Lately, I’ve noticed a trend: many young people, frustrated with life, start fantasizing about socialism. They imagine it as a utopia where all their material problems vanish, thanks to guaranteed jobs, fixed prices, and state-provided housing. But reality was nothing like that. I know because I lived in that system and saw it up close. My family wasn’t part of the elite; we were just ordinary folks living in a provincial town, far from the privileges of Moscow or other major cities.
Money and Doublethink
Soviet citizens had a complicated relationship with money—it was an endless exercise in doublethink.
On one hand, every Soviet person wanted what everyone else in the world wants: prosperity, financial security, the freedom to choose and buy what they desired, and a high social status. In short, they wanted money, because all of that is tied to having money.
On the other hand, openly admitting you cared about money or wanted to earn a lot? That was a big no-no. It was considered downright indecent.
The Historical Roots of Russian Attitudes Toward Money
The Soviet government’s rhetoric about money didn’t appear in a vacuum—it fell on fertile ground, shaped by centuries of cultural beliefs and practices.
For centuries, Russian peasants lived off subsistence farming and only encountered money in three scenarios: paying taxes to the landowner, bribing officials, or borrowing in times of crisis. In all cases, money was associated with hardship, loss, or trouble. This ingrained the perception that money was problematic, dirty, and morally suspect. A righteous person wasn’t supposed to have wealth. After all, in religious teachings, it was the poor who were “blessed,” not the rich.
Even the aristocracy shunned money—but for entirely different reasons. Managing finances was considered beneath them, the domain of estate managers. For a noble to personally handle money or think about increasing it was seen as undignified. Nobles were expected to display generosity, hospitality, and a grandeur that would leave their neighbors in awe.
Take, for example, Count Rostov from War and Peace, who threw an extravagant party that left him utterly bankrupt. Yet such behavior wasn’t frowned upon. Among the aristocracy, tossing a sable coat into the snow and saying, “Keep the change,” wasn’t foolish—it was elegant.
The merchant class, of course, understood money well, but they too lived by the social rules of their environment. It was good form to downplay the value of wealth. This led to ostentatious spending on mistresses and singers, dangerous steamboat races on the Volga river that sometimes ended in boiler explosions, and absurd stunts like burning money in stoves or throwing it out of windows—giving rise to the expression “throwing money to the wind.”
The urban intelligentsia also distanced itself from money. If someone didn’t “know how to live,” it was seen as a mark of their virtue. For creative professionals, being helpless with finances was almost a moral obligation. Creativity was viewed as “pure,” while money was “tainted,” and the two were never supposed to mix—at least not openly.
When the famous opera singer Fyodor Chaliapin once remarked, “Only birds sing for free,” he was publicly condemned by virtually everyone.
Ineptitude with money was celebrated as a virtue and even elevated to a national characteristic. Meanwhile, other ethnic groups—Gypsies, Jews, and Germans—were often accused of greed or excessive focus on making money. This stereotype seeped into proverbs and jokes, reinforcing the notion that financial savvy was somehow un-Russian.
Now, contrast this with Protestant ethics, which view money as one of God’s gifts, something to be managed wisely and responsibly. The difference is stark.
Money and the Soviet Regime
The Bolsheviks were people who understood virtually nothing about money. They were professional revolutionaries whose lives revolved around writing articles and proclamations, evading the tsarist police, and stoically enduring exile or hard labor. When it came to economics, they relied on Karl Marx, who had brilliantly analyzed the plight of mid-19th-century English workers but left no practical guidance on how to build socialism in an agrarian Russia devastated by wars, epidemics, and mass emigration.
After the 1917 Revolution, the Bolsheviks dreamed of abolishing money altogether, convinced that all evil stemmed from its existence. However, they quickly discovered that running a government or maintaining an army without money was impossible.
Facing a severe cash shortage, the Bolsheviks acted decisively. They confiscated all bank deposits and declared they wouldn’t repay the czarist debts owed to foreign banks. Why hold back? According to their ideology, capitalism would soon vanish, and the entire world would become a unified Soviet state anyway.
But this bold move backfired spectacularly. The economy ground to a halt. Private trade went underground, and a black market flourished where goods were bought and sold using anything of value—from bottles of vodka to foreign currency. Meanwhile, enterprises were left clueless about how to operate without monetary transactions.
