Consumer goods in the Soviet Union

The industry of the Soviet Union was usually divided into two major categories. Group A was "heavy industry," which included all goods that serve as an input required for the production of some other, final good. Group B was "Soviet consumer goods" (final goods used for consumption), including food, clothing and shoes, housing, and such heavy-industry products as appliances and fuels that are used by individual consumers. From the early days of the Stalin era, Group A received top priority in economic planning and allocation.

The consumer industry and Soviet economic development

Following the October Revolution of 1917, the economy of the Soviet Union, previously largely agrarian, was rapidly industrialized. From 1928 to 1991 the entire course of the economy was guided by a series of ambitious five-year plans. (see Economic planning in the Soviet Union) The nation was among the world's three top manufacturers of a large number of basic and heavy industrial products, but it tended to lag behind in the output of light industrial production and consumer durables. One result of this was that consumer demand was only partially satisfied.

Consumer Goods in the early Stalin years (1930s)

Introduction of consumer goods

The 1930s saw major changes in the supply and distribution of consumer goods in the Soviet Union. The First Five Year Plan focused on the industrialization of the country and the production of industrial goods. After the successful industrialization drive in the First Five Year Plan the government turned its focus to improving the lives of its citizens. The introduction of the Second Five Year Plan in 1933 attempted to accomplish this by shifting the focus of production exclusively from industrial goods to include the production of some consumer goods. The Party Congress of February 1934 bolstered the calls for improvement of both quantity and quality in food products and other consumer goods. These changes led Stalin to declare in 1935 that, “Life has become more joyous”.

After the revolution, Soviet government strove to eliminate bourgeois values and lifestyle by distributing resources equally. Things that were once viewed as petit-bourgeois and associated with the elite—such as luxury goods and polite manners—became theoretically accessible to all citizens. To a Soviet consumer, a luxury item was any good with the exception of plain breads, cabbage, potatoes and vodka. By granting all citizens access to larger variety of consumer goods, views of consumer goods shifted from representative of the elite and therefore despised to being desired by all citizens. This shift in opinion and perception fit into the main Marxist-Leninist goal of empowering the proletariat. The Soviet government looked to teach Soviet citizens about Marxist-Leninist ideology along with table manners and discerning taste in food and material goods. Bolsheviks were expected to be cultured and mannered. Being able to discuss luxury goods with comrades was an important social skill even if a person could not hope to gain such goods.

The government used consumer items as legitimate awards to honor comrades whose work contributed to the building of socialism. However, the culturalization of society legitimized the formerly despised bourgeois concerns about status and possession, and the practice of giving special goods to a subset of the population also created a new social hierarchy which received special privileges.

Distribution and supply

In the early 1930s, the closed distribution system was the primary method of consumer goods distribution. By 1933, two thirds of Moscow’s population and 58 percent of Leningrad’s population were served by these stores. The closed distribution system consisted of stores and cafeterias accessible only to workers registered at that enterprise. These centers distributed rationed goods. The system was set up to protect the workers from the worst effects of limited supply and shortages. It also linked the rationing system with employment.

Rationing was regarded as the default option during this time period. Rationing happened during the first half of the 1930s, between 1929 and 1935, and after a brief pause began again in the 1940s, between 1941 and 1947. The State was in charge of declaring rationing periods but local officials also had the power to declare others between these. The closed system quickly became a method of giving special privileges to loyal Stalin followers and the Stalinist elite. Some stores became places that distributed higher quality goods to certain categories of more privileged citizens. Most of these closed distribution stores had low prices, long lines, and limited supply regardless of the rationing policies.

At the same time, there were three other legal alternatives to closed distribution stores: commercial stores, Torgsin stores and Kolkhoz markets. All had higher prices than the closed distribution stores. Since the state controlled all of these distribution methods, it could exercise a distribution monopoly.

The First Five-Year plan caused the closure of all artisan methods of consumer goods production, such as small private factories and workshops. In the mid-1930s, these methods of production were allowed to return on a small scale. In May 1936, a law was passed that slightly improved the supply of consumer goods by legalizing individual practice of trades such as cobbling, cabinetmaking, carpentry, dressmaking, hairdressing, laundering, locksmithing, photography, plumbing, tailoring, and upholstery – it slightly improved the shortage of consumer goods. Artisanal activity related to food was still banned. Kolkhoz markets were set up for artisans and peasants to sell their homemade goods. The State regulated the amount of participation in these markets but prices were allowed to float. This floating caused the prices at these markets to normally be higher than prices in the closed distribution stores. Individual service was illegal until May 1936.

The State also set up Torgsin stores that sold scarce goods in exchange for foreign currency, gold, silver and other valuables. The purpose of these stores was to expand Soviet hard currency reserves so that the country could import more equipment for the industrialization drive. Since these goods were scare, consumers viewed them as treasure and selling them was a huge sacrifice. Prices were kept low to entice people to participate in the Torgsin stores. These stores ran from 1930 to 1936.

From 1929, the State ran commercial stores that functioned outside the rationing system. Goods were sold for higher prices than in the closed distribution stores, two to four times as much. The goods sold were regarded as higher quality than goods sold by the closed distribution stores.

At the end of 1933, the first department store, called the Central Department Store, opened in Moscow. It ran until the fall of the Soviet Union in 1991 as part of the commercial store network. The end of the first rationing period and the abolition of the closed distribution system in 1935 caused the commercial store network to expand. In January 1935, there were five department stores open in the USSR. A year later, fifteen more department stores had opened.

