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Stalin’s Doctrine of Price Reductions during the Second World War and Postwar Reconstruction

Abstract

This article examines how price reductions became a late Stalinist economic doctrine. When rationing was abolished in 1935, Stalin linked reducing retail prices to economic and revolutionary progress. This progress was derailed by the war, which saw the return of rationing and its accompanying price distortions, as well as the explosion of private trade at exorbitant market prices. Aft er an unsuccessful attempt to compete with the market through state commercial trade at high prices, the government repeatedly reduced prices from 1944 onward in an eff ort to clear stockpiles of too-expensive items, regulate the currency supply, shift the population’s spending from food to consumer goods, bring down market prices, and attack the private sector. Price reductions were presented as an expression of Stalin’s care for workers’ economic interests during the process of recovery and as a blow at those who had unfairly profi ted during the war. By the early 1950s, annual price reductions had become an explicit economic doctrine and a new Stalinist ritual and celebration, despite the persistence of serious shortages, especially of food, and growing evidence of the policy’s shortcomings.

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Components of this article were presented in workshops at Georgetown University, the University of Manchester, and University College London’s School of Slavonic and East European Studies. The author wishes to thank participants for their comments. Special thanks go to Michael David-Fox, Philippa Hetherington, and Yakov Feygin, as well as the two anonymous reviewers at Slavic Review, for their feedback and encouragement along the way. Support for the research and writing of this article came from the University of Chicago, the Social Science Research Council’s International Dissertation Research Fellowship and a postdoctoral research fellowship from the International Center for the History and Sociology of WWII and its Consequences at the Higher School of Economics.

1 ‘O snizhenii tsen na khleb i otmene kartochnoi sistemy na miaso, rybu, sakhar, zhiry i kartofel’: postanovlenie soveta narodnykh komissarov soiuza SSR i tsentral΄nogo komiteta VKP(b) (Moscow, 1935), 3–4.

2 Julie Hessler, A Social History of Soviet Trade: Trade Policy, Retail Practices, and Consumption, 1917–1953 (Princeton, 2004), 302 .

3 On the expansion of the “persistent private sector” during the war, see Hessler, A Social History of Soviet Trade, 279–89.

4 Hessler A Social History of Soviet Trade, 3067 .

5 Hessler, A Social History of Soviet Trade, 308, 310 .

6 Donald A. Filtzer, Soviet Workers and Late Stalinism: Labour and the Restoration of the Stalinist System aft er World War II (Cambridge, Eng., 2002), 4243 . Filtzer makes a similar point in his more recent work on postwar living standards. See: Donald A. Filtzer, The Hazards of Urban Life in Late Stalinist Russia: Health, Hygiene, and Living Standards, 1943–1953 (New York, 2010), 5 .

7 Filtzer, Soviet Workers and Late Stalinism, 7879 .

8 Margolin N. S., Balans denezhnykh dokhodov i raskhodov naseleniia (Moscow, 1940), 35 .

9 Charles S. Maier, In Search of Stability: Explorations in Historical Political Economy (Cambridge, Eng., 1987), 6 .

10 Ibid.

11 Andrew Sloin and Oscar Sanchez-Sibony, “Economy and Power in the Soviet Union, 1917–39,” Kritika: Explorations in Russian & Eurasian History 15, no. 1 (Winter 2014): 11 .

12 Sloin and Sanchez, 18–19.

13 In 1929, Stalin accused Nikolai Bukharin of “normalizing” the market by suggesting prices could be “maneuvered” to incentivize peasants selling to the state, arguing that speculators would always pay more and the peasantry would hold out for higher prices. Allowing the market to determine agricultural prices would lead to “a rupture with the working class and the economically weaker part of the rural population, and a bond with the wealthy part of the urban and rural population,” Stalin concluded. See: I. V. Stalin, “O pravom uklone v VKP(b): rech΄ na plenume TsK i TsKK VKP(b) v aprele 1929 g. (stenogramma),” Sochineniia, tom 12 (Moscow, 1949), 42–46. On Stalin’s anti-capitalist worldview and simultaneous acceptance of some of its instruments, see Oleg V. Khlevniuk, Stalin: New Biography of a Dictator, trans. Nora Seligman (New Haven, 2015), 7.

