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Through the Back Door

The Black Market in Poland 1944–1989

Series:

Jerzy Kochanowski

This book analyzes the history of the black market in Poland before the 1940s and the development of black-market phenomena in post-war Poland. The author evaluates the interrelation between black-market phenomena and historical and geographical conditions. At first, the black market stabilized the system by making it more flexible and creating a margin of freedom, albeit in the short term. In the long run, the informal economic activities of the people ran counter to and undermined the official ideology of the state. The author concludes that in post-war Poland, owing to a singular coincidence of historical, political, economic and social factors, the second economy had its own unique character and an endemic presence that loomed large in the Soviet Bloc.

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1. Terms and Methods

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1.Terms and Methods

“During the war one could get anything at all”, reminisced the Polish painter Franciszek Starowieyski, “but once the socialist shambles began its reign, even trivial things became unavailable. Very quickly people realized that socialism was a force of “desertification.” “What will happen in the Sahara once the socialists arrive? They will run out of sand,” ran a popular joke that did the rounds in 1945, when it became clear how quickly everything was disappearing and falling apart, once socialism took hold.”1 This book is dedicated to all the efforts undertaken by post-war Polish society to irrigate the “socialist desert” and squeeze from it as much as possible. Bearing in mind that most of the oases and water reserves and oases had been nationalized; Poles were obliged to engage in a complicated, and usually illegal, game playing with the state. This went on for almost half a century.

1.1What Color was the Black Market?

This book does not aspire to be an economic, sociological or anthropological analysis. It aims at an interdisciplinary (albeit history-focused) reconstruction of various behaviors, mechanisms, phenomena, practices, processes and strategies united under the shared umbrella of the term “black market”. These mechanisms and strategies were unusually multilayered; they varied in time and geography. They reacted instantly to external and internal circumstances. Black market players spoke their own language and had a distinct set of values. They were involved in the black market sometimes purposefully and exclusively for profit, and sometimes under duress and against their will.2 As with any other mass phenomenon, with this one also there are controversial and debatable issues, starting with the terminology and the methodology; these require some clarification.

No state can completely control its citizens and their economic life. No society consists solely of those who put the common good above the individual one. The economy of a state often brings to mind a river that at times dips under the surface, its flow becoming subterranean. Its depth, the strength of the current, the type of river bed, fauna and flora of the underground flows (to stay with the fluvial terminology) depend on many factors and look different in every ←13 | 14→country; this does not make it any easier for researchers. This much is clear both from the variety of terms used to describe it (Poland’s black market economy has been variously referred to as the “gray sphere”, or shadow, black, second, parallel, hidden, informal, unofficial, secret, unobservable, unregistered, or unquantifiable economy), and also from the absence of a universally satisfying definition. While trying to create one, some reach for moral yardsticks and others for legal, institutional, statistical (especially if they are able to register the black market activities) or, as a last resort, ideological criteria. Regardless of the perspective adopted, the term “black market” is used to refer to the production and exchange of goods or services conducted for profit (whether monetary or not) outside of formal institutions (also implying that it remains outside of legally binding regulations) and unaccounted for in the gross national product.3

Everywhere in the world the gray sphere faithfully accompanies the official economy. It always has its own, often endemic, characteristics dependent on the economic and social structure, tradition, and legal system. However, one can assume that in countries where the free market system is established and developed, the gray sphere is mostly about avoiding taxes and taking advantage of illegal labor. Criminal activities, such as selling drug and weapons, the trade in fissile material, and human trafficking are a different matter. These tend to hog the headlines and bring enormous profits but at the same time they barely influence the everyday life of an average Frenchman, German or Finn.

The average citizen of any “people’s democracy”, whether a Pole, a Russian or a Romanian, did not care much about the black market in tanks or uranium, but wanted to know how and where they could get shoes, gas, furniture, and pots (and what to put in the latter), since the supply of even the most ordinary goods could never be taken for granted. To have money in one’s purse or wallet was ←14 | 15→not enough to succeed in making a successful purchase; it was a common experience to stand in line in front of a store with no guarantee that the item of one dreams, or indeed anything else at all, would be there when one finally arrived at the front of the line hours later. Chronic shortages in the socialist economies are a well-known fact and much has been written about them. János Kornai’s work on this topic has become a classic (which, incidentally, does not mean that his conclusions are immune to debate).4 What matters more for our purposes is, rather than showing how the shortages came about, looking at how they were alleviated. There were two possible approaches: either the state rationed the goods and services, or society took over the (re)distribution. From the point of view of the totalitarian/ authoritarian state, such an alternative was unacceptable and the liberal slogan “What is not forbidden is allowed” was generally substituted with the clear guideline: “What is not explicitly allowed is forbidden”.5

Citizens were disinclined to conform to the dictatorial economy and, especially where the shortages were particularly painful, they constantly perfected adjustment strategies. Through the “back door”, they would drain the state sector and develop social networks based on mutual but not exactly gratuitous help in acquiring goods and services that were absent from the market. Poles jokingly defined the worst possible punishment as “sentenced to two years with no cronies”. Similar sentiments had their equivalents in almost all socialist countries; in the Soviet Union they used to say “Blat is stronger than Stalin”; the Polish “cronies” and Soviet “blat” both meaning “good ol’ boy networks”. The whirlpool of the second economy sucked out the supplies from the first one thus creating shortages, which increased various informal economic activities.6 In the socialist countries this vicious circle not only produced the second economy, but also the ←15 | 16→“second society”7 guided by its own ethical rules, goals, models, and mentality. Its existence was probably most in evidence when viewing society from the economic angle.

When the entire economy not only depends on the state but also belongs to it, it is hard to call the “underground” economy a parallel one. Parallel equals independent, and independence was certainly not a characteristic of the socialist second economy. In the Soviet Bloc countries, the connections between the two economies were very tight and usually of a parasitic kind. The official economy provided money, natural resources and products for private (legal and illegal) artisans and merchants or smugglers. Private houses were built with state-owned bricks and cement; cars ran on state-owned gas.8 But there was also a certain symbiosis. The state enterprises could not operate, nor meet their production goals, without using the strategies of the grey sphere both in dealings with the state and private co-operants. The managers of state enterprises often knowingly flouted the law, because they knew that without the proverbial “nuts and bolts” supplied by canny artisans the factory would have not been able to function. Not too many questions were asked, such as enquiring too closely into the source of steel used for the production of parts. In this context, the shades used to define the informal economic arrangements of the time – ranging as they do from gray to black – are clearly insufficient. No wonder that researchers into the socialist second economy were obliged to broaden the palette considerably.

