Lenin Explains Launching of NEP as Temporary Retreat.

In the early 1920s, the Bolsheviks carried out a retreat from earlier policies of the 1917 Russian Revolution. It was called the New Economic Policy (NEP). It was launched in response to the devastation of the young Soviet republic after three years of civil war, foreign imperialist intervention, and setbacks of revolutionary struggles in Europe.

In discussions and debates on social media and elsewhere in Cuba on a series of economic measures adopted in the Caribbean country on June 18, 2026, a number of supporters of the Cuban Revolution have referred to the NEP.

While some of the measures being taken in Cuba resemble the NEP, the situation facing Cuba today is very different.

An article on the NEP in the first installment of this post summarized that policy and the reasons for its implementation in Soviet Russia. The introduction to that article outlined the circumstances that led Cuba’s Communist Party and the country’s National Assembly to adopt the latest economic measures in Cuba. A postscript to that article sketched the differences between Soviet Russia in the early 1920s and Cuba today. Those materials can be found in Part I.

We are publishing below for the information of our readers major excerpts of speeches by Russian revolutionary leader V.I. Lenin on the NEP. The headlines and text below are from the original sources. Subheadings, notes, and photos are by World-Outlook.

— World-Outlook editors.

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(This is the second of two parts. The first can be found in Part I.)

Report on Tactics of Russian Communist Party.

The following are excerpts from a report Lenin gave to the Third Congress of the Communist International on July 5, 1921. The entire document, titled “Report on the Tactics of the Russian Communist Party,” can be found in Vol. 32 of Lenin Collected Works. A digital version of the full report can be found here.

By V.I. Lenin.

When the Civil War came to an end… we faced a different problem. If the country had not been so laid waste after seven years of incessant war, it would, perhaps, have been possible to find an easier transition to the new form of alliance between the proletariat and the peasantry. But bad as conditions in the country were, they were still further aggravated by the crop failure, the fodder shortage, etc.

In consequence, the sufferings of the peasants became unbearable. We had to show the broad masses of the peasants immediately that we were prepared to change our policy, without in any way deviating from our revolutionary path, so that they could say, “The Bolsheviks want to improve our intolerable condition immediately, and at all costs.”

And so, our economic policy was changed; the tax in kind superseded the requisitions. This was not invented at one stroke. You will find a number of proposals in the Bolshevik press over a period of months, but no plan that really promised success. But this is not important. The important thing is that we changed our economic policy, yielding to exclusively practical considerations, and impelled by necessity.

A bad harvest, fodder shortage and lack of fuel — all, of course, have a decisive influence on the economy as a whole, including the peasant economy. If the peasantry goes on strike, we get no firewood; and if we get no firewood, the factories will have to idle. Thus, in the spring of 1921, the economic crisis resulting from the terrible crop failure and the fodder shortage assumed gigantic proportions.

All that was the aftermath of the three years of civil war. We had to show the peasantry that we could and would quickly change our policy in order immediately to alleviate their distress. We have always said — and it was also said at the Second Congress— that revolution demands sacrifices….

Revolution entails enormous sacrifice for class making it.

Naturally, every revolution entails enormous sacrifice on the part of the class making it. Revolution differs from ordinary struggle in that ten and even a hundred times more people take part in it. Hence every revolution entails sacrifices not only for individuals, but for a whole class. The dictatorship of the proletariat in Russia has entailed for the ruling class — the proletariat — sacrifices, want and privation unprecedented in history, and the case will, in all probability, be the same in every other country.

The question arises: How are we to distribute this burden of privation? We are the state power. We are able to distribute the burden of privation to a certain extent, and to impose it upon several classes, thereby relatively alleviating the condition of certain strata of the population. But what is to be our principle? Is it to be that of fairness, or of majority? No. We must act in a practical manner. We must distribute the burdens in such a way as to preserve the power of the proletariat. This is our only principle.

In the beginning of the revolution the working class was compelled to suffer incredible want. Let me state that from year to year our food policy has been achieving increasing success. And the situation as a whole has undoubtedly improved. But the peasantry in Russia has certainly gained more from the revolution than the working class. There is no doubt about that at all….

I have already said that in the spring of 1921 the most appalling want caused by the fodder shortage and the crop failure prevailed among the peasantry, which constitutes the majority of our population. We cannot possibly exist unless we have good relations with the peasant masses. Hence, our task was to render them immediate assistance.

