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Problems with NEP - Coggle Diagram
Problems with NEP
Social
The peasants had the choice to not sell their grains and keep it for personal use instead as the government charged low prices for it. Moreover, meat prices were rising which lead to the peasants using the grain to feed their animals instead.
A lot of peasants had no use for the surplus money they received from grains as they couldn't do much with it anyways so many just kept it. They only waited until prices of grain went up before they sold it.
NEP caused the deterioration of the relationship between the Government and peasants. Firstly the government stopped private traders from buying grain as they would pay double for grain. After that he sent officials backed by the police to seize grain from the peasants. This was extremely with the peasants many of whom protested against Stalin's actions
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Economic
NEP caused the a problem for foreign trade. In 1926-27 exports were at 33% while imports were at 38% of their 1913 levels due to decline in grain exports
All the excess capacity was used up which meant that there was nothing more they could do to gain the capital needed for industrialization
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NEP caused owners to desire less manpower within their factories. This led to mass unemployment as they weren't as desperate to hire people.
It increased the number of factories but decreased the number of people working on the fields which led to a lower production of grain.
Political
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NEP used American production methods in order to speed up the production process which was not socialist
Policy 1
Policy 1 heavily favours the peasants and the improvement of agriculture. Because of this the social factors which NEP affected will improve especially those relating to the peasants. Increasing the price of grain will encourage peasants to sell to the government instead and if they can afford something with their surplus revenue then they may choose to sell their crops instead of holding on to it. All of this will improve relations with the peasants. However, since policy 1 focuses so much on agriculture it will take longer for the country to industrialize at a slower pace. Moreover, factory workers get little benefit short term but they will receive more as the country gains more revenue. Lastly, this will have a negative effect on imports and exports which can slow down the growth of the Russian economy.
Policy 2
This heavily focuses on industrialization which will achieve Stalin's goal of increasing Russia's production. The Soviet union will be able to increase its factory and production achieving whatever they need in terms of industry. In terms of agriculture they will benefit in the long term but will suffer during the industrialization process. However, this will have an extremely negative effect on the peasants and the workers. This will lead to mass famine for the peasants but also exhaustion and disapproval from the workers. Overall, the Soviet union will reach it's goals with the price being it's people.