The state embarked on an ambitious privatization
program of small and medium-size enterprises, though it maintained
control of the finance, transportation, heavy industry, and foreign
trade sectors (the "commanding heights", as they were called at the
time).
In 1921-2, Lenin re-introduced money to re-monetize the economy
which consisted of barter, quotas, and centrally issued economic
directives. Within less than 7 years, production in many parts of the
economy reverted to pre-revolutionary levels. Nor did the NEP die with
Lenin. It continued for 4 years after his death in 1924.
But the policy was not without its faults.
NEP was characterized by inflation and the need to cap the prices of
non-agricultural goods. Peasants hoarded grain for speculation
purposes. A black market in goods was developed by Nepmen - private
traders. Communist party General Secretary Joseph Stalin
(1879-1953), reinstated agricultural production quotas in 1929,
collectivized all arable land, and criminalized private trading in
1930. In 1928, he promulgated the first Five-Year Plan (1928-1932)
and central planning replaced market mechanisms.
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