Foreign influence

The import of foreign goods was extremely limited during the 1930s. The official slogan was "There is much to be learned from the example of the advanced capitalist countries in the field of consumer goods". Small amounts of foreign goods were imported, studied, and then copied. These Soviet versions of foreign consumer goods were distributed through consumption channels. The State did not directly import large quantities of consumer goods.

During the Soviet-Nazi pact period (1939–41) the Soviet citizens' primary interaction with the outside world was with the newly occupied borderlands of Finland, the Baltic States, Bessarabia, and Poland. Goods considered scarce in the USSR such as watches, bicycles, clothes and food products were plentiful in these regions. The occupying Red Army was fascinated with the diversity of goods at low prices. Viewed as a once-in-a-lifetime opportunity to acquire them, soldiers bought large quantities of these goods to send back to their families in the USSR. This flow of goods inspired civilians to seek permission to travel to these areas to acquire the goods and sell them on the black market.

Consumer goods in the 1980s

Although there was an effort to emphasize public over private consumption in the Soviet Union, nevertheless households earned incomes that they could use for the purchase of consumer goods or for savings. If households were unable to convert income into goods, a variety of incentives could arise. For example, in the event of excess demand for consumer goods, one would expect households to react by working less or accumulating savings or both. From the planners' viewpoint, it was necessary to balance the output of consumer goods and services with the population's income.

Soviet planners fought a constant battle for the consumer goods balance throughout the Soviet era. After World War II, they kept wages under better control, and increased the output of consumer goods. By the end of the Soviet era, however, they were plagued by what they perceived as a substantial and growing monetary overhang, which took the form of supply shortages.

After the industrial stagnation in the 1970s and early 1980s (see Soviet economic development), planners expected that consumer industries would assume a more prominent role in Soviet production beginning with the Twelfth Five-Year Plan. But despite a greater emphasis on light industry and efforts to restructure the entire planning and production systems, even by 1989 very little upturn was visible in any sector of industry. High production quotas, particularly for some heavy industries, appeared increasingly unrealistic by the end of that plan. Although most Soviet officials agreed that perestroika was necessary and overdue, reforming the intricate industrial system had proved difficult.

The processes and goals of consumer production

Increased availability of consumer goods was an important goal of perestroika. A premise of that program was that workers would raise their productivity in response to incentive wages only if their money could buy a greater variety of consumer products. This idea arose when the early use of incentive wages did not have the anticipated effect on labor productivity because purchasing power had not improved. According to the theory, all Soviet industry would benefit from diversification from Group A into Group B because incentives would have real meaning. Therefore, the Twelfth Five-Year Plan called for a 5.4% rise in nonfood consumer goods and a 5.4% to 7% rise in consumer services. Both figures were well above rates in the overall economic plan.

Consumer goods targeted included radios, televisions, sewing machines, washing machines, refrigerators, paper, and knitwear. The highest quotas were set for the first three categories. Although in 1987 refrigerators, washing machines, televisions, tape recorders, and furniture were the consumer categories making the greatest production gains compared with the previous year, only furniture met its yearly quota. Furthermore, industrial planners had tried to use light industries to raise the industrial contributions of such economic regions as the Transcaucasus and Central Asia, which had large populations but lacked the raw materials for heavy manufacturing.

Consumer supply in the 1980s

In the 1980s shortages continued in basic consumer items, even in major population centers. Such goods occasionally were rationed in major cities well into the 1980s. Besides the built-in shortages caused by planning priorities, shoddy production of consumer goods limited actual supply. Poor work practices such as shturmovshchina were partly to blame for quality problems.

Analyzing shortages in Soviet Union showed very uneven distribution among the population. For example, both Moscow and Leningrad, which were heavily visited by foreigners, were supplied much better than the rest of the country and did not have rationing until the late 1980s. Similarly, presence of goods on the shelves in a state store in a minor city often could simply mean that these goods were rationed and could not be bought at will. But in most cases shortages simply meant either empty shelves or long waiting lines. There were also some hidden channels of goods distribution; for example, in many cases goods were directly distributed/sold at places of work totally bypassing the store shelves.

While it was often possible to buy meat, milk and most kinds of produce on farmers markets (Russian: колхозный рынок), the prices there were typically two to four times higher than in state stores and the availability was highly seasonal.

During the 1980s, the wide availability of consumer electronics products in the West demonstrated a new phase of the Soviet Union's inability to compete, especially because Soviet consumers were becoming more aware of what they were missing. In the mid-1980s, up to 70% of the televisions manufactured by Ekran, a major household electronics manufacturer, were rejected by quality control inspection. The television industry received special attention, and a strong drive for quality control was a response to published figures of very high rates of breakdown and repair. To improve the industry, a major cooperative color television venture was planned for the Warsaw Television Plant in 1989.

Western specialists regarded the quality of goods available to be poor when judged by their standards and by the end of the 1980s, shortages became worse. By the time of the Soviet Union's collapse at the end of 1991, nearly every kind of food was rationed. Non-rationed foods and non-food consumer goods had virtually disappeared from state owned stores. While the gap was partially filled by non-state stores which started to appear in the mid-1980s, the prices in non-state stores were often five to ten times higher than in state stores and were often out of reach for the general population.

See also

• Economy of the Soviet Union
• Shortage economy
• Soviet fashion design

Sources

•  This article incorporates public domain material from websites or documents of the Library of Congress Country Studies. – Soviet Union