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.mbox-text{border:none;padding:0.25em 0.5em;width:100%}.mw-parser-output .ambox .mbox-image{border:none;padding:2px 0 2px 0.5em;text-align:center}.mw-parser-output .ambox .mbox-imageright{border:none;padding:2px 0.5em 2px 0;text-align:center}.mw-parser-output .ambox .mbox-empty-cell{border:none;padding:0;width:1px}.mw-parser-output .ambox .mbox-image-div{width:52px}@media(min-width:720px){.mw-parser-output .ambox{margin:0 10%}}@media print{body.ns-0 .mw-parser-output .ambox{display:none!important}}</style><table class="box-Cleanup_rewrite plainlinks metadata ambox ambox-content" role="presentation"><tbody><tr><td class="mbox-image"><div class="mbox-image-div"><span typeof="mw:File"><a href="/wiki/File:Crystal_Clear_app_kedit.svg" class="mw-file-description"><img src="//upload.wikimedia.org/wikipedia/commons/thumb/e/e8/Crystal_Clear_app_kedit.svg/40px-Crystal_Clear_app_kedit.svg.png" decoding="async" width="40" height="40" class="mw-file-element" srcset="//upload.wikimedia.org/wikipedia/commons/thumb/e/e8/Crystal_Clear_app_kedit.svg/60px-Crystal_Clear_app_kedit.svg.png 1.5x, //upload.wikimedia.org/wikipedia/commons/thumb/e/e8/Crystal_Clear_app_kedit.svg/80px-Crystal_Clear_app_kedit.svg.png 2x" data-file-width="128" data-file-height="128" /></a></span></div></td><td class="mbox-text"><div class="mbox-text-span">This article <b>may need to be rewritten</b> to comply with Wikipedia's <a href="/wiki/Wikipedia:Manual_of_Style" title="Wikipedia:Manual of Style">quality standards</a>.<span class="hide-when-compact"> <a class="external text" href="https://en.wikipedia.org/w/index.php?title=Second_economy_of_the_Soviet_Union&action=edit">You can help</a>. The <a href="/wiki/Talk:Second_economy_of_the_Soviet_Union" title="Talk:Second economy of the Soviet Union">talk page</a> may contain suggestions.</span> <span class="date-container"><i>(<span class="date">April 2022</span>)</i></span></div></td></tr></tbody></table> <p>The <b>second economy of the Soviet Union</b> was the <a href="/wiki/Black_market" title="Black market">black market</a> or the <a href="/wiki/Informal_sector" class="mw-redirect" title="Informal sector">informal sector</a> of the <a href="/wiki/Economy_of_the_Soviet_Union" title="Economy of the Soviet Union">economy of the Soviet Union</a>. The term was suggested by <a href="/wiki/Gregory_Grossman" title="Gregory Grossman">Gregory Grossman</a> in his seminal article, "The Second Economy of the USSR" (1977).<sup id="cite_ref-bene_1-0" class="reference"><a href="#cite_note-bene-1"><span class="cite-bracket">[</span>1<span class="cite-bracket">]</span></a></sup> Economist <a href="/wiki/Gerard_Roland_(economist)" class="mw-redirect" title="Gerard Roland (economist)">Gerard Roland</a> noted that as Grossman anticipated, "the logic of the <a href="/wiki/Second_economy" class="mw-redirect" title="Second economy">second economy</a> tended over time to undermine the logic of the <a href="/wiki/Command_economy" class="mw-redirect" title="Command economy">command system</a> and to lead to expanding <a href="/wiki/Black_market" title="Black market">black markets</a>".<sup id="cite_ref-bene_1-1" class="reference"><a href="#cite_note-bene-1"><span class="cite-bracket">[</span>1<span class="cite-bracket">]</span></a></sup> This prediction was corroborated by the long-term analysis of the economies of Russia and Ukraine (1965–1989) by Treml and Alexeev.