Soviet prices: rising, but not on the up and up

March 27, 1991

By Renfrey Clarke

MOSCOW — They were the first eggs I had seen in my local food store in over a month. I stood in line, seized a packet, and headed for the check-out. On the packet was printed in large letters: "Price 1 rouble 34 kopeks".

"Niyeeet!" (The meaning of this Russian word, I should explain, is not "no", as you will find in the dictionary. Rather, it is something like "What a fool you are! Haven't you anything better to do than cause me problems?")

"Why didn't you look at the sign? Three roubles five kopeks! Agreed price!"

Enlightenment dawned. It was the year of privatisation, when market mechanisms were finally to come to the Soviet economy, and when fixed, state-controlled prices were to slip progressively into the past. "Agreed prices", supposedly negotiated between buyer and seller, had become the norm for a wide range of basic goods, from paper to animal feeds.

For months I had my eye on a Latvian-made stereo amplifier in a store near my workplace. It cost 350 roubles, well over a month's earnings for most Russians. (You don't just buy these things in Soviet shops. You wait for an appointed day, then queue up from before dawn to place an order, then wait further months for delivery).

Passing by the electrical goods store, I noticed that the sign on the amplifier had been changed. If I ever got my hands on one, it would now cost 600 roubles.

In the final months of 1990, even before "agreed prices", an opinion poll cited by the Moscow weekly Economics and Life found that inflation was the largest single cause of economic disquiet among the population, well ahead of shortages of particular goods. Russians would rather queue up, or even go without, than see the value of the rouble fall.

Falsified statistics

It used to be maintained that inflation in the Soviet Union was insignificant, and the State Committee on Statistics published a laughable figure of 5% for inflation in 1990. But despite the official fiction of controlled, stable prices, Soviet citizens have for years been familiar with steep rises in the prices they have to pay for everyday goods.

Four years ago, when I first lived in Moscow, I was struck by the numerous soft drink vending machines around the city centre. The liquid they dispensed was yellow, and I think was supposed to be apple juice. It cost three kopeks. Last summer when I returned, there were still a few machines like this. But most of them had moved up-market. The liquid they dispensed was green, and was supposed to be lime ks.

This kind of subterfuge was extremely widespread. But on its own, it goes nowhere near accounting for the battering which Soviet consumers took from inflation even before the first grim days of 1991. To reveal the key mechanisms, I must turn to my friend Oleg.

When I first called on him last October, Oleg expressed his pleasure by opening a tin of ham. "One year ago", he confided, spearing a slice, "you could get this stuff in the ordinary shops. Now you have to have friends. You know how much I paid?"

I looked at the tin. The official price was there on the label, as on virtually all Soviet consumer products: 1 rouble 94 kopeks.

"Five roubles?", I suggested. No, six.

"For the ordinary Soviet citizen, and in questions of ham", Oleg continued between mouthfuls, "inflation is not 3% or 5%. In fact ...", and here he paused for effect, "it's 300%".

We went out onto the street. A shoe store was still open. A queue stretched out the door and down the road. Beside the queue a woman stood silent and motionless, holding up a pair of children's shoes.

"She'll have just bought them", Oleg said. "They'll have cost her about 15 roubles, and she'll want 50. When there are no more shoes left inside, she'll make her sale."

Why shelves are empty

With numerous items, only trivial quantities ever reach the shelves of the state shops; most of those produced are purloined and sold off at some other point in the distribution process.

To give just one example, car parts for many months now have been available only through the black market. If you want shock absorbers for your Lada, the only place you'll get them is the Soviet equivalent of the laneway at the back of the pub. And you'll pay at least four times the official price.

With some goods, the black market is not the sole resource. There are now also private cooperatives producing for the consumer market — at the price the market will bear. A burgeoning area for cooperatives is the shoe trade.

The Russian Republic's "500-day" economic plan, published last September, featured a detailed breakdown of the minimum living standard which Gorbachev, Yeltsin and other political leaders had pledged to protect. Among the lists of consumer items were men's leather shoes for 30 roubles, a price that was to remain frozen until the "transition to the market" was in its latter stages.

But even at the time the plan was drawn up, men's leather shoes, produced in state factories, could not be bought in the state shoe x months, I have yet to see a pair on sale there — a remarkable fact if you consider that during this time Soviet state factories have produced several hundred million.

If you want shoes, your best bet is to go to the Riga Market, in Moscow's inner northern suburbs. As you emerge from the metro station, you pass between long rows of people — literally hundreds of them — each holding up a dress, a cassette player, a handbag, an iron. After you run this gauntlet, you come upon booths set up by shoemakers' cooperatives, and there you can buy a pair of flimsy slip-ons for around 90 roubles — two weeks' wages for a secondary teacher.

The introduction of "agreed prices" merely filled out a picture in which the established distribution and pricing system had already largely been allowed to disintegrate, enriching a small layer of crooks and profiteers while consigning scores of millions of Soviet citizens to penny-pinching misery.

In the provinces

The provincial cities or the peasant food markets are now the sole recourse for many urban shoppers. In January Izvestiya published a survey in which its correspondents in various centres commented on the availability in their cities of meat.

In Nizhny Novgorod, meat had not been freely available at the official prices for years. At the markets, prices had doubled in the previous two or three months, to around 18 roubles a kilogram for beef. In Yaroslavl, there was "not even the smell of meat at state prices". In Chelyabinsk, families kept unusable meat ration coupons as souvenirs. In the markets in Leningrad, beef was fetching 30 or even 40 roubles a kilogram.

The one bright spot, it seemed, was Minsk, the capital of the Byelorussian Republic. There, beef was freely available in the state shops at the official price of 1 rouble 90 kopeks a kilogram, with no need to queue.

Byelorussia was among the regions worst affected by the Chernobyl disaster. And as the inhabitants of Minsk have learned, cattle accumulate more radioactive material in their tissues than the shorter-lived poultry and pigs.

Pork was on sale in the Minsk markets for 18 roubles a kilo.

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