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When the time came for the trip back, we discovered that we definitely did not have enough gas. Worse yet, we were out of vodka! I was doing my usual meander through closed gas stations and empty industrial back lots, questing after gasoline, idling in third gear and trying not to touch either the gas pedal or the brakes to conserve the precious vapors. Finally, I spotted my quarry: a plucky urchin with a jerrycan. I was sent in to negotiate. Knowing how little we had to offer, I worked hard to establish understanding, sympathy and trust. This took some time. After a while, it did appear that we would get some gas, but not without parting with something valuable. The plucky urchin wanted a replacement for his unfashionable sweatpants and his imagination inevitably seized upon the jeans I was wearing. We were considering a trade, but then even he conceded that I would look ridiculous in his sweatpants. The deal remained tentative all the while the gasoline was being dispensed, but in the end he walked away, disappointed, with just a wad of rubles. To celebrate, we stopped for a picnic in a forest. Back on the highway, as we approached the hillside studded with giant concrete letters spelling “Leningrad Region,” our urchin friend was perched on top of the letter “L,” his jerrycan by his side. Had I brought a spare pair of jeans, we could have obtained a reserve; without it, we crawled back into town timidly, with hardly a slosh to be heard from the gas tank, and his wardrobe remained unfashionable.
There is a lesson to be learned here: when faced with a collapsing economy, one should stop thinking of wealth in terms of money. Access to actual physical resources and assets, as well as intangibles such as connections and relationships, quickly becomes much more valuable than mere cash.
A Rude Awakening
Two years later, I was back again, this time in the dead of winter. I was traveling on business through Minsk, St. Petersburg and Moscow. My mission was to see whether any of the former Soviet defense industry could be converted to civilian use. I toured formerly top secret factories and institutes. I managed to get a sample batch of product (little circuit boards) shipped to the US, but only after the government delayed the shipment and slapped on an export duty that neatly equaled our margin on the entire production run. So, the business part of the trip was a total fiasco and a complete waste of time, just as one would expect. In other ways, it was quite educational.
Minsk seemed like a city rudely awakened from hibernation. During the short daylight hours, the streets were full of people, who just stood around as if wondering what to do next. The same feeling pervaded the executive offices, where people I used to think of as the representatives of the “evil empire” sat around under dusty portraits of Lenin bemoaning their fate. No one had any answers.
The only beam of sunshine came from a smarmy New York lawyer who hung around the place trying to organize a state lottery. He was almost the only man with a plan. The director of a research institute which was formerly charged with explosion-welding parts for nuclear fusion reactor vessels also had a plan: he wanted to build summer cottages. The director of another research institute, one formerly charged with developing the silent magneto-hydrodynamic drive for nuclear submarines, had taken to hunting ducks in the city park. He proudly reported them to be free of radionuclides, but they tasted quite vile. There were also a lot of German businessmen, ostensibly in town on business, but really just to drink on the cheap and to sample the local women, a wide assortment of whom was on display at each of the two big tourist hotels.
I wrapped up my business early and caught a night train to St. Petersburg. On the train, a comfortable old sleeper car, I shared a compartment with a young, newly retired army doctor, who explained to me a truly medieval technique of curing recruits of the common cold using a vat of hot water and some turpentine, showed me his fat roll of hundred-dollar bills, and told me all about the local diamond trade. He was also dabbling in real estate: apartments in St. Petersburg were then selling for around one twenty-fifth of what they are worth now. We split a bottle of cognac and snoozed off. It was a pleasant trip.
St. Petersburg was a shock. There was a sense of despair that hung in the winter air. There were old women standing around in spontaneous open-air flea markets trying to sell toys that probably belonged to their grandchildren to buy something to eat. Middle-class people could be seen digging around in the trash. Everyone’s savings had been wiped out by hyperinflation. I arrived with a large stack of one-dollar bills. Everything was one dollar, or a thousand rubles, which was about five times the average monthly salary. I handed out lots of these silly thousand-ruble notes: “Here, I just want to make sure you have enough.” People would recoil in shock: “That’s a lot of money! ” “No, it isn’t. Be sure to spend it right away.” However, all the lights were on, there was heat in many of the homes and the trains ran on time.
My business itinerary involved a trip to the countryside to tour and have meetings at a scientific facility. The phone lines to the place were down, and so I decided to just jump on a train and go there. The only train left at 7 a.m. I showed up around 6, thinking I could find breakfast at the station. The station was dark and locked. Across the street, there was a store selling coffee, with a line that wrapped around the block. There was also an old woman in front of the store, selling buns from a tray. I offered her a thousand-ruble note. “Don’t throw your money around!” she said. I offered to buy her entire tray. “What are the other people going to eat? ” she asked. I went and stood in line for the cashier, presented my thousand-ruble note, got a pile of useless change and a receipt, presented the receipt at the counter, collected a glass of warm brown liquid, drank it, returned the glass, paid the old woman, got my sweet bun, and thanked her very much. It was a lesson in civility. After that, there was nothing to do except stand on the dark platform, look at the one illuminated object — the clock — and wait for the train.
Once on the train, it eventually dawned on me that I didn’t know where I should be getting off or where I should be going after that, so I strolled through the train, hoping to spot a scientist, I suppose. I found one fellow reading an English textbook and, considering it to be close enough, asked him whether he knew of the place I was visiting. Not only did he know it, but he worked there and knew the people I was planning to visit. We arrived there together, at what was clearly the most important building on the entire compound — the cafeteria — just as the lunch hour ended. Everyone felt sorry that I had missed lunch, but nothing could be done about it: lunchtime was officially over. This was quite an illustrious institution, with many world-renowned scientists who had contributed to international scientific collaborations, but it could no longer pay salaries, with the cafeteria remaining as one of the few remaining perks.
The New Normal
Three years later I was back again, and the economy had clearly started to recover, at least to the extent that goods were available to those who had money, but enterprises were continuing to shut down and most people were still clearly suffering. There were new, private shops, which had tight security, and which sold imported goods for foreign currency. Very few people could afford to shop at them. There were also open air markets in many city squares, at which most of the shopping was done. Many kinds of goods were dispensed from locked metal booths, quite a few of which belonged to the Chechen mafia: one shoved a large pile of paper money through a hole and was handed back the item. It was all a bit sketchy, but here, at least, one could pay with rubles.
There were sporadic difficulties with the money supply. I recall standing around waiting for banks to open in order to cash my traveler’s checks. The banks were closed because they were fresh out of money; they were all waiting for cash to be delivered. Once in a while, a bank manager would come out and make an announcement: the money is on its way, no need to worry.
There was a great divide between those who were unemployed, underemployed or working in the old economy, and the new merchant class. For those working for the old state-owned enterprises — schools, hospitals, the railways, the telephone exchanges and what remained of the rest of the Soviet economy — it was lean times. Salaries were paid sporadically or not at all. Even when people got their money, it was barely enough to subsist on.
But the worst of it was clearly over. A new economic reality had taken hold. A large segment of the population saw its standard of living reduced, sometimes permanently. It took the economy ten years to get back to its pre-collapse level, and the recovery was uneven. Alongside the nouveaux riches, there were