economics

TRX
November 7, 2011
147:
> I wonder what a country dominated by
> the black/grey market would look like?

Possibly a lot like the Union of Soviet Socialist Republics.

The USSR was possibly unique in that it had two unofficial markets - the "on the left" barter system, that was used by the proletariat for everything from onions to road machinery, and the government's own black economy based on the gulags.

The figure I have for 1946 was that 30% of the Soviet economy was driven by prison labor, and that the percentage had been the same back in Tsarist times. I've found some later references, but they didn't name a definite percentage. Though Lenin had originally promised to shut down the gulags, apparently they were such a critical part of the economy the system was left in place.

The "barter" system was a little more extreme than in most places, as so much of production was kept off the books that even official government agencies were reduced to aquiring necessities via the black market.