Stalinist Markets and Entrepreneurship interviewed Elena Osokina, Professor of Russian History at the University of South Carolina. Osokina is best known for the English translation of her Our Daily Bread: Socialist Distribution and the Art of Survival in Stalin’s Russia, 1927-1941. She published two books in Russian last year that I hope will eventually come out in English: The Heavenly Blue of Angels’ Vestments: A Fate of Masterpieces of Ancient Russian Religious Art, 1920s-1930s and The Alchemy of Soviet Industrialization.

As she explains in the Republic both studies look at the social-economics of Stalinist industrialization. The Heavenly Blue of Angels’ Vestments deals with the fate of Russian religious art after 1917, the creation of museums to house it in the 1920s, and the sale of that religious art to museums and collectors around the world.  The Alchemy of Soviet Industrialization examines the role of the Torgsin state stores in the accumulation of funds for industrialization.

Osokina discusses both books in the Republic interview. Toward the end she’s asked about her understanding of Stalinist society. I want to highlight her comments since they’re something that I try to get across to my students and listeners of the podcast.

There’s been a longstanding stereotype about the Soviet Union under Stalin as an exclusively self-contained, closed and totalitarian state and society. You can see a different reality in your books: people receive money transfers from abroad, and the OGPU or NKVD actually hold people hostage because of these transfers; tens of thousands of foreigners live and work in the country, and in general the country is in constant communication with the outside world. How do you now view the Soviet Union under Stalin?

Speaking about my impressions of Stalin’s society, I would like to debunk two stereotypes: total control and the absence of the market.

It’s hard to agree with the Cold War Sovietologists (the so-called totalitarian school), who believed that Stalin was able to establish total control over the Soviet society, and that the society was amorphous, totally passive, and atomized. Now after the large amount of research by social historians, it’s clear that people actively pursued their goals and interests. The society was not passive, and there was no total control. And besides was this even possible in principle? There was always a certain degree of freedom and autonomy. This shouldn’t, however, fall into the other extreme, which modern historiography suffers from, and exaggerate the degree of active or passive resistance to the regime, or to represent Soviet society as “a society of partisans,” where everyone opposed the regime in one way or another and resisted by all possible means.

And the idea that markets were absent in the economy in the 1930s is also a stereotype and simplistic. The market in the 1930s was enormous, otherwise people would not have been able to survive in an economy of total deficit and hunger. As the state limited the opportunities for the legal market to develop, human initiative went underground—there was a huge black market of goods and services in the country.

Private enterprises disguised themselves in the form of socialist trade. For example, the industrial enterprises had cafes or cafeterias, which functioned as private enterprises: the director of the cafĂ© paid the management of the organization, the “roof” [krysha—which also means protection from officials—Sean.] of which he worked under, and in exchange received documents that presented him as a civil servant. In fact, he bought food for the cafĂ© or cafeteria with his own money and skimmed from the revenue. There were even clandestine firms that privately produced and sold goods and services to the population. The history of the black market under Stalin disproves the stereotypical picture of an intimidated society, devoid of initiative. The black market performed important functions. It compensated for the shortages and pitfalls of the official state economy, redistributed products and goods based on market principles, and gave people the opportunity to survive and improve their material conditions.

There was also state entrepreneurship in the Soviet economy of the 1930s. Torgsin (the All-Union Trade Association with Foreigners) is the best example. Another example of a market initiative of the Soviet state is the mass export of religious icons, that laid the foundations of the world antique market for Russian religious art.

Therefore, to represent the economy and social life of the USSR in the 1930s as completely devoid of a market, pragmatism, private initiative, and rationality is wrong. The USSR could not have existed for so long without them. The symbiosis of the market and economic planning contributed to the survival of not only society but also the state as well.

Entrepreneurship of Soviet citizens is a phenomenon Gabor Rittersporn explored in his excellent Anguish, Anger, and Folkways in Soviet Russia. Bureaucrats and citizens alike used a variety of strategies to circumvent the restrictions and shortages in the Stalinist system. In fact, as Alena Ledeneva’s studies of informal relations, blat, and corruption show, these practices, though illegal in the Soviet system, were necessary to its very working. Just to give one example Rittersporn provides:

Indeed, the Soviet economy constantly needed people able to find scarce assets, recombine procedures and rules, and rebuild organizational structures. Firms needed railway cars to ship their goods. They were lucky if they found an entrepreneur like the one who headed the transportation department of the administration responsible for flax production in the Russian Republic. He asked three rubles for each cubic meter of timber for the wagons he provided, twenty for each ton of shavings, and so on. Since managers were prepared to pay them, the fees were not be considered excessive.

The railways regularly auctioned unclaimed cargoes. For the state-owned companies that purchased them, and that otherwise would never come across many precious goods, did it matter that a clever individual and not officially registered organizations (that did not deign to trade with them) resold the wares? Apparently not, since they were prepared to pay much higher prices than those fixed by the state. Even state-owned firms traded scarce products among themselves for black-market prices.

Gabor Rittersporn, Anguish, Anger, and Folkways in Soviet Russia, University of Pittsburgh Press, 2014, 220-221.