The condition of the working class is extremely hard. It is suffering horribly. Those who have more political understanding, however, realize that in the interest of the dictatorship of the working class we must make tremendous efforts to help the peasants at any price. The vanguard of the working class has realized this, but in that vanguard there are still people who cannot understand it, and who are too weary to understand it. They regarded it as a mistake and began to use the word “opportunism.”

They said, “The Bolsheviks are helping the peasants. The peasants, who are exploiting us, are getting everything they please, while the workers are starving.’” But is that opportunism? We are helping the peasants because without an alliance with them the political power of the proletariat is impossible, its preservation is inconceivable. It was this consideration of expediency and not that of fair distribution that was decisive for us.

We are assisting the peasants because it is absolutely necessary to do so in order that we may retain political power. The supreme principle of the dictatorship is the maintenance of the alliance between the proletariat and the peasantry in order that the proletariat may retain its leading role and its political power.

The only means we found for this was the adoption of the tax in kind, which was the inevitable consequence of the struggle. This year, we shall introduce this tax for the first time. This principle has not yet been tried in practice. From the military alliance we must pass to an economic alliance, and, theoretically, the only basis for the latter is the introduction of the tax in kind. It provides the only theoretical possibility for laying a really solid economic foundation for socialist society.

The socialized factory gives the peasant its manufactures and in return the peasant gives his grain. This is the only possible form of existence of socialist society, the only form of socialist development in a country in which the small peasants constitute the majority, or at all events a very considerable minority. The peasants will give one part of their produce in the form of tax and another in exchange for the manufactures of socialist factories or through the exchange of commodities.

Freedom to trade, freedom for capitalism.

This brings us to the most difficult problem. It goes without saying that the tax in kind means freedom to trade. After having paid the tax in kind, the peasant will have the right freely to exchange the remainder of his grain.

This freedom of exchange implies freedom for capitalism. We say this openly and emphasize it. We do not conceal it in the least. Things would go very hard with us if we attempted to conceal it.

Freedom to trade means freedom for capitalism, but it also means a new form of capitalism. It means that, to a certain extent, we are re-creating capitalism. We are doing this quite openly. It is state capitalism. But state capitalism in a society where power belongs to capital, and state capitalism in a proletarian state, are two different concepts.

Without the slightest denationalization, we shall lease mines, forests and oilfields to foreign capitalists, and receive in exchange manufactured goods, machinery, etc., and thus restore our own industry.

Of course, we did not all agree on the question of state capitalism at once. But we are very pleased to note in this connection that our peasantry has been developing, that it has fully realized the historical significance of the struggle we are waging at the present time. Ordinary peasants from the most remote districts have come to us and said: “What! We have expelled our capitalists, the capitalists who speak Russian, and now foreign capitalists are coming!” Does not this show that our peasants have developed?

There is no need to explain to a worker who is versed in economics why this is necessary. We have been so ruined by seven years of war that it will take many years to restore our industry. We must pay for our backwardness and weakness, and for the lessons we are now learning and must learn. Those who want to learn must pay for the tuition. We must explain this to one and all, and if we prove it in practice, the vast masses of the peasants and workers will agree with us, because in this way their condition will be immediately improved, and because it will ensure the possibility of restoring our industry.

What compels us to do this? We are not alone in the world. We exist in a system of capitalist states…. On one side, there are the colonial countries, but they cannot help us yet. On the other side, there are the capitalist countries, but they are our enemies. The result is a certain equilibrium, a very poor one, it is true. Nevertheless, we must reckon with the fact. We must not shut our eyes to it if we want to exist. Either we score an immediate victory over the whole bourgeoisie, or we pay the tribute.

We admit quite openly, and do not conceal the fact, that concessions in the system of state capitalism mean paying tribute to capitalism. But we gain time, and gaining time means gaining everything, particularly in the period of equilibrium, when our foreign comrades are preparing thoroughly for their revolution. The more thorough their preparations, the more certain will the victory be. Meanwhile, however, we shall have to pay the tribute.….

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The NEP and the Tasks of Political Education Departments.

