When I opened the newspaper on the morning of August 17, I saw the headline “Market Crashes.” I’m not an economist and understand nothing of the enigmatic world of money. For me, the word “market” means open-air stands where old ladies from villages near Moscow sell cheap freshly picked mushrooms, garlic, potatoes, and dill, and men from the Caucasus whose teeth are capped in gold for the beauty and prestige of it offer unbelievably expensive peaches and a spicy sauce called adzhika—you taste a drop and flames leap out of your mouth. Reading the words “market crashes,” I imagined dilapidated wooden stands collapsing and velvety peaches rolling across wet asphalt in consort with escaping potatoes.
Nonetheless I stopped in my tracks. No serious newspaper ever covers such trivial events on the first page. I called a friend, an English businessman. “Simon,” I said, “they’re writing that the market has crashed. Can you explain what this means?” Simon explained the default of the Russian government in paying its debts so professionally and in such detail that I understood virtually nothing. “So what should I do?”
“I’d get my money out of the bank, just in case,” said Simon.
I got back on the phone and called all my relatives and friends—people even more naive than I am with respect to financial matters, and ordered them to take their money out of the bank.
“What do you mean?” they asked, clearly reluctant. “We just put it in there.”
“No back talk! Simon says. Get your money out.”
“Who is Simon?”
“It doesn’t matter!” Simon actually saved several people from losing everything—I’m sure he’ll be rewarded in the next world. In the first two days of the crisis it was still possible to withdraw money from your account. We managed to do so. The only problem was what to do with it once we had it.
By the beginning of September, the crisis in Russia had already emptied pockets and store shelves. I dropped into see a girlfriend and found her small children dressed in tutus and eating black caviar as if it were porridge.
“Have you all gone mad?” I asked.
“Not at all,” my friend replied. “It’s just that all our regular clothes are dirty and you can’t get laundry detergent anywhere. And caviar is cheaper than anything else at the moment. I can’t afford cheese anymore, can I?”
And she was absolutely right. The strangeness of the situation was that Russian-produced delicacies had suddenly become “bargains.” Caviar didn’t get cheaper, of course, but it didn’t go up in price either, and psychologically it went down three or four times relative to the ruble-dollar exchange rate. All imported goods, on the other hand, tripled or quadrupled in price. The exchange rate of the dollar jumped up and down, but prices only went up, reaching mind-boggling heights: merchants included the cost of possible future…
This is exclusive content for subscribers only.
Try two months of unlimited access to The New York Review for just $1 a month.
Continue reading this article, and thousands more from our complete 55+ year archive, for the low introductory rate of just $1 a month.