menu_open Columnists
We use cookies to provide some features and experiences in QOSHE

More information  .  Close

A Planned Economy in Modern Russia? It Didn't Work Last Time and Won't Work Today.

11 0
previous day

The Kremlin seems to be preparing to introduce state-mandated prices for food. Or at least some foodstuffs. Of course, for the benefit of the population. The effects of the government's own policies came to a boil when the price of potatoes in stores reached 120-130 rubles ($1.46-$1.58) per kilogram. 

Thirteen leading industry associations representing food retailers, producers, processors and consumer advocates wrote to Prime Minister Mikhail Mishustin, requesting that the state not regulate food prices. The fact of this letter’s existence shows that the government is close to making a decision. If Moscow ignores these businesses and experts, propaganda channels across the country will say that the government is taking care of the Russian people, stopping the price bacchanalia unleashed by greedy merchants. 

It is not difficult to predict what will follow. We Russians have been in this position before. It was not even 40 years ago that we endured endless queues, coupons and “sausage trains” to buy goods in Moscow. Now, of course, we have a market economy. That does not preclude shop counters being divided between goods with state and private prices. If that happens, dishonest brokers will almost certainly cheat their customers by selling regulated produce at market prices.

Market prices will soar, just like how meat from a Soviet store was at first four times cheaper than meat from the open market, then ten times. The state audit office will be so busy catching price gougers that a separate state Planning Committee — like Gosplan — will have to be resurrected because there is simply not enough food to supply at state prices. The Kremlin will say there is no other way to deal with producers that cannot cope with demand, but insist on charging the public ever higher prices. Wherever this committee........

© The Moscow Times