The following are excerpts from a report Lenin gave to the Second All-Russia Congress of Political Education Departments of the Communist Party, on October 17, 1921, titled “The New Economic Policy and the Tasks of the Political Education Departments.” It can be found In Vol. 33 of Lenin Collected Works. A digital copy of the full report can be found here.

By V.I. Lenin.

Comrades, I intend to devote this report, or rather talk, to the New Economic Policy, and to the tasks of the Political Education Departments arising out of this policy, as I understand them….

In the initial period, when we had only just completed the first stage in the work of building up the Soviet government and had only just emerged from the imperialist war, what we said about our tasks in the field of economic development was much more cautious and circumspect than our actions in the latter half of 1918 and throughout 1919 and 1920….

At the beginning of 1918 we expected a period in which peaceful construction would be possible. When the Brest peace^[1] was signed it seemed that danger had subsided for a time and that it would be possible to start peaceful construction. But we were mistaken, because in 1918 a real military danger overtook us in the shape of the Czechoslovak mutiny and the outbreak of civil war, which dragged on until 1920.

Partly owing to the war problems that overwhelmed us and partly owing to the desperate position in which the Republic found itself when the imperialist war ended — owing to these circumstances, and a number of others, we made the mistake of deciding to go over directly to communist production and distribution. We thought that under the surplus-food appropriation system the peasants would provide us with the required quantity of grain, which we could distribute among the factories and thus achieve communist production and distribution….

A strategic retreat.

At that time, when in the heat of the Civil War we had to take the necessary steps in economic organization, it seemed to have been forgotten. In substance, our New Economic Policy signifies that having sustained severe defeat on this point, we have started a strategical retreat. We said in effect: “Before we are completely routed, let us retreat and reorganize everything, but on a firmer basis.” If Communists deliberately examine the question of the New Economic Policy, there cannot be the slightest doubt in their minds that we have sustained a very severe defeat on the economic front.

In the circumstances it is inevitable, of course, for some people to become very despondent. almost panic-stricken, and because of the retreat, these people will begin to give way to panic. That is inevitable. When the Red Army retreated, was its flight from the enemy not the prelude to its victory? Every retreat on every front, however, caused some people to give way to panic for a time.

But on each occasion — on the Kolchak front, on the Denikin front. on the Yudenich front, on the Polish front and on the Wrangel front^[2] — once we had been badly battered (and sometimes more than once) we proved the truth of the proverb: “A man who has been beaten is worth two who haven’t.” And being beaten we began to advance slowly, systematically and cautiously.

Of course, tasks on the economic front are much more difficult than tasks on the war front, although there is a general similarity between the two elementary outlines of strategy. In attempting to go over straight to communism we, in the spring of 1921, sustained a more serious defeat on the economic front than any defeat inflicted upon us by Kolchak, Denikin or Pilsudski.

This defeat was much more serious, significant and dangerous. It was expressed in the isolation of the higher administrators of our economic policy from the lower and their failure to produce that development of the productive forces which the Program of our Party regards as vital and urgent.

The surplus-food appropriation system in the rural districts — this direct communist approach to the problem of urban development — hindered the growth of the productive forces and proved to be the main cause of the profound economic and political crisis that we experienced in the spring of 1921. That was why we had to take a step which from the point of view of our line, of our policy, cannot be called anything else than a very severe defeat and retreat.

Moreover, it cannot be said that this retreat is — like retreats of the Red Army — a completely orderly retreat to previously prepared positions. True, the positions for our present retreat were prepared beforehand. That can be proved by comparing the decisions adopted by our Party in the spring of 1921 with the one adopted in April 1918, which l have mentioned. The positions were prepared beforehand; but the retreat to these positions took place (and is still taking place in many parts of the country) in disorder, and even in extreme disorder….

Purpose of the New Economic Policy.

The New Economic Policy means substituting a tax for the requisitioning of food; it means reverting to capitalism to a considerable extent — to what extent we do not know. Concessions to foreign capitalists (true, only very few have been accepted, especially when compared with the number we have offered) and leasing enterprises to private capitalists definitely mean restoring capitalism, and this is part and parcel of the New Economic Policy; for the abolition of the surplus-food appropriation system means allowing the peasants to trade freely in their surplus agricultural produce, in whatever is left over after the tax is collected — and the tax takes only a small share of that produce. The peasants constitute a huge section of our population and of our entire economy, and that is why capitalism must grow out of this soil of free trading.