Although the model described below was evolved to apply to the Soviet Union, it nevertheless applies to a great degree also to other states of the eastern bloc (and not just in Europe).9

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1.1.1Legal Markets

The market called, for more than one reason, red was in fact the inefficient and inflexible system of state distribution. It was aided by the pink market, in which privately, legally owned goods changed hands. The state created a network of komis (second-hand) stores (skupochnyie in Russian) where one could sell clothes, books, furniture and so on, for prices no higher than in regular stores. Komis stores were one of the few places where traces of market behavior occurred – for example, the price was negotiable, and the un-cleared stock was put on sale. However, there were not many skupocznyie and so their influence on the market was negligible.

The white markets were of greater importance. They included the town marketplaces where one could sell used goods (barakholki were often closed down due to their taking liberties with the interpretation of the term “second-hand items”), and also the kolkhoz markets which sold food. The prices in both markets were not regulated by the state (apart from times of exceptional shortage, when maximum prices were introduced but rarely respected).

1.1.2Semi-legal Markets

The gray market included apartment and holiday cottage (dacha) rental services (and also house renovation, car repair, tailoring and shoe services) carried out after – or sometimes during – working hours by shabashnikovs. Income acquired from tutoring or medical advice was also included in that group. The illegal but commonly accepted barter between enterprises (without which production goals were often impossible to meet) was part of the grey market. The authorities usually turned a blind eye to the grey market, especially in the areas where the supply of goods and services was insufficient.

1.1.3Illegal Markets

The brown market dealt with goods theoretically available on the red market but in reality subject to chronic shortages. In the case of meat, dairy products, clothes, refrigerators, cars, mechanised equipment, and building materials, the demand was vastly greater than the supply. As a result, numerous means of back ←17 | 18→door distribution became available. Producers, employees of trade headquarters and warehouses, transport drivers and salesmen, all took part in these dealings. People engaged in such actions in order to create social capital, hoping for a reciprocated “service” in other shortage areas. A separate segment of the brown market dealt with coveted imported items, considered as luxuries in the Soviet Union – mostly clothes, and in the 1980s, also video cassettes or cars, vast numbers of which were brought into the country, often legally, by sailors, athletes, and artists. Theoretically, these were to be distributed by the small network of komis stores but since the vendors did not want to leave a paper trail (their IDs had to be shown and their details recorded during each transaction), more discreet and less formal channels of distribution were soon created.

Factories and enterprises also took advantage of the brown market. For example, the management of the kolkhozes, the collective farms, were constantly obliged to grapple with lack of parts and being in possession of illegally acquired cash (lewa kasa) obtained the needed items through informal channels by buying items that had been stolen or produced as side jobs.

Although the participants in the brown market were tolerated, both the state and a large part of society viewed those engaged in the black market as criminals. Draining the red market for profit (via shoplifting, theft from warehouses and factories or from transport and generating a fake surplus, usually by lowering the quality of the product) was also considered a black market activity. Alcohol played an extremely important role on the black market. Its retail distribution was under special state control, which on the one hand led to a growth in the production of moonshine, and on the other to the private distribution of state alcohol, of course at higher prices.

Soviet luxury items (jeans, wigs, etc.) legally imported and distributed on the brown market were but a drop in the ocean of need. It is hard to estimate how many were smuggled into the Soviet Union and how many were purchased from tourists (this was the domain of fartsovshchiks, who also sold tourists local souvenirs or hard-to-get-items such as caviar). The higher caste of the black marketers, valutchiks (from Russian valuta – currency), monopolized the illegal trade in hard currency and gold, which, along with precious stones, were used as a store of value and were thus the main items subject to hoarding. This kind of illegal trading carried the most severe punishment, including the death penalty.

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1.2The Black Market in Communist Poland: Problems with Definition

We can assume that, following World War II, and in particular in the late 1940s and early 1950s after the communist regime had established itself, the structure of the internal market in Poland was not very different from that outlined above. At the same time, thanks to a singular coincidence of historical, political, economic, and social factors, the Polish second economy had its own characteristics and indeed endemic traits, compared to other Soviet bloc countries.10

Among the historical factors, a significant role was played by the instrumental and pragmatic attitude that a large part of society had toward the state and its institutions, which they perceived as something external and unconnected to them, an attitude that was a legacy of the Second World War and, earlier, of the partitions of Poland. This was particularly prevalent in the part of Poland formerly under Russian occupation. The average Polish citizen identified first of all with his family and his close-knit social network, for example in a work place or a neighborhood, next – with the nation (in its 19th century sense), and finally – with the state. “This ambivalent attitude,” wrote the Polish historian Andrzej Friszke, “with its strong undertow of rebelliousness and contrariness weakened the executive abilities of the totalitarian state”.11 As a result, compared with other countries in the bloc, institutional control was much weaker both in the sphere of national symbolism and the economy.

On the other hand, already during the interwar period, the state had exerted a firm grip on the economy, which caused a sizeable part of the population to consider it a force capable of solving economic problems; the perceived degree of its ability to do that colored society’s evaluation of the government and its legitimacy. After the war, this point of view was reinforced, especially in the context of fervent egalitarian propaganda, which inflated the aspirations and expectations of society in regards to consumption. However, when the economy, underachieving on all possible fronts, especially since the 1970s, became increasingly less and less capable of solving the economic problems, with increasing pain for ←19 | 20→the population, citizens changed their attitude to the state and its institutions by taking the initiative to battle on their own against the shortages.12

