The years following the Revolution were filled with difficulty, poverty, and famine.  They were also filled with hope and idealism.  Lenin and the Bolsheviks used this odd set of circumstances to forge a new nation built on Marxist principles.  They soon found many differences between Marxist theory and the national reality.  Food shortages increased and some grew discontent with the new government.  It took the Kronstadt Rebellion for Lenin to see that the nation was not ready to adopt pure Communism.  He developed a compromise plan to end the shortages and revitalize the economy.  This was known as the New Economic Plan or NEP.  Its embrace of 'centralized capitalism' offended many ideological purists like Leon Trotsky, but these true believers lacked the support to oppose Lenin.  The new form of capitalism attracted foreign investment and helped to end the primitive state of Soviet agriculture.  The small commercial collectives that the NEP created helped to alleviate the suffering of the Russian people.  It also produced a great deal of wealth and introduced a new class of Bourgeoisie - the so-called 'NEP men'.

The new Soviet state began successfully fighting the inflation that the Civil War had caused, and even began to mint coins again (a practice that had stopped with the Provisional Government in 1918).  Instabilities caused by the war had led to the early coins struck in 1922 only being released into circulation along with newer designs in 1924.  Stamps and banknotes bearing the hammer and sickle also began to enter circulation giving people the feeling that some degree of normalcy had returned.  Currency was revalued and postal rates stabilized.  In the arts, Socialist Realism and Constructivism continued to advance the Communist theme.  It seemed as though the nation was on its way to recovery.

Militarily the era was one of demobilization and small scale recovery.  The majority of the Imperial navy was scrapped, including many battleships, with only those of the Gangut class being retained.  Soviet air power was also greatly diminished with the retirement of the Ilya Muromets four-engine bombers.  Infantry weapons also saw a setback as the Federov Avtomat was withdrawn from production.  It seemed that under Lenin, the military was to take a back seat to the nation's economic concerns.  The army would be forced to manage on the remnants of the old Tsarist army.  These cutbacks were relieved in some way by a defense cooperation treaty with Germany signed in 1922.  The two nations agreed to joint training exercises and other forms of military cooperation.  These ties were strengthened later by the Treaty of Berlin which pledged that in the event of war with a third party, the other nation would remain neutral and not take part in economic blockades or sanctions against the other.

It would take the death of Lenin in 1924 to alter the nation's trajectory.  The Party descended into back room plots and intrigues.  Stalin's faction gradually gained influence and began eliminating his rivals.  Trotsky was the first victim when he lost his position as War Minister in 1925.  Laws began to move in a more authoritarian direction as individual freedoms slowly vanished.  For example, firearms laws were consolidated in a Criminal Code, which provided that unauthorized possession of a firearm would be punishable by hard labor. A 1925 law made unauthorized possession of a firearm punishable by three months of hard labor, plus a fine of 300 rubles (equal to about four months' wages for a highly-paid construction worker).  In other cases showing up late for work could result in a prison sentence for 'sabotage'.  This began to feed an atmosphere of paranoia that would lead to the 'War Scare' with Poland.  By 1926 Stalin expelled Trotsky and several other rivals from the Politbureau.  By 1927 his control was so absolute that he was able to expel his rivals from the Party altogether.  With his control nearly absolute, Stalin reversed his earlier support for the NEP.  The program was abolished completely in 1928, and a year later he expelled one of its greatest proponents, Bukharin, from the Party.  Leon Trotsky was deported the same year.

In 1929 Stalin decided that Collectivisation would replace the NEP.  It soon led to protests and outright rebellion in some places.  Stalin blamed the shortages on the last of the property owning farmers - the Kulaks.  Many were executed, deported, or assigned to forced labor details in the Siberian wilderness, but not before they slaughtered their cattle and ruined their crops in protest.  In Central Asia, opposition to the government turned into open war as groups of rebels known as Basmati rose up against the Soviet government.  These crisis would only become worse in the years to come as government sponsored starvation, oppression, and terror became the law of the land.