That is the very ABC of economics as taught by the rudiments of that science, and in Russia taught, furthermore, by the profiteer, the creature who needs no economic or political science to teach us economics with.

On the one hand, the improved position of the people. In this connection we must remember the peasants. It is absolutely incontrovertible and obvious to all that in spite of the awful disaster of the famine — and leaving that disaster out of the reckoning for the moment — the improvement that has taken place in the position of the people has been due to the change in our economic policy.

On the other hand, if capitalism gains by it, industrial production will grow, and the proletariat will grow too. The capitalists will gain from our policy and will create an industrial proletariat, which in our country, owing to the war and to the desperate poverty and ruin, has become declassed, i.e., dislodged from its class groove, and has ceased to exist as a proletariat.

The proletariat is the class which is engaged in the production of material values in large-scale capitalist industry. Since large-scale capitalist industry has been destroyed, since the factories are at a standstill, the proletariat has disappeared. It has sometimes figured in statistics, but it has not been held together economically.

The restoration of capitalism would mean the restoration of a proletarian class engaged in the production of socially useful material values in big factories employing machinery, and not in profiteering, not in making cigarette-lighters for sale, and in other “work” which is not very useful, but which is inevitable when our industry is in a state of ruin.

The whole question is who will take the lead. We must face this issue squarely — who will come out on top? Either the capitalists succeed in organizing first — in which case they will drive out the Communists and that will be the end of it. Or the proletarian state power, with the support of the peasantry, will prove capable of keeping a proper rein on those gentlemen, the capitalists, so as to direct capitalism along state channels and to create a capitalism that will be subordinate to the state and serve the state….

Is this the last fight?

The dictatorship of the proletariat is fierce war. The proletariat has been victorious in one country, but it is still weak internationally. It must unite all the workers and peasants around itself in the knowledge that the war is not over. Although in our anthem we sing: “The last fight let us face,” unfortunately it is not quite true; it is not our last fight. Either you succeed in uniting the workers and peasants in this fight, or you fail to achieve victory.

Never before in history has there been a struggle like the one we are now witnesses of; but there have been wars between peasants and landowners more than once in history, ever since the earliest times of slavery. Such wars have occurred more than once; but there has never been a war waged by a government against the bourgeoisie of its own country and against the united bourgeoisie of all countries.

The issue of the struggle depends upon whether we succeed in organizing the small peasants on the basis of the development of their productive forces with proletarian state assistance for this development, or whether the capitalists gain control over them. The same issue has arisen in scores of revolutions in the past; but the world has never witnessed a struggle like the one we are waging now.

The people have had no way of acquiring experience in wars of this kind. We ourselves must create this experience and we can rely only on the class consciousness of the workers and peasants. That is the keynote and the enormous difficulty of this task.

We must not count on going straight to communism.

We must not count on going straight to communism. We must build on the basis of peasants’ personal incentive. We are told that the personal incentive of the peasants means restoring private property. But we have never interfered with personally owned articles of consumption and implements of production as far as the peasants are concerned.

We have abolished private ownership of land. Peasants farmed land that they did not own — rented land, for instance. That system exists in very many countries. There is nothing impossible about it from the standpoint of economics. The difficulty lies in creating personal incentive. We must also give every specialist an incentive to develop our industry.

Have we been able to do that? No, we have not! We thought that production and distribution would go on at communist bidding in a country with a declassed proletariat. We must change that now, or we shall be unable to make the proletariat understand this process of transition.

No such problems have ever arisen in history before. We tried to solve this problem straight out, by a frontal attack, as it were, but we suffered defeat. Such mistakes occur in every war, and they are not even regarded as mistakes. Since the frontal attack failed, we shall make a flanking movement and also use the method of siege and undermining….

(This was the second of two parts. The first can be found in Part I.)

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For Further Reading on the NEP.

By V.I. Lenin.