Polish society was already well prepared to undertake independent, if unofficial, economic activities. It was the crisis of the 1930s that had inspired the multitude deprived of jobs and the means of survival to engage in trade. “Higher categories of workers (lower rank state officials, railroad workers, employees of local government and social services) are being absorbed on a massive scale into the ranks of the petty bourgeoisie,” wrote Stanisław Rychliński, “which does not directly ‘enhance’ the cultural and social position of the middle class […]. The petty bourgeoisie has lost its static character of a middle stratum, separating the upper echelons of society from the underprivileged. It has become a makeshift bridge with a dynamic undercurrent.”13 During the German occupation, the range of acceptable social behavior became stretched. The ability to adjust to a new situation and to survive became more important than social status. Trade, smuggling, and cottage industry made survival possible both for those from the social margins and the intelligentsia.14 The ghettoization of the Jews, followed by their annihilation, created a blank space on the economic map, which quickly filled with Poles. “New kinds of enterprises emerged,” wrote Jan Szczepański, “run by people without professional qualifications, from different social classes. It was a particular kind of small manufacturing functioning usually in breach of the then current law, all kinds of ‘shady businesses’ that disregarded the official regulations, bribed the German authorities and focused on quick profit. At that time, new models of operating a business appeared, and remained after the war.”15 After returning from England, the lawyer and economist Stanisław M. Korowicz noted the poignant joke circulating in the late 1940s which encapsulated the new reality with the comment that in post-war Poland “a large number of Catholics are doing business and a large number of Jews wear army uniforms. It’s a crazy world!”16 We cannot overestimate the influence of private property in agriculture (from 1956), ←20 | 21→private trade, artisanry and services on the shape and size of communist Poland’s second economy. In 1979, the private economy (including agriculture) employed 23.9% of the labor force. Polish peasants, who already during the German occupation had proved that they were capable of adapting to difficult circumstances, adapted to the new reality and actively participated in all kinds of economic activities, usually at the shadier end of the market. On the one hand, they skillfully and creatively took advantage of food shortages, particularly of meat, in the cities. On the other, as representatives of the private – that is, the disadvantaged sector, they were constantly struggling with shortages in the means of production, often acquiring them in an unofficial way. Private trade and artisanry were strongly tied up with the state in a parasitic/ symbiotic way. At the same time, small-time entrepreneurs were some of the most important clients of the gold and hard currency black market.

As an aside, the Polish hard currency black market was sustained and stimulated (an unprecedented situation in the Soviet Bloc) by the state currency policies, for instance on foreign currency bank accounts and internal export. Thus, a dual currency system effectively existed in Poland in the last several years before the fall of communism. Also, beginning with the late 1950s, Polish authorities presented an attitude that differed from that of the authorities of other countries of the Bloc towards emigration, with the exception of political emigration of course. The extent of permitted contacts was relatively wide, which meant a greater flow of hard currency, goods, and technology as well as a wider penetration of models of consumption. Beginning in the 1970s, Polish regulations regarding travel outside the Iron Curtain countries were much more liberal than those in the rest of the Soviet Bloc (except Yugoslavia, with its special status). All this had various consequences: from smuggling and the tourist trade to copycat activities emulated by those who keenly watched the goings-on. This mattered – since as in all poor countries, the ability to access goods and services offered in developed western countries was a synonym for wealth.17 The long-term isolation of the Soviet Bloc states produced in its citizens the so-called “fire-victim syndrome”, of those who had “lost their belongings in a fire and who were now trying to rebuild their life in the mode of developed societies with mass consumption. ←21 | 22→Those patterns reach us through films, TV, newspapers and magazines, tourism, family visits, etc.”18 The difference between the reality of the Soviet Bloc and the western ideal could to a large extent (or sometimes only) be eliminated using black market strategies.

It is not easy to paint a picture of the black market in communist Poland. Certainly, this could not be the work of a realist painter but rather a pointillist, with overlapping colors, and the full image only to be appreciated from a distance. Neither do traditional definitions have a perfect fit here. It makes sense to go along with Jerzy Tomaszewski, an acclaimed historian and economist, who describes the black market as a “casual term for illegal or clandestine trade taking place within controlled trade in goods […]; it emerges when the supply of particular items, despite being strictly regulated (official prices, provision cards, trade monopoly etc.) does not meet the demand.”19

Subsequent chapters will show, however, that the black market in communist Poland did not coincide with this definition. For example, the rationing of consumer goods was only periodically in effect in Poland (from 1944 until 1953, and from 1976 until 1989), and then only in respect of selected items, whereas the black market existed during the entire post-war period.20 However, during the forty‑five post-war years, the regulations were enforced in big enterprises, which had to follow the rules of distribution in respect of energy, cement, machinery, and money. But even the large factories had to take on board black market strategies when selling such strictly regulated goods as meat, sugar, and alcohol to their employees or when exchanging goods with other producers. These practices were endemic in the 1980s. It’s important to stress that without this inter‑factory barter, factories would often not have been able to operate at all.21 In particular, the monographic chapters that follow (dealing for instance with meat, alcohol or gas) will provide numerous examples of such practices.

Can we include phenomena not connected with shortages and rationing under the black market umbrella? The unofficial gas trade functioned in Poland, ←22 | 23→and also in the USSR, Romania and other countries, regardless of temporary shortages and regulations; during such periods, it increased and specialized. Similarly, illicit alcohol distilling existed also in times when alcohol stores were well supplied. It is worth mentioning that until the crisis of the 1980s, the black market prices of moonshine and gas coming from state resources were lower than those of the official market. Should the proverbial baba – the peasant woman selling meat, which she brought from the countryside directly to private apartments in Warsaw or Krakow when meat was not being rationed – be treated as a black market phenomenon, or rather as a form of a traditional local distribution system? How should we view the informal taking over of the function of inefficient stores in order to shift even goods not subject to market restrictions? For example, in 1984 two resourceful men got in on the act of the not‑very‑dynamic, state‑owned Fish Market. They bought two tons of herring for 50zl a kilo in the port of Świnoujście and sold it for a much higher price in the city of Zielona Góra, some 300 km away.22 Later the same year, the agent of a store on the Baltic coast, who had “first sunk one million zloty of his own renovating the space and had then later tried in vain to stock it with goods bought on the local market, in the end bought them in Silesia, added his costs to the price and found himself in prison accused of speculation.”23 A year later, newspapers covered the story of a saddler from Przemyśl, who supplied bread at a small surcharge to nearby Stubno, where there was no bakery, and as a result was hit with a fine and suspended sentence.”24 The concept of a “market” implies trading, albeit not necessarily money-based.25 This allows us to no longer consider such phenomena as tax evasion, embezzlement, or corruption, leaving us at the same time with a question: where is the boundary between the black market (or indeed a market of any other hue) and economic crime? How to classify for example the “meat affair” in Warsaw, when a surplus of meat intentionally produced in state enterprises was distributed in official stores at official prices in the early 1960s? How can we classify artisans who produced goods using materials often illegally obtained from state-owned sources but who distributed their product through legal store networks? Such activities – although not part of the black market per se – yielded large, often untaxed or unreported profits, later converted into ←23 | 24→black‑market hard currency and gold. They also encouraged the development of smuggling techniques, which brought in luxury and hoarding articles unavailable on the official market.

