In the 1960s, the Soviet Union began prohibiting typical goods, common to most middle class consumers, that prompted most citizens to seek goods and supplies via other means. An underground market came to fruition to meet the people’s demands.
The government began penalizing people for purchasing common necessities, “Involvement in the underground economy had become a fact of Soviet existence by 1980. Economic activities regarded as normal in market economies not only were prohibited under Soviet law, but also carried heavy penalties. The acquisition of consumer services (repairs of appliances and autos, medical services) and residential housing, the resale of scarce consumer goods, trade in western consumer goods such as blue jeans or cigarettes were on a par with criminal activities such as the narcotics trade and moonshine liqueur. Virtually every citizen became a de facto criminal in the quest for a more comfortable life” (Geldern).
Anything citizens couldn’t get their hands on on the Black Market, the Soviet Union hacked up the prices for most other goods. But it did not necessarily help the Soviet Union, “The underground economy both aided and impeded the growth of the Soviet economy. The system was more efficient when independent agents circumvented artificial price and production controls, thus buffering average citizens from the inefficient allocation of resources by central planners. Growth in the unofficial sector far outstripped growth in the stagnant official economy. Yet obligatory law-breaking had a corrosive effect on society, and undermined the legitimacy of the state” (Geldern).
Following the fall of the Soviet Union, most of the citizens who participated in the Black Market turned into criminals and racketeers.