There's one fundamentally enigmatic thing about life in modern Russia. Of all the things there are to buy here these days -- cat food, cars, liquor, clothes -- almost none of it is the product of local industry. It's all imported. The country's productivity has dropped almost 50 percent since last year and God knows how much since 1990.


At the same time, lots of people seem to have money. If manufacturing is so low, where is this money coming from? There is, of course, the Grand National Theft element -- oil, metals and weapons, all being sold abroad as quickly as they can be carried across the border -- but this type of money is the property of a very elite and very rich few, who usually take themselves abroad as well. Then there's the big business of commercial "shuttle activity" -- buying, transporting and reselling goods -- but this, again, comes right back down to imported goods.


In Karl Marx's universal "money-goods-money" formula, the essential middle link is missing in Russia nowadays. Money just seems to circulate and multiply wildly in a kind of strange vacuum. It is like the astounding news about MMM's business tactics -- they don't actually invest any money in anything in order to build up the huge returns they promise their customers. They just scoop up more and more money and sit on it, waiting for the inevitable explosion. The government is trying to do right by its citizens, warning that such schemes are nothing but a high-stakes lottery with no happy endings. But what they don't dare to say is that the whole country is itself rather like an MMM pyramid, and that all of us are doomed shareholders.


The authorities are now repeating the golden word "investment" like a mantra. As well they might, because investment is the only thing that is going to get Russian manufacturing back on its feet. Looking honestly at the situation, though, who do they expect is actually going to invest? The banks? The "new Russians?" Don't make me laugh. As long as there are quicker and easier ways of making money (doing what we call krutit dengi -- spinning money), the only thing these people are going to be "investing" in is speculation. And when the financial system completely collapses, they will be investing in property in Belgrave and yachts in Monte Carlo -- not half-ruined metal plants somewhere in Chelyabinsk.


Foreign investment? Well, unless this is something relatively small-scale, safe and specific -- or dealing with raw materials -- there will not be any foreign investment. In a less than a year's time, I predict the following will happen: Productivity will fall to zero, and plants and factories will stop working entirely. People won't work -- they will grow potatoes in their backyards, chew American gum, drink Dutch vodka, wear Chinese T-shirts and drive Japanese cars. So forget the German miracle and the Korean miracle. This will be the biggest of them all -- the great Russian miracle. No other nation could achieve this.


n


I think they used to call the Swiss a nation of financiers. Now the same can be said of Russians, since hundreds of thousands -- if not millions -- of them have become involved in rather sophisticated monetary operations. Most of these people are not rich -- just the opposite. They are pensioners, the unemployed and underpaid workers. Their dividends are small, but still much bigger than the money they get from the state.


My mother, a pensioner, is a member of the "business class" herself. She has invested her voucher and bought shares in a couple of companies. She also recently described to me a plan she's got in the works to put some of her money into a certain fast-growing but not-too-reliable deposit, and then take it out after three months and invest it somewhere else, where the rate is not so high but the risks are smaller, and eventually putting it all in the stablest bank she can find (a state one, I suppose -- they're considered to be the most trustworthy). It all sounds very smart. All of her retired friends do the same thing, she told me. Looks like a big new social trend.


n


I got a fax from the Hermitage nightclub, in response to my complaints about the 7,000-ruble sausage at their new terrace barbecue. They have, they write, found a "professional chef" and will be serving "200-gram steaks with fresh vegetables, bread and sauce for between 10,000 and 12,000 rubles." Great news, but all I could think was how strange, you write a column with occasionally smart and provocative things, and the only time you get a response is when you mention an overpriced sausage.