The Soviet government abandoned its efforts to prolong War Communism into the time of peace; but only in response to a profound crisis. By 1920 War Communism had enabled the Soviet regime to establish itself over nearly the whole territory of the Russian Empire – with the exception of the Baltic states, Finland and Eastern Poland. But the economy was devastated. The output of large-scale industry had fallen to a mere 13 per cent of the 1913 level, iron and steel to a mere 4 per cent. Even small-scale artisan industry produced less than half its pre-war level. Grain output was only two-thirds of the 1909–13 average. Foreign trade had collapsed, amounting to less than 1 per cent of the 1913 turnover. (Gatrell 1994b, pp. 233, 231; Lewis 1994a, p. 201.)

In conditions of peace, the grain requisitioning policy and the other policies of War Communism were no longer viable. From the summer of 1920 peasant disturbances were widespread. From the beginning of 1921, the country plunged into a disastrous fuel, transport and food crisis, and unrest spread to the industrial workers. Against this tense background, in March 1921 the Xth Communist Party Congress decided to replace requisitioning by a food tax, which was fixed in advance at a lower level than the previous grain quotas. The peasants would retain any surplus. Their incentive to grow more food would thus be restored.

These decisions of March 1921 amounted to a quite limited reform. They assumed that peasants would dispose of their surpluses through local barter or by exchanging them for consumer goods provided by state agencies. Otherwise, War Communism, including the moneyless economy, would remain intact.