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R 071905Z JAN 88
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R 071632Z JAN 88
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SUBJ BASIC 304
REF PM071630 MOSCOW OGONEK RUSSIAN
15 DEC///AMENDMENTS AND
IMPROVEMENTS.
TAKE
2 OF 9—OGONEK VIEWS CAUSES,
EFFECTS OF
'SHADOW'
ECONOMY
PM071632
((TEXT))
NOW THAT THE HEALTH OF THE PREREFORM ECONOMY
IS
DISCUSSED ALOUD AND UNHYPOCRITICALLY, WE BELIEVE THE TIME HAS COME
TO SPEAK EQUALLY FRANKLY ABOUT ITS SHADOWY SIDE,
AS
A SHORTCOMING
WHICH IS A DIRECT CONTINUATION OF THE ''MERITS” OF THE
ADMINISTRATIVE DECREE STYLE OF ECONOMY:
STRICT CENTRALIZATION OF
PLANNING AND RATIONED DISTRIBUTION OF RESOURCES,
PREVALENCE OF
COERCIVE MOTIVATIONS IN THE MANAGEMENT SYSTEM,
ADMINISTRATIVE
DECISIONMAKING METHODS ORIENTED TOWARD QUANTITATIVE PARAMETERS,
HIERARCHICAL CRITERIA FOR ASSESSING LEADERSHIP CADRES,
CONSTANT
REPRODUCTION OF LEVELING TRENDS,
AND SO FORTH,
THAT
IS,
A
PHENOMENON GENERATED BY THE MAIN FEATURES OF THE ECONOMIC
MANAGEMENT SYSTEM THEN IN OPERATION.
THIS APPROACH MEANS BROADENING THE FRAMEWORK AND REGARDING AS
THE SHADOW ECONOMY NOT ONLY OUTRIGHT ECONOMIC CRIME
(THAT IS,
THE
"BLACK" ECONOMY),
BUT ALL UNRECORDED, UNREGULATED METHODS OF
ECONOMIC ACTIVITY,
AS DISTINCT FROM THOSE SET FORTH IN NORMATIVE
DOCUMENTS AND RULES.
THE SHADOW ECONOMY EXISTS BOTH OUTSIDE THE
SOCIALLY ORGANIZED SECTOR (IN THE SO-CALLED "SECOND" ECONOMY),
AND
UNCLASSIFIED
Approved For Release 2002/05/17
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PAGE: 0007
WITHIN
IT
(THE
« INFORMAL
, "
"FICTITIOUS" ECONOMY).
LET US LOOK AT
THESE FORMS OF THE SHADOW ECONOMY
IN MORE DETAIL,
PAYING PARTICULAR
ATTENTION NOT TO DESCRIBING SPECIFIC SENSATIONAL CASES AND
INTRIGUING DETAILS OF THE LIVES OF THE PEOPLE INVOLVED,
BUT AS FAR
AS POSSIBLE DESCRIBING IN DETAIL THE PHEMOMENA AND CAUSES GIVING
RISE TO THEM AND ASSESSING AND PREDICTING HOW THE SHADOW ECONOMY
WILL "BEHAVE"
IN THE REFORM PERIOD.
ICEBERGS OF THE "SECOND" ECONOMY
((SUBHEAD))
THE TERM "SECOND" ECONOMY IS NOT INFREQUENTLY USED AS
A SYNONYM
FOR THE SHADOW ECONOMY
IN ITS CRIMINAL
INTERPRETATION.
HOWEVER,
WE
WILL FOLLOW THE WELL KNOWN HUNGARIAN ECONOMIST
J.
KORNAI AND USE
IT
TO REFER TO ALL THOSE FORMS OF PRODUCTION ACTIVITY THAT WERE
FORMERLY DEEMED INEXPEDIENT— INDIVIDUAL LABOR ACTIVITY,
SMALL-SCALE
GROUP PRODUCTION
(ARTELS AND SMALL COOPERATIVES),
AND OTHER "SMALL
FORMS"
(THE "FIRST" ECONOMY,
CORRESPONDINGLY,
IS LARGE-SCALE STATE,
COOPERATIVES ND KOLKHOZ PRODUCTION,
THE ONLY FORM CONSIDERED TO BE
A GENUINELY SOCIALIST SECTOR).
THE "SECOND" ECONOMY
IS LIKE AN ICEBERG:
ON THE SURFACE
IS THE
LEGALIZED,
REGISTERED PART COVERED BY TAXATION;
BUT THE GREATER
PART IS CONCEALED
(FROM FINANCIAL AND CONTROL ORGANS,
BUT NOT FROM
CONSUMERS)
AND EXISTS WITHIN THE FRAMEWORK OF THE SHADOW ECONOMY.
UNTIL RECENTLY THE "SECOND" ECONOMY WAS ILLEGAL OF NECESSITY,
ALTHOUGH THERE WAS, FOR INSTANCE,
NO DIRECT BAN ON INDIVIDUAL LABOR
ACTIVITY AS SUCH (NOT ONLY IN LEGISLATIVE ACTS,
BUT EVEN IN
NORMATIVE DOCUMENTS AND PROVISIONS).
MOREOVER THE RIGHT TO SUCH
LABOR IS GUARANTEED BY THE CONSTITUTION,
ALTHOUGH THE LOCAL
AUTHORITIES, ON THE PRINCIPLE "WHAT IS NOT PERMITTED IS
PROHIBITED," WERE EXTREMELY RELUCTANT TO REGISTER
IT:
IN THE
COUNTRY AS
A WHOLE,
BY
1987 ONLY 100,000 INDIVIDUALS WERE
"LICENCED."
BUT THERE WERE CONSIDERABLY MORE OF THEM
"UNDERGROUND":
ACCORDING TO ROUGH ESTIMATES,
SOME 20 MILLION
PEOPLE WERE INVOLVED
IN THE PROVISION OF SERVICES ALONE
IN THE
"SECOND" ECONOMY.
"PRIVATE OPERATORS," FOR INSTANCE, LONG BEFORE INDUSTRY AND
TRADE COULD GET THINGS MOVING,
WOULD SATISFY THE SPONTANEOUS
PREMIUM DEMAND,
WHETHER AMONG THE MASSES OR AN ELITE,
FOR VARIOUS
GOODS IN SHORT SUPPLY.
THEY MANUFACTURED PHONOGRAPH RECORDS FROM
X-RAY PHOTOS AND MADE "DESIGNER" CLOTHES;
THEY MET THE DEMAND FOR
CULTURAL WORKS THAT WERE NOT PERMITTED AT THE TIME:
THEY COPIED
WESTERN VIDEOS AND XEROXED "LOLITA,"
"WE,"
"DOCTOR ZHIVAGO," AND
"HEART OF A DOG."
AND IN THE BIG CITIES THE "PRIVATE OPERATORS"
CLIPPED POODLES AND LAPDOGS; TAUGHT YOGA AND IKEBANA;
PRACTISED
PSYCHOANALYSIS AND CLAIRVOYANCE IN THEIR OWN HOMES OR THE CLIENT'S;
SANG AT WEDDINGS,
DID PEOPLE'S WORK FOR DIPLOMAS AND COURSES,
AND
SO FORTH.
ADMIN
(MORE)
15 DEC IRONTON/CM 07/1858Z JAN
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