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Nothing to Buy

Key Economic Concepts:

• Choice
• Redistribution of Income
• Role of Government
• Scarcity

Description:

Students compare the Soviet-era marketplace with present-day Russian marketplace.

Lesson Objectives:

Students will:

• Compare Soviet-era marketplace with present-day Russian marketplace.
• Demonstrate consumer decision-making in both Soviet-era marketplace and present-day Russian marketplace.

Introduction:

[Note to teacher: During the reign of Communism in the Soviet Union, there was no unemployment. People had good income regardless of the quality of their work. However, there were very few goods available for purchase.

The Soviet Union decided to distribute goods equally. Therefore, all produce grown and goods manufactured within the Soviet Union were sent to a central location to be distributed to each of the cities and villages throughout the country. (Show the students this map of present-day Russia to show the vastness of the country: http://lcweb2.loc.gov/frd/cs/sutoc.html ^[1] or www.cia.gov/library/publications/the-world-factbook/index.html ^[2] )

Because economic needs differed from location to location, villages and cities frequently found themselves with many goods they didn't need, and few goods that they wanted. Therefore, many consumers had money, but were unable to purchase what they wanted or needed.

Since the fall of Communism and the Soviet Union, a different economic situation has developed. Since employment and product manufacturing and distribution are no longer overseen by the government, the unemployment rate has risen dramatically. At the same time, the value of the ruble dropped so those who had saved money during the Soviet era no longer had much money. Many companies have come from the west (United States, Europe) and are selling their products in Russia. Therefore, Russian consumers now have plenty to buy but no money to spend.]

Resources:

• A Country Study- Soviet Union: This website offers information about and provides a map of the former Soviet Union.
  http://lcweb2.loc.gov/frd/cs/sutoc.html ^[1]
   
• Central Intelligence Agency: The World Factbook.
  www.cia.gov/library/publications/the-world-factbook/index.html ^[2]
   
• Fodor's for Choice Travel Experiences: Here you can read reviews of restaurants in St. Petersburg.
  www.fodors.com/world/europe/russia/st-petersburg/restaurants.html ^[4]
   
• Daily Lesson Plan: Is the Ruble Becoming Rubbish? A lesson in Comparative Economics.
  www.nytimes.com/learning/teachers/lessons/19980909wednesday.html?searchpv=learning_lessons ^[5]
   

Process:

Activity 1

After explaining the differences between the marketplaces in the Soviet Union and present-day Russia, divide the students into two groups: Soviet-era marketplace and present-day Russia marketplace.

After the students are divided into the two groups, give each group of students the appropriate "wallet" and list of goods to buy. Explain to each group that they need to purchase enough goods to support their family of five for one week. Then, explain to each group that they have only one Saturday to do their shopping (8 hours). In the case of the Soviet-era group, there were many long lines that consumers had to stand in before they could buy the food or goods.

They will use the tables below to determine how they will best spend their time and money to acquire the goods needed for their families. [ Note to teacher: The value of the Ruble changed dramatically. While it may seem that present-day Russians are earning more, inflation makes those Rubles worthless.]

Soviet-era Wallet: One week's salary is 50 Rubles (there are 100 kopeks in a ruble)

Soviet-era Prices:

Present-day Wallet: 500 Rubles

Present-day Russia Prices:

Students must decide how to spend their income and their time. They should generate a list on chart-paper of all of the food and goods that they bought and how much money they have left over. They should also calculate the amount of time they needed to purchase all of those goods.

Discussion Questions

After students have shared their shopping lists, discuss the following:

1. Would you rather shop in the Soviet-era or present-day Russia? Why? [answers will vary]
2. Which group had more money to spend compared to the cost? [Soviet-era group]
3. Which group had more choices of goods to buy? [present-day Russians]
4. By how much did the price of milk increase between the Soviet Era and present-day Russia? [100 times more expensive]
5. How much did the average wage increase? [10 times]
6. What do the two calculations above suggest about the state of the present-day Russian economy compared to the Soviet Era economy? [Wages have not increased as much as price. The economy is not as strong].
7. How much money did the Soviet Era consumers have after shopping? [answers vary]
8. What does that suggest about the economy in the Soviet Union? [It suggests that while consumers have plenty of money to spend, they do not have enough goods to buy. Therefore, the economy is not as strong as it appears.]
9. Go to www.fodors.com/world/europe/russia/st.%20petersburg/listings_nam_20002.html ^[3] to read reviews of restaurants in St. Petersburg. Remember that $1 = 27 Rubles.

• In dollars, how much was the author's meal at Count Suvorov? [$17]
• In Rubles, how much is the same meal? [459 Rubles]
• What is the average Russian consumer's wage? [500 Rubles] Could he or she afford to eat a meal at Count Suvorov? [No. It would cost nearly one week's wages for one meal.]

Conclusion:

Have the students answer the following questions and turn them in when they have finished.

Extension Activity:

Is the Ruble Becoming Rubbish?

In this partner-approved (Illuminations) lesson plan for grades 8-12, students "analyze the effects of economic turmoil on various segments of the Russian economy and relate them to the local economy and their own lives. " Although this plan is written for older students, it can be easily adapted to a fifth-grade classroom. There are also some interesting Extension Activities at the end of the lesson. www.nytimes.com/learning/teachers/lessons/19980909wednesday.html?searchpv=learning_lessons ^[5]

Links Used:

1. ^{^ ^} "A Country Study- Soviet Union" - (lcweb2.loc.gov) This website offers information about and provides a map of the former Soviet Union.
2. ^{^ ^} "CIA The World Factbook" - (www.cia.gov) The World Factbook provides information on the history, people, government, economy, geography, communications, transportation, military, and transnational issues for 266 world entities.
3. ^{^} "St. Petersburg Restaurant Reviews" - (www.fodors.com) Read reviews of restaurants in St. Petersburg.
4. ^{^} "Fodor's for Choice Travel Experiences" - (www.fodors.com) Here you can read reviews of restaurants in St. Petersburg.
5. ^{^ ^} "New York Times: The Learning Network" - (www.nytimes.com) This website from the New York Times offers lesson plans and educational material for teachers related to current news articles.

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