The importance of private economic activities during late Stalinism

"After Stalin’s forced collectivisation of agriculture and the industrialisation drive in the 1930s, the private economy seemed to be only of minor importance in the Soviet Union and is rarely discussed. Only the small garden plots, the kolkhoz and the black market are usually mentioned. This paper describes different ways used in private economic activities and tries to estimate their importance in the first half of the 1950s. The research is mainly based on archival sources located in Estonia, but since agriculture there had already been collectivised in 1949, the situation must have been very similar in other parts of the Soviet Union. Because corruption was higher and the share of agriculture larger in the republics of the Caucasus region and in Central Asia, it could be expected that there private economy played a more important role than in the Baltic republics. According to Soviet statistics, in 1955 a quarter of the net national income of the Estonian SSR was generated by private garden plots. Since the estimation was based on fixed state prices, agricultural production was still underrated compared to the industrial one. Roughly two thirds of the food products consumed by worker’s families in the first half of the 1950s were produced privately and of course to even a larger extent in the countryside. Nearly every second household was entitled to own a garden plot of 0.5 hectares; a large number of smaller gardens should also be taken into account. For example, for many rural teachers the garden was more important than their regular salary. Distributing the privately produced food needed private traders. In a time when Socialist trade employed 25,000 or 3.5 percent of the workforce and between sixty and eighty percent of expenditure was used to buy foodstuff, private market trade should have reached a similar size. Moonlighting, the brewing of liquor, black marketing, customer services and the free professions were other areas of private economic activities. The artisan’s cooperatives, the artel’s, very often formed a shield hiding the private contracts of craftsmen. Without the help of so called pushers (in Russian: tolkachi) the distribution of regular deliveries in the system of the command economy would have been difficult. One fifth of urban living space was built privately, in the countryside the majority. This employment statistic also bears evidence of large self-employment. In a time of full employment, when housewives were a clear exception, 20 percent of the working age population did not work in a state enterprise, a state institution, on a kolkhoz or sovkhoz, or was learning. Stealing from the state or the kolkhoz was also widespread and might, in addition, be named a private economic activity. ‘Organising’ from the state was a socially accepted technique, without this, private house building, the keeping of livestock and the obtaining of deficit products would have been nearly impossible. Corruption of state officials was a normal occurrence within the setting of a command economy. In the system of the health service, physicians regularly accepted ‘gifts’. High-ranking officials were involved in bribe taking and dividing the belongings of deported or arrested persons among themselves was part of the work of the security organs. Since Soviet economic statistics are not very reliable, a proper and exact estimation appears to be impossible. A well-founded conservative guess would estimate that more than one fourth of the national income of the republic was generated privately and more than 40 percent of household incomes. Because of the very importance for the sheer survival of the population, the state was unable to change the situation. Without garden plots, even starvation would have occurred. According to archival evidence, the interpretation of the economy of late Stalinism being run nearly entirely by the state might need re-consideration. The Soviet state set the conditions and many rules of the game, but could not exist without private economic activities, even when they were despised ideologically. The famous Soviet curse “You shall live only from your regular wage!” bore a real meaning. Not only the peasant members of the kolkhoz, but even many persons employed by the state generated the majority of their income privately."