14 On the closed distribution system, see: Sheila Fitzpatrick, Everyday Stalinism: Ordinary Life in Extraordinary Times; Soviet Russia in the 1930s (New York, 1999), 9698 .

15 Naum Jasny, The Soviet Price System (Palo Alto, 1951), 31 .

16 On the hierarchy of ration recipients and those excluded from the ration system, see Elena Osokina, Our Daily Bread: Socialist Distribution and the Art of Survival in Stalin’s Russia, 1927–1941, ed. and trans. Kate Transchel and Greta Bucher (Armonk, 2001), 3839 .

17 On commercial trade in the 1930s, see Osokina, 127–29.

18 On the relationship between rationing and an eventual communist economy inkind, see: Oleg Khlevnyuk and Davies R. W., “The End of Rationing in the Soviet Union, 1934–1935,” Europe-Asia Studies 51, No. 4 (June 1999), 55961 .

19 Hessler, A Social History of Soviet Trade, 14, 198 .

20 Khlevniuk and Davies, 558.

21 Ibid.

22 RGASPI, f. 558, 11, d. 1118, l. 42 (Stalin’s response to Molotov’s speech on the end of rationing, November 1934).

23 RGASPI, f. 558, op. 558, op. 11, d. 1118, l. 48–49.

24 RGASPI, f. 558, op. 558, op. 11, d. 1118, l. 49–50.

25 RGASPI, f. 558, op. 558, op. 11, d. 1118, l. 51. Muzhik is a derogatory word for ‘peasant.’

26 RGASPI, f. 558, op. 11, d. 1118, l. 52.

27 RGASPI, f. 558, op. 11, d. 1118, l. 53.

28 Molotov V. M., Ob otmene kartochnoi sistema po khlebu (Moscow, 1934), 23 .

29 Feliks Chuev, Sto sorok besed s Molotovym: iz dnevnika F. Chueva (Moskva, 1991), 367 .

30 For market price trends in the 1930s, see Malafeev A. N., Istoriia tsenoobrazovaniia v SSSR, 1917–1963 gg. (Moscow, 1964), 195 .

31 Hessler, A Social History of Soviet Trade, 24143 .

32 RGASPI, f. 17, op. 3, d. 1041, l. 169 (Addendum to the decree on rationing, July 18, 1941).

33 Ibid.

34 Hessler, A Social History of Soviet Trade, 27172 .

35 Elena Dmitrievna Tverdiukova, “Bor’ba so zloupotrebleniiami v sfere kartochnogo snabzheniia naseleniia v SSSR. 1941–1947 gg.,” Vestnik Sankt-Peterburgskogo Universiteta, Seriia 2: Istoriia (June 2010): 3738 .

36 “Na kolkhoznykh rynkakh Moskvy,” Izvestiia, August 30, 1941, 4.

37 RGASPI, f. 82, op. 2, d. 688, l. 43 (Report on kolkhoz market price behavior from A. B. Liubimov to A. I. Mikoian, February 19, 1942).

38 RGASPI, f. 82, op. 2, d. 688, l. 43–44.

39 RGASPI, f. 82, op. 2, d. 688, l. 45.

40 RGASPI, f. 82, op. 2, d. 688, l. 46. Note that, prior to early 1946, Ministers were known as Commissars and Ministries as Commissariats. This article uses “Minister” and “Ministry” throughout to maintain consistency.

41 RGASPI, f. 82, op. 2, d. 688, l. 49.

42 RGASPI, f. 17, op. 123, d. 101, l. 5 (Proposal to Andreev and Mikoian to expand subsidiary farming and the size of plots from I. Benediktov, September 8, 1941).