Most of Lenin’s writings on the NEP can be found in volumes 32 and 33 of his Collected Works (LCW). Major speeches, reports, and articles in chronological order include:

• Report on Tax in Kind to Tenth Congress of Soviet Communist Party (March 15, 1921; LCW, vol. 32, pp. 214-238). (Digital — Item 6.)
• Report on Tax in Kind to Meeting of Moscow Communist Party Leaders (April 9, 1921; LCW, vol. 32, pp. 286-298). (Digital.).
• Speech on Concessions Policy to Communist Trade Union Leaders (April 11, 1921; LCW, vol. 32, pp. 300-315). (Digital).
• The Tax in Kind (Pamphlet; April 21, 1921; LCW, vol. 32, pp. 329-365). (Digital).
• Reports on the Tactics of the Russian Communist Party (Presented to the Third Congress of the Communist International, July 5, 1921; LCW, vol. 32, pp. 478-496). (Digital — Item 4).
• The New Economic Policy and the Tasks of the Political Education Departments (Oct. 17, 1921; LCW, vol. 33, pp. 60-79). (Digital).
• The Importance of Gold Now and After the Complete Victory of Socialism (Nov. 5, 1921; LCW, vol. 33, pp. 109-116). (Digital).
• The Home and Foreign Policy of the Republic (Report to the Ninth All-Russia Congress of the Soviets, Dec. 23, 1921; LCW, vol. 33 pp. 143-177). (Digital).
• Political Report to the Eleventh Congress of the Soviet Communist Party (March 27, 1922; LCW, vol. 33 pp. 263-326). (Digital — Item 2).
• Better Fewer, but Better (Article published in Pravda, March 2, 1923; LCW, vol. 33, pp. 487-502). (Digital).

By Leon Trotsky.

• Report on New Soviet Economic Policy and the Perspectives of the World Revolution (Presented to the Fourth Congress of the Communist International, Nov. 14, 1922; in First Five Years of the Communist International 2, Pathfinder Press, pp. 220-263). (Digital).
• Theses on the Economic Situation of Soviet Russia from the Standpoint of the Socialist Revolution (Dec. 1, 1922; in First Five Years of the Communist International 2, Pathfinder Press, pp. 264-274). (Digital).

By Farrell Dobbs.

• Precarious New Equilibrium (Chapter from Revolutionary Continuity, vol. 2, Pathfinder Press, pp. 155-167).

NOTES.

[1] The new revolutionary government of Russia, led by the Bolsheviks, made concessions to capitalist powers in 1918 when it signed a peace treaty at Brest-Litovsk, in what is today Belarus.

In 1917, as World War I raged around them, the workers and peasants of Russia carried out a mighty revolution, overthrowing the stranglehold of the tsarist regime and semi-feudal class relations. Exhausted by years of war, they faced the monumental task of building the new Soviet republic under the threat of attack by many imperialist armies lined up on both their western and eastern borders.

Squeezed in that vise, with its troops fatigued and demoralized, the Bolshevik leadership made the decision to concede a vast amount of territory and resources in a separate peace agreement between their infant republic and the Central Powers of Germany, Austria-Hungary, the Ottoman Empire, and Bulgaria. This treaty effectively pulled Soviet Russia out of World War I.

The Bolshevik leadership laid bare the harsh truth about the decision to end Russian involvement in WW I in exchange for the surrender of territory, calling the treaty “onerous and humiliating.”

The Brest-Litovsk treaty was hotly debated and ultimately ratified by the Russian Communist Party at its 7th congress in March 1918.

At Brest-Litovsk, the Bolsheviks surrendered roughly one million square miles of territory —  including land containing about 90% of Russia’s coalfields, 50% of its industry, 64% of its iron ore, and Ukraine’s breadbasket.

The Soviet republic, however, used the breathing space opened up by the Brest-Litovsk treaty to build the Red Army, at the same time preparing to defend the conquest of worker and peasant power by mobilizing the population and energizing an international solidarity movement in their defense.

The Bolsheviks did not retreat on the conquest of state power by workers and peasants — which took place through a social revolution that shook the world — and the subsequent drive to uproot the vestiges of feudalism and tsarist rule. They did not retreat on their course to firmly cement the rule of the workers and peasants. The Brest-Litovsk concessions enabled them to drive ahead on continued education and mobilization of the masses of working people throughout the Soviet federations — and the world — to defend their revolutionary course.

[2] Alexander Kolchak, Anton Denikin, and Nikolai Yudenich were leading commanders of the White Army counterrevolutionary forces during the Russian Civil War (1918-1922). Pyotr Wrangel served during the same period as a commanding general in the anti-Bolshevik Volunteer Army. Jozef Pilsudski led Polish forces in the Polish Soviet War of 1919.

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