Eat the Rich: A Treatise on Economics (20 page)

Speaking of pumpkin rollers in the corridors of power, I went to see the house where Rasputin was assassinated. The overblown and butt-ugly Yussupov Palace belonged to a family who owned, basically, everything in Russia. Rasputin, a Siberian peasant, was a televangelist. TV had not been invented, however, so he had to swindle people one at a time. The one he picked was Alexandra, wife of the last Russian czar. It’s a shame that Alexandra didn’t live long enough to talk to Nancy Reagan about horoscopes.

Some of the czar’s advisors decided Rasputin had to go. Young Prince Felix Yussupov volunteered to do the honors. Felix liked to cross-dress. He took a chef, a chauffeur, a valet, a housekeeper, and a groom with him when he went to college. He didn’t sound too tightly wrapped. I kept waiting for the tour guide to tell me that Felix killed Rasputin to impress Jodie Foster.

The prince lured Rasputin to the Yussupov Palace and fed him on cyanide-enhanced cakes and wine. These had no effect. So Felix shot Rasputin in the heart. The charlatan seemed to expire, but an hour later, when Felix returned to get the body, Rasputin reached up and grabbed him by the throat. Yussupov managed to free himself, and Rasputin ran into the garden, where one of the coconspirators shot him three more times. The prostrate Rasputin was put in a car trunk and dropped through the ice into a tributary of the Neva. Even then he didn’t die. His body was found downriver, clutching the pilings of a bridge. Rasputin was the Richard Nixon of Russian politics. Don’t tell me our countries haven’t got a lot in common.

In comparing free-market and collectivist systems, the temptation is to prove too much. Socialism is not the simple cause of Russian bungling any more than laissez-faire is the simple cause of Albanian larceny. Economics is too complicated for that.

Economics is probably too complicated, period, for somebody who was beginning to think of Russians as a Yankee lost tribe. Maybe I hadn’t been getting enough sleep. It was the summer solstice—the White Nights—and daylight lasted until 3
A.M
. Even then, night came only to street level. Above, the sky was still glowing.

During the White Nights, everybody walks around the city from supper until breakfast in a genial haze. There are concerts and dances, and busloads of army cadets bring their dates to Palace Square and whistle and yell to see the sun up at midnight. All the people in the streets are solicitous and cheerful. Which is quite a change, because another thing that’s American about this country are the manners. Russians have American-style manners and then some. Russians have American professional-athletics-style manners.

Russians don’t, won’t, can’t line up for anything. At every turnstile, ticket booth, or cash register, they shove in from all sides like piglets on a sow. They have no sense of personal space. They’ll walk across an empty Red Square to stand on the toes of your shoes.

Every question or request, at even the most “Western” hotels and restaurants, is met with a stare of dull surprise and a grudging, laconic response.

“Do you have soup today?”

Waiter pauses, frowns, grimly considers. “Yes.”

“What kind of soup?”

“Different kinds.”

“Could you tell me some of the different kinds?”

“Soup of the day.”

Small boys, when they see a passing train, give it the finger. An Intourist travel agent, queried on whether it would be worthwhile to visit Khabarovsk, rolled her eyes and said, “
Pfft.
I don’t know.
I’ve
never been there.”

I asked a long-distance operator, “Will you put this call through to the United States?”

“Maybe,” he replied.

Suggested slogan for post-Soviet tourism promotion campaign: Russia—Barge Right In.

People who weren’t in Russia before 1991 sometimes think Russian rudeness is a product of freedom. “I guess the Russians are finally free to
be
rude,” they’ll say. They’re wrong. Manners were worse yet in the USSR and were accompanied by a public atmosphere of defeated fatigue and indefatigable suspicion. Plus, half the people were drunk—a thrashing, helpless, hello-coma kind of inebriation I saw almost nowhere on this trip except occasionally in the mirror.

So socialism causes rudeness. And capitalism causes rudeness. But if you go to Sweden, where they’ve got both, everybody’s polite. You figure it out.

