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Soviet Union [USSR] Retail and Wholesale Distribution System
In the mid-1980s, about 8 percent of the labor force worked in
the distribution system. For the most part, internal trade took
place in state retail outlets in urban areas and in cooperatives in
rural areas. Prices in state and cooperative outlets were set by
the State Committee on Prices and were determined by many
considerations other than supply and demand. Both rural and urban
inhabitants could also use "collective farm markets," where
peasants, acting both individually and in groups representing
collective farms, sold their produce directly to consumers. Here
prices fluctuated according to supply and demand. Similar
arrangements existed for nonedible products, although in a less
developed form, as could be seen in a variety of secondhand stores
and flea markets. Although such enterprises specialized in used
items, they also sold new products, again on a supply-and-demand
basis.
With regard to many types of consumer goods, the country's
economy was "taut," that is, enterprises carried low inventories
and reserves. Demand for good-quality items frequently exceeded
supply. In effect, some goods and services, such as housing, were
rationed as a result of their scarcity. In addition, a system of
special stores existed for use by privileged individuals and
foreigners. These stores could be found in major population centers
but were not highly publicized. They contained good-quality items,
both food and nonedible goods, in scarce supply. Moreover, a second
economy had long flourished to supply consumer goods and services,
such as repair work and health care, for which the official retail
distribution system could not meet consumer demand. Observers
expected that as a result of the reforms of the 1980s, a growing
variety of goods and services would be distributed through the
expanding private sector of the economy
(see Soviet Union USSR - The Twelfth Five-Year Plan, 1986-90
, this ch.).
Distribution on the wholesale level took place largely through
state-directed allocation, in conjunction with the planning
process. Heavy industry, particularly producer goods, and the
defense industry received highest priority. Reforms of the mid1980s promised to decentralize this system somewhat, with users of
materials free in many cases to make purchasing contracts with the
suppliers of their choice. Western observers were uncertain as to
the impact such an alteration would have on the supply system as a
whole.
In 1984 per capita consumption was about one-third that of the
United States. It was about half that of France and the Federal
Republic of Germany (West Germany) and roughly two-thirds that of
Japan. Soviet levels of consumption were below those of some of the
country's allies in Eastern Europe as well.
Data as of May 1989
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