2024/11/19 by Kristy Ironside · 1 voice · 1 citation
Social Sciences · #Post-Communist Economic and Political Transition
paper · doi:10.1093/oxfordhb/9780197621509.013.4
openalex publication_date 2024/11/19 · openalex created_date 2025/10/10 · openalex updated_date 2026/05/21
Abstract This chapter surveys the Soviet government’s attempts to use consumer price policy to balance the population’s income and expenses, and thus raise living standards, after the Second World War. Consumer prices were already highly politicized under Stalin before the war, but this became especially true after 1949, when his government launched a policy of annual consecutive price cuts. Though these cuts were portrayed as the main driver of real wages, in fact, they were based not on increased supply but on heavy subsidies, and therefore only exacerbated shortages. Even after the policy was abandoned, and as discussions emerged among both leaders and economists about how to rationalize price policy and put an end to subsidies, prices remained highly politicized up until the Soviet collapse, limiting their use as a tool to balance income and expenses. In the meantime, artificially low prices contributed to a growing glut of unspendable cash in the economy, much of which ended up in savings accounts. The Soviet government, in sum, never managed to effectively use consumer prices to balance the population’s income and expenses, imposing a long-term constraint on living standards in the postwar period.