As a child growing up in St. John's, Newfoundland, I remember Soviet fishermen going on shopping excursions while their vessels were in port. (Used Lada automobiles - which their disgruntled Canadian owners were happy to be rid of - were particularly popular.)
More recently, I read about people in Hungary being allowed to take short trips to Austria not long before the Berlin Wall came down, and Hungarians would come back in cars loaded down with appliances and other consumer goods.
How would the average person in a Communist country get Western money? Were relatives in the West allowed to send it to them? Was it earned through black-market dealings with tourists?
i will try to explain it. after the revolution of 1956 the government distrusted the pople and did not allowed them to leave the country. you could ask for a travel permission, but the officials could deny it without saying the reason. this prohibition eased up in the 60's, when you received the reason why you are not allowed to leave, and also a couple of people (politicans, sportsman, travel guides) - still strictly monitored - were alloved to travel abroad. owning foreign currency was out of the question.
in the mid 60's countries were marked as "friendly" (east) and "imperial" (west) and even more people were allowed to travel to friendly countries. people received "real" passports from 1972. you could get two kinds of passports: "invite passports" when a relaitve invited you, or tourist passports. provided you were a party member.
and this is the part that might answer your question. you received an allowance with each passport. you could buy 50$ with your invite and 70$ with your tourist passport. there were some major travel agencys where you could buy the foreign currency. owning more foreign currency was a crime, so even if a relative sent you money, the government could reserve it and maybe your family too. above that it was only allowed to bring some Forint (hungatian currency) with you, in case you have troubles to get back.
in the 80's some countries (like Austria) stopped asking for visas. Hungarian citizens received world passports and from 1988 you could buy as many foreign currency as you wanted, and around this time Gorenje-tourism happened. taxes were calculated pro person, so if you managed to get 4-5 persons to go shop with you, and on the way back you managed to fit them all together in your Fiat or Lada (the granny usually sat IN the washing machine) you could bring in the washing machine legally, without even paying tax.
edit:typo