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Research Article

The second economy in the Estonian SSR: small-scale speculation and black market profiteering

Pages 217-235 | Published online: 15 Feb 2023
 

ABSTRACT

The article provides insight into one of the most prevalent forms of the second economy in the Estonian SSR – small-scale speculation and black market profiteering – through the results of narrative research conducted among a small group of speculators who were involved in the smuggling of Western goods behind the Iron Curtain between the mid-1970s and late-1980s. The empirical material comprises five in-depth interviews that focus on various illegal and semi-illegal practices and strategies employed to establish and sustain the flow of contraband consumer items.

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1. In the context of Soviet Estonia, the period of late socialism was confined to the years between the mid 1960s and mid 1980s (Klumbytè and Sharafutdinova Citation2013, 7).

2. Verdery (Citation1996, 21) attributes the downfall of Soviet-style socialism to inadequate planning, flaws in the distribution system, and hoarding of materials.

3. While the article leaves aside other methods of obtaining consumer items, as briefly referenced in the interview excerpts, speculators also bought Western products and/or imported goods from Berezka stores (exclusive hard currency shops), conducted trade with sailors, and, in some cases, were able to travel abroad (to Soviet bloc countries) themselves due to connections and close relationships with people working for the government ministries of the Estonian SSR who were able to grant travel permits. People in Soviet society were influenced by the West or, perhaps, what they imagined the ‘West’ to be, which was different from the ‘real’ West. According to Yurchak (Citation2005, 219), this manifestation of Western lifestyle was ‘locally produced’ and ‘existed only at the time when the real West could not be encountered.’.

4. See more about the classification of the markets of the Soviet second economy in Kochanowski (Citation2017, 17–18).

5. While Pagel (Citation2019, 383) and Salmon (Citation2006, 187) identify female prostitutes as one group of black marketeers, there were non-sex worker women involved in speculation, albeit fewer than men (assumingly due to cultural values that viewed women responsible for carrying the burden of household chores in addition to having full-time employment outside of the home that was considered a time-consuming ‘double burden’) (Schwartz Citation1979, 67). There are, however, two reasons for gender disparity within the participants of this article, resulting from the snowball sampling, in which men recommended other men for interviewing. The argument is that male speculators had stronger relationships with each other and weaker ties to their female counterparts, as women were described as a separate, close-knit subgroup who were interested in procuring niche Western goods (for example, cosmetics, personal care products, and nylon stockings) solely for their own personal use or reselling to a very limited group of people (family, friends, and coworkers) instead of building an extensive interconnected system of suppliers, collaborators, and customers. The second reason is that women speculators were seen as accessories to male speculators’ schemes, as Participant 3 recalled: ‘My neighbor was a pleasant young lady. We didn’t date, but we’d occasionally go to Hotel Viru’s restaurant [on the 2nd floor], drink expensive liqueurs, and act like a couple. In truth, it was a cover because who would suspect or assume that a couple is there to buy something.’.

6. Carrying high-demand commodities, including Western goods, and trading in foreign currency, Berezka stores served foreigners and Soviet officials who worked abroad and/or received their salary in foreign currency (Ivanova Citation2013, 245).

7. Due to the fear of being monitored in public or during phone calls, speculators used coded language to refer to contraband items, for example, a jacket was referred to as ‘a box’ and pair of jeans was called ‘a pencil box.’.

8. On winners and losers during the post-Soviet transformation, see Keller and Vihalemm (Citation2003, 205).

Additional information

Notes on contributors

Merlin Tiit

Merlin Tiit is a sociology PhD student and a junior research fellow at the Institute of Social Sciences, Tallinn University, Estonia. She obtained a Master’s degree in Ethnology, Folkloristics, and Applied Anthropology from the University of Tartu, Estonia. Her research interests include everyday life during late Socialism, consumer culture, and social networks.

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