To achieve some measure of efficiency the state
now required industrial enterprises to operate on
commercial principles (khozraschet), paying wages
and other bills and to sell, even at distressed prices
relative to the rising relative price of foodstuffs. By
1923–1924, the government balanced its budget by
levying excise taxes, enterprise and personal taxes
on income and property, and a forced bond issue.
The tsarist vodka monopoly was reintroduced, to
the dismay of many. Centralized expenditures, es-
pecially on education, were cut, and school fees in-
troduced. All this allowed stabilization of the new
currency (chervonets), which had replaced the ru-
ined ruble or sovznak notes used before.
The NEP period was also the golden era of So-
viet economics, with many different points of view,
mathematical and sociological, permitted to publish
and debate. Nikolai Kondratiev, Alexander Chaya-
nov, Yevgeny Preobrazhensky, Grigory Feldman,
Stanislav Strumilin, and the young Vasily Leontiev,
inventor of input-output analysis, were active at
this time. In addition to theoretical matters, the in-
dustrialization debate centered on whether Russia’s
peasant economy could produce enough voluntary
savings to permit industrialization beyond the re-
covery phase. That debate, and most free inquiry,
would end in 1928. Political freedom had already
been closely limited to the Bolsheviks alone; by 1922
publications had to pass prior censorship.
In practice, planning was still rudimentary.
There was no operational program for command
allocations, as there would be during the 1930s,
but the “balance of national economy,” patterned
on German wartime experience, served as a kind of
forecast for key sectors and basis for discussion of
investment priorities.
These policies were strikingly successful in al-
lowing the Soviet economy to regain its prewar lev-
els of agricultural and industrial production by
1926–1927. School enrollment exceeded the prewar
numbers. But food marketings, both domestic and
export, were down significantly, probably owing to
the higher cost and relative unavailability of manu-
factured goods the peasants wanted to buy and also
the breakup of larger commercial farms during the
Revolution and civil war. Yet by 1927 reduced grain
marketings convinced many in the Party (particu-
larly the so-called left opposition) that administra-
tive methods would be needed in addition to market
incentives. Even though this was largely due to a
mistaken price and tax policy by the govern-
ment—comparable to the earlier Scissors Crisis—
the authorities now began to use “extraordinary
measures” to seize grain early in 1928. This policy
and its consequences effectively ended the NEP, for
once it was decided that industrialization and mili-
tary preparedness required more investments than
could be financed from voluntary savings in this
largely peasant country, the way was open for Josef
Stalin to pursue a radical course of action, once ad-
vanced by his enemies Leon Trotsky and his allies on
the left.
See also: COMMANDING HEIGHTS OF THE ECONOMY;
GOODS FAMINE; GRAIN CRISIS OF 1928; SCISSORS CRI-
SIS; TRUSTS, SOVIET; WAR COMMUNISM
BIBLIOGRAPHY
Carr, Edward Hallett. (1958). Socialism in One Country,
1924–1926, vol. 1. London: Macmillan.
Davies, R. W. (1989). “Economic and Social Policy in the
USSR, 1917–41.” In The Cambridge Economic History
of Europe from the Decline of the Roman Empire, Vol. 8:
The Industrial Economies: The Development of Economic
and Social Policies, ed. Peter Mathias and Sidney Pol-
lard. Cambridge, UK: Cambridge University Press.
Erlich, Alexander. (1960). The Soviet Industrialization De-
bate, 1924–1928. Cambridge, MA: Harvard Univer-
sity Press.
Nove, Alec. (1969). An Economic History of the USSR. Lon-
don: Allen Lane.
M
ARTIN
C. S
PECHLER
NEW-FORMATION REGIMENTS
The term new-formation (“western-model,” “foreign-
model,” or “western-formation”) regiment refers to
military units organized in linear formations, uti-
lizing gunpowder weapons and tactics developed in
the West. These regiments consisted of eight to ten
companies, each ideally numbering 100 (infantry)
to 120 (cavalry and dragoons) soldiers, though few
regiments were at full strength. The colonel and
lieutenant colonel commanded the first and second
companies of the regiment, though de facto com-
mand of the colonel’s company was given to a first
(lieutenant) captain. Captains or lieutenants (either
Russian or European) commanded the remaining
companies. Other personnel included ensigns,
sergeants, and corporals, at the company level, and
administrative officers, such as captains of arms,
quartermasters, camp masters, clerks, priests,
drummers, and buglers. The regiments featured
combined arms: muskets, pikes, artillery, grenadiers,
NEW-FORMATION REGIMENTS
1041
ENCYCLOPEDIA OF RUSSIAN HISTORY