Kaganovich emerged from the Civil War as one of the new elite of proletarian, revolutionary administrators who were to have a decisive influence in shaping the political development of the state in the coming era. The ending of the Civil War left the new Bolshevik regime in a state of disorientation. A series of crises – the Kronstadt rebellion, the strike movement, and the peasants' revolts – had compelled a démarche, the abandonment of War Communism and the introduction of the New Economic Policy (NEP). This was widely resented by party activists as a capitulation to capitalism. The Bolshevik regime lacked legitimacy and its social base was seriously eroded. The failure of the European revolution, forced the Soviet regime to come to terms with the realities of capitalist encirclement. The party strove to consolidate its power by outlawing other parties and by imposing as ban on factions within the Bolshevik party itself. The one-party state rested on the administrative might and coercive capacity of the party, the state apparatus, the Cheka and the Red Army.

The new regime sought to legitimize itself as the embodiment of the ‘dictatorship of the proletariat’. But this was a party that in a sense substituted itself for a declassed proletariat. It bolstered its self-legitimation through its claim to embody a wider good, and through profession of a consequentialist morality. The ideals of communism were left in suspension as the regime orientated itself to a new task, assuming the role of a developmental dictatorship.