43 On travel to the village to purchase food and other goods, see William Moskoff, The Bread of Affliction: The Food Supply in the USSR during World War II (Cambridge, Eng., 1990), 155 .

44 It should be emphasized that these were not a great success in the 1930s. See Hessler, 255.

45 Hessler, A Social History of Soviet Trade, 268 .

46 Cherniavskii U. G., Voina i prodovol’stvie: snabzhenie gorodskogo naseleniia v Velikuiu Otechestvennuiu voinu, 1941–1945 gg. (Moscow, 1964), 17 .

47 Wendy Z. Goldman, “Not by Bread Alone: Food, Workers, and the State,” in Wendy Z. Goldman and Donald Filtzer, eds., Hunger and War: Food Provisioning in the Soviet Union during World War II (Bloomington, 2015), 65.

48 Goldman, 66.

49 RGASPI, f. 82, op. 2, d. 688, l. 69.

50 Moskoff, The Bread of Affliction, 161 .

51 Osokina, 83.

52 Ibid.

53 Cherniavskii, 153.

54 Ibid.

55 Rebecca Manley notes that the market figures prominently in evacuee writing, as does market price inflation. See: Rebecca Manley, To the Tashkent Station: Evacuation and Survival in the Soviet Union at War (Ithaca, 2009), 16667 .

56 Natalie Belsky, “Encounters in the East: Evacuees in the Soviet Hinterland during the Second World War” (PhD diss., University of Chicago, 2014), 202 .

57 GARF, f. 327, op. 2, d. 11, l. 172 (Stenograph of an inspectors’ meeting on the condition of evacuees in Kuibyshev oblast, January 14, 1942). The author wishes to thank Natalie Belsky for sharing this archival source.

58 On economic warfare through currency emission, see Arsenii Grigorevich Zverev, Zapiski ministra (Moscow, 1973), 222 .

59 RGASPI, f. 82, op. 2, d. 789, l. 109–10 (Zverev’s report to Stalin on the results of the currency reform, circa early 1948).

60 RGASPI, f. 82, op. 2, d. 780, l. 83 (Report from Gosplan to Molotov on the state of the currency supply, December 12, 1945).

61 RGASPI, f. 82, op. 2, d. 780, l. 84.

62 RGASPI, f. 82, op. 2, d. 686, l. 81 (Report from A. Liubimov on workers’ consumption of food products sold in the kolkhoz markets, undated).

63 Malafeev, 232.

64 RGASPI, f. 82, op. 2, d. 780, l. 83.

65 Goldman, 79.

66 Ibid.

67 On Glavosobtorg in the 1930s, see Hessler, A Social History of Soviet Trade, 201–5.

68 Moskoffcites evidence that goods were considered to be of a higher quality and were handled in a more sanitary way in the commercial shops, see Moskoff, The Bread of Affliction, 166. Elena Tverdiukova paints a different picture, arguing that the quality and quantity of goods in Osobtorg shops was frequently no different than that of regular state shops, see Elena Tverdiukova, “Osobtorg,” Rodina 1, no. 10 (2010): 133.

69 RGASPI, f. 82, op. 2, d. 685, l. 30 (Undated report on commercial trade from Mikoian and Liubimov to Stalin, circa fall 1944).

70 Ibid.

71 “A. G. Zverev: ‘Ia ne za odin proekt ne vyskazyvaius’; Stenogramma soveshchaniia u narodnogo komissara finansov SSSR tov. Zvereva A. G. 4 dekbriia 1944 g.,” in L. N. Dobrokhotov et al., eds., Denezhnaia reforma 1947 goda: dokumenty i materialy (Moscow, 2010), 95.

