NEP, Stalinism, New Deal & Social Changes: Analysis

Posted on Apr 5, 2025 in Economy

NEP Application: Overcoming War Losses

The NEP (New Economic Policy) aimed to:

  • Overcome the losses of the war.
  • Achieve economic growth to reach socialism.
  • Support the nation through peace and without external assistance.

NEP Features:

  1. Free trade is allowed, outside state control.
  2. Foreign companies and capital investments are permitted.
  3. Wages and salaries are performance-based.
  4. Small private companies (more than 20 workers) are adopted.
  5. The state controls banking, foreign trade, transport, and key industries.

Positive Outcomes of the NEP:

  1. Expansion of agriculture, reducing hunger.
  2. Industrial growth.
  3. Improved standard of living.
  4. Stabilized currency.

Negative Outcomes of the NEP:

  1. Creation of a new wealthy agricultural group due to economic freedom.
  2. Increased agriculture, trade, and wealth creation.

Stalin’s Dictatorship

Features:

  • Pioneer of the personality cult: Stalin’s word was law.
  • Eradication of dissent and repression: opposition was banned and destroyed.

Agrarian Collectivization:

Collectivization: The government ordered the end of private property in rural areas, forcing farmers into sovjozes or kolkhozes.

  • Kolkhoz: A collective farm where land was state property, and machinery, storage, and production buildings were collectively owned.
  • Sovkhoz: A large state-owned farm managed by state employees.

A major famine occurred in 1932. Farmers (kulaks) were blamed for sabotage, resulting in 5-10 million deaths or exiles.

Negative Outcomes:

The situation did not improve. Agriculture in the Soviet Union remained weak, prioritizing industry.

The New Deal

Size and Scope:

  • A program to stabilize the banking system.
  • Significant investment in public employment.
  • Efforts to reduce agricultural production.
  • Support for large companies in the industry.
  • Employers were compelled to accept social improvements.
  • Grants were provided for the elderly, widows, and the unemployed.

Causes of the Crisis:

  • Crisis in the industry and construction sectors.
  • Growth of stock market speculation.
  • Disparity between stock market values and the actual state of the economy.

Reasons for Stock Market Crash:

  • Black Thursday: 13 million shares were offered for sale without buyers.
  • Millions more shares were offered in subsequent days, but there were no buyers.
  • The stock market lost significant value.

Conclusions

Crisis in the United States:

  1. Disappearance of savings, leading to a fall in consumption and investment.
  2. Failure of the banking system.
  3. Failure of industrial growth and increased unemployment.

Extension of the Crisis:

  1. Cessation of investments in the United States, impacting the European economy.
  2. Implementation of protectionist barriers by all countries, greatly reducing international trade.

The New Information Society

Changes in Social Structure:

  1. Increasing importance of the bourgeois society.
  2. Growth of middle-level classes, though impoverished in the 1930s.
  3. Growth of the proletariat.
  4. Reduction of the rural population.

The New Role of Women:

  1. Women entered the workforce.
  2. The right to vote was generalized for women.
  3. Social liberation of women, though traditional roles persisted.

Mass Culture:

  1. New media: newspapers and radio.
  2. New forms of leisure: film and sports competitions.