<sup id="cite_ref-treale_2-0" class="reference"><a href="#cite_note-treale-2"><span class="cite-bracket">[</span>2<span class="cite-bracket">]</span></a></sup> To a varying degree, the second economy influenced all <a href="/wiki/Eastern_Bloc_economies" class="mw-redirect" title="Eastern Bloc economies">Eastern Bloc economies</a>. </p><p>Grossman defines the concept of second economy with a two-prong test, which is the set of economic activities which satisfy at least one of the two conditions: "(a) being directly for private gain (b) being in some significant respect in knowing contravention of existing law."<sup id="cite_ref-gro77_3-0" class="reference"><a href="#cite_note-gro77-3"><span class="cite-bracket">[</span>3<span class="cite-bracket">]</span></a></sup> Studies of second, shadow, gray and so on economies are difficult because unlike official economies there are no direct statistics, therefore indirect methods are required.<sup id="cite_ref-treale_2-1" class="reference"><a href="#cite_note-treale-2"><span class="cite-bracket">[</span>2<span class="cite-bracket">]</span></a></sup> Treml and Alexeev studied the relationships between per capita legal money income and such income-dependent variables as per capita savings and purchases of various goods and services. The study indicated that the disparity between legal income and legal spending gradually grew during 1965–1989 and by the end of the period the correlation between the two almost disappeared, indicating the rapid growth of the second economy.<sup id="cite_ref-treale_2-2" class="reference"><a href="#cite_note-treale-2"><span class="cite-bracket">[</span>2<span class="cite-bracket">]</span></a></sup> The proliferation of the second economy was impossible without widespread corruption.<sup id="cite_ref-ale_4-0" class="reference"><a href="#cite_note-ale-4"><span class="cite-bracket">[</span>4<span class="cite-bracket">]</span></a></sup> </p><p>A significant impact on the economy of the Soviet Union was the system of <i><a href="/wiki/Blat_(favors)" title="Blat (favors)">blat</a></i>, a network of favors, which allowed people to procure all kinds of goods and services, operating within both official and second Soviet economies and continued to operate in post-Soviet Russia.<sup id="cite_ref-5" class="reference"><a href="#cite_note-5"><span class="cite-bracket">[</span>5<span class="cite-bracket">]</span></a></sup> Since the early days of the Soviet Union, some authors claim that there has been a tradition to exaggerate the blame of the "black market" for <a href="/wiki/Consumer_goods" class="mw-redirect" title="Consumer goods">consumer goods</a> <a href="/wiki/Shortage" title="Shortage">shortages</a>, thus effectively shifting the blame off state bureaucrats with their inadequate planning.<sup id="cite_ref-treale_2-3" class="reference"><a href="#cite_note-treale-2"><span class="cite-bracket">[</span>2<span class="cite-bracket">]</span></a></sup> </p><p>During the era of <i><a href="/wiki/Perestroika" title="Perestroika">perestroika</a></i>, the <a href="/wiki/500_Days" class="mw-redirect" title="500 Days">500 Days</a> program of economic transition mentioned the <a href="/wiki/Shadow_economy_of_Russia" title="Shadow economy of Russia">shadow economy</a> would be an important factor in reforms and predicted that at least 90% of it was to be absorbed by the opening <a href="/wiki/Free_market" title="Free market">free market</a>.