72 Ibid., 94. 73. Ibid., 97–98.

74 Ibid., 104–6.

75 GARF, f. 5446, op. 47, d. 1847, l. 44.

76 GARF, f. 5446, op. 47, d. 1844, l. 24–25 (Report on lower commercial prices, May 1945).

77 GARF, f. 5446, op. 47, d. 1867, l. 36.

78 Stalin I. V., “Rech΄ na predvybornom sobranii izbiratelei Stalinskogo izbiratel΄nogo okruga goroda Moskvy, 9 fevralia 1946 goda,” Sochineniia, tom. 16 (Moscow, 1997), 14 .

79 Zakon o piatiletnem plane vosstanovleniia i razvitiia narodnogo khoziaistva SSSR na 1946–1950 gg. (Leningrad, 1946), 51, 56.

80 “V sovete ministrov,” Izvestiia, September 17, 1946, 1.

81 Dikhtiar G. A., Sovetskaia torgovlia v period sotsializma i razvernutogo stroitel΄stva kommunizma (Moskva, 1965), 262 .

82 Donald Filtzer argues that the price increase was a reaction to the harvest failure and intended to depress consumption of grain, see Filtzer, Soviet Workers and Late Stalin ism, 47–48. Julie Hessler, on the other hand, suggests it was consistent with the policy of narrowing ration and commercial prices that had governed distribution since 1944, a policy that was predicated on the idea that postwar distribution would advance through the stages laid out during the mid-1930s transition to non-rationed trade, see Hessler, A Social History of Soviet Trade, 305.

83 “Dannye TsSU o normirovannom snabzhenii naseleniia 1942–1947 gg.,” in A. Ia. Livshin and I.B. Orlov, eds., Sovetskaia povsednevnost΄ i massovoe soznanie, 1939–1945 (Moscow, 2003), 205.

84 Elena Iur΄evna Zubkova, Russia Aft er the War: Hopes, Illusions, and Disappointments, 1945–1957 (Armonk, 1998), 52 .

85 On panic buying and the mood in Moscow as news of the currency reform spread, see Zubkova, Russia Aft er the War, 5354 .

86 See the reports on skyrocketing market prices in “Eshche raz o slukhakh,” in L. N. Dobrokhotov, Denezhnaia reforma, 374.

87 The working group on reforming the ruble appears to have first met in early 1943, see “Stenogramma vystupleniia A. G. Zverev na soveshchanii po voprosam denezhnogo obrashcheniia, 28 ianvaria 1943 g.,” in L. N. Dobrokhotov, Denezhnaia reforma, 32.

88 “Postanovlenie soveta ministrov SSSR i TsKP(b) o provedenii denezhnoi reformy i otmene kartochek na prodovol΄stvennye i promyshlennye tovary,” Pravda, December 15, 1946, 1

89 Ibid.

90 “Otmena kartochek na prodovol΄stvennye i promyshlennye tovary,” Pravda, December 15, 1947, 2.

91 Ibid.

92 See GARF, f. 5446, op. 49, d. 4606 (Local reports on kolkhoz market trade, December 16, 1947).

93 GARF, f. 5446, op. 49, d. 4607, l. 27 [Report on kolkhoz market trade in Kiev, December 16, 1947].

94 GARF, f. 5446, op. 49, d. 4609, l. 98 (TsSU reports on kolkhoz market trade, January 3, 1948).

95 GARF, f. 5446, op. 49, d. 4609, l. 79.

96 GARF, f. 5446, op. 49, d. 4608, l. 170, 225 (Daily reports on meat prices in the kolkhoz markets of major Soviet cities, December 1947–January 1948).

97 GARF, f. 5446, op. 49, d. 4608, l. 207, 225.

98 “O povyshenii pokupatel’noi sposobnosti rublia i real’noi zarabotnoi platy,” in L. N. Dobrokhotov, Denezhnaia reforma, 437.

99 Ibid., 438.

100 Ibid., 440.

101 See, for example, RGASPI, f. 17, op. 135, d. 10, l. 77–79.

102 GARF, f. 5446, op. 51, d. 2610, l. 77 (Coefficients of existing retail prices for the main food products in the city of Moscow versus prices in 1940, undated but circa January 1948).

