{"id":913,"date":"2014-02-23T14:00:43","date_gmt":"2014-02-23T14:00:43","guid":{"rendered":"http:\/\/www.traveller.ee\/blog\/?p=913"},"modified":"2018-08-24T12:06:12","modified_gmt":"2018-08-24T10:06:12","slug":"5-things-you-didnt-know-about-the-soviet-economy","status":"publish","type":"post","link":"https:\/\/testblog.traveller.ee\/other\/5-things-you-didnt-know-about-the-soviet-economy\/","title":{"rendered":"5 Things You Didn’t Know About the Soviet Economy"},"content":{"rendered":"

The Soviet economy didn\u2019t ask how to get goods to the consumer. Instead, it asked how does the consumer find the goods? This article is a tribute to the wonderful ingenuity of ordinary Soviet citizens and the ways in which they tried to fix communism – by breaking it.<\/p><\/blockquote>\n

The Soviet Union represents one of the most daring and baffling economic experiments in human history. Building state communism turned out to be so tricky that even Lenin thought it wasn\u2019t working\u00a0out<\/a>. What was it then? Presumably after a lot of drinking, somebody came up with the idea that you don\u2019t need fancy pants concepts like \u201csupply and demand\u201d or \u201cmarket equilibrium\u201d to run an economy \u2013 instead, you could just guess what people might need and you know, wing it.<\/p>\n

\"In<\/a>

In Soviet Russia, the party plans you.<\/p><\/div>\n

The result was a centrally planned economy. In a nutshell, there was a committee in charge of determining the economic goals of the USSR for five year periods called \u2013 somewhat unimaginatively \u2013 \u201cfive year plans\u201d. The committee would figure out, for example, how many tons of televisions people might need and then fire away instructions at state-run manufacturers. To encourage productivity, metaphorical biscuits would be handed out to over-achievers.<\/p>\n

As it turned out, micro-managing everything was not a great idea. The grander industrial goals outweighed consumers\u2019 needs, deficit grew out of control and to contribute to the chaos, manufacturers would commonly misreport their production results to get ahead. So while the Soviet common folk were wondering where on earth all the ham had gone, the regime was busy with projects like \u201cnuclear weapons hoarding\u201d and \u201cthe Great Plan for the Transformation of Nature\u201d, the latter amounting to little more than the catastrophic draining of the Aral sea:<\/p>\n

\"Pictured:<\/a>

Pictured: The “Not So Great Plan for the Transformation of Nature”<\/p><\/div>\n

What did the common people think of all these communist shenanigans? Well, firstly:<\/p>\n

1. People don\u2019t like boxes<\/h2>\n

As a species, we\u2019re not too keen on putting in effort if the reward is relatively small. Tell your child they can have a bucket of Ben & Jerry\u2019s ice cream on the condition that they go and get it themselves, and that they can only<\/i> buy it from a shop in another city. Most likely, they\u2019ll take the money, promise to do as told and then proceed to get it from the absolute closest possible location.<\/p>\n

Now, replace \u201cchild\u201d with \u201cregular Soviet citizen\u201d and \u201cBen & Jerry\u2019s\u201d with \u201cgenerally everything that is not required for immediate survival purposes\u201d and you’ll end up with Soviet everyday life. Contrary to a popular belief, people weren’t starving all the time<\/em> as they generally had access to the basic necessities. But getting stuff beyond the simplest everyday items amounted to a quest of epic proportions. A time consuming way of undertaking this quest involved slacking off work to try and find shops that might possibly have what you need and then queuing for hours to get it.<\/p>\n

\"This<\/a>

This is not an iPhone launch. This is the \u201cfresh bread\u201d launch.<\/p><\/div>\n

When you put obstacles like that in people\u2019s way, they\u2019ll start behaving much like water by trying to push through any gaps. This resulted in\u2026<\/p>\n

2. A shadow economy of a massive scale<\/h2>\n

Unless queuing was your idea of spending quality time in fresh air, you had to hustle.<\/p>\n