As famine loomed, the Soviet government was forced to retreat from its ideals and introduced the New Economic Policy (NEP). For a few years, Soviet citizens were allowed to engage in trade and own small private businesses. This policy staved off mass starvation but brought about unintended consequences: a new class of individuals emerged who possessed resources and weren’t dependent on the state.
And here lay the problem. Once people could earn their own bread, dangerous thoughts began to form in their minds—ideas that the Soviet regime found intolerable. After all, financial independence gave people the power to act on those ideas. It was a threat the government was not willing to endure.
Cultivating Financial Helplessness
By the 1920s, Soviet propaganda was actively fostering a culture of financial helplessness among its citizens. The message was clear: all blessings should come from a single source—the state. Why? Because a person entirely dependent on the government is much easier to control. If they step out of line, their job or home can be taken away, leaving them with no options.
The idea that only bad people are interested in money was hammered into the public consciousness. Foreign capitalists, speculators, and swindlers were painted as greedy villains. This messaging started early—children’s books consistently portrayed wealthy characters as negative figures and the poor as virtuous heroes. Wealth, greed, and betrayal were depicted as inseparable traits.
Take, for example, the mythical figure of Koschei the Deathless from Russian folklore, whose riches are tied to his evil nature. Or the character of Malchish-Plokhish from Arkady Gaidar’s classic Soviet story—a greedy boy who betrays his comrades for barrels of jam and a basket of cookies.
The “devil” figure in Soviet ideology was the capitalist, caricatured as a greedy bourgeoisie. Even into the late 20th century, Soviet media depicted these villains in the likeness of American industrial magnates—most notably the Rothschilds, Rockefellers, and Vanderbilts. Soviet citizens knew little about these families, let alone the individual figures within them, but they were fed a singular narrative: these were evil people, practically vampires, who amassed their wealth by sucking the lifeblood of ordinary folk.
The notion that wealth could be created through innovation, organization, or managerial skill was never acknowledged. The idea that a person could build something valuable—something that wouldn’t exist without their vision and efforts—was entirely absent from Soviet discourse.
Similarly, the fact that much of America’s social, medical, and educational infrastructure was funded by wealthy philanthropists was conveniently omitted. Such a reality didn’t fit the Soviet worldview and, therefore, couldn’t possibly exist.
The Money Beliefs of Soviet People
As a result of the Soviet system, we, the ordinary people, didn’t even realize how unnatural our way of life was. My grandmother, Diana, was absolutely convinced she lived “like a lady.” This, despite the fact that her house had no running water, was heated with firewood, and had a pit toilet. She lived in a town of 25,000 people, worked as a deputy school principal, and her husband was the director of the town’s main enterprise—a wood-processing plant.
Of course, by any standard, this was poverty. But we didn’t see it that way because we had nothing to compare it to. Nobody we knew belonged to the party elite or traveled abroad.
As a child, I never saw a sum of money larger than 200 rubles—that was my father’s monthly salary as a design engineer at an automobile factory. At the official exchange rate, that was roughly $330 a month. My mother earned 75 rubles, or about $125. We were solidly middle class by Soviet standards.
In rural areas, peasants didn’t see actual money until the 1960s. When Stalin’s industrialization began, anything of value owned by peasants was seized for collective farms. The peasants themselves worked for “workdays,” which were checkmarks on a ledger indicating they had worked. It was essentially serfdom under a new name, mirroring the feudal obligations of the past. This system disappeared alongside the villages themselves, as younger generations migrated to cities and the older population aged out of the workforce.
We, kids, couldn’t even comprehend what it meant to have “a lot of money.” Wealth, in our imaginations, looked like a treasure chest straight out of the Soviet film Treasure Island. Terms like “investment” or “bank check” were alien to us. As for bills of exchange or securities, we had no idea what they were.
What we did understand, however, was the concept of a “buried treasure.” We’d heard stories about pre-revolutionary bourgeoisie hiding their jewels, which were occasionally discovered during the demolition of old buildings. But finding a treasure chest was as unlikely as winning the lottery.
Still, every Soviet schoolchild knew exactly what to do in such a case. If you won a large sum of money or unearthed something valuable, you were expected to hand it over to the Peace Fund. What was the Peace Fund, exactly? Nobody really knew. But keeping the treasure for yourself was unthinkable. Doing so would have branded you as a terrible person—worse than Rockefeller himself.
Soviet Wealth: What It Meant and How It Was Measured
In the USSR, wealth existed, but it wasn’t measured by money—it was defined by what you actually had and could use. Additionally, there was a strict divide between “acceptable” and “unacceptable” wealth.