103 GARF, f. 5446, op. 51, d. 2610, l. 75 (Coefficients of existing retail prices for the main manufactured consumer products versus prices in 1940, undated but circa January 1948).

104 “Telefonogramma I. B. Stalina L. P. Berii o proekte postanovleniia o zapreshchenii povysheniia zarplaty,” in Politbiuro TsK KPSS(b) i Sovet Ministrov SSSR 1945–1953 (Moscow, 2002), 210.

105 GARF, f. 5446, op. 50, d. 2435, l. 23.

106 GARF, f. 5446, op. 50, d. 2435, l. 32.

107 See, for example, GARF, f. 5446, op. 50, d. 2435, l. 15–16, 39–47 (Petitions from the alcohol and fish industries to reduce retail prices of overstocked goods, March-April 1948).

108 “Vtoroi etap snizheniia tsen,” Izvestiia, April 10, 1948, 1.

109 Their high price was not the only thing that made cars unobtainable. As Lewis Siegelbaum notes, these ‘deficit’ commodities belonged overwhelmingly to the state. See Lewis H. Siegelbaum, Cars for Comrades: The Life of the Soviet Automobile (Ithaca, 2008), 183.

110 Ibid.

111 GARF, f. 5446, op. 51, d. 2610, l. 34.

112 Ibid.

113 On the importance of the turnover tax in the Soviet state budget, see Franklyn D. Holzman, Soviet Taxation: The Fiscal and Monetary Problems of a Planned Economy (Cambridge, Mass., 1955).

114 Pravda, March 1, 1949, 1.

115 RGASPI, f. 17, op. 135, d. 22, l. 60.

116 RGASPI, f. 17, op. 135, d. 22, l. 61.

117 RGASPI, f. 17, op. 135, d. 22, l. 76.

118 RGASPI, f. 17, op. 135, d. 22, l. 77.

119 Ibid.

120 Shepilov D. T., The Kremlin’s Scholar: A Memoir of Soviet Politics under Stalin and Khrushchev, ed. Stephen V. Bittner, trans. Anthony Austin (New Haven, 2007), 245 .

121 Shepilov, 19. Shepilov, who was ousted as a member of the Anti-Party group that tried to remove Khrushchev in 1957, also claimed that the policy of abandoning routine price reductions during the “khrushchevshchina” was detrimental to the economic and political situation of the country and gave rise to covert and overt price increases then. See Shepilov, The Kremlin’s Scholar, 245.

122 Anastas Ivanovich Mikoian, Tak bylo: razmyshleniia o minuvshem (Moscow, 1999), 355 .

123 Ibid.

124 Mikoian, 518.

125 GARF, f. 5446, op. 120, l. 202.

126 “O novom snizhenii gosudarstvennykh tsen na prodovol΄stvennye i promyshlennye tovary,” Pravda, March 1, 1950, 1.

127 Ibid., 2.

128 “Na osnovne postoiannogo rosta narodnogo khoziaistva . . .” Pravda, March 1, 1950, 1.

129 Jukka Gronow, Caviar with Champagne: Common Luxury and the Ideals of the Good Life in Stalin’s Russia (Oxford, 2003), 42 .

130 See, for example, RGANI, f. 5, op. 30, d. 68, l. 49.

131 It was extremely common for the “departments for workers’ provisioning” (otdely rabochego snabzheniia, ORSes) to be closed for the entire first day aft er the price reductions while they repriced the goods, and for newly cheaper goods to be unavailable there. See the hundreds of reports regarding problems of implementing the price reductions in the ORSes contained in GARF, f. 5451, op. 30, d. 151; 152; 244; 353; 385 (trade union reports on trade at the new lower prices, 1949–54).

