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Why did Lenin set up the NEP instead of a state controlled economy?
Wiki User
∙ 13y ago
The New Economic Policy (NEP) was instituted to revive the Russian economy, particularly the agricultural portion. Peasant farmers were forced to turn over most of their crops to the government, so many began hoarding or even not growing any. The result was severe grain shortages. Lenin felt that the farmers would produce more if allowed to keep more.
The NEP was still for the most part a state controlled economy. It was a minor temporary retreat from full state control. As to agriculture he released farmers from having to give most of their crops to government requisitioning, allowed them to sell crops on open markets and pay taxes on their income. As for businesses, only small businesses were released from state control.
Small businesses were those with about ten to twenty employees. All other business were kept under control.
Wiki User
∙ 13y ago
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