In addition, the Polish authorities had problems with an accurate definition of black market phenomena. They struggled with a lack of precise legal language and at times, obliged to do so by the circumstances, allowed the accused the benefit of the doubt. More than that! In the 1980s, when the illegal trade encompassed practically all goods, not infrequently the sentences that the communist authorities meted out in cases involving the black market were strikingly lenient, often in direct contrast to the expectations of the public opinion that had demanded an intervention. When in 1984, a war veteran asked the authorities to curtail the speculation of goods, such as appliances and clothes, bought in official stores, an apparatchik from the Council of Ministers’ Committee for Obeying the Law, Public Order and Social Discipline ruled that the law had not been broken. One was allowed to resell a product at a higher price if one had bought it earlier solely for private use. Only deliberate re-sale, planned in advance – and this was hard to prove – would be prosecuted. State lawyers agreed that tightening the law would do little to improve the situation.26 From September 1981, anti-speculation law (see chapter 3) dealt only with “products in daily use”. A telling exchange of letters between the District Office of Interior Affairs in Kalisz and the General Prosecutor’s Office took place in 1985. “Kalisz,” wrote the deputy chief of the Kalisz police, “is the location of a well-known manufacturer of pianos; the famous Calisia is located here. When the pianos are delivered to the local music store, the line in front of it is just as long as the one waiting for citrus fruit in front of the deli next door. It means that people are eager to buy pianos. Police investigated the purchase of pianos outside the state‑regulated system. It turned out that on January 17 [1985], the District Prosecutor’s Office in Kalisz took the position, expressed in writing, that a piano meets higher‑level needs and, as such, is not a product of everyday use.” When the prosecution dismissed the charges against the potential black marketeer, the Kalisz police, afraid that this could make case law (“Tomorrow, we may no longer be able to say that a fur coat is not an article of everyday use…!”) asked Warsaw for an opinion. Ultimately, the General Prosecutor upheld the decision of the Kalisz lawyers.27 The terminology used in post‑war Poland did not help. Officially, the term “black market” did not exist. Initially, in the less formal official language the traditional term “profiteering” ←24 | 25→(paskarstwo) was used; in the more formal language – wartime, or goods, usury (lichwa wojenna or lichwa towarowa) was quickly substituted by the key term “speculation” (spekulacja),28 which defined only a part of the phenomenon we are talking about: “an economic crime, which consists of a person, who was not authorized to do so, buying goods in order to re‑sell them at a profit ” or “a crime, which involves an illegal middleman in the process of distributing goods in order to gain profit.” In post‑war Poland, the term “black market” denoted rather the trade in hard currency and gold (the term “black‑market exchange rate” was used also in the official correspondence). In the late 1950s and the early 1960s, the phrase “black market” appears more often both in the press and in the less official pronouncements of the authorities. The term is not clearly defined and generally depicts the activities of those black marketeers trading in various articles – from hard currency and gold, meat and alcohol to cars and construction materials. Only after 1980, when the illegal trade became a significant problem, was the term “black market” – often in quotation marks, often preceded by the adjectives food, gas, currency etc. – widely employed by journalists and MPs. The official term “speculation” was also used. It seems therefore that the approach of the Indian economists may be more useful in defining the black market in communist Poland. Already at the beginning of the 1980s they had concluded that “in recent decades the black market has become a way of life [for the Indian people].”29 No wonder their definition is much broader than the ones accepted in the West and fits the Eastern European realities much better: “When by (artificial) manipulation of the economic forces of demand and supply, of both currency and produce (or either), trade or industry (or both) create an artificial situation of scarcity or glut, and in the process amass huge returns on their investments […], we have a black market situation.”30

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1.3Literature, Sources, Method

Polish literature on the subject has not been very helpful in helping one get a grip on the topic of the Polish black market (or sorting out the definitions). It is economists and lawyers – and not historians or anthropologists – that have long dominated this area of research. In 1957, on the wave of political changes triggered by the momentous events of October 1956, the newly established, as part of the Council of Ministers, Economic Council, led by the Polish economist Oskar Lange (who later lived in the USA and became a professor at the University of Chicago), attempted to evaluate the illegal income of Poles.31 Research on economic crimes continued in the following years within the Supreme Audit Office (Najwyższa Izba Kontroli, NIK) and the Committee for Research on Social Issues of the Polish People’s Republic (Komitet Badań nad Zagadnieniami Społecznymi Polski Ludowej), chaired by the distinguished economist Michał Kalecki (who was later to serve as the deputy director of the United Nations Economic Department). At the beginning of the 1960s, the research was cancelled by Władysław Gomułka’s government in an attempt to avoid the scientific confirmation and popularization of a well‑known fact – that the involvement of Polish society in illegal transactions had reached a mass scale. It was more convenient to focus on individual economic scandals. As a result, bookstores and the libraries tended to offer only legal expertise (written by Tadeusz Cyprian, Stanisław Galarski, Oktawia Górniok, Bronisław Koch, and others). In 1974 the Institute for Criminal Problems (Instytut Problematyki Przestępczości) was established at the Prosecutor General’s Office.32 It also dealt with economic crimes, but only a very small group of people had access to the often fascinating conclusions of its research. The uniformed services such as the Central Customs Office (Główny Urząd Ceł, GUC), the police (Milicja Obywatelska, MO; nota bene, in spite of the name “militia”, these were not community vigilantes but a fully professional force), and the Security Service (Służba Bezpieczeństwa, SB) also prepared evaluations but only for internal distribution.