\"No,<\/a>

No, not like this.<\/p><\/div>\n

Hustling in the Soviet Union was far more intricate a concept than rolling down the street in a leopard skin Cadillac, lookin\u2019 all fly. It involved all areas of life. Want to get a brand new fur coat? Time to rub shoulders with the shop assistant. Need to put your kid in day-care? Hope you know someone who knows a kindergarten teacher close to home. You might argue that having connections is good under any economic model, but would you need connections for buying pantyhose? No? Well, welcome to the Soviet Union!<\/p>\n

I rarely hear the older people say: \u201chey, this one time I legitimately bought a radio<\/em>\u201d. More often than not, I hear stories of how somebody \u201cacquired\u201d, \u201csecured\u201d or \u201cliberated\u201d a particular item. These stories always involve some sort of a needlessly complex scheme of getting hold of a desired product.<\/p>\n

\""Hey,<\/a>

“Hey, want some sugar? No, really, I’m selling sugar. Meet me in the back alley at full moon.”<\/p><\/div>\n

Because exploiting personal relations for obtaining stuff was not exactly legal, nobody knows exactly how many goods and services were exchanged within these unofficial networks. Tracking the shadow economy is also difficult because\u2026<\/p>\n

3. It was primarily a social system, not an economic one<\/h2>\n

While people did barter goods directly, the shadow economy was a little more complex than \u201cyou to me, me to you\u201d.<\/p>\n

\""I'll<\/a>

“I’ll fix your pipes if you’ll fix mine. Or you know, get me vacation tickets some time, that’s also fine.”<\/p><\/div>\n

As anthropologist Janine Wedel put it in her study of communist Poland<\/a>, you couldn\u2019t just waltz into a shop and say: \u201cI\u2019m sure you could use some coffee – how about that leather bag?\u201d This was not<\/i> OK. You had to be smooth, talk about anything except what you want to get. Make friends \u2013 stay friends. Be cool. Do not<\/i> look at the leather bag.<\/p>\n

Why make friends? Because friends don\u2019t let friends suffer communism. Generally, people didn\u2019t see the shadow economy as a black market \u2013 it was rather seen as simply helping out friends and family. You\u2019ve got a pal who can\u2019t afford new skis for their child and you happen to work at a school? Just write off a pair of \u201cbroken\u201d skis off the inventory list, place an order for a replacement and voila \u2013 everybody wins! With little effort you’ve done your friend a solid, their child’s happy\u00a0and somewhere, a planning officer is left wondering why is it that Soviet skis keep breaking all the time.<\/p>\n

Normally, people wouldn\u2019t even charge their friend for favours because here\u2019s the twist \u2013 when the time comes, they\u2019ll have to help you – not because you have helped them, but because it\u2019s moral<\/i> to help friends. Not helping friends was seen as antisocial behaviour which could lead to the offender being ostracized.<\/p>\n

To an outside observer, all this looks an awful lot like bartering. But the moral, personal aspect of “just helping friends” masked the economic\u00a0nature<\/a> of these arrangements.<\/p>\n

Speaking of morals\u2026<\/p>\n

4. Embezzling was not stealing (necessarily)<\/h2>\n

Look, nobody wants to feel like a criminal. Of course, when a store manager regularly siphons goods out to their friends and family, it looks less like \u201chelping\u201d and a lot like \u201cstealing\u201d. But Soviet citizens didn\u2019t care much about semantics. As much as the official communist ideology condemned unofficial activities, it also offered an excuse for them.<\/p>\n

One of the leading ideas of the Soviet ideology was that everything ultimately belongs to the people. So, if everything belonged to the people, but that everything was having a hard time reaching the people due to flaws in the planning system, then what\u2019s wrong with giving the system a little push? How could you steal something that belongs to you anyway (kind of)? Sure, you might make a small profit on the side, but hey \u2013 what goes around comes around, right?<\/p>\n

