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This article claims it was common in the USSR if an enterprise needed steel, to buy say knives or other steel goods and melt them for steel.

In general, control by the ruble was designed to prevent deviations from the central production plan. But since the plan itself was often inconsistent, providing an enterprise with too little of one input and too much of another, managers in order to meet their output requirements were forced to develop sources of supply that could bypass Gosbank's clearing operations, i.e., sources that required neither bookkeeping money nor cash. Hence, the immense amount of interfirm bartering that took place in the Soviet Union. An enterprise with excess coal might be lucky enough to trade it for some desperately needed steel. More likely, it would trade its excess coal for some rubber that it didn't need, and would then go about finding an enterprise that had excess steel but needed rubber. Or, worse still: it would trade coal for rubber, then trade rubber for steel knives, and finally melt down the knives to obtain raw steel.

I wonder if this is correct.

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    I have a snkeaking suspicion that someone somewhere in the chain misinterpreted the concept of "metallolom" (metal recycling). That sounds far more plausible than buying steel utensils (as opposed to something bigger) – user5341 Sep 4 '15 at 17:31
  • In the article, it explains it better as a bartering system. If A had extra tires and needed steel, while B had knives and needed rubber... – Is Begot Sep 4 '15 at 17:35
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    The quoted section does not claim it was common for knives to be melted for steel. It says there was an immense amount of bartering, and gave an example of what that might look like. – Oddthinking Sep 5 '15 at 3:37
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    I think this is a speculative example of the truth being that due to poor central resource planning a lot of resource shortages were addressed in an ad hoc manner. It was common for factories to have to barter for materials, no I do not believe it was restricted to just melting knife blades or that this particular speculative route occured more often. – crasic Sep 11 '15 at 4:24

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