Uplifting the Russian Humpty Dumpty

After the opening of the former Soviet Union to the West, the economy of Russia and its satellite countries came under control of criminal groups. The reason is fairly simple. The only people who knew anything about business were people who had participated in what was know as "the black market" during Soviet Union. And it is these people that took over the economic leadership of these countries.

The black market obviously has nothing to do with black people, but rather with the secret, illegal supply of foreign products to Soviet customers. Although it was against the law, with heavy penalties prescribed for those who were caught participating, it became a huge market that some economists credit with having produced up to 50% of the Soviet Union's GDP. The people could not legally get the goods that they wanted because all supply and distribution of products was under command of the government. A person who wanted American jeans or Japanese television had to obtain it secretly and against the law. To supply this demand, was created what was known as the black market, and many people had regular jobs and made money secretly on the black market. It existed, on a huge scale, because of how lucrative it was. A person coming back from America or Western Europe with 1,000 Levy's jeans would be able to sell them for an equivalent of $300,000 American dollars and would be set for life. And if he had enough connections, he could avoid prosecution and instead make more connections in KGB or in the police or in the government to supply their own secret, illegal wants.

The black marketeers therefore developed a very sharp business acumen through all their dealings. The problem with them was this: They were crooks. Having learned to do business at the time that business was illegal, they developed a criminal mindset and ran their operations in a corrupt and criminal way. So that when the Soviet Union collapsed, they, as the only people in the country who understood business, conducted their business activities in a thoroughly corrupt and unethical manner - running scams, murdering competitors and undesirables, and pilfering hrough connections the work that it took people decades of work to produce.

Meanwhile the rest of the population had no understanding of business or marketing. And while many had high education, in-depth professional knowledge, great skills, and strong ethics, they had - and many still have - no idea how to make these work for them in the market economy. Many had, and still have, beliefs that business and marketing are criminal, or at least immoral, activities. And of those who do not have such beliefs, there are many who have deep-seated insecurities about their ability to do such things, as well as lack of knowledge and skill in these areas.

The crooks got rich; everyone else got poor. And instead of realizing the prosperity that they hoped for from the change of the system, the Russian Humpty Dumpty had a great fall.

There is a viable way to get Russian Humpty Dumpty up to where it thought it was heading at time of the opening. It is for the first group to realize that running their operations in an honest, ethical and responsible manner has much to do with their businesses' reputation and long-term success. Nobody wants to trade for a long time with a crooked businessperson who may sabotage one's organization, or to procure goods from a crooked enterprise that may create defective products that kill one's kids; and it is only those businesspeople who create a transparent and ethical business culture that maintain their success for any length of time. And it is for the second group to do away with beliefs and habits that inhibit their economic viability. Whether the employer is the government or a private company, if the work increases people's well-being and wealth, it is a work worthy of having been done.

With these two changes in thinking and habits being put into effect, Russia will finally be able to get where it thought it was going, or at least go significant way in that direction. Given the outcomes, as well as the present state of affairs, these are changes that are well worth being made.