A year ago, at the height of the oil price bubble, I took a flight from London to Moscow. Once our final boarding call was announced, duty-free shops all over the terminal came alive with a flurry of activity. Moscow-bound passengers, already burdened with numerous shopping bags, grabbed last-minute electronics, perfume and jewelry and rushed to the checkout. Then, on the way to the gate, we were greeted by a man in a kind of butler's uniform bearing a strong resemblance to the late British actor John Gielgud. His jaw set in a disdainful grimace, he kept repeating: "Thank you very much, my Russian friends. Much appreciate your spending your money here."

I have no idea who paid him to stand there and whether his withering English sarcasm was part of his job description. It is true, however, that in recent years Russian visitors have developed a reputation for crass nouveau-riche consumerism. Although Russia no longer has world-renowned writers, artists or composers, wild Russian spending and partying have become legendary the world over.

There is nothing wrong with this, especially after 80 years of Communist shortages. What is funny, however, is that Russians insist that theirs is a deeply spiritual culture that contrasts with the shallow materialism of the West.

Most nations, like most individuals, have an overly flattering opinion of themselves. But in Russia, self-delusion sometimes borders on pathological. A recent BBC poll found that two-thirds of Russians are convinced that their country is regarded around the world as a force for good, while only 12 percent believe that foreigners see it as a threat to its neighbors.

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This is clearly not how its neighbors view Russia, especially after the war in Georgia. And, judging by the company Moscow keeps in its foreign policy -- the likes of Belarus, Venezuela and Iran -- it seems more at home with international pariahs.

The wide gulf between reality and perception is a legacy of patently false Soviet propaganda, which portrayed the Soviet Union as a workers' paradise where everyone was free, happy, prosperous and equal. We were told that the Kremlin's foreign policy pursued peace and disarmament. It helped the downtrodden to free them from imperialist oppression and altruistically assisted fraternal Communist nations. By the 1960s, few people even bothered to listen to such nonsense.

There is an old joke about a family watching television, which broadcasts its standard fare: "In the Soviet Union, happy childhood is protected by the Communist Party, which gives Soviet kids the best preschool care and free education. They grow up happy, healthy and productive."

Suddenly, little Masha bursts into tears.

"What's the matter with you?" ask her alarmed parents.

"I want to live in the Soviet Union."

The point of the joke is that the naive child has not yet learned to dismiss everything the government says as a pack of lies. But the reality was not that simple. Nazi Propaganda Minister Joseph Goebbels used to say that if you tell a lie big enough and keep repeating it, people will eventually come to believe it.

Even though Soviet citizens were cynical about the official propaganda, pervasive lying still distorted their perceptions. World War II is a good example. The simplistic, black-and-white Soviet version of events -- that the Soviet Union was an innocent victim of German aggression and that the Red Army brought only freedom to Poland, Czechoslovakia and other countries -- has never been questioned either officially or in popular mythology. Inconvenient facts like the Molotov-Ribbentrop Pact, the brutal treatment of the liberated countries and the wanton sacrifice of millions of Soviet soldiers and civilians do not seem to dim the national myth.

Russia's attempt in the 1990s to become integrated into the international community foundered in part because of its inability to understand how its recent history was perceived in the West. Similar self-delusion shapes Russia's relations with former Soviet republics and Eastern European countries, causing frequent international spats and bouts of mutual recrimination.

At home, too, the deeply ingrained influence of Soviet propaganda has been negative. Ordinary Russians have had it drummed into them how technologically advanced, industrialized and rich their nation has always been. They find it hard to understand the disconnect between their putative wealth and pervasive poverty and backwardness they see all around them. As a result, Russians tend to seek scapegoats for their dismal standards of living: They blame foreigners, ethnic minorities or 1990s oligarchs for stealing their wealth.

There is a widely held belief in Russia that Soviet President Mikhail Gorbachev and President Boris Yeltsin dismantled the Soviet Union on orders from foreign secret services. Indeed, how else to explain the ignominious crumble of an empire that had routinely described itself as monolithic, powerful and destined lead the rest of humanity to the bright communist future?

Self-delusion not only tends to exaggerate Russia's achievements and contribution to world history and economy but diminishes its standing, too. The Soviet media loved to repeat ad nauseam how the country was surrounded by enemies. Even today, many Russians sincerely believe that foreign governments secretly plot to dismember their country and get their hands on its natural resources.

This is why the Kremlin reacts so angrily to NATO's eastward expansion or the installation of elements of the U.S. missile defense system in Poland and the Czech Republic. Russia would have been a far more secure nation -- and much more open toward its neighbors and partners in the international community -- if it took a realistic look at its nuclear arsenal and understood that no military power on Earth would ever want to tangle with it.

Alexei Bayer, a native Muscovite, is a New York-based economist.