It's Not Your Grandfather's Russia (Discovery Blog)

“White Russians” in ice glasses on an ice table in an ice-bar in St. Petersburg
(photo essay at the end of the post)

I was in Russia in 1965 and just returned. "I like to visit every 40 years or so," I told folks in Moscow. The place has changed, I explained deadpan to some young Russians of my acquaintance. Where an Intourist restaurant of yore served bad food with a sour attitude and left you free thereafter to wander vacant streets after dinner, utterly bored, intimidated and depressed, Moscow today fairly shouts its attractions, some of which are embarrassing, and all of which are costly. The formerly deserted, fourteen lane-wide streets are now so full of traffic at midnight that one has to dodge frustrated drivers who decide to pass on the "sidewalk lane." Police in their sad little Ladas are the ones who seem intimidated now.

Everyone seems to stay out late and arrive late to work in the morning. Heavy traffic is both a real excuse for it and just an excuse. These early summer dates, when the night is still light at midnight, remain hot until late, so it takes a long time for the typical apartment to cool down and make sleep possible.

Bruce Chapman frustrated at a traffic jam on the embankment of the Moscow-River

I come back to the States with a few tips for tourists and visiting businessmen.

Security: it is impressive to see how thoroughly some otherwise old fashioned airports manage to screen luggage. It happens three times, by my count, from the time one arrives at the terminal for departure. Everyone has had to go through a security check to get a visa, but then has to register again upon arrival. The hotels take care of it, but the process is slow and you are expected to produce the paperwork when asked. I don't like that sort of thing, unless it is applied to terrorists, of course.

As one drives into Moscow one finds a checkpoint for truck inspections on every road. Imagine having such a thing outside, say, New York! One explosive laden van was found while I visited, but it made almost no press outside Russia, I noticed.

The downside of traveling wealthy. Americans who stay at the best hotels will be shocked at the high prices, Moscow being one of the most expensive big cities in the world. Some complain also that meal costs seem exorbitant and that they are being fleeced by taxis. They are probably right on all of that. Russian friends warned me to stay away from hotel taxis and fancy hotel restaurants (though one Russian buffet I enjoyed at the opulent Renaissance Moscow Hotel, despite a keening Gypsy band that drowned out conversation, was well worth the hard coin).

Instead of hotel taxis one dickers with taxis at stands, or better, hails whatever car is coming down the road and asks to be delivered to one's destination and works out a mutually agreeable price. I couldn't believe I was doing it, but I did do it a couple of times, and was pleased at the reasonable cost. Russian friends advise: don't stop a car with more than one person!
Best of all, use the Metro or walk. Walking, which Bloomberg News bureau chief Jim Brooke advises, is fun and interesting and almost comprehensible. But the Metro will take you great distances cheaply and very fast. Trains leave every 40 seconds. Keep your hand on your wallet and try to learn a few Cyrillic letters so you won't get lost, and be brave. The Metro stations themselves are an education for nose (the smell of fresh piroshki in the little shops) and eye (the huge newsstands and tiny shops of thread and thimbles) and ear (the startling excellence of classical musicians offering Mozart for a few roubles, if you care – and you should). These are the treats the rich--stuck in increasingly hopeless traffic jams--miss.

I was told that there are a hundred thousand new cars in Moscow each month. Rush hour is all the time and makes anything we experience seem tame. People get out of their cars and fight about it. Cops abandon their posts in fear.

Tips. Don't. The old communist ethos was that working people should not be demeaned by tips and the new capitalist spirit has not yet changed the old habits. Modest gratuities (10%) are added to many restaurant bills, and one can add a bit to them, but otherwise, tipping is rare. Of course, paying for special goods and services--real tips, in other words--is another matter. On a night train from St. Petersburg to Moscow it turned out that there was no dining car attached, so an enterprising Russian in my compartment talked to the car attendant and found that she happened to have on hand some extra salt fish, Russian black bread and very cold Baltic beer. A mere 500 roubles ($20) fed three of us, and was followed by hot tea served in a typical Russian silver holder and glass.

