Scissors Crisis

As a result, peasants began to stop selling their produce and revert to subsistence farming, leading to fears of a famine.

Furthermore, the problem was exacerbated by the government seeking to avoid another famine by keeping the bread grain prices at artificially low levels.

[citation needed] By August 1923 a wave of strikes spread across Russian industrial centres, sparked off by the crisis.

To combat the crisis, the government reduced costs of industrial production by cutting staff, rationalizing production, controlling wages and benefits and reducing the influence of traders and middlemen (NEPmen) by expanding the network of consumer cooperatives (such as the People's Commissariat of Trade).

[citation needed] After the 1927 crisis, soviet economist Lev Gatovsky performed an analysis and actively participated in the planning for the state intervention that followed.