<sup id="cite_ref-treale_2-4" class="reference"><a href="#cite_note-treale-2"><span class="cite-bracket">[</span>2<span class="cite-bracket">]</span></a></sup> </p> <div class="mw-heading mw-heading2"><h2 id="See_also">See also</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Second_economy_of_the_Soviet_Union&action=edit&section=1" title="Edit section: See also"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <ul><li><a href="/wiki/Corruption_in_the_Soviet_Union" title="Corruption in the Soviet Union">Corruption in the Soviet Union</a></li> <li><a href="/wiki/Shortage_economy" title="Shortage economy">Shortage economy</a></li></ul> <div class="mw-heading mw-heading2"><h2 id="References">References</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Second_economy_of_the_Soviet_Union&action=edit&section=2" title="Edit section: References"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <style data-mw-deduplicate="TemplateStyles:r1239543626">.mw-parser-output .reflist{margin-bottom:0.5em;list-style-type:decimal}@media screen{.mw-parser-output .reflist{font-size:90%}}.mw-parser-output .reflist .references{font-size:100%;margin-bottom:0;list-style-type:inherit}.mw-parser-output .reflist-columns-2{column-width:30em}.mw-parser-output .reflist-columns-3{column-width:25em}.mw-parser-output .reflist-columns{margin-top:0.3em}.mw-parser-output .reflist-columns ol{margin-top:0}.mw-parser-output .reflist-columns li{page-break-inside:avoid;break-inside:avoid-column}.mw-parser-output .reflist-upper-alpha{list-style-type:upper-alpha}.mw-parser-output .reflist-upper-roman{list-style-type:upper-roman}.mw-parser-output .reflist-lower-alpha{list-style-type:lower-alpha}.mw-parser-output .reflist-lower-greek{list-style-type:lower-greek}.mw-parser-output .reflist-lower-roman{list-style-type:lower-roman}</style><div class="reflist"> <div class="mw-references-wrap"><ol class="references"> <li id="cite_note-bene-1"><span class="mw-cite-backlink">^ <a href="#cite_ref-bene_1-0"><sup><i><b>a</b></i></sup></a> <a href="#cite_ref-bene_1-1"><sup><i><b>b</b></i></sup></a></span> <span class="reference-text">"<a rel="nofollow" class="external text" href="http://news.berkeley.edu/2014/08/25/authority-on-soviet-economy-gregory-grossman-passes-away/">Authority on Soviet economy, Gregory Grossman, passes away</a>". <i>Berkeley News</i>. August 25, 2014.</span> </li> <li id="cite_note-treale-2"><span class="mw-cite-backlink">^ <a href="#cite_ref-treale_2-0"><sup><i><b>a</b></i></sup></a> <a href="#cite_ref-treale_2-1"><sup><i><b>b</b></i></sup></a> <a href="#cite_ref-treale_2-2"><sup><i><b>c</b></i></sup></a> <a href="#cite_ref-treale_2-3"><sup><i><b>d</b></i></sup></a> <a href="#cite_ref-treale_2-4"><sup><i><b>e</b></i></sup></a></span> <span class="reference-text">Vladimir G. Treml and Michael V. Alexeev,<a rel="nofollow" class="external text" href="https://www.ucis.pitt.edu/nceeer/1993-900-03-Treml.pdf">"The Second Economy and the Destabilization Effect of Its Growth on the State Economy in the Soviet Union: 1965-1989"</a> (PDF), BERKELEY-DUKE OCCASIONAL PAPERS ON THE SECOND ECONOMY IN THE USSR, Paper No. 36, December 1993.</span> </li> <li id="cite_note-gro77-3"><span class="mw-cite-backlink"><b><a href="#cite_ref-gro77_3-0">^</a></b></span> <span class="reference-text">Gregory Grossman, "The Second Economy in the USSR", <i>Problems of Communism</i>, 26, 5, September/October 1977, pp . 25–40.</span> </li> <li id="cite_note-ale-4"><span class="mw-cite-backlink"><b><a href="#cite_ref-ale_4-0">^</a></b></span> <span class="reference-text">M. Alexeev, <a rel="nofollow" class="external text" href="https://www.ucis.pitt.edu/nceeer/1995-809-04-Alexeev.pdf">"The Russian Underground Economy in Transition"</a> (PDF), The National Council for Soviet and East European Research, Title VIII Program, November 20, 1995.