At the turn of the 1970s and the 1980s, a Warsaw sociologist complained: “in Poland [black market] issues are not researched systematically, and then only by the media, where they are treated as marginal or pathological phenomena ←26 | 27→(economic crime, speculation).”33 Scientific dissertations written at that time by sociologists or economists who departed from the “pathological” perspective were unlikely to see the light of day in print.34 Outside of Poland very little was written about the Polish second economy, especially in comparison with the USSR, which was the center of attention. This changed in the 1980s, when the second economy became a subject that slowly began to find its way into Poland. In 1984, the first article by Marek Bednarski,35 a pioneer of black market research, and a brochure by Rudolf Jaworek became available.36 By the end of the year, the weekly Polityka had published a series of articles about the parallel economy.37 In the following years the black market became the subject of both presentations at scholarly conferences38 and of books with limited distribution.39

In spite of it being the year in which Poland’s transition from People’s Republic to democracy began, 1989 was by no means a watershed year in research on communist Poland’s second economy. The times of transformation brought other current topics to cover. In the early 1990s the only relevant book to be published was that of Marek Bednarski, a summary of his earlier work.40 That monograph with its focus on the 1980s remains to this day the most exhaustive picture of the economy of that period. In the middle of the 1990s, as the archives continued to open their doors to scholars and research on the institutions of the communist state moved ahead, the second economy caught the attention of Polish historians. One pioneer was Grzegorz Sołtysiak, who in 1991 published several sources on ←27 | 28→the activities of the Special Commission for Combating Fraud and Corruption (Komisja Specjalna do Walki z Nadużyciami i Szkodnictwem Gospodarczym) in the period 1945–1954.41 Another was Marcin Kula, a professor at the University of Warsaw and co-founder of the school of the researchers of People’s Poland, who encouraged his students to use the Special Commission’s materials while researching social history;42 other pioneers were Dariusz Jarosz and Tadeusz Wolsza, who in 1995 published, in book format, a selection of documents about the Special Commission. It is undoubtedly the best researched institution of those dealing with the illegal economic activity of Polish society (among the researchers were Piotr Fiedorczyk, Roman P. Smolorz, Bogdan Sekściński, Ludwik S. Szuba, Ryszard Tomkiewicz, and Waldemar Tomczyk). In the late 1990s, information about the Polish black market began to appear in publications on a wider spectrum of problems – Dariusz Jarosz and Maria Pasztor wrote about the context of the “meat affair”, Paweł Sowiński about tourism and recreation, Dariusz Stola – about migration, Małgorzata Mazurek and Mariusz Jastrząb – about shortages, Krzysztof Kosiński – about alcoholism, Krzysztof Madej – about the policies of Gomułka’s regime with regard to criminal economic activities.43

The primary sources also posed significant problems for researching the Polish second economy. The black market is an illegal, informal sphere of social behavior, existing as it does at the margin of the law or in conflict with it. Not surprisingly, black market players are never eager to document their activities. It was the institutions that controlled, investigated and punished those activities that produced the majority of sources. Such materials were mainly generated by the Polish Workers’ Party and the Polish United Workers’ Party, popularly, although incorrectly, referred to in the West as the “Communist Party” (Polska Partia Robotnicza / Polska Zjednoczona Partia Robotnicza, PPR/PZPR), the Ministry of Public Security / the Ministry of Internal Affairs (Ministerstwo Bezpieczeństwa Publicznego/Ministerstwo Spraw Wewnętrznych , MBP/MSW), the SB and MO, NIK, the General Prosecutor Office, the Ministry of Justice, the GUC and the civic institutions engaged in the fight against speculation, such as, between 1945 and 1954, the Special Commission or, between 1981 and 1987, the Central Commission for Combating Speculation (Centralna Komisja do Walki ze Spekulacją).

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Other sources included materials from central and local state archives,44 which at first glance had nothing to do with the black market – such as the Ministry of Foreign Affairs, (Ministerstwo Spraw Zagranicznych, MSZ) or the Central Committee of Physical Culture and Tourism (Główny Komitet Kultury Fizycznej i Turystyki, GKKFiT) or the Central Committee of Tourism (Główny Komitet Turystyki, GKT) but which were ultimately a repository of valuable information. Much information on the behavior of the authorities can be retrieved from official reports but these are always written from the perspective of those authorities. In the absence of any sociological research into the black market45 and the understandable reluctance of the black market protagonists to document their activities, the grass‑roots perspective is painfully absent. This gap is only to a certain degree filled by letters and complaints received by the authorities, by the institutions, and newspaper editors (stored in the archives of the Polish United Workers’ Party or Polish Television [TVP] archives) or reports gathered by the employees of Radio Free Europe from visitors out of Poland. The credibility of those sources is, however, questionable. The newspapers and magazines were no more credible, despite the fact that the topic of black market pathology was one always in demand in communist Poland. And yet, it was only the press (and then only for an astute reader) that constituted an invaluable source of grass‑roots information.

During the almost decade‑long process of researching and writing this book, I talked with close to a hundred people about the black market in communist Poland. I have never met anyone who lived in Poland during that time who had not experienced the black market phenomenon in one way or another (provided they were reasonably observant). There are twenty odd million similar potential witnesses. The sheer numbers make it difficult to use oral history testimonies in a representative way (not to mention other logistical challenges that this method would entail). Theoretically, I could have interviewed a random cross-section of people. The scale of such research would have exceeded, however, the resources of an individual scholar. I used the interview technique cautiously and only after exhausting other sources. The weekly Polityka and the daily Gazeta Wyborcza ran, on several occasions, competitions on black market memoirs; they proved to be useful and interesting for this author.

