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. Last Updated: 07/27/2016

Russia's Voodoo Economics

Throughout the entire world, there is a certain order of things: If a person is out of work, he gets allowances or welfare. The condition he finds himself in is called unemployment. We have a different way of doing things: A person works, but receives neither salary nor benefits. What is this called?


I don't know whether earlier in the history of world economics there were as many cases of massive, systemic and endless nonpayment of salaries as in Russia today. On such a wide scale, I rather doubt it. This is our contribution to the treasury of civilization, our own invention.


The invention is very useful for the political authorities and is based on precise, even sharp-witted calculations that are not lacking in cynicism. You don't have to be a great psychologist or carry out extensive opinion polls in order to figure out the following: The mentality of a typical ex-Soviet toiler was formed in such way that he would rather forego unemployment benefits than lose his semi-fictitious, unpaid job.


If the expansion of the North Atlantic Treaty Organization to the East or, say, the AIDS epidemic does not worry the population much if at all, and corruption and crime only trouble people every so often, then the threat of becoming unemployed strikes real terror into the hearts of Russians.


The state benefits from this in two ways. It saves on budget expenditures for social welfare and keeps the citizens psychologically traumatized.


Such was one of the idle thoughts that occurred to me during my short stay in a beautiful hotel on the Mediterranean coast of the kingdom of Morocco.


It is nice to meet people who don't know anything about Russia at all and who ask naive but good questions.


For example, one rather pleasant Egyptian television producer was able to divert his attention from the belly dancer long enough to ask me: "What is Russia producing these days, aside from arms, of course?" He asked without any ulterior motive, yet the question took me aback for a second. I was somewhat evasive: "In Russia, a lot of everything is produced, but this doesn't at all reflect on everyday life, since the demand for locally produced goods is not very great. They are little advertised. And, yes, in general, they're not, as a rule, of very high quality."


I took Russian movies as an example: We still produce several scores of films each year in spite of it all, but they can only be seen at club showings. (Whether it's worth going to these showings is another question.) The Egyptian probably decided that I was greatly exaggerating -- otherwise, the picture I presented would have seemed too absurd.


Was I exaggerating? How many people in Russia can boast of having bought even one stitch of clothing or shoes produced here these past few years? How about appliances? Electronics? Sporting equipment? Perhaps many can claim to have bought a domestic automobile -- as a punishment for the poverty that does not allow a person to buy even a Skoda or some kind of Korean job.


The grocery store in my building -- not a supermarket, but something quite ordinary -- has among the, thank God, abundance of food, only domestically produced bread, milk, kefir, J-7 juices (made from imported fruit concentrates), a few kinds of kolbasa, candy, alcoholic drinks and Ekstra oat flakes. In the vegetable and fruit department, everything comes from abroad, including pleasant-looking potatoes.


"But Russians eat salo!" This was the irate response that the patriotic poet, Sergei Mikhalkov, threw in the face of any of the country's Westernizing vermin, meaning that Russians eat Russian lard after all. But even this phrase has lost its currency. In my local store, you can find Czech salo (lard), Danish salo -- but not even Ukrainian salo.


If in the country today no one understands what is being produced and almost nothing of one's own is being sold, then where is the national income coming from and where are people getting so much money?


The tourist industry is dead. Trade is at a handicraft or cottage industry level. Is the money coming from exports of natural resources? We certainly have exported quite a lot if you take into account the significant portion of income that is pocketed or tucked away in foreign banks.


So how to account for relatively not-so-low well-being? This trick will be something far more mysterious than the Russian soul.