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Spellbound says
The key policies of Lenin's were initially the decrees on Land – giving the land to peasant soviets, taking it away from the landlords and the decree on peace – the treaty of Brest Litovsk ending Russia's involvement in WWI. His response to the start of the Civil War was War Communism – this involved armed Red Guards going into the countryside to "expropriate" foodstuffs to feed the cities, all industry was nationalised, and private enterprise being banned (amongst other things).
As the Civil War appeared to be won, Lenin realised that the economy was in tatters and needed to be fixed before socialism could be introduced. The New Economic Policy (NEP) was the result of the debates.
NEP was only meant to be a temporary measure to kickstart the economy after the disasters of WWI and the Civil War. Marxist orthodoxy claims that in order to achieve Communism the means of production must be owned by the workers.
NEP still had the banks and large enterprises under government ownership, as per War Communism, but it allowed small businesses and farmers to own their businesses. By the mid 1920s NEP was creating a prosperous class of business owners and some farmers were also prospering – and the debate on what to replace it with was gathering momentum. By 1928 the argument had been settled in favour of the Five Year Plans.
NEP was seen as a failure by the Marxist Bolsheviks because it was an economic success and the reason for the shift in policy in 1928 / 29 was because of ideological considerations.
The main disadvantage was that it was not creating an urban working class, nor was it modernising Russian industry as fast as was considered necessary – as Russia felt isolated and encircled, the threat of invasion snuffing out the revolution was never far from the minds of the leading Bolsheviks.
It was not a failure as a business model, in fact it was remarkably successful, creating some social divisions between the prosperous "NEPmen" and other workers.
See: http://www.historylearningsite.co.uk/war_communis…