Acceptable wealth was something you displayed to friends, colleagues, and family to signal that you were a resourceful person worth knowing. Owning something rare or valuable meant being well-connected, and those connections were seen as valuable assets.
However, flaunting wealth in public or around strangers—people who couldn’t benefit from your connections—provoked irritation, judgment, or even punishment. For example, in the 1960s, wearing foreign-made skinny pants or a flashy tie could get you stopped by patrols. They might cut your pants or ruin your tie outright, and you would be labeled the troublemaker, not them.
If you owned fashionable clothes, you were expected to show them off only in private settings, like a birthday party or a New Year’s celebration. Wearing them in public just to “show off” made you your own worst enemy.
Wealth earned through merit—like being an opera singer or pilot—was deemed acceptable. For such accomplishments, you might be rewarded with a prestigious apartment in central Moscow or a dacha (a summer house near the city).
Vacationing on the Black Sea was another coveted status symbol, but it was far from accessible to everyone. Plane or train tickets were hard to come by, and lodging presented its own challenges. If you had friends willing to host you unofficially, you were in luck. Otherwise, you might live in a tent, cook on a campfire, and go to the bathroom in the bushes. The sign of ultimate prestige was a state-sponsored vacation package. With the right connections, you could get a spot at a resort and enjoy the full seaside experience.
But for most Soviet citizens, the sea was a distant dream, seen only in movies. My family, for instance, never went to the Black Sea—it simply wasn’t possible.
The crème de la crème was a trip to Bulgaria’s seaside resorts—an actual foreign country! The pinnacle of prestige, however, was a cruise on the Baltic or Mediterranean Seas, reserved for those deeply entrenched in the good graces of the state.
Certain foods—like smoked sausage, oranges, and premium alcohol—were also signs of wealth, as were high-quality furniture and toys. Importantly, the best items weren’t Soviet-made. Goods from Czechoslovakia, Poland, or—ideally—East Germany were prized.
To give you an idea, I had a German doll with sideways-glancing eyes and a lacy hat. I don’t know where my parents managed to get her, but she was a status symbol, and I called her “The German Doll.”
French items—perfume, clothes, and vinyl records—were especially sought after, while Japanese and American goods were so rare that owning them implied connections at the highest levels of power.
Seafarers, pilots, and diplomats brought back treasures from faraway lands. For example, one family I knew owned a straw hat their grandfather had brought back from Cuba. To us, it was a priceless artifact, treated with reverence. You couldn’t even touch it without thoroughly washing your hands first.
What You Could (and Couldn’t) Buy in the USSR
Having money in the Soviet Union didn’t mean you could buy whatever you wanted. In many cases, the things you needed simply weren’t available.
Take my childhood, for example: quality meat was never on store shelves, household appliances were scarce, and decent clothing was almost impossible to find. I vividly remember trying to buy pencils before the school year started. Despite visiting every nearby store, there were none to be found.
The scarcity extended to nearly everything, with the exception of the most basic food items. My grandmother, however, often scolded us for complaining. After the war, she said, stores were completely empty, and her salary could barely buy two loaves of bread at the market. Back then, the entire army and all government workers survived on rations provided by their jobs. Compared to those times, the early 1980s—with no ration cards—seemed like luxury to her.
Things You Couldn’t Buy at All
But money wasn’t just useless because of shortages. Certain things were entirely off-limits, no matter how much you had.
Housing: All housing in the USSR, except for rural homes, belonged to the state. You could receive an apartment from your workplace or the city, but you couldn’t buy one outright. Bribes were an option—pay the right official, and they might help you secure a place. However, both you and the official risked lengthy prison sentences.
Travel Abroad: It was impossible to buy a trip overseas. Without a foreign passport, you couldn’t apply for a visa, and passports were issued only to those the government deemed eligible.
Business Ownership: Private businesses didn’t exist in the USSR. Starting or buying one was simply out of the question.
Phones and Cars: You couldn’t pay to have a telephone installed in your apartment; you had to join a waiting list that stretched for years. The same applied to cars—owning one required patience, not just money.
Infrastructure: Building a road or connecting utilities to your dacha wasn’t something you could do on your own. Every such project required special permission from the authorities.
The Soviet government designed life this way deliberately. By controlling access to housing, travel, business, and infrastructure, the state ensured that individuals remained dependent on their superiors for even the most basic improvements in their lives. Independence was not just discouraged—it was systematically crushed.
