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Chapter Six "People Without A Definite Occupation": The Illegal Economy and "Speculation" K. S. Karol remembers a thriving illegal market economy in Rostov during and after the war, recalling that the worst problem for him and his circle of friends was the "crash of the official economy." At the start of the war Karol condemned his landlady for trading on the black market, but by 1944, he says, "all of us had become her emulators with even more sophisticated rackets to help us get by."! Speculation, the buying and reselling of goods for profit, was a focal point of discussion at the top of the country's power structure as well as among the population at large. The language used to discuss the production and distribution of goods in any society carries considerable political weight; during the Cold War, economic activity was associated with "freedom ," a relative term construed in different ways by the competing powers. In the West, the right to own property is a core principle of "democracy," with goods produced and distributed on the basis of a "free" market regulated by supply and demand, a system most Westerners see as superior. Theorists on the other side of the Cold War divide held to a different outlook, believing a centrally planned economy superior because it avoided the periodic crises of capitalism2 They described Soviet"socialism" in terms of the expanded economic rights and social equality stemming from "collective ownership" of "socialist property." In their view, such a system created the conditions necessary for the "free" development of each individual citizen3 As with the other issues examined here, however, theory did not mesh with ! Karol, Solik, 282. 2 As American journalist Harry Schwartz observed, "Russian economists and political leaders are fond of claiming superiority for their own dictatorial organization on the groW1d that it avoids economic crises and depressions to which capitalist economies such as that of the United States are subjec!." Schwartz, Russia's Postwar Economy (New York: Syracuse University Press, 1947), 113. 3 The Communist Party published a pamphlet in 1943 entitled "The Basic Rights and Obligations of Citizens in the USSR." It states that "Socialist Democracy creates the conditions for the maximum development of initiative and creative ability among the working masses in the struggle for a new socialist social structure." GARO f. R-3737, op. 8, d. 34a, 1. 82. "PEOPLE W ITHOUT A DEFINITE OCCUPATION" 181 practice. The official "planned" economy was in a state of crisis (at least) from July 1941, when rationing began, until it ended in December 1947, and a market economy flourished in the Soviet Union in the war and postwar period. This chapter examines divergent perspectives on "speculation" between 1943 and 1948. Illegal economic activity was not unique to the Soviet Union; during World War II most countries, including the United States, rationed goods and/or placed restrictions on sales and prices, and all of them faced problems with forbidden trade. Black market deals were common whenever and wherever demand and the means of payment exceeded the supply of something. In the United States black-market transactions were carried on extensively in meat, sugar, tires, and gasoline4 In Britain, meat and dairy products , clothing, liquor, and many other items were rationed and became popular black-market commoditiess In occupied Belgium (1940-44), the illegal economy "expanded day by day," economist Raoul Miry recalled just two years after the war, due to the "effective consent of all citizens." Illegal trade thrived on the margins of an inadequate and tightly controlled rationing system , while those involved risked harsh penalties, including hard labor in Germany6 Also, as we have seen, because of the devastation wrought by tl1e war in much of Europe, rationing-and along with it illegal market activity-continued in most countries for years after the war. Workers in Poland stole goods from their factories to sell on the illegal market, thereby supplementing their meager wages, while"other workers produced goods for black market sale during work or used machines after work for this purpose." Workers had to take part in the illegal economy to survive, while the Polish Workers' Party manipulated the issue to its advantage by scapegoating speculators, "who were both easily recognizable to workers and a convenient target for the state.,,7 In Japan, too, by the end of the war goods were disappearing from stores except for rationed food items, and many people turned to the black market to survive despite the threat of severe penalties8...

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