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The type of primary sources, the great time span, and the sheer diversity of black market phenomena forced the author to limit radically the range of problems and focus on the most representative ones. It is important to stress that strict differentiation between economic crimes and black market activities turned out to be impossible. Often common sense and intuition remained the only valid criteria and then, just in case, the label “black market” was put in quotation marks.46 In defining any market (including the black market), the main criterion is the existence of an act of trading in order to gain a profit. We are also looking for elements of organized action, deliberateness and specialization suggesting some kind of professionalism. A black market strategy should include visible stages of planning, execution, and evaluation of profitability. Black market activities also involve the presence of deliberate bending or breaking of the existing law. The product traded on the black market has to be subject to specific restrictions, such as monopoly, rationing, or a ban on distribution) on the manufacturer and distributor, imposed in this case by the communist state in Poland, which leaves no doubt with regard to its legal status. In order to be successful, economic activity requires favorable conditions and sufficient time to develop and perfect appropriate techniques and strategies. It is best to investigate the black market mechanisms that take place over a great duration with attention to possible changes and mutations. The interest of the authorities in a particular sector of an illegal trade is also one of the determining factors. A further important criterion is the mass scale of the phenomenon. It was certainly not possible to live during the times of “real socialism” without being involved in some way in black market transactions. It is important to pinpoint which sector of economy was most likely to engage in black market trading for the greatest time, preferably between 1944 and 1989. Often it is not easy to pigeon‑hole some of the phenomena that at first sight seem quintessentially black market in character. For example, the illegal tobacco trade, which infringed one of the main monopolies of the state, disappeared at the turn of the 1940s and the 1950s. Tobacco trading returned to the black market in the early 1980s but only briefly and accompanied by practically all other goods. Nor do black market sales of books fit in here since they took place mostly in the 1980s and were limited to the narrow circles of book aficionados. The same can be said of the so‑called koniki, the touts selling tickets for movies and sports events. Although they survived throughout the entire duration of the ←30 | 31→Polish People’s Republic and continued throughout its collapse, their operations were confined to the big cities. For the same reasons I eliminate from my spectrum pornography and drugs.47 Geography seems to be one of the most crucial criteria. The phenomena that existed continuously, reached a mass scale and were ubiquitous in most of Poland (with allowances for regional differences) would be the best to observe and study. The complexity of the subject determined the division of the chapters into two types: general and monographic. The first general chapter provides a short survey of the world history of the black market until the 1940s. It is followed by a chapter, which presents the development of the black market phenomenon in post-WWII Poland, with emphasis on the three institutions established specifically in order to combat speculation in the country. This chapter also presents the broad political, social and economic context of the Polish black market. The last chapter in this cluster offers an analysis and the correlations of the black market and its historical and geographical determinants. After considering the criteria of trade, profit, specialization, mass scale, continuity and geography on the battlefield that was the black market, there were only three armies left: those that traded in meat, those that traded in alcohol, and those that traded in both hard currency and gold. Of course the graph of the fluctuations of their black market trading was never linear. It looked more like a very irregular wave. We can definitely say though that in post‑war Poland unofficial trade in those articles was an important element of the game playing between society and the authorities. It thus made sense to dedicate a separate, monographic chapter to each of the above specialized branches of the black market. The inclusion of the automobile sector of illegal trading (including cars, gas and spare parts) posed more questions. On the one hand, the black market in automobiles came into play at the beginning of motorization at the turn of the 1950s and the 1960s and reached a mass scale in the 1980s. On the other, most of the transactions, especially those involving gas, were one‑sided. The state was the sole distributor of gas, which could not be produced independently (unlike meat and alcohol) or brought from abroad (unlike currency, gold or even cars). The only way of introducing gas to the black market was to “repossess” it in various ways ←31 | 32→from the state. I therefore came to the conclusion that the illegal distribution of gas merited a chapter of its own.48

Black market phenomena were, to some extent, homogenous: despite changing economic, political, and social circumstances, certain specific goods continued to change hands illegally. More difficult to tackle is the topic of smuggling, which constituted a discrete and singular black market category. On the one hand, smuggling broke the state monopoly in international trading,49 as well as tax and currency laws; on the other – it involved a very wide range of goods. Hard currency and gold always stayed on the smugglers’ list; other wares came and went depending on the economic situation, the consumption aspirations of society, the type of shortages etc. Despite those complexities, smuggling meets our criteria: it was significant throughout the post‑war era, highly profitable, and specialized. If earlier on, smuggling was regional, took place mostly in areas close to the Polish borders and involved the lower classes, in communist Poland it became a countrywide phenomenon. With the appearance of mass tourism in the late 1950s, millions of Poles began to participate in this activity. The part of the book dedicated to “currency values” presents highly specialized gold and currency smugglers. A separate monograph chapter is focused on “tourist commerce” commonly practiced within the Soviet Bloc countries. The above classification is proposed in the full knowledge that maintaining clear boundaries between each sector of the black market is extremely difficult. As always, what is not clearly defined and of an informal nature is usually full of empty spaces, margins and overlaps. As a result, some repetitions were unavoidable. It was also not possible to avoid highlighting some themes at the cost of others. The over‑representation of Warsaw, evident in the book, does not mean that the role of the provinces is intentionally diminished, or that it was simply the Warsaw perspective that was the easiest to research. This approach certainly does not reflect any bias on the part of the author. There is no doubt that Warsaw remained over the years the black ←32 | 33→market capital of the country. All the source limitations forced the author to look at the topic through the eyes of a state official or a policeman rather than those of an illegal money changer (cinkciarz) or the “baba” selling veal. Thus themes presenting the strategies undertaken by the black market insiders, their motivations, opinions, ethical considerations, and rituals are certainly debatable and do not exhaust the topic. The same can be said about relations between the black market and the official economy or about estimating the real profit from unofficial operations. Here, a more general question arises: how should we define black market “profit”? I am fully aware that this book can do no more than open the door; behind it there lie paths that can take us in many very different directions.

This book is the result of research financed by the Ministry of Science and Higher Education, Grant No 1 H01G074 29.

I would not have been able to write this book without help from countless friends, colleagues, acquaintances and strangers, who supported my project by bringing to my attention the existence and location of the materials, by sharing their knowledge, often very particular and unsurpassed, or by facilitating the logistic of the research. I am most grateful to Włodzimierz Borodziej, Błażej Brzostek, Katarzyna Chimiak, Katarzyna Czajka, Andrzej Garlicki, Tomasz Gleb, Grażyna Godziejewska, Bogdan Górski, Heidi Hein‑Kirchner, Maria Hrnova, Iwona Jakimowicz‑Ostrowska, Dariusz Jarosz, Włodzimierz Kalicki, Mariusz Kardas, Ondrej Klipa, Jacek Kochanowicz, Maria Koczerska, Jeff Kopstein, Krzysztof Kosiński, Éva Kovács, Andrzej Krajewski, Marcin Kula, Jan Kusber, Andreas Lawaty, Włodzimierz Lengauer, Tomasz Markiewicz, Ewa and Przemysław Matusik, Małgorzata Mazurek, Maria and Mikołaj Morzycki‑Markowski, Jana Oldfield, Krzysztof Persak, Błażej Popławski, Joachim von Puttkamer, Jolanta Rudzińska, Maika Sach, Bożena Skarżyńska, Emilia Słomanowska‑Kamińska, Grzegorz Sołtysiak, Anna and Jacek Soszyński, Paweł Sowiński, Andrzej Stach, Dariusz Stola, Grażyna Szelągowska, Philip Ther, Janina Tomala‑Steinhauer, Romuald Turkowski, Maciej Wojtyński, Marcin Woźniczko, Andrzej Wroński, Anna and Piotr Wróbel, Marcin Zaremba, Jonathan Zatlin and Klaus Ziemer. The present edition is the fruit of the collaboration between Anna Wróbel and Anda and Seamus MacBride. To all others whom my less‑than‑perfect memory has caused me to omit I sincerely apologize.