Salary, Loans, and Extra Income
For the average Soviet citizen, survival meant living paycheck to paycheck. Salaries were distributed twice a month and set by the central government in Moscow. Occasionally, you might receive a bonus or a celebratory gift box with groceries, but that was the exception.
Women earned less than men, and in a bizarre twist of socialist ideology, manual laborers often earned more than engineers. The official reasoning was that workers were the “ruling class” and held power in the country. Of course, in reality, power rested with bureaucrats, but you couldn’t exactly plaster “Glory to the Bureaucratic Class!” on red banners, so everyone pretended workers were in charge.
Wages were almost entirely spent on food, clothing, and basic necessities. Beyond that, the government constantly pressured citizens to pay membership fees for organizations like “Friends of Children,” “OSOAVIAKHIM” (a military-patriotic society), or the Peace Fund. When the state was strapped for cash, people were forced to buy government bonds. Refusing wasn’t an option—noncompliance could cost you your job. This practice was especially rampant during Stalin’s industrialization campaigns.
As a result, salaries were never enough. Borrowing money was common, but not from banks—those didn’t offer personal loans. Instead, people borrowed from friends, neighbors, or relatives, always interest-free. If you borrowed from your parents, they’d eventually tell you not to bother repaying it—“You need it more than we do.”
Still, there was a small semblance of credit: you could buy a winter coat or furniture on installment—if you could find it in the first place.
Alternative Sources of Income
Under Stalin, the average Soviet citizen was either desperately poor and grateful for a lump of sugar or lived off state privileges as a high-ranking official or favored specialist.
Occasionally, bonuses were given for exceptional achievements, but during Stalin’s era, these were usually in the form of goods or access to benefits rather than cash. You might receive a wristwatch or a sewing machine. In later years, monetary bonuses became more common, along with extra payments for special titles or awards.
In the latter half of the 20th century, as natural resource deposits were discovered in the north and Siberia, new opportunities emerged. Soviet citizens could take on grueling jobs building railroads or settlements in the Arctic and earn significant bonuses. However, the conditions were brutal: polar nights, freezing temperatures, and isolation from civilization. Everything—down to a simple apple—had to be flown in and was considered a luxury.
If someone managed to save money, they deposited it in the state bank, effectively lending their savings to the government. Many opened accounts for their children, hoping to amass a small fortune by the time they came of age. But these savings were wiped out during the rampant inflation of the 1990s.
Despite strict prohibitions, unofficial entrepreneurship thrived in the USSR. My grandmother Zinaida, the wife of a military officer, supplemented her modest pension with her exceptional sewing skills. Clients would bring her fabric and a sketch of their dream dress, and she’d bring it to life.
My friend’s mother had a knitting machine and made beautiful sweaters to order. She also bred a Persian cat and charged for mating services.
ion also had a robust black market, underground manufacturing, and smuggling operations. But that’s a story for another day. If you’re curious, make sure to subscribe!
Economic Crimes and the Soviet Legacy
In the Soviet Union, prices were set by the government, with no regard for supply and demand. Items came pre-stamped with their price, which couldn’t legally change. But this system only encouraged local merchants to hoard in-demand goods, reselling them to select individuals at a markup or in exchange for favors.
Buying and reselling goods for profit was considered a criminal offense, punishable by two to seven years in prison, often with confiscation of property. Citizens were also prohibited from owning foreign currency or gold, except for jewelry. After the revolution, some still held onto these assets, but during Stalin’s industrialization push, the government demanded they be surrendered. Currency speculation carried severe penalties, and in extreme cases, could result in execution.
A Society Ill-Prepared for the Market Economy
By the time the USSR collapsed, most citizens had no idea how to function in a market economy. The Soviet government essentially forced its people to remain in a state of perpetual, artificial childhood. Money wasn’t earned; it was doled out like an allowance. Earning income without state approval was forbidden.
The Soviet system divided citizens into “favored” and “unfavored” children. If you were unfavored, escape wasn’t an option—you couldn’t simply strike out on your own. The only exception was for Jewish citizens, who were allowed to emigrate starting in the 1970s due to special agreements between the USSR and the United States.
For everyone else, life was governed by beliefs captured in popular Russian proverbs:
- “What you want doesn’t matter—you’ll stop wanting it soon enough.”
- “Righteous labor won’t earn you a stone palace.”
- “Money is like stones: a heavy burden on the soul.”
- “Sell your soul to hell, and you’ll be rich.”