Toasts. It is customary for the host to offer a toast and the guest to offer a toast in reply, especially if there is a hostess to be recognized. It is also customary to down a shot of cold vodka at such times, followed by several more. I explained that it is my own custom--regardless--to merely sip such vodka, not gulp it. That strange spoil-sport trait was always accepted with good cheer and saved me a heavy head later on.

Weekends. Everyone has a "dacha," a country place, even the poor. I don't know about that, but many people must have dachas because the roads out of big cities are especially clogged on Fridays and the countryside is full of little houses and some big ones, many of them new. That means that weekends are the one time you can get around Moscow or St. Petersburg in a car without suffocating.

New construction. It's everywhere. Maybe not like Shanghai, but impressive, nonetheless. Historic preservationists will be pleased to see how innovative Russian architects have become at integrating old and new. But, on closer examination, the preservationists also will discover that literally thousands of historic structures still are falling to the wrecking ball each year.

I saw a private development project where the two 30-something year old owners have underway a conference center, resort hotel, offices and condos in a 40 acre space by a major train station. The plan is ambitious and far-sighted and one suspects that the confidence of the builders is not misspent.

Taxes and regulations. The flat tax of 13 percent is a success and helps provide a gusher of revenue for the state. However, the "social taxes" for everything else (pensions, health, etc.) are so high (about 26 percent) that many workers avoid them by "working white"; that is, off the rolls. The social taxes also are regressive, moreover; so, the more you make, the relatively less you pay.

Tax deductions for business and other expenses are much more complex than in the U.S. It is hard to do the paperwork, I was told, and even hard to get a simple receipt, that one can use. Regulations are so opaque that many suspect that they exist not to achieve any particular aim, except perhaps to support reason to bribe petty bureaucrats.

Bribes, indeed, are so widespread that academic degrees are said to be available for a consideration. The supposed price for becoming a police officer is $200 thousand. The new recruit will make it up in bribes. Going price of a hired killing (supposedly): $10 thousand. The mob is said to have organized the airport workers and taxis. That might explain why hardly any airport workers speak English; they don't have to.

Unions: there aren't many. Supposedly they weren't needed in the former Workers Paradise and they have not found traction since then in the era of robber barons in the 90s and of raw capitalism of today. I was told that there is no minimum wage. Meanwhile, there are many illegal immigrants, especially from the breakaway former Soviet republics. Some are legal, many are not.

Westerners are unaware how similar this problem is to that experienced in the United States. Notice the street sweepers early in the morning. They are likely these days to be ethnic Tajiks or Uzbecks. The city employees are legal though.

Greatest failure (in my view): Russia still lacks an independent sector.

The tradition of non-profit support is missing. With a few exceptions, the rich don't have a sense of "enlightened self-interest", let alone altruism. It is not part of the culture--yet, anyhow. It is one of the real challenges, and opportunities, facing the country.

Greatest plus: the dynamism of the Russian economy is thrilling.

Everyone you meet wants to do a business deal. Investor groups like Equity Capital, whose annual dinner I attended, or the huge Renaissance Capital, regularly get over 35 percent returns. Most of the early 1990s horror stories of cheating and lack of patent protection are said to be history. In any case, business deals are what people mainly think about all the time. It is a mood that won't last forever, but I felt as if, in a sense, I had been transported back to the U.S. of the 1880s or "Roaring 90s." It isn't particularly high minded or low minded, but it is very much alive.

One other thing. I remember a Soviet Russia where nobody laughed.

Today's Russia has much charm and many more amusements. Young lovers relax in each other arms in the parks. Kids play in the fountains. There is music and enterprising ways to separate the visitor from a few roubles--ice cream, horse rides, pictures with costumed "aristocrats" or, outside the Kremlin, a Putin look-alike. The price for posing with the Putin look-alike is 500 roubles, but for the Lenin look-alike nearby it is only 300! You have to smile.

Photos by Matthew Scholz, Discovery Institute's Director of IT:

A couple in a park

Moscow subway station

Moscow subway escalators

Classical music in the metro (the stop serves one of the city’s concert halls and music academy, and musicians spend half hour or so after their “shift” performing both for fun and for money)