I gave up and took a boat trip to a palace complex built by Peter the Great—Peterhof, named after Peter, as everything that Peter named was. Here were four or five residences too big to live in, plus one too big to walk through without taking a break for lunch.

Fountains, cascades, and other waterworks clutter Peterhof’s grounds. The ordinary garden hose has taken much of the thrill out of fountains, I think. Right in our backyards we have something that sprays water beautifully into the air, and you can squirt your wife with it. Also, we have electricity. Spumes, spritzes, and artificial drizzle received more
oohs
and
aahs
when viewers knew that hundreds of serfs were scrambling uphill with buckets to make them happen.

Peterhof’s fountains have been under restoration since World War II. Some spitting gargoyles had a plaque that read,
THE DRAGONS WERE RAVAGED BY THE NAZIS
. Which must have been a sight to see. Not satisfied with sexually molesting the garden ornaments, Hitler’s troops ruined all of Peterhof during their unsuccessful siege of what was then Leningrad.

I went to the appalling Throne Room and looked at the gilded rococo moldings slobbered all over the walls and ceilings. A dozen immense purple glass chandeliers from a whore’s idea of paradise ruined the space overhead. Underfoot, an ugly jigsaw puzzle of parquet flooring spread for acres in all directions, so much of it that there were once servants whose job was to skate through the palace in big socks, keeping everything buffed. The throne itself was preposterous, and above it was a portrait of fat Catherine the Great, the picture bracketed by personifications of Justice, Truth, Virtue, and other things that Catherine wouldn’t have known if they bit her.

An afternoon at Peterhof is enough to explain the whole Bolshevik revolution, especially in 1917 to starving sailors on the Kronshtadt fleet, freezing soldiers at World War I’s Eastern Front, and semichattel peasants hauling water buckets for the Peterhof fountains. I was ready to join the revolution myself if I’d get a chance to heave that throne through a window, make a penny-arcade shooting gallery out of the chandeliers, and play ducks and drakes with a hand grenade on those parquet floors.

The problem is, the Bolsheviks didn’t do those things. And when the Germans did, the Bolsheviks spent the next four and a half decades carefully restoring the place. This is because marxists are insane.

Marxism has had such an impact on this century and remains, even after the fall of the Soviet bloc, such a potent intellectual force that we tend to forget how loony are its fundamental tenets.

Karl Marx believed that man is created by economics, not the other way around. No soul is involved. Nebuchadnezzar, Jesus, Attila the Hun, Leonardo da Vinci, George Washington, Albert Schweitzer, and Alanis Morissette are all just different versions of investment maven Warren Buffett. And mankind, like Warren Buffett’s Berkshire Hathaway company, moves ever forward economically. History, to Marx, was nothing but the inevitable evolution of economic systems. First there was snatch and grab, followed by hunt and gather, then feudalism, capitalism, and, finally, there will be snatch and grab again, as much as you like, in the communist utopia.

Marx insisted that these economic systems determine everything. He lived in the capitalist age, so all of what he saw around him was a construct of capitalism: marriage, family, religion, government, nation. When communism came, these would disappear.
Poof!
No more wife and kids, and you don’t have to go to church on Sunday, you can play golf. Unless golf is a capitalist construct, too, in which case you’ll be standing in the grass with a
niblick
in your hand and no idea what to do.

Faith in the primacy of economic determinates is, in brief, putting a price on your mother. As I pointed out in the last chapter, a good economist can do this, if pressed. But Marx was not a good economist. He espoused the Labor Theory of Value, the idea that the value of a product is determined by the work required for its production. Thus, a hole in the ground is worth more than a poem. (Although this actually happened to be the case with much of the poetry written in the Soviet Union.)

Marx also believed that once private property was eliminated and communism had arrived, all of humankind would be gathered into one huge, cohesive, all-pervading socioeconomic cooperative. How this would happen, however, Marx hadn’t a clue. He hinted it would be accomplished in a big, gooey, spontaneous, Woodstock way. In Russia, it was done with guns.

