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NEP, March 21

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On March 21, 1921, the Soviet Union’s Bolshevik Party implemented the New Economic Policy (NEP) in response to the economic failure of War Communism.

Economist Ludwig von Mises and many other observers would go on to note that this slight liberalization of socialist policy — the re-introduction of money, for example — was a frank admission of the inability of bureaucrats and politicians to run an industrial economy from a central board. That is, in a socialist commonwealth, it is impossible to calculate and plan for the needs of society.

Vladimir Lenin called the NEP “state capitalism.”

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