There was a direct correlation between the allocation of material goods and power or position in the socio-political hierarchy. Below the Soviet elite nobody had many possessions – most people lived in a single pair of clothes – and there was barely enough food for everyone. But in the distribution of even these few goods there was a strict ranking system with infinite gradations between the various categories of employee based on status in the workplace, skill level and experience, and to some extent on geographical location, for rates of pay were better in Moscow and other major cities than they were in the provincial towns and rural areas. Despite its egalitarian image and ideals, this was in fact a highly stratified society. There was a rigid hierarchy of poverty.
Private trade partly compensated for the frequent shortages of the planned economy. People sold and exchanged their household goods at flea markets. If they could afford it, they could buy the produce grown by kolkhoz peasants on their garden allotments and sold at the few remaining urban markets tolerated by the government. People were allowed to sell their furniture and other precious items at the state commission stores, or exchange their jewellery and foreign currency for luxury foodstuffs and consumer goods at the Torgsin shops developed by the regime in the early 1930s to draw out the savings of the population and raise capital for the Five Year Plan. The black market flourished on the margins of the planned economy. Goods unavailable in the state stores were sold at higher prices under the counter, or siphoned off to private traders (bribe-paying friends of the manager) for resale on the black market. To cope with the problems of supply an ‘economy of favours’ came into operation through small informal networks of patrons and clients (a system known as ‘blat’). In many ways the Soviet economy could not have functioned without these private connections. To get anything (a rented room, household goods, a railway ticket, a passport or official papers) required personal contacts – family and kin, colleagues, friends, or friends of friends. The same blackmarket principles were known to operate in Soviet factories and institutions, where many goods and services were supplied and exchanged on the basis of personal contacts and favours. Soviet propaganda portrayed blat as a form of corruption (the aim of rooting out these private networks of patron-client relations assumed an important role in the purges), and this view was shared by many workers, in particular. But most people were ambivalent in their attitude to blat: they recognized that it was not right morally, and certainly not legal, but relied on it, as everybody did, to fulfill their needs and get around a system they knew to be unfair. Without blat it was impossible to live with any comfort in the Soviet Union. As the proverb said: ‘One must have, not a hundred roubles, but a hundred friends.’