Anna asked me to write about shock therapy, but first I need to say a couple of words about the economic situation in the Soviet Union: not how did it look objectively, not how did it look for the rest of the world, but how the ordinary people, who’ve been inside this system, perceived the economic situation.

The ruling word was “deficit,” and in Russian, in those days it meant not the fact of deficiency of certain goods, but deficient goods themselves. “Deficit” meant anything, which you were unable to find in the store, anything, you had to “get,” either staying in a long line, if you were lucky to be at the place and at the time, where and when “a deficit” has been distributed. Or perhaps you knew somebody who worked in retail, and they could help you to “get a deficit.” There were also “holiday distributions” at the workplaces, or in the worst case scenario, you could find “a speculator” who would sell to you “a deficit” for a sky-rocketing price.

You might ask – who could afford this sky-rocketing price? The answer is that most of the people could. Not every day, not for everything, but if you really-really needed something, you would come up with the money, most of the time.

The salaries were approved somewhere far away from your place of work, and in a majority of cases were not individualized, meaning that a junior engineer will have the same 120 rubles monthly, and maybe 130 or even 135 rubles monthly, if they would work for the Department of Defense. All prices, from bread to beef, to bananas, to underwear, to chairs were fixed across the country, so everybody knew what did the “ice-cream for 19 kopeks” mean, you could use a price instead of a brand.

Most of the people would use their “retail connections” or “speculators” from time to time, for example when they would needed new winter boots or a coat for their toddler. And the vast majority of people would complain about this situation. Most of “intelligentsia” would lament: I wish it would be legal being able to get something for a higher price. It’s much better than not having these goods at all! Why “they” won’t let these people sell what they have.

Continue reading “Switching To The New Economic Model (1991)” →