92 SOCIAL SCIENTIST
banked savings totalled some ^40,000 million—a purchasing power equivalent to over a third of the retail turnover in 1973. The authorities are now trying to channel this extra purchasing power into expensive luxuries such as jewellery and imported consumer goods, having failed to rid themselves of accumulated stocks of local products which consumers rejected because of their poor quality. When goods that Russian buyers really want appear on the market they are sold out within hours. So a feature of this Soviet-style inflation is an unevenly supplied market with many bottlenecks and frequent shortages, (.Emphasis added).
This lengthy quotation makes two points clear: that the 'repressed inflation5 is in relation to such luxuries as jewellery and imported consumer goods, not articles of basic consumption; and secondly^ there is an ever-growing volume of purchasing power among the people which is sought to be channelled in outlays on luxury articles.
Prices and Jobs
This sort of inflation is the very opposite of what is happening in the capitalist world where it is in relation to mass consumption goods such as foodgrams, and cheaper varieties of cloth. What is the behaviour of prices of essential articles in the USSR? The Economist report continues:
Steady prices in communist shops, it (Moscow Radio) says, are a clear vindication of Karl Marx. Marx aside, the claim is fair enough ... The Soviet retail price index has remained unchanged for seven years (fares on the Moscow underground are still the same as they were in 1965 when it was built) and in China officially recorded local prices have risen hardly at all over two decades, (Emphasis added).
An equally important admission relates to the employment situation. <('With labour in increasingly short supply^ there is a good deal of competition among managers to twist the rules in order to attract the labour they need. These workers are often given unofficial rises in salary, as well as fringe benefits which do not come into any official statistics". (Emphasis added).
This again is in marked contrast with the capitalist world where the problem is not one of "labour in increasingly short supply" but of redundancy and wage-cuts on a massive scale.
Also instructive is The Economist^ assessment of the future. For, it says:
What will probably determine the future rate of inflation in communist countries more than anything else is the degree of their involvement in trade with the west. . . Soaring prices on world markets have already had a destabilizing effect on some of the smaller east European countries.. . One result of rapidly changing world prices is that it has become harder and harder for Comecon to trade on the old basis of five-year agreements. It may well decide to review those agreements at shorter intervals which in turn should have an unsettling effect on long-term planning in individual Comecon countries.