Entrepreneurs and the Re-emergence of Capitalism

A stereotypical depiction of a Nepman from the Russian propaganda film “Soviet Toys” (1924) by Dziga Vertov

In 1921, the New Economic Policy was implemented, which denationalized industry and further diversified the Russian economy. Vladimir Lenin argued that reforming the economy would stabilize unrest, particularly within the peasantry. Citizens were permitted to privately sell and exchange surplus of food and resources as a result of the New Economic Policy’s tax-in-kind parameters. Ironically, this economic policy seemed to encourage a capitalist mindset through its denationalization and move to private transactions. Scholar Marjorie Hilton describes the NEP-era as “a darkly humorous world of outlandish, shady characters and ridiculously trying situations” (12). The label “Nepman” was given to individuals who, from the state’s perspective, abused the new economic policies for personal gain.

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“Who here is the most unhappy?
Obviously, the individual consumer.
Poor thing, squeezed between the wholesaler and the middleman.
But we are ready to send goods to your home,
Quickly and at wholesale prices.
Send us your order by postcard or telegram right away.”

(“Who is the Most Unhappy?” – 1924)

A wave of economic entrepreneurs, both in the villages and cities, began to pose a threat to the state, as they took advantage of the new policies. With the open market established, the citizen had complete control over prices and negotiations. Soon enough, it became the private sector versus the state, and the state was considerably outnumbered. It was unable to provide many services that individuals in the private sector could ,“and this was part of the enormous resentment, class envy and animosity, insecurity, and marginality that festered throughout the 1920’s” (Orlovsky 841). The difficulty for the state was that the supply of goods rarely met the demand, and therefore, a Nepman would almost always be assured profit if his private business was more accessible to the consumer

The faces of Nepmen are held up by a Russian crowd

The Soviet state started yet another propaganda campaign to frame entrepreneurial, Nepmen as evil, greedy, fat, and a threat to Soviet socialism. Specifically, newspaper art and columns became a popular form of public manipulation. The state used the rise in education and political engagement to encourage citizens to write articles that exposed the practices of private salesmen as well as force a negative view of the private sector on readers. For example, a contest was posted in a mid-1920’s newspaper column titled “Who is the Worst Retailer?” which asked readers to submit reviews on their experiences with devious, private salesman.  “For a loyal revolutionary, buying goods from Nepmen must have seemed like giving assistance to the enemy . . . Perhaps these ads also functioned to remind people that they were supposed to take exception to Nepmen” (Kiaer & Naiman 129). However, the convenience of private businesses must have relieved many who had previously dealt with an unaccommodating government. As the 1920’s continued, Nepmen faced special taxes and public backlash for pursuing entrepreneurship and using state policies, because it undermined the economic authority of the Soviet state. The New Economic Policy established economic balance in early Soviet Russia, but it resulted in a reemergence of capitalism that made NEP’s justification challenging in a state striving for socialism. Instead of excepting the responsibility of the unforeseen issue, the government punished citizens who, using NEP policy, acted capitalistically. In 1925, the government’s concern with Nepmen died down due to leadership changes, but Joseph Stalin’s First Five-Year Plan in 1928 would completely change the economic system.


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Hilton, M.. (2009). The Customer Is Always Wrong: Consumer Complaint in Late-NEP Russia. The Russian Review, 68(1), 1–25. Retrieved from http://www.jstor.org.ezproxy. lib.vt.edu/stable/20620925

Kiaer, C., & Naiman, E. (2006). Everyday Life in Early Soviet Russia: Taking the Revolution Inside. Indiana University Press. https://books.google.com/books?id=7SBTUPKGxwYC&pg=PA119&lpg=PA119&dq=nepmen+in+soviet+russia&source=bl&ots=7eZVaPosNY&sig=6WLDiyR6hxThRRPvCuy3v_oZcU4&hl=en&sa=X&ved=0ahUKEwjx3Ofg0fDKAhXHXB4KHd5VDRgQ6AEIUzAL#v=onepage&q=nepmen%20in%20soviet%20russia&f=false

Orlovsky, D. T.. (1990). The New Soviet History. The Journal of Modern History, 62(4), 831–850. Retrieved from http://www.jstor.org.ezproxy.lib.vt.edu/stable/1881065





Kiaer, C., & Naiman, E. (2006). Everyday Life in Early Soviet Russia: Taking the Revolution Inside. Indiana University Press. Pg. 129.

9 thoughts on “Entrepreneurs and the Re-emergence of Capitalism

  1. Awesome work again Drew. When we get to the Soviet ’70s, I encourage you to revisit this subject of corruption and market scheming.


  2. I really like your post Drew. You go into detail about the practical problems that arose amongst the classes in the short years following the New Economic Policy.


  3. Excellent job on the history of the NEP! Your post highlights how I think the leadership of the Soviet Union still was not completely solid in their feelings of control over the country. Any form of capitalism or semi-market solutions would be a threat to the new political order. Great job!


  4. I really enjoyed reading your post Drew especially watching the video at the end. I wrote about the New Economic Policy in my blog post and found it very interesting that Lenin and the Bolshevik’s who wanted a communist country went to a capitalist economy to get out of the economic crisis they were in. I thought I read a lot about this policy but did not see the part about the Nepman and thought that was very interesting. Good Job!


  5. Awesome work again Drew! You kill it every week incorporating your reading material with important and interesting topics. I agree with Mitchell’s comment above and think that you did a great job in outlining the threat that the soviet leadership felt with the emergence of this new semi-capiltalist economy. Building off of that, I believe that Amanda also brings an interesting point forward that Lenin and the Bolshevik party, in their attempt to build a socialist state, actually implemented capitalist policies in an effort to get out of their current economic crisis. Great work, keep it up!


  6. Really cool post! It shows that entrepreneurship can really thrive given even the tiniest of favorable circumstances, and it’s super interesting to see how the soviets responded to a circumstance that they themselves created.


  7. Great post, no only in content, but also in design. I particularly enjoyed how you integrated multimedia media into your post, good job!


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