On 21 January 1924 Lenin died of a massive stroke, having spent the last year of his life as a chronic invalid. His death prompted a nationwide outpouring of grief – in no small part, a displaced catharsis for a traumatised population that had endured almost a decade of armed conflicts and social upheaval, and the protracted ravages of hunger and disease. For several days, hundreds of thousands of mourners gathered outside the House of Unions in Moscow where his body lay in state, braving blizzards and temperatures as low as -40°C as they patiently waited their turn to process past the scarlet catafalque. Theatres closed; newspapers were wholly given over to coverage of reactions to the leader's demise. On 26 January, the day of his funeral, Petrograd was renamed Leningrad by official decree. At countless meetings convened in workplaces and institutions around the country, citizens made solemn vows to cherish Lenin's memory and devote themselves to building socialism.

How best to accomplish that aim remained a moot issue. Marxist theory held that its successful realisation depended on transforming the new state into a major industrial power – but that would require a substantial investment in infrastructure, and capital was in short supply. Grain exports were one of the few viable means of accumulating sufficient hard currency to purchase the necessary equipment abroad. But as Lenin himself acknowledged in a speech of 31 October 1921, the Bolsheviks’ attempt to remodel the economic basis of the state by ‘storm tactics’ had failed, causing a precipitous drop in agricultural outputs. The government was consequently left with little choice, he argued, but to attempt to rebuild the shattered economy by abandoning the draconian requisitioning of foodstuffs and partially revoking the enforced nationalisation of private enterprise. If the state re-incentivised the peasantry to produce a surplus by permitting them to retain a portion in which they could trade, it would allow grain exports to resume and create disposable income that farmers could spend on goods. This would in turn help to revive the re-privatised domestic manufacturing and services sectors, causing money to circulate around the economy and generate badly needed tax revenues for the exchequer. In effect, this had begun to happen by the time of his death.