Doing Business in Russia. Котова К.П - 7 стр.

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country the social classes can be identified by the force of inflationary impact:
the higher classes feel the least impact; the lower classes, the most.
      In practical terms, this means that beggars, refugees, and bums are hit by
an inflation rate of 10,000 per cent and more – since this is the current rate of in-
crease in the price of staples. Sugar and tea prices have gone up 100 times over
their original level. Paradoxically, this class consists of the most prodigious con-
sumers: they lavishly use matches, salt, or bread. The lowest class has access
only to a few consumer items, which they consume in astounding quantities.
      The intermediate class (which is the most numerous class, like the middle
class in the USA) forms the nation’s core of stability. They experience an infla-
tion rate counted in hundreds. They consume staple goods and food like salt,
matches, bread, tea, and sugar, too, but they also buy footwear and clothes (the
prices for which have gone up 10-50 times). They buy books (10-20 times as
costly now), soap (10 times up) and pay their rent (1,000 per cent higher). As a
result, the mean level of inflation for them is much lower than that experienced
by the have-nots. However, the intermediate class suffers from inflation more
than the latter and must sharply reduce its purchase of books, soap, and shoes.
The class enjoying the maximal social privilege resembles the least privileged,
in the sense that its members don’t reduce the level of their consumption. On the
other hand, this class relishes living under the lowest possible level of inflation.
Rouble costs for travelling abroad have soared to impossible heights, but the
dollar costs have gone up only a little. The social elite continues to pay in dollars
(provided by the CPSU central Committee in the past and, at present, received
as a result of its privileged social position). Prices for cars and dachas went up
much less than the prices for matches (proportionally speaking), which is crazy
from the point of view of the common sense. It is up to economists and sociolo-
gists to figure out the dynamics of this highly differentiated inflation. But one
thing is already clear: it is possible only in a “non-economy” like that which ex-
ists in Russia at present.