The Russian Review/Volume 1/April 1916/Russia's Problem of the Increased Cost of Living
Russia's Problem of the Increased Cost of Living.
By V. Kusmin-Karavayev.[1]
A year ago the question of the increased cost of living in Russia was considered merely from the point of view of the outer effects. The prevailing prices were compared with those which had existed during the preceding year, and measures were adopted to keep the prices from rising very high above that level. Therefore, the means used were largely simple and elementary. Fixation of prices was the commonest of these measures, and it was strengthened by threats of severe punishment and requisition. But it was soon discovered that the question could not be settled in this way. Articles of prime necessity not only became expensive, but their supply in some places began to diminish rapidly. Then attention was directed to the problem of railroad transportation. But there, again, the measures adopted were not effective. The decrease of supply was soon followed by total disappearance of some of the prime necessities of life. Sugar, for example, could not be obtained at Petrograd for some time. It became a common thing to see hundreds of people waiting in line before a store to obtain a pound of sugar, or a bottle of milk, or a bag of flour.
This shortage of the prime necessities of life is felt very acutely by the consumers. Bitter reproaches are showered upon the officials of the Ministry of Railways for the failure of the country's railroad system to transport sufficient quantities of products. And great indignation is expressed against the municipal authorities for not providing supplies. These reproaches against the municipal authorities are indulged in even by those who ought to know perfectly well that these officials are powerless to do anything for the regulation of transportation, or the determining of prices.
There are two interesting facts which have been brought out by the conditions of the transportation system. As far as Petrograd is concerned, its connection with the interior of the country is maintained by one railroad line. But, in Moscow, as well as in Petrograd, there are hundreds of people waiting in line for their turn to purchase sugar, butter and flour. And yet Moscow is the greatest railroad center in Russia. It is clear, therefore, that railroad transportation is not solely responsible. A part of the blame should be placed upon the conditions existing at the sources of supply.
There is one other noteworthy phase of the matter. Petrograd had all along received most of its supplies of grain, both for municipal consumption and for export, by water, and not by rail. Why is it, then, that during the present year even the supplies needed for municipal consumption did not arrive? Late crops and early frosts have occurred in previous years. Why did not Petrograd ever before experience shortage of flour, oats, and wheat?
It might be said, of course, that, as matters stand, the blame should be thrown on the cupidity of the sellers. Without denying the presence of this cause, it seems to us that this would be much too simple a cause of all causes. In the long run, the question of prices, as well as of supply and demand, is settled, not by the seller's cupidity, but by the normal desire of gain and the normal fear of loss. Therefore, if we admit that the large dealers in grain did not send to Petrograd and Moscow sufficient quantities of food products, we must come to the conclusion that the system of fixation, requisition, and punishment, like a two-edge instrument has directed its sharper edge against the consumer, and not the seller. The truth of this conclusion is borne out by the fact that Petrograd is threatened by wood famine. At a recent meeting of the Petrograd Municipal Council it was reported that the supply of wood for the current winter has been much smaller than usual, despite the fact that the demand has increased considerably, due to the fact that many manufacturing concerns now use wood instead of coal. Yet, in the districts which usually supply Petrograd with wood, fewer trees have been cut down than formerly. Thus, the wood dealers, obviously taking into account the administrative measures, diminished their productive activities.
Now, increase in the cost of living must be regarded as inevitable. The country is passsing through an acute economic and financial crisis. The amount of paper money in circulation is three times the normal. And, while its market value has not fluctuated within the country itself, the purchasing power of paper money has decreased considerably. Therefore, the condition in which people with "fixed incomes," (who constitute the bulk of the city population), find themselves, may be called either increased cost of living, or depreciation of money.
No less important is the economic crisis, which has had its most marked effects again, upon persons with "fixed incomes," Russian economic life is based on rural economy. And the latter has suddenly undergone a tremendous change. The enormous sums of money,—almost one and half billion roubles,—which the population of the country annually spent for drink, now remain in their hands. At the same time, hundreds of millions of roubles come into the peasants' hands as pensions, money paid to the families of militiamen, and as payments for supplies delivered to the War Department. The enormously increased deposits received by the savings institutions continue to grow. Despite the rapidly rising prices for such articles as dry-goods, the peasants now purchase larger quantities of them than they did formerly, even in the most successful years.
In former days, it should be noted, the rural population not only cut down its needs, but it actually starved. There is nothing strange, therefore, in the fact that this population first of all began to satisfy its need of food products, i. e., it ceased to throw its supplies of these products upon the municipal markets. Last summer the writer had occasion to spend some time in a village in one of the northern governments, which he had visited annually for many years. Approaching a group of peasants, who were just through with their breakfast and morning rest, he found that the place where they were sitting was strewn with egg shells. Now, he had never before seen peasants in this locality eat eggs, except on holidays, or as a special delicacy. And those were the times when eggs were worth about one copeck each. At present, peasants refuse to sell them at three copecks.
In the same locality, the writer had occasion to observe another interesting phenomenon. Hemp-growing is quite common there. Ordinarily, the work of preparing hemp is done by women and girls. This work is not difficult and not tiresome, but it is dusty, and the women are compelled to work in the rain. The usual wages paid are from 35 to 40 copecks per day. Now it is impossible to find workers for 1 rouble and 20 copecks. And this is so because they refuse to work under conditions which compel them to breathe dust and remain out in the rain.
An economic crisis always entails an increase in the cost of living, as a consequence of a disturbance in the established economic relations. Of course, human cupidity takes advantage of such an economic disarrangement of things. But no system of repression can overcome an economic crisis. The duties of the authorities are much more complicated. They must differentiate between the direct consequences of an economic crisis and its indirect results, such, for example, as the unreasonable increase of prices, unjustified by the cost of production.
- ↑ From "Vestnik Evropi" (Messenger of Europe), of Petrograd.