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The strategy of regulating the domestic market by the state in the 20s
The actions of the People's Commissariat of Trade in the domestic market were extremely active, where, along with trade promotion measures, monopolistic and administrative methods of influencing market conditions prevailed, which led to only a temporary effect on the market.
Administrative measures, not being inherently related to the interests and patterns inherent in the market system, could not influence the market for a long time and contribute to the development of its long-term healthy trends.
Excessive regulation, strict implementation of the course on fixed prices led to severe economic consequences. Already in the 1924/25 economic year, the People's Commissariat for Trade introduced marginal procurement prices for bread, raw materials (wool, flax, leather), meat, cow's oil and eggs. This policy consisted in prohibiting purchases of agricultural products at prices exceeding the established limits for all major state producers funded by budgetary funds, as well as for other organizations capable of preventing the sale of limits. Thus, fixed prices were set uniformly for large areas, regardless of harvest and market conditions. As a result, an ever-widening gap has formed between the limits and prices of the free market, the market coverage by private capital has expanded, and government procurement has sharply decreased.
Determining the prospects for price development only in connection with their dynamics, fixing only one formal characteristic of the pricing process to the detriment of its content, characteristic of the administrative apparatus, predetermined many negative aspects of state price regulation in the mid and late 20s.
The strategic line of government regulation of the domestic market in the 20s was to maintain agricultural prices at a level that makes exports profitable (that is, reducing prices and vigorously countering their further rise), and achieving low break-even (with an element of accumulation) prices for industrial goods by reducing the cost of production and trade margins.
Due to the lack of a meaningful formulation of the problem of price regulation arising from the analysis of the prospects for market development, it was difficult to seriously explore the possibilities of its solution by planning authorities. The focus on lowering prices in conditions of commodity starvation could not give positive results.
Unsecured by the corresponding increase in inventories, the decline in industrial prices led to an increase in commodity hunger, and consequently to an increase in the gap between official and free prices. In this regard, goods entering the retail network at a reduced price became objects of speculation, and the decrease "did not reach" the consumer, remaining in the channels of the commodity distribution system. Suffice it to note that during the period of active regulation of wholesale and selling prices from February 1, 1924 to October 1, 1926, the selling prices of state industry were reduced by 18% and, as shown by the retail index of the Market Research Institute, this decrease was accompanied by an increase in retail prices for the same period by 5%. Clipuri Sex https://www.tubev.sex/?hl=ro .