In the
second economy of the Soviet Union
The second economy in the Soviet Union was black market or the informal sector in the economy of the Soviet Union. The term was suggested by Gregory Grossman in his seminal article, "The Second Economy of the USSR" (1977). , a tsekhovik ( rus, цеховик, p=t͡sɨxɐˈvʲik) was an owner-operator of an illegal, underground ''
tsekh'' ("factory"). The manufactured goods were distributed via
black market
A black market, underground economy, or shadow economy is a clandestine market or series of transactions that has some aspect of illegality or is characterized by noncompliance with an institutional set of rules. If the rule defines the se ...
.
[Stephen Handelman, ''Comrade Criminal: Russia's New Mafiya'', 1995, , "Glossary"]
With the exception of petty handicraftsmanship, any larger scale manufacturing was illegal in late Soviet Union.
The operation of ''tsekhoviks'' was based on the widespread scarcity of
consumer goods in the Soviet Union
Consumer goods in the Soviet Union were usually produced by a two-category industry. Group A was "heavy industry", which included all goods that serve as an input required for the production of some other, final good. Group B was "consumer goods" ...
produced by the legal
planned economy
A planned economy is a type of economic system where investment, production and the allocation of capital goods takes place according to economy-wide economic plans and production plans. A planned economy may use centralized, decentralized, part ...
of the country. ''Tsekhoviks'' maintained deep connections with both corrupted officials and
the criminal world, necessary for the safety and efficiency of the operation.
[Felia Allum, Stan Gilmour, ''Routledge Handbook of Transnational Organized Crime'', 2012, ]
pp. 115-116
/ref>
A notable criminal case resulted from '' Operation 'Cartel''' carried out by KGB
The KGB (russian: links=no, lit=Committee for State Security, Комитет государственной безопасности (КГБ), a=ru-KGB.ogg, p=kəmʲɪˈtʲet ɡəsʊˈdarstvʲɪn(ː)əj bʲɪzɐˈpasnəsʲtʲɪ, Komitet gosud ...
, which uncovered several major illegal furrier
Fur clothing is clothing made from the preserved skins of mammals. Fur is one of the oldest forms of clothing, and is thought to have been widely used by people for at least 120,000 years. The term 'fur' is often used to refer to a specific i ...
factories in Kazakh SSR
; kk, Қазақ Советтік Социалистік Республикасы)
*1991: Republic of Kazakhstan (russian: Республика Казахстан; kk, Қазақстан Республикасы)
, linking_name = the ...
. It ended in prosecution of some 500 people, with 3 bosses receiving death sentences.[Martin Mccauley, ''The Rise and Fall of the Soviet Union'', , 2014]
pp. 374-375
/ref>
With the beginning of ''perestroika
''Perestroika'' (; russian: links=no, перестройка, p=pʲɪrʲɪˈstrojkə, a=ru-perestroika.ogg) was a political movement for reform within the Communist Party of the Soviet Union (CPSU) during the late 1980s widely associated wit ...
'', which, among other things, allowed private enterprise, many former ''tsekhovik''s suddenly became wealthy, respectable entrepreneurs, known as "new Russians
The New Russians (russian: link=no, новые русские ''novye russkie'') were a newly rich business class who made their fortune in the 1990s in post-Soviet Russia. It is perceived as a stereotypical caricature. According to the stereot ...
". At the same time the growth of criminal enterprise continued well into the history of modern Russia,[ the driving force being increased profit via ]tax evasion
Tax evasion is an illegal attempt to defeat the imposition of taxes by individuals, corporations, trusts, and others. Tax evasion often entails the deliberate misrepresentation of the taxpayer's affairs to the tax authorities to reduce the taxp ...
and violation of various health, safety, etc., codes.
References
{{reflist
Second economy of the Soviet Union