There’s a problem with such an immense, omnipotent, and ubiquitous organization (a problem, that is, besides the millions of people killed to create it). What is this thing supposed to
do?
Karl Kautsky, another leading crackpot left-wing theoretician of the nineteenth century, said, “In the socialist society, which is after all just a single, giant industrial enterprise, production and planning must be…organized as they are organized in a modern, large, industrial enterprise.” But a modern, large, industrial enterprise producing what? Game Boys? Inner peace? Blow jobs? Candy and gum? Without rational prices, how do you know what to produce? Without private property, how do you get these products? Without products, how can there be markets? Without markets, how can prices be set?

Between 1918 and 1921, the Lenin government actually attempted to develop a system of nonmonetary accounting. Try this in your bankbook. “Let’s see, I withdrew the clean dishes from the dishwasher, and I deposited my kids at day care…”

Absent the automatic commonsense mechanisms of supply and demand, what really happens is that all production and consumption decisions are made by…Joseph Stalin. Stalin went so far as to claim that economic policy was a Kremlin matter and economists should stay out of it.

The absurdity of socialism made a dog’s breakfast out of the Soviet economy, just as it continues to ruin Cuba’s. But a visit to Russia is more interesting to an amateur economist than a visit to Cuba, because the truth about how socialist thinking beggared the USSR is now being told. Even some socialist thinkers are willing to tell it. Mikhail Gorbachev, in his
Memoirs,
says, “The costs of labor, fuel, and raw material per unit of production were two- to two-and-a-half times higher than in the developed countries, while in agriculture they were ten times higher. We produced more coal, oil, metals, cement, and other materials (except for synthetics) than the United States, but our end-product was less than half that of the U.S.A.”

This end product was not, of course, insignificant. The Soviet Union was able to manufacture moon rockets and atomic bombs and enough AK-47s to make every shoeless jackanapes in the Third World into an NRA life member. But Soviet industrial might mostly ended up doing doughnuts on the lawn. The Russians used to say, “We build huge machines that dig coal and ore out of the ground. We burn the coal to smelt the ore to build huge machines that dig coal and ore out of the ground.”

Even when Soviet factories produced something useful or necessary, central planning bunged it up. The government in Moscow would send commands called gross-output targets to all manufacturing facilities. The gross-output target told the factory manager what to make and how much of it. Anyone who has dealt with bureaucrats who are accountable only to other bureaucrats knows what happened next.

The trouble wasn’t that the factory managers disobeyed orders. The trouble was that they obeyed them precisely. If a shoe factory was told to produce 1,000 shoes, it produced 1,000 baby shoes, because these were the cheapest and easiest to make. If it was told to produce 1,000 men’s shoes, it made them all one size. If it was told to produce 1,000 shoes in a variety for men, women, and children, it produced 998 baby shoes, one pump, and a wing tip. If it was told to produce 3,000 pounds of shoes, it produced one enormous pair of concrete sneakers.

The factory managers weren’t doing this because they were evil or stupid. They did it because their livelihoods, their futures, and sometimes their necks were at stake. They didn’t have to satisfy customers. They didn’t have to please stockholders. What they had to do was meet the gross-output target, no matter what.

Getting the raw material and machinery to meet the gross-output target was as hard on Soviet factory managers as wearing enormous concrete sneakers was on Soviet consumers. Soviet factories were not allowed to deal directly with each other. All requisitions had to go through the State Planning Committee (the well acronymed GOSPLAN) and the State Committee on Material-Technical Supply (the wonderfully acronymed GOSSNAB). These entities worked as well as everything else worked in the Soviet Union. Thus when a factory manager was told to produce 1,000 shoes, he ordered 1,000 tons of leather. That way, maybe he’d get at least a couple of pieces of cowhide. And if he got too much, great, he’d hide it.

A black market of strange bartering grew up among factories as managers traded unneeded things to make unwanted stuff. And a special class of bureaucrats called
tolkachi,
“pushers,” arose to facilitate these deals.
Tolkachi
were, essentially, hired to be white-collar criminals. Many of today’s filthy-rich New Russians were
tolkachi
and still are, since the Russian government has by no means untangled itself from the economy.