132 “Deviatnatsatyi s΄ezd KPSS, Moskva, 5–15 oktiabria 1952 g.,” Kommunisticheskaia Partiia Sovetskogo soiuza v rezoliutsiakh i resheniiakh, s΄ezdov, konferentsii i plenumov, t. 8 (Moscow, 1985), 280.

133 Stalin I. V., Ekonomicheskie problemy sotsializma v SSSR (Moscow, 1952), 69 . This statement was included in an addendum to Stalin’s main remarks on a draft version of the textbook. It was Stalin’s response to criticisms expressed by L. D. Iaroshenko, a minor Soviet economist, who argued that, under socialism, concern with the scientific organization and rationalization of productive forces should have replaced concern with money, commodities, credit, and other capitalist categories. Stalin disagreed, labeling Iaroshenko a “retrograde Marxist” spouting “unholy twaddle.” See Ethan Pollock, Stalin and the Soviet Science Wars (Princeton, 2006), 207–9.

134 As Yoram Gorlizki and Oleg Khlevniuk note, Stalin increasingly delegated authority in the postwar period but rejected out of hand any talk of “reforms.” In the meantime, his colleagues came to realize that certain policy areas were in crisis, such as agriculture, and began reforms soon aft er his death. See Yoram Gorlizki and Oleg Khlevniuk, Cold Peace: Stalin and the Soviet Ruling Circle, 1945–1953 (Oxford, 2004), 123–24.

135 “O novom snizhenii gosudarstvennykh tsen na prodovol΄stvennye i promyshlennye tovary,” Pravda, March 1, 1953, 1.

136 “Novoe snizhenie roznichnykh tsen,” Pravda, April 1, 1953, 1.

137 On Stalin’s approach to reforming the countryside aft er the war, see Gorlizki and Khlevniuk, 136.

138 “Zasedanie verkhovnogo soveta SSSR; rech΄ predsedatelia Soveta ministrov soiuza SSR tovarishcha G. M. Malenkova,” Pravda, August 9, 1953, 2.

139 “O merakh dal΄neishego razvitiia sel΄skogo khoziaistva SSSR,” 2.

140 GARF, f. 5446, op. 120, d. 1057, l. 65.

141 GARF, f. 5446, op. 120, d. 1057, l. 64.

142 RGANI, f. 5, op. 30, d. 68, l. 13–14 (Report from Mikoian to Malenkov and Khrushchev on the state of Soviet retail and kolkhoz market trade, April 20, 1954).

143 GARF, f. 5446, op. 120, d. 1057, l. 65 (Mikoian’s speech to the Council of Ministers regarding agricultural supplies ahead of the April 1 price decrease, March 31, 1953).

144 RGANI, f. 5, op. 30, d. 68, l. 13.

145 RGANI, f. 5, op. 30, d. 68, l. 14.

146 Ibid.

147 Julie Hessler, “Postwar Normalisation and its Limits in the USSR: The Case of Trade,” Europe-Asia Studies 53, no. 3 (2001): 446 .

148 On the “Big Deal,” see Vera Sandomirsky Dunham, In Stalin’s Time: Middleclass Values in Soviet Fiction (Cambridge, Eng., 1976), 3–23.

149 Chuev, 366–67.

150 Chuev, 442.

151 Elena Iur΄evna Zubkova, Poslevoennoe sovetskoe obshchestvo—politika i povsednevnost’ (Moscow, 2000), 8788 .

152 “Zapiska N. S. Khrushcheva v presidium TsK KPSS po voprosam uporiadocheniia zarabotnoi platy i pensionnogo dela,” in Tomilina N. G. et al., eds., Nikita Sergeevich Khrushchev: Dva tsveta vremeni, dokumenty iz lichnogo fonda N. S. Khrushcheva, v 2-kh tomakh (Moscow, 2009), 279 .

153 “Programma kommunisticheskoi partii Sovetskogo soiuza,” Pravda, July 30, 1961, 6.

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