Wednesday, December 11, 2013

The best anecdote about the Soviet economy you'll see all day

(or maybe even all week) ....

In many of my presentations I try to explain the workings of the Soviet economy, especially insofar as it created unique and quirky effects on people's lives that we're still seeing, and we'll continue to see for years to come.

This, however, is one of my favorites. It's from a 1967 book by Ben Ami called "Between Hammer and Sickle" looking at the Soviet Union's often contradictory attitude to its Jews.

Those who get the most out of the market are peasants from the far south, chiefly the Caucasus. 
It is worthwhile for the mustached Georgian father and his two tall, broad-shouldered sons to set out on a fine spring day, at four o'clock, before dawn, from their house on a kolkhoz about sixty miles from Tbilisi. Leaving the village, each carries a bag which contains 44 pounds of beautiful red tomatoes grown in the private vegetable patch near their house. They board a TU-104 jet [Tupolev] after checking their three bags (every passenger is allowed 44 pounds of personal baggage). Our three friends fly to Moscow at a speed of about 650 miles per hour and land at nine o'clock that same morning at the Moscow airport. They hire a cab and by ten o'clock they are in the kolkhoz market of the busy capital. Opening their bags, they set their tomatoes in rows and wait for customers. Housekeepers, mostly of the privileged classes, prefer these lovely tomatoes and buy them at four or five times their prevailing price in the government shops.

By four in the afternoon, our Georgians have disposed of all the tomatoes. They go shopping in GUM, the large department store in Red Square, and in Detskii Mir, the large children's store in the heart of Moscow, where they buy fine gifts for their wives and toys for their children. Then they spend a few hours at the Aragvy, a fine Georgian restaurant, where they enjoy good Georgian wine and hand out coins to the musicians who play sentimental Georgian tunes for them. Thus the busy day ends gaily. The next day they go back to Tbilisi and from there to their village. The money they bring back will be invested in their private farm. They repeat this routine a number of times during the season. 

These 'jet tomatoes' are yet another element of the parallel economy."

When I started learning about Soviet macroeconomics in University (it seemed like a good idea at the time ... in retrospect it was slightly less useful than I thought it would be) we heard several versions of this story. All have a lot of truth to them: highly subsidized transportation, incredibly expensive fruits and vegetables, and the ability of a small number of farmers to play the system and win big. 

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