned. It was also necessary to appease the peasants and to avert any further major uprisings. Finally, since the expected world revolution had not taken place, the resources of capitalist states were badly needed to assist Russian reconstruction.
Under NEP the government stopped requisitioning the peasants’ entire crop, taking instead only what was needed to meet the minimum requirements of the army, urban workers, and other nontarm groups. The peasants still had to pay a very heavy tax in kind, but they were allowed to sell the remainder of their crop. Peasant agriculture became in essence capitalist once more, and the profit motive reappeared. The whole system tended to help the rich peasant grow richer and to transform the poor peasant into a hired, landless laborer.
Elsewhere in the economy, under NEP the state retained what Lenin called “the commanding heights”— heavy industry, banking, transportation, and foreign trade. In domestic trade and in light industry, however, private enterprise was once more permitted. This was the so-called private capital sector of the economy. in which workers could be paid according to their output and factory managers could swap some of their products for raw materials.
Lenin himself described NEP as a partial return to capitalism and urged the communists to become good at business. Yet NEP was never intended as more than a temporary expedient. Lenin believed that it would take a couple of decades before the Russian peasant could be convinced that cooperative agriculture would be the more efficient. He also argued that a temporary relaxation of government intervention would increase industrial production and give the Russians a useful lesson in managerial skills.
Economic recovery was indeed achieved. By 1928 industrial and agricultural production was back at prewar levels. But NEP was bitterly disliked by leading communists, who were shocked at the reversal of all the doctrines they believed in. Those who took advantage of the opportunities presented by the NEP were often persecuted in a petty way by hostile officials, who tried to limit their profits, tax them heavily, and drag them into court on charges of speculation.
The kulak had essentially the same experience. Thus the government often seemed to be encouraging private enterprise for economic reasons and simultaneously discouraging it for political reasons.