At the end of 1950’s, relations between the USSR and China have become hostile. In this period, China has made a number of critical remarks about the USSR. The essence of these remarks was capitalist tendencies in the USSR. The nomenclature, the ruling caste in the USSR, was using the state assets for the purpose of personal gain. Here are some examples.
“Managers of one of the factories specializing in military production, having in the “key positions” their own personnel, “have transformed the state enterprise into a private one”. They have organized a production of non-military commodities, so that in the course of 3 years they have made a 1200 ruble profit in production of pens”.
“A chairman of one state collective farm in the Kursk region has started to believe that the farm is his private property. Members of the gang organized by this chairman, which included a bookkeeper, a cashier, a stockman, an agriculturalist, a director of a store, and others, while protecting each other, have fleeced the farm workers. In a few years of their criminal activity they have embezzled more than a hundred thousand rubles”.
“Some become involved in commercial activity: they buy commodities at low prices and sell them dearly; also, they bring commodities from far-away places and make huge profit. Thus, for example, in Moscow there are many speculators who re-sell agricultural products. They bring to Moscow oranges, apples, different kinds of vegetables, and sell them at speculative prices. Favorable conditions were created for the grabbers: they can use hotels, storage facilities, and other services”.
People made money due to the deficit of consumer goods:
“Some specialize in the role of brokers and operators. They have wide connections and using a bribe can obtain all that they want. In Leningrad there is a broker about whom they say: ‘Even though he is not the minister of trade, all the stock is in his hands. Though he is not a railroad officer, all the trains are at his command. All Leningrad warehouses are at his service. He obtains huge sums of money as a reward for passing on various commodities. In 1960 from one forestry company he has obtained 700 thousand rubles. And there is a whole gang of such brokers in Leningrad”.
Capitalist tendencies got a tacit support of the middle and higher level government officials:
“Such people (i.e. underground businessmen) do not act alone. They always form connections and work hand-in-hand with workers of state trading and other organizations. They have advocates and supporters in the militia and judicial offices. They even get support and protection from high government officials.” In other words, in a situation of scarcity of commodities, and due to the low quality of Soviet goods, a high government official was ready to “look the other way” when there was a crime committed right before his eyes, just to obtain a “kick-back” from the speculators.
Malenkov, one of the rulers of the USSR in 1950’s, used to say: “There have appeared a good number of managers who think that government factories which they are supposed to manage are really their own property… Such managers believe that they can do anything, that they don’t have to respect state and party codes, (they) trespass Soviet law, create chaos”. This is a step towards privatization when each state worker can do what he wants, at his post. Here is an example: a driver of a government bus takes part of the money which the passengers pay for the tickets. The militia officers create chaos in their departments, extorting money at each favorable occasion.
The society has a fractal nature. The theft which the nomenclature has organized on the scale of society repeats itself in various petty thefts on the level of everyday life which we all can observe.