Pervasiveness of informal practices in the Soviet economy and society was notorious. It is welldocumented in the studies of second economy and the first hand data.
In the massive literatureon the 'second economy', many informal practices pervading the Soviet command system wereidentified and thoroughly examined.
In the economic analysis of the Soviet system Grossmanand others conclude that shortage accounts for a large part of informal activities in Sovieteconomic system whereas Shleifer and Vishny’s conclude that shortage was reproduced as a wayfor the party and government officials to extract monopoly rents.
It should be noted, however,that the characterisation of these practices as 'informal' testified to the Soviet regime's ability toensure that they mostly contributed to rather than subverted the formal targets and activities of society. The informal economy took care of many needs that were not met by the commandeconomy, and thus contributed to the functioning of the Soviet system. Informal practices werealso seen as balancing off an extremely centralised and monopolistic power. According to KenJowitt, however, at some stage informal practices subverted more than contributed to the party'sformal goals and general interests.
The predominant role of the informal practices in subvertingthe Soviet system has been reflected in a well-known anecdote of the Soviet period formulatingthe six paradoxes of socialism (in fact, a folk definition of socialism): No unemployment but nobody works. [Absenteeism] Nobody works but productivity increases. [False reporting]Productivity increases but the shops are empty. [Shortages]The shops are empty but fridges are full. [
]Fridges are full but nobody is satisfied. [Privileges of others] Nobody is satisfied but all vote unanimously. [Cynicism]The informal practices hidden in these paradoxes - I named them in square brackets – are the best indicator of the self-contradictory and self-subversive nature of the Soviet ‘socialist’ system.First, the so-called ‘socialist’ economy could not have worked according to its acclaimed principles. The planned economy would not have worked if it was not for
– to push, to jostle), who ‘pushed’ for the interests of their enterprise in such matters as the procurement of supplies or the reduction of plan tasks. Their 'professional' role was to support theSoviet 'command' economy and to enable it to work, which paradoxically could only be done byviolation of its declared principles of allocation.Parallel to the state enterprises, individual households had to be involved in practiceslubricating the rigid constraints of a state centralised economy. For example,
practicescushioned the discrepancies between the institutional and the personal in the authoritarian state:
1 Harvard Interview Project2 Grossman, G. (1977) 'The Second Economy of the USSR', The Problems of Communism, Vol. 26, No. 5, pp. 25-40; Grossman, G.(1992) 'The Second Economy in the USSR and Eastern Europe: A Bibliography'. Berkeley-Duke Occasional Papers on the Second Economy inthe USSR. Paper No. 21, July 1990.
Shleifer, A. and Vishny, R. (1993), "The Politics of Market Socialism," Working Paper, Department of Economics, HarvardUniversity.
4 Jowitt, K. 'Soviet Neotraditionalism: The Political Corruption of a Leninist Regime'. Soviet Studies, Vol. XXXV, no. 3, July 1983, pp.275-297, p.275.