Finally, my special thanks to my wife Iwona, who has always listened patiently to my reports on black market discoveries and was my first critical reader. Also thanks to my children Róża and Antek, for whom the shortages of the, for them pre‑historic, Polish People’s Republic turned into a very noticeable shortage of a father.

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1 Franciszka Starowieyskiego opowieść o końcu świata czyli reforma rolna, written down by K. Uniechowska, Warszawa 1994, p. 132.

2 See: M. Kosewski, Ludzie w sytuacjach pokusy i upokorzenia, Warszawa 1985, pp. 12–73.

3 The Second Economy in Marxists States, ed. M. Łoś, Houndmills–London 1990, pp. 2–4; E. Klinkmüller, G. Leptin, Terminologische Anmerkungen zum Begriff der Schattenwirtschaft, in: Beiträge zum Problem der Schattenwirtschaft, ed. G. Hedtkamp, Berlin 1983, pp. 11–13; Gospodarka nieformalna. Uwarunkowania lokalne i systemowe, ed. K.Z. Sowa, Rzeszów 1990; M. Bednarski, Drugi obieg gospodarczy. Przesłanki, mechanizmy i skutki w Polsce lat osiemdziesiątych, Warszawa 1992, pp. 15, 34; F. Schneider, D.H. Enste, The Shadow Economy: An International Survey, Cambridge 2002, pp. 6–9. See also: The Unofficial Economy: Consequences and Perspectives in Different Economic Systems, ed. S. Alessandrini, B. Dallago, Aldershot 1987 (especially articles: E. Feige, The Anatomy of the Underground Economy and P. Wiles: The Second Economy: Its Definitional Problems; M. Göke, K.-H. Hartwig, Schwarzmärkte, in: Ökonomische Theorie der Rationierung, ed. M. Tietzel, München 1998, pp. 106–137.

4 J. Kornai, Economics of Shortage, Amsterdam–New York 1980; J. Kornai, The Socialist System: The Political Economy of Communism, Princeton 1992; Models of Disequilibrium and Shortage in Centrally Planned Economies, ed. Ch. Davis, W. Charemza, London 1989. See: K. Nowakowski, Niedobory w gospodarce a społeczeństwo i jednostka, Katowice 1993; M. Jastrząb, Puste półki. Problem zaopatrywania ludności w artykuły powszechnego użytku w Polsce w latach 1949–1956, Warszawa 2004, p. 130.

2004; M. Mazurek, Społeczeństwo kolejki. O doświadczeniach niedoboru 1945 J. Kornai, The Socialist System: The Political Economy of Communism 1989, Warszawa 2010; M. Mazurek, Antropologia niedoboru w NRD i PRL 1971–1989, Wrocław 2010.

5 The Second Economy in Marxists States…, p. 4; A.V. Ledeneva, Russia’s economy of favours: Blat, Networking and Informal Exchange, Cambridge–New York 1998, p. 87.

6 A.V. Ledeneva, Russia’s Economy of Favours…, p. 87.

7 E. Hankiss, The “Second Society”: Is There an Alternative Social Model Emerging in Contemporary Hungary?, in: “Social Research” p. 55, 1988/1–2 & 13–42. See: M. Marody, Od społeczeństwa drugiego obiegu do społeczeństwa obywatelskiego, in: “Studia Socjologiczne” 1999, p. 4 (155)/35–51. See: J.R. Wedel, The Private Poland: An Anthropologist’s Look at Everyday Life, New York 1986; Herrschaft und Eigen-Sinn in der Diktatur. Studien zur Gesellschaftsgeschichte der DDR, ed. T. Lindenberger, Köln–Weimar–Wien 1999; U. Brunnbauer, “Die sozialistische Lebensweise”. Ideologie, Gesellschaft, Familie und Politik in Bulgarien (1944–1989), Köln–Weimar–Wien 2007.

8 J. Brodacz, Mali ludzie – wielkie interesy. Afera skórzana w Radomiu, “Polityka”, 45/Nov 5 1960; Central Archives of Modern Records in Warsaw (Archiwum Akt Nowych – AAN), The Office of the Council of Ministers (Urząd Rady Ministrów – URM), 32/115, fol. 38.

9 Based on: A. Katsenelinboigen, Coloured Markets in the Soviet Union, in: “Soviet Studies” 29/1977/1, pp. 62–85; F. Haffner, Ist die Schattenwirtschaft ein Reformansatz? Das Verhältnis der Wirtschaftsreformen in Osteuropa zur Schattenwirtschaft, “Vierteljahreshefte zur Wirtschaftsforschung” 1985, pp. 177–187; L.I. Shelley, The Second Economy in the Soviet Union, in: The Second Economy in Marxist states…, pp. 11–26; G. Grossman, The Second Economy of the USSR, in: The Underground Economy in the United States and Abroad, ed. V. Tanzi, Lexington–Massachusetts–Toronto 1982.

10 See: A. Korbonski, “The Second Economy” in Poland, in: “Journal of International Affairs” 35/1981/1, pp. 1–13; M. Łoś, The Dynamics of the Second Economy in Poland, in: The Second Economy in Marxists States…, pp. 27–49; S. Tellenbach, The Logic of Development in Socialist Poland, “Social Forces” 57/1978/2 (special), pp. 436–456.

11 A. Friszke, Kultura polityczna w PRL 1948–1989, in: A. Friszke, Przystosowanie i opór. Studia z dziejów PRL, Warszawa 2007, p. 398.

12 Ibid., 399. See: W. Narojek, Socjalistyczne “welfare state”. Studium z psychologii społecznej Polski Ludowej, Warszawa 1991. The shortages in Poland were worse than those in the GDR, Czechoslovakia or Hungary, and occasionally than those in the Soviet Union, Romania and Bulgaria.

13 Drobnomieszczaństwo w strukturze i świadomości społecznej, ed. Z. Zagórski, Wrocław 1988 (Acta Universitatis Wratislaviensis. Prace Filozoficzne. Socjologia 2), p. 3.

14 See: M. Walczak, Walka ekonomiczna narodu polskiego 1939–1945 Warszawa 1983, pp. 63–99; K. Wyka, Gospodarka wyłączona in Życie na niby, Kraków 2010, pp. 274–311.

