Abstract
The taxation of private income, turnover and profit remained the most effective mode of restricting accumulation in the private sector through the NEP. The effectiveness of other modes like the sale of state industrial products or the extension of credit from nationalised banks was limited. As the dearth in the supply of fabricated consumer goods grew more acute in the mid-1920s, state industrial and trade undertakings were instructed to reduce sales to private traders. Traders responded by substituting private industry or crafts for state industry as a source for this merchandise, that source being an economic sector that lay beyond stringent state regulation. In addition, the implementation of centrally set restrictive supply policies against traders was hampered by the fact that the heads of trusts and syndicates often preferred private traders to the consumer co-operatives to market their output. The marketing strengths of the private sector that underlay this preference included its dense and far-flung network of outlets, traders’ better adaptability to consumer demand patterns and their readiness to pay in cash to a greater extent than could be anticipated from the co-operatives. Likewise, reducing or blocking credit from the public sector was also an instrument of limited effectivity. Enterprises in the private sector were less reliant on credit than were state or co-operative undertakings. When the stream tended to dry up, traders reacted by converting optimal volumes of their capital into merchandise, by circulating these inventories at faster tempos or by seeking expensive loans from private lenders.
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Notes
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© 1997 Arup Banerji
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Banerji, A. (1997). Taxation: Policies and Levies. In: Merchants and Markets in Revolutionary Russia, 1917–30. Studies in Russian and East European History and Society. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-25201-5_3
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