Living Conveniently on the Left

A thriving network of hidden entrepreneurs

Yelizaveta Tyntareva, a lawyer living in Vilnius, Lithuania, a few years ago sold her Zhiguli car for 2,000 rubles (about $3,000). She then used that small amount of venture capital to buy so-called deficit goods, consumer articles like sunglasses and wigs that are almost always in short supply and high demand in Soviet shops. As she bought, Tyntareva also sold. Gradually she built up a stock of everything from gold rings, watches, wigs and jeans to velvet suits, umbrellas and cameras. The business prospered; she acquired a regular clientele among Baltic Sea vacationers, hired four assistants, and even set up a mail-order service. Unfortunately, though, Tyntareva was an economic criminal under tough Soviet "speculation" laws. Early this year she was arrested and sentenced to twelve years in prison. The penalty could have been death.

Tyntareva and her customers were part of the Soviet Union's thriving underground economy. This involves more than just the familiar black marketeers, dealing in Levi's and ballpoint pens, icons and caviar, who greet Western visitors around the main tourist hotels. It is, in fact, a second economy, parallel to the official state-controlled one. In a thriving permanent network, illegal and quasi-legal entrepreneurs, speculators and thieves sell hard-to-get goods and services to workers, peasants and even state officials.

The Soviets call it living na levo--"on the left." At its simplest, it is nothing more than passing on to the local butcher tickets for a popular soccer game or concert in return for a good cut of meat; tipping off the plumber about a shipment of shoes that is due to arrive in a shop as payment for fixing a leaking pipe; or holding down a second job as a furniture mover or apartment painter. Na levo can and does, however, also extend to smuggling consumer goods in from the West, running a hidden factory, stealing state-owned materials and skipping out from work on a state job to moonlight privately.

The economy on the left exists at every level of Soviet society. For city dwellers the private economy provides plumbers, clothes and even legal services through the homemade advertisements that cover billboards. Farmers go underground to get tools or fertilizers that are unavailable in the regular economy. Economist Gur Ofer, an associate professor at the Hebrew University of Jerusalem, calculates that up to 12% of the average citizen's income derives from the private economy and that 18% of all consumer expenditures are made there.

Despite their illegality, private markets are readily visible in Moscow and other Soviet cities. The gathering place for Moscow apartment hunters is the subway stop on Leningradsky Prospekt. The place to buy women's goods, such as lipstick, lingerie and dresses, is inside the public toilet two blocks from the Bolshoi Theater. On a side street near the Moscow Planetarium, fartsovshchiki (black marketeers) have set up an underground supermarket, dealing in everything from gin to chewing gum, jeans and Western pop records. One of the hottest selling items in any market is information. Some hustlers charge one or two rubles for "a sentence." The mysterious sentence: a valuable tip-off that an item in short supply will be delivered to a certain shop the following day.

Whole industries have sprung up to service the markets on the left. Printers illicitly run off copies of scarce books, while entire hidden factories make jeans and cosmetics. Truck Drivers Nikolai Butko and Alexander Konovalov developed a very elaborate triangular trade from the Caucasus Mountain city of Krasnodar near the Black Sea. They picked up purloined steel from a state factory, delivered it to government farms in exchange for off-market tomatoes, grapes and peas, and then sold the produce in Siberia, where fresh vegetables were in short supply.

"The amount of bribery of public officials is enormous," notes Berkeley Economist Gregory Grossman, an expert on the illegal Soviet economy. "It is an extremely corrupt society where graft and bribery of officials is enormously widespread and where stealing on the job is commonplace and far more sophisticated than crude break-ins or thefts at state warehouses." One of the biggest frauds of the 1970s was the caviar caper, in which officials of the Soviet Ministry of Fisheries shipped expensive black caviar abroad in large cans marked "smoked herring." Western firms cooperating in the fraud repacked and resold the caviar. They put the Soviet conspirators' share of the profits into Swiss bank accounts. The swindle is still officially denied by the Kremlin, but the Fishing Minister abruptly resigned after some of the "herring" was mistakenly sent to domestic shops.

Though Soviet officials are aware of the booming second economy, they generally ignore the dealings of Ivan the Terrible Capitalist. Major violators are sometimes arrested, and officers of the MVD'S Administration for Combatting the Embezzlement of Socialist Property and Speculation have infiltrated the black markets. But the Kremlin grudgingly accepts the underground economy because it fills the gaps left in the inefficient Soviet system, eases shortages and makes consumers' lives bearable. Collective-farm managers admit that often the only way to meet their production targets is to buy supplies on the black market. "If they tried to shut down every illegal activity," says one Western diplomat in Moscow, "the economy would come close to collapsing and the party would face serious problems of public disorder." The underground economy is nowhere to be found in the theories of Marx or Lenin, but it has become an integral part of Soviet society today.

This file is automatically generated by a robot program, so viewer discretion is required.