</span> </li> <li id="cite_note-5"><span class="mw-cite-backlink"><b><a href="#cite_ref-5">^</a></b></span> <span class="reference-text"><a href="/wiki/Alena_V._Ledeneva" title="Alena V. Ledeneva">Alena V. Ledeneva</a>, <i>Russia's Economy of Favours: Blat, Networking and Informal Exchange</i>, 1998, <style data-mw-deduplicate="TemplateStyles:r1238218222">.mw-parser-output cite.citation{font-style:inherit;word-wrap:break-word}.mw-parser-output .citation q{quotes:"\"""\"""'""'"}.mw-parser-output .citation:target{background-color:rgba(0,127,255,0.133)}.mw-parser-output .id-lock-free.id-lock-free a{background:url("//upload.wikimedia.org/wikipedia/commons/6/65/Lock-green.svg")right 0.1em center/9px no-repeat}.mw-parser-output .id-lock-limited.id-lock-limited a,.mw-parser-output .id-lock-registration.id-lock-registration a{background:url("//upload.wikimedia.org/wikipedia/commons/d/d6/Lock-gray-alt-2.svg")right 0.1em center/9px no-repeat}.mw-parser-output .id-lock-subscription.id-lock-subscription a{background:url("//upload.wikimedia.org/wikipedia/commons/a/aa/Lock-red-alt-2.svg")right 0.1em center/9px no-repeat}.mw-parser-output .cs1-ws-icon a{background:url("//upload.wikimedia.org/wikipedia/commons/4/4c/Wikisource-logo.svg")right 0.1em center/12px no-repeat}body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .id-lock-free a,body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .id-lock-limited a,body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .id-lock-registration a,body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .id-lock-subscription a,body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .cs1-ws-icon a{background-size:contain;padding:0 1em 0 0}.mw-parser-output .cs1-code{color:inherit;background:inherit;border:none;padding:inherit}.mw-parser-output .cs1-hidden-error{display:none;color:var(--color-error,#d33)}.mw-parser-output .cs1-visible-error{color:var(--color-error,#d33)}.mw-parser-output .cs1-maint{display:none;color:#085;margin-left:0.3em}.mw-parser-output .cs1-kern-left{padding-left:0.2em}.mw-parser-output .cs1-kern-right{padding-right:0.2em}.mw-parser-output .citation .mw-selflink{font-weight:inherit}@media screen{.mw-parser-output .cs1-format{font-size:95%}html.skin-theme-clientpref-night .mw-parser-output .cs1-maint{color:#18911f}}@media screen and (prefers-color-scheme:dark){html.skin-theme-clientpref-os .mw-parser-output .cs1-maint{color:#18911f}}</style><a href="/wiki/ISBN_(identifier)" class="mw-redirect" title="ISBN (identifier)">ISBN</a> <a href="/wiki/Special:BookSources/0521627435" title="Special:BookSources/0521627435">0521627435</a>.</span> </li> </ol></div></div> <div class="mw-heading mw-heading2"><h2 id="Further_reading">Further reading</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Second_economy_of_the_Soviet_Union&action=edit&section=3" title="Edit section: Further reading"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <ul><li>Gregory Grossman, "Roots of Gorbachev's Problems : Private Income and Outlay in the Late 1970s," Joint Economic Committee, US Congress, GORBACHEV'S ECONOMIC PLANS, Volume 1, Washington, DC, 1987, pp. 213–229.</li> <li>Gregory Grossman, "The Second Economy in the USSR and Eastern Europe: A Bibliography " BERKELEY-DUKE OCCASIONAL PAPERS ON THE SECOND ECONOMY IN THE USSR, # 21, July 1990.</li> <li>Gregory Grossman, "Notes on the Illegal Private Economy and Corruption," in SOVIET ECONOMY IN A TIME OF CHANGE, U .S., Joint Economic Committee, U S Congress, Government Printing Office, Washington, 1979, pp. 834–855.</li> <li>Gregory Grossman, "The 'Shadow Economy' in the Socialist Sector of the USSR," in THE CMEA FIVE-YEAR PLANS (1981-1985) IN NEW PERSPECTIVE, NATO Colloquium, Brussels, 1982, pp. 99–115.</li></ul>    </div><noscript><img src="https://login.wikimedia.org/wiki/Special:CentralAutoLogin/start?type=1x1" alt="" width="1" height="1" style="border: none; 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