A Social History of Soviet Trade: Trade Policy, Retail Practices, and Consumption, 1917-53

Published by EH.NET (January 2005)

Julie Hessler, A Social History of Soviet Trade: Trade Policy, Retail Practices, and Consumption, 1917-53. Princeton: Princeton University Press, 2004. xvi + 366 pp. $39.50 (hardcover), ISBN: 0-691-11492-7

Reviewed for EH.NET by Valery Lazarev, Department of Economics, University of Houston.

Trade is as central to the history of market economies, especially in the early stages of their making, as supply and demand to economic theory. The opposite is true with respect to administrative-command economies. Government decision-making is the natural starting point of research in Soviet economic history, while trade, which seems to be merely a technical issue on the margin of planned allocation, is last on the subject list. This perception, which dominated for decades, meant that we knew more about black markets in the USSR than about the operation of legal trade establishments. The only exception was the NEP period, 1921-28, when legal markets had the broadest extent. Post-1991 studies that benefit from direct access to the recently-opened archives have shown that Soviet reality was far from the stereotype of “scientific” central planning; that it was a complex mixture of administrative controls and markets regulated and/or tolerated by the government; that interaction and conflict of private interests were determining economic outcomes even under Stalin’s brutal dictatorship. It is no surprise that trade has been moving upwards on the list of research priorities, with a number of studies focusing on certain aspects of trade and provision of consumer goods (the works by Elena Osokina, and R.W. Davies and Oleg Khlevniuk, for example). This new book by Julie Hessler goes further in this direction by offering the first comprehensive study of trade in the USSR from the revolution of 1917 to the death of Stalin in 1953.

The subject of the book is retail trade in consumer goods, following the Soviet definition of trade (torgovlia) that excluded both transactions between enterprises and international trade. As the subtitle Trade Policy, Retail Practices, and Consumption suggests, the book covers both the supply side of consumer goods market — the operation of the retail trade industry and the changes in its regulatory environment — and its demand side — consumer behavior and patterns of consumption. The former subject is treated most extensively, especially trade policy transformations over the three decades. A traditional discussion of decision-making by the top authorities is nicely augmented by excursions into the behavior of local bureaucracies based on rarely-used materials from regional archives.

Discussion of the operation of the retail trade industry is deficient in some aspects. One would expect to find more on the daily routine of a trade establishment; the distribution of decision-making rights within the hierarchy of trade administration; bargaining between producers and sellers (or wholesalers and retailers); retail industry human resources (wages, turnover, education, party membership); managerial incentives; and the extent of employee crime. The latter would be a reasonable expectation given that the author gained access to court cases. The author focuses instead on the notion of “cultured trade” — the government’s attempts to introduce “modern consumerism” — which, she argues, was Stalin’s preference. This focus does not seem justified. In an economy that fluctuated between “normal” shortage and outright famine, calls for making stores clean, salesmen polite, and customers scrupulous were hypocritical. In fact, the author shows that the effects of promoting “cultured trade” did not go far beyond “study trips” to the U.S. and attempts at cloning Macy’s stores in Moscow and a few other large Russian cities where a majority of the Soviet elite resided. A strong side of the “retailing practices” component of the book is the extensive discussion of private trade after its official abolition in the early 1903s. I believe the findings on the extent of private trade in the USSR during WWII and in its aftermath, the forms and scale of involvement of urban and rural workers in small-scale retail operations, and the relative weight of private trade as a source of goods for a working family are the most valuable contributions of the book.

The coverage of the “demand side” — consumption patterns and consumer behavior — is based predominantly on the data of budget surveys, performed by the Soviet statistical agency from the 1920s on, and is rather sketchy. Although the author is aware of the limitations of her data, she does little to corroborate the evidence using production and retail sales volume data. Instead she rushes to conclusions, based on a few aggregate numbers, such as that the consumption inequality was decreasing in the mid-1930s, that the consumption gap between white-collar and blue-collar workers nearly closed by the early 1950s, and even that the waves of repressions were triggered by increasing shortages of consumer goods, cotton cloth in particular. Given the presentation of limited evidence, these statements are utterly speculative. Much of the consumption behavior is discussed within the abovementioned concept of “cultured trade.” The final conclusion with respect to the effects of the transition to state-owned trade in the 1930s is vague and inconsistent. This transition did not “introduce modern consumerism” into Russia (as was allegedly intended) but “democratized it, by making it available to citizens from the popular classes — but only if they lived in the big cities or had connections or happened by some miracle to be in the right place at the right time” (p. 246). That is quite a democratization! It would be more accurate to say that the Stalinist transformation did not eliminate (or even diminish?) stratification of consumption, but replaced money and prices as the main instruments of allocation with rationing, queuing, and networking.

I would certainly prefer to find a more systematic presentation of the data. Ten short tables in the book serve only illustrative purposes. The author mentions in the introduction that this is due to space limitations and directs the reader to her web site for extra longitudinal data and source notes that are helpful indeed. It is not clear however why this compact and important information was omitted. There is still more material that could be incorporated into the text. For example, the author mentions that she created a unique database from credit reports of private traders from the 1920s. However, no analysis is presented, even descriptive. Only a few pieces of information from these reports are cited. I believe the book would have also benefited from closer integration with recent literature on Soviet economic history that has produced a wealth of quantitative and institutional data for the period studied in the book.

Valery Lazarev is assistant professor of economics at the University of Houston. His recent publications include The Economics of Forced Labor: The Soviet Gulag (co-editor and contributor) and articles in the Economic History Review, the Journal of Comparative Economics, and Comparative Economic Studies.