In Russia, an Expensive Car Can Be a Road Sign of Misfortune
It appears that a purposeful informational blockade is preventing the Russian public from conducting an informed debate on the consequences of significant political events. But instead of patiently waiting for an uncertain outcome, many all-encompassing trends can be inferred from the surroundings of our everyday life –for example, from the growing number of expensive cars on Russian roads. Which, in reality, doesn’t mean that the economy is booming.
Discussions continue as to what the prime minister really meant when he publically criticized Mechel (one of Russia’s leading mining and metals companies) and crashed the Russian market. Some political thinkers believe that he meant nothing at all. He just did it, and that’s it. Period. While those who (like the author of this column) see this as a sort of a neutron financial bomb, after which all the enemies are dead while all the infrastructure is preserved – anyone can come and own it – are incurably infected with conspiracy mania. What’s there to say? We’ll see. In the fall it will become clear who will take possession of the shattered Mechel, who will quickly become incorporated into the Evraz system (one of the largest vertically-integrated steel, mining and vanadium businesses in the world); then the discussion can be continued. Right now, there is no promise for any debate; either we assume that our prime minister is intelligent and always understands exactly what he is doing, or we assume something very different. It is impossible to combine these two types of logic.
Simultaneously, new discussions were launched about the meaning of the prime minister’s following action: he took over a presidential function and commanded to deliver aid to Ukraine and Moldavia that are drowning in a flood. But it seems like this verbal battle would make even less sense.
And it is absolutely impossible to guess whether it has truly been decided that Khodorkovsky will be released on parole; on the one hand, it seems so – otherwise why would the detention center need to approve the petition submitted to the district court? On the other hand, who knows how it will end? We do not have any concrete information that would allow us to clearly state: yes, they will let him go. And that means that the existing regime started taking advantage of its only opportunity to correct the situation by slowly and peacefully dismantling the system it has created. Nor have we any information to assuredly say: no, he’ll keep serving his sentence. And thus we should not lend ourselves to dangerous illusions. But since we do not have any information, why should we make wild guesses? We should arm ourselves with patience and simply wait for the situation to develop.
There is, however, a reality delivered to us through the sensations of everyday life, one that is indicative of profound processes that will inevitably have an effect on politics and economics. One of such given realities is a highway in suburban Moscow.
Ramshackle trucks and sparse Zhigulis and Volgas drag on down this highway in one endless traffic jam; but every year, if not every month, there are more and more fancy Infinities, Audi sixes, if not Audi eights; the X-5, which once seemed to be the lot of the elites, is turning into a common automobile phenomenon right before our eyes; I am not even mentioning the fantastical tuned-up Hummers, welded from two or three semi-tanks into an armored sausage in the fashion of a pink wedding limousine; I’m not talking about the pathetic Mercedes and mundane Land Rovers for the poor… What is this – a symbol of general economic prosperity, or a sign of mass madness, which happens in Italy, for example, when well-groomed playboys speed down the highways in out-of-this-world Ferraris, while some of these machos do not even have a roof over their heads? It seems that it’s neither. Instead, it is a visible confirmation of an old theory that money in Russia has again stopped being money. That is, it stopped functioning as the universal equivalent. In the Soviet era, money was just “candy wrapper” that accompanied the main capital – position plus connections; today, money has become something like the Native Americans’ feathers – there isn’t a problem that money by itself can solve. Neither in “big economics” nor in household practical experience.
In a normal economic situation, a fancy car is a sign of financial success, a measure of social status. In an abnormal one, it can actually turn out to be an attribute of failure, a road sign of misfortune. People try to save up money for the most important thing: housing. But the price surges, not motivated by anything but deferred demand, keep outrunning the savings, while inflation swallows them. Mortgage rates grow higher every day; at some point, one is bound to realize: this is it. Putting money into a piggy bank, i.e. an account in a Russian bank, is the same as feeding bills into a bonfire. And the despaired one spends all of the savings on the first available luxury, on something that people usually can afford only after all the vital problems have been solved. When the family lives in a spacious house, a profitable contract has been signed for years to come and it is okay to relax a little…
This problem is much deeper and much more complex than those of Mechel and Evraz. And it obviously makes the authorities nervous, because they (and I apologize for the conspiracy-driven approach) analyze the state of things. And they see how mass irritation swells behind the smokescreen of outward prosperity; how the topic of rising food prices and price mayhem at gas stations is the permanent discussion topic in the lower echelons of society; how people driving new Jeeps calculate whether they will have enough funds to make payments on their credit cards… They are nervous, but they still continue dividing and distributing among the tops, and exchanging symbolic gestures that signify supremacy inside the illusory political system; “why – it’s not our business, what for – it’s not for us to judge.”