\""I'm<\/a>

“I’m just standing here, waiting to help that poor, expensive copper wire.”<\/p><\/div>\n

In Estonia, where anti-Soviet sentiments were strong, people found other ways of justifying their hustling. A relative of mine worked at a TV station where he used his technical know-how to build electronic devices out of components he\u2019d acquire from his workplace (by breaking the station\u2019s equipment) and selling these for a healthy profit. When I confronted him about what to me sounded like common theft, he\u2019d object and explain he was not stealing \u2013 he was \u201cundermining the Soviet occupation\u201d. A weird modern day Robin Hood, he saw himself not as a hustler, but as a freedom fighter. A freedom fighter who just happened to make a healthy buck while, uh\u2026 freedom fighting? The great irony here is that as much as his activities subverted the Soviet system, they also made it work by satisfying the market’s demand. This is also why the authorities didn’t want to interfere with the shadow economy too much<\/a>.<\/p>\n

By the way, the whole selling electronics for personal profit thing might sound awfully familiar. That\u2019s because\u2026<\/p>\n

5. The Soviet Union had private businesses (sort of).<\/h2>\n

Selling things for personal profit wasn’t legal, but what\u2019s a totalitarian regime to a natural born entrepreneur? That\u2019s right – a challenge! The Soviet Union\u00a0allowed for some private market activity<\/a> in the late 1980’s, but even before that there were people who just couldn’t miss a good business opportunity.<\/p>\n

I have a family acquaintance who worked as a truck driver, ferrying wool from one place to another. Soon enough, he learned that he could make a few extra rubles on the side by embezzling leftover wool to the \u201cprivate sector\u201d. One thing led to another and in a couple of years, the wool operation had grown to include dozens of handlers across five different countries.\u00a0Effectively, he was running a multinational enterprise – inside the goddamn Soviet Union<\/i>.<\/p>\n

He did ultimately land a few years in prison as it became harder and harder to hide his rapidly growing wealth, but the point is this \u2013 life finds a way. Over-regulation with artificial boundaries doesn’t work, particularly when these boundaries clash with people\u2019s expectations of normalcy.<\/p>\n

As for the self-made wool tycoon, he started his next business venture before he even left the prison.<\/p>\n

For a full list of stuff embezzled in the Soviet Union, join the Traveller Tours guides on their daytrips<\/a> and walking tours<\/a>.<\/strong><\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"

The Soviet economy didn\u2019t ask how to get goods to the consumer. Instead, it asked how does the consumer find the goods? This article is a tribute to the wonderful ingenuity of ordinary Soviet citizens and the ways in which they tried to fix communism – by breaking it. The Soviet Union represents one of …<\/p>\n","protected":false},"author":5,"featured_media":938,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[40,39,38],"class_list":["post-913","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-other","tag-black-market","tag-shadow-economy","tag-soviet","entry","clearfix"],"acf":[],"_links":{"self":[{"href":"https:\/\/testblog.traveller.ee\/wp-json\/wp\/v2\/posts\/913","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/testblog.traveller.ee\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/testblog.traveller.ee\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/testblog.traveller.ee\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/testblog.traveller.ee\/wp-json\/wp\/v2\/comments?post=913"}],"version-history":[{"count":26,"href":"https:\/\/testblog.traveller.ee\/wp-json\/wp\/v2\/posts\/913\/revisions"}],"predecessor-version":[{"id":2358,"href":"https:\/\/testblog.traveller.ee\/wp-json\/wp\/v2\/posts\/913\/revisions\/2358"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/testblog.traveller.ee\/wp-json\/wp\/v2\/media\/938"}],"wp:attachment":[{"href":"https:\/\/testblog.traveller.ee\/wp-json\/wp\/v2\/media?parent=913"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/testblog.traveller.ee\/wp-json\/wp\/v2\/categories?post=913"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/testblog.traveller.ee\/wp-json\/wp\/v2\/tags?post=913"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}