15 Drobnomieszczaństwo…, p. 5.

16 S.M. Korowicz, W Polsce pod sowieckim jarzmem, London 1955, p. 31.

17 R.L. Chugh, J.S. Uppal, Black Economy in India, New Dehli 1986, p, 14 See: K. Karcz, Efekt naśladowania zewnętrznych wzorców konsumpcji jako czynnik utrudniający sterowanie spożyciem indywidualnym, in: Narzędzia polityki gospodarczej i społecznej w procesie kształtowania konsumpcji. All-Poland academic and didactic conference of Faculties of Trade in Goods and Services of higher economic schools, September 1987, vol. 1, Katowice 1987, pp. 201–205.

18 J. Szczepański, Zagadnienia konstruowania i realizacji modelu i wzorów konsumpcji socjalistycznej, in: Badania nad wzorami konsumpcji, ed. J. Szczepański, Wrocław–Warszawa–Kraków 1977, p. 33.

19 J. Tomaszewski, Czarny rynek, in: Encyklopedia historii gospodarczej Polski do 1945 roku, ed. A. Mączak, vol. 1, Warszawa 1981, p. 114.

20 During the post-war period there existed various quasi-regulatory measures such as coupons, branch allowances, special stores, sailors’ or miners’ ration books, etc. See: Ökonomische Theorie der Rationierung

21 AAN, URM, 32/119, fol. 67.

22 AAN, URM, 32/121, fol. 83.

23 S. Podemski, Niech nie lecą wióry, Polityka 18/1984.

24 Szczęście w nieszczęściu, Polityka 48/1985, Szlachetny spekulant, Polityka 8/1986.

25 D. O’Hearn, The Consumer Second Economy: Size and Effects, Soviet Studies 32/1980/2, p. 219.

26 AAN, URM, 32/184, fol. 59–62.

27 AAN, URM, 32/116, K 73, p. 166.

28 “Goods usury” usually occurring under disrupted economic conditions (war or natural disaster) meant that the manufacturer or the merchant obtained extraordinary and unsubstantiated economic profits. “Speculation” implied that, additionally, a profit-taking middleman was involved. M. Bednarski, Drugi obieg gospodarczy…, p. 152.

29 S.K. Ray, Economics of the Black Market, Boulder 1981, p. 1. In the 1980s the size of the second economy, mostly consisting of black market practices such as gold smuggling, was estimated at over 50 per cent of the GNP. A. Kumar, The Black Economy in India, New Delhi 202, p. 55.

30 S.K. Ray, Economics…, p. 4.

31 See: Szara strefa Października. “Notatka” o nielegalnych dochodach w Polsce 1956–1957, ed. J. Kochanowski, Przegląd Historyczny (PH), 95 2004/1, pp. 77–96.

32 Monitor Polski 1974/9/68.

33 P. Gliński, Ekonomiczne uwarunkowania stylu życia. Rodziny miejskie w Polsce w latach siedemdziesiątych, 1983, PhD dissertation, IFIS PAN, p. 112.

34 The above-mentioned PhD dissertation by P. Gliński and Paweł Wyczański’s PhD dissertation, the Dept. of Finance and Statistics at the SGiPS (now called the SGH) 1987, Czarny rynek walutowy w Polsce 19701984.

35 M. Bednarski, Drugi obieg, Życie Gospodarcze 1984/35 See also Gospodarka “drugiego obiegu” a kryzys lat osiemdziesiątych in: Rzeczywistość polska i sposoby radzenia sobie z nią, ed. M. Marody, A. Sułek, Warszawa 1987.

36 R. Jaworek Gospodarka nieformalna-czwarty sektor gospodarczy, Warszawa 1984.

37 J. Kleer, W cieniu, L.Będkowski, Jak sąsiad z sąsiadem, K. Krubski, Góra lodowa, M. Przybylik, Słonina i schab spod serca, W. Markiewicz, Poemat pedagogiczny, J. Baczyński, Policzyć sztuki, godziny i do kasy, Polityka 1984/49.

38 J. Rogoziński, Kryzys jako weryfikator w sferze rynku i konsumpcji, in: Narzędzia polityki gospodarczej i społecznej…, vol. 1, pp. 151–161.

39 J. Misala, Nieoficjalna wymiana handlowa obywateli polskich z zagranicą, Warszawa 1989; P. Wyczański, Dwuwalutowość w gospodarce polskiej oraz metody i możliwości jej ograniczenia, Warszawa 1989.

40 M. Bednarski, Drugi obieg gospodarczy…

41 Komisja do walki, ed. G. Sołtysiak, Karta 1991/1, pp. 81–97.

42 T. Grosse, J. Grużewski, M. Kozak, M. Kula, M. Meller, K. Piasecki, P. Piskorski, P. Salak, M. Woźniak, P. Zalewski, Szarzy ludzie zaplątani w codzienności komunizmu, PH 1993/3, pp. 335–350.

43 See the bibliography.

44 See the bibliography – list of archives.

45 With the exception of J. Węgleński, for the research on tourist commerce from the beginning of 1960s, see: chapter 9.

46 in 1987, K. Rogoziński had proposed putting the word “black” in “black market” in quotation marks; K. Rogoziński, Kryzys jako weryfikator…, p. 161.

47 Drugs appear to be a separate issue. While other sectors of the black market enjoyed a certain level of social acceptance, this was not the case with drugs. Drug dealing was widely perceived in the rightly so, as a criminal activity. Pornography was also viewed negatively but not overly rigidly, although it is difficult to define it precisely and impossible to determine the scale of the phenomenon.

48 I did not include, however, the unofficial trade in construction materials despite the fact it was a widespread, long‑term practice prevalent throughout Poland. To analyze the problem would not have contributed many new details to flesh out the picture of the black market but it would have required a separate set of research methods and tools. The unofficial methods of acquiring apartments were a separate phenomenon that operated outside of the black market spectrum. See: D. Jarosz, Peerelowskie lamenty mieszkaniowe, in: Od Piłsudskiego do Wałęsy. Studia z dziejów Polski XX wieku, ed K. Persak, Warszawa 2008, 307–320, D. Jarosz, Mieszkanie się należy… Studium z peerelowskich praktyk społecznych, Warszawa 2010.

49 M. Bednarski, Drugi obieg gospodarczy…, p. 40.