Soviet citizens bid farewell to prices stable for nearly 3 decades

April 02, 1991|By Scott Shane | Scott Shane,Moscow Bureau of the Sun

MOSCOW -- On the last day of socialist prices in the world's first socialist country, Tatyana Martirovskaya stood outside Children's World and wept.

Her district soviet had given her a rationing coupon for the capital's children's department store. The coupon gave Ms. Martirovskaya, a 28-year-old computer programmer, the right to buy 100 rubles' worth of hard-to-find clothing for her 16-month-old son, Misha.

Best of all was the date stamped on the coupon: April 1. It was the last day of the old, heavily subsidized prices, the last chance to buy before prices for most children's goods would rise three, four or five times. Between her maternity-leave payment of 70 rubles a month and her medical-student husband's stipend of 120 rubles a month, her family was just scraping by even with the old prices.

But when she arrived at the massive building next to KGB headquarters in central Moscow, she was greeted by a notice: "April 1, Detsky Mir will serve residents of Tagansky District only."

Crestfallen, she joined the crowd of shoppers trying to elbow into the single, narrow glass door, only to be rebuffed by four policemen when they saw the Sverdlovsky District residence stamp in her internal passport.

She waited and tried again, then again. She collared a passing police captain and fruitlessly tried to talk him into intervening. She caught a bus to the Sverdlovsky District Soviet and asked if anyone there could help.

At 2 p.m., more than four hours after she had arrived, she gave up.

"I guess it's an April Fool's joke on us," Ms. Martirovskaya said bitterly, waving the tissue-thin rationing coupon in the spring sunshine, tears welling in her eyes. "I don't know what we'll do. We can't afford the new prices. We'll have to borrow old clothes from friends."

The Soviet Union has spent much of the last five years parting with illusions. But today it says a final farewell to one of the fondest and most tenacious: that under Soviet socialism, the state keeps prices low for the benefit of the ordinary working man and woman.

Beef that cost 2 rubles a kilo yesterday will cost 7 rubles a kilo today. A typical loaf of bread will rise from 24 kopecks to 61 kopecks. A ride on Moscow's metro will increase from 5 to 15 kopecks.

Children's stockings that went for 1.6 rubles a pair will cost 4.50. A man's suit that brought 107 rubles will rise to 245 rubles, about one month's pay for the average worker. (Ruble to dollar comparisons have become almost meaningless, since a ruble is worth $1.80 at the official rate, 18 cents at the special "tourist" rate, and less than 4 cents on the thriving black market.)

Citizens already have begun to receive monthly "compensation" payments under a complicated formula that purportedly covers about 80 percent of the price increases. But few people have any faith that the payments will keep them abreast of inflation.

"They're giving me 65 rubles a month compensation, and everything's going to be three times higher," said Pyotr N. Obushek, 63, a retired electrician for the Moscow metro. "I'm not sure it'll be enough for food. For clothes and everything else, I can't imagine there will be anything left."

Mr. Obushek had just waited 20 minutes in line at the Smolensky Gastronom, one of the capital's biggest food stores, to buy sausage for 2.20 rubles a kilogram. The store sold out of sausage just before noon to customers trying to beat today's sausage prices of 6 to 8 rubles a kilo. It was already out of milk, meat and nearly everything that still sells for state prices except bread.

The official state prices of many goods, including basic foods, have been frozen for nearly three decades. This pricing policy offered considerable political dividends for the Communist leadership, who during periods of inflation in the West could boast convincingly of the advantages of socialism.

But the economic consequences of frozen prices have grown steadily more devastating. The state's subsidies for food and consumer goods have soared from 7 billion rubles in 1965 to a budget-busting 250 billion rubles last year. Many peasants feed cheap bread rather than grain to their private livestock.

Goods are diverted from state stores to the high-priced black market, contributing to the empty shelves and long lines in the state sector. State enterprises, responding to the false signals of the artificial prices, fail to produce what people need or want.

Long after most economists, East and West, had fingered non-market prices as the main culprit in Soviet economic woes, President Mikhail S. Gorbachev kept clinging to the old prices.

The reason was obvious: fear. In 1962, under Nikita S. Khrushchev, the last major food-price increase had touched off a violent clash between angry workers and troops in the Russian city of Novocherkassk, ending with dozens of strikers killed.

That time, meat prices rose 30 percent. This time, they are increasing 200 percent. Yet the mood in many places seems more prone to resignation than riot.

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