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. Last Updated: 07/27/2016

Worth Its Weight, Only

Life used to be easy for Sergei Blumenburg, a filmmaker who produces documentaries and occasional commercials, including a commercial for Pepsi that airs on Russian television. Hiring actors and actresses used to be a simple, uncomplicated business, but that was back in the days when the ruble meant something. Now, the 44-year-old Russian complains, the first thing that actors and actresses say to him -- even before discussing their lines or wardrobe -- is, "Let's talk color. How are you going to pay me? In red or in green? " Of course, the currency of choice is "zelyoniye", or "greens", as dollars are commonly referred to.


Some of the new currencies that have followed on the heels of the ruble have scarcely managed to command more respect. Ukrainian coupons, which were issued at par with the ruble as a transitional currency pending introduction of the hrivna -- and have become virtually the only currency in the world to depreciate against the ruble -- are referred to by Ukrainians as "fantiki" (candy wrappers). In Lithuania, which recently introduced coupons pending the introduction of its own currency, the "litas", critics have already begun mocking the coupons, which are decorated with animal motifs, calling them "zoo tickets". But the ruble seems to be the subject of endless ridicule. As the joke goes, "How much is a pound of rubles worth? -- A pound".


Why and when did the ruble become the object of such scorn and derision? An executive at the Itar-Tass news agency who was standing in line to collect his salary recently -- in Russia, even getting paid means standing on line -- touched on part of the problem. Fingering the crisp, new 5, 000-ruble note the bookkeeper had just handed him, after a 45-minute wait, the executive remarked, "It's amazing. It isn't backed by anything, not gold, not silver, not even bread". The executive is right. Although it says on the front of every ruble that it is "backed by gold, precious metals and other assets of the State Bank", according to Igor Belikov, a historian at the Gorbachev Foundation, the ruble has not been backed by gold, or anything else, since the Bolshevik Revolution.


"Formerly, it said on every ruble, just as it does today, that it was backed by gold, but in reality, it wasn't backed by anything", Belikov said.


Before the revolution swept across the great plains of Russia, the monetary system was much healthier. From the 13th century until 1704, purchases were made with bars of silver, instead of money, according to a Soviet encyclopedia. In 1704, coins were first put into circulation, and, in 1897, the "golden ruble" was introduced, thus called because each ruble was backed by pure gold and could be exchanged in any bank for a gold coin. A faded and fragile 25-ruble note dated 1909, which is pink and features a picture of Alexander III, also says in Slavonic that there was no limit to the amount of money that could be exchanged for gold. A one ruble note dated 1898, which is orange and bears the two-headed eagle, a Byzantine symbol that later became a symbol of the czarist empire and is now reappearing as the insignia on the new 50- and 100-ruble coins, makes its owner the same promise. In 1914, the exchange rate was 1. 9 rubles to the dollar.


Under the Provisional Government, the ruble, which was called a "kerenka", after Alexander Kerensky, became virtually worthless as inflation soared to astronomical proportions. Salaries were paid in millions of rubles in an effort to keep up with prices, which rose an average of 20 to 30 percent a day. A loaf of bread cost half a million rubles, a kilogram of sugar cost tens of millions of rubles, a tram ride, half a million rubles. Salaries were given out in large sacks. Since prices were rising daily, workers were often paid in goods, like bread or salt.


By 1924, however, a convertible ruble called the "chervonets", from the Slavonic and Ukrainian word for red, "chervoniy", was introduced. The chervonets made its way onto international exchanges and was freely convertible throughout Europe and the United States during the mid-1800s and from 1924 to 1929, under the semi-capitalist New Economic Plan begun by Lenin. One chervonets was the equivalent of 20 million to 30 million rubles, Belikov said.


The plan was to have the chervonets, which was Russia's link to the rest of the world through trade, eventually replace the ruble. But for the chervonets to remain convertible, it would have been necessary to introduce a market economy. Instead, when Stalin came to power, a series of disastrous monetary reforms were begun and the chervonets was taken out of circulation and replaced by one currency, the inconvertible Soviet ruble. Rather than strengthening Adam Smith's invisible hand, Stalin and his successors used an iron fist to create a tightly controlled centralized command economy. Money became a political instrument, rather than an economic one. Since travel abroad was forbidden and there was no trade with countries outside the Soviet bloc, the leadership reasoned, why bother having a convertible ruble?


Since then, the ruble has plummeted in value and many people have lost faith in it. Recently, on the popular Friday night game show "Field of Miracles", a woman was offered a choice of 20, 000 rubles or a mystery prize in a shiny, black suitcase. Another contestant, a man, was offered 40, 000 rubles or the prize in the suitcase. Both contestants chose the suitcase and looked utterly crestfallen when it was opened and the treasure inside turned out to be -- a wad of rubles. Even children have learned to depreciate their country's currency. Said a 13-year-old named Kirill, "If you have only 15 or 20 rubles, you may as well just throw them away".


Lori Cidylo is a freelance journalist based in Moscow.