NEW YORK -- Huge obstacles and the threat of harsh penalties have failed to curb the entrepreneurial spirit in the Soviet Union, where 'underground millionaries' thrive in the midst of drab communal living, according to the latest issue of Fortune magazine.
Konstantin Simis, a Russian attorney who was expelled after a book he was writing about corruption was confiscated, writes that a thriving network of profitable private enterprises operates in the U.S.S.R., involving manufacturing goods worth hundreds of millions -- even billions -- of rubles. A ruble is worth $1.40 at the official rate, 10 to 25 cents on the black market.
'The tenacity of the entrepreneurial instinct in the U.S.S.R. has proved amazing,' Simis wrote in Fortune. 'Neither the huge obstacles in the path of private enterprise nor the threat of harsh penalties -- even capital punishment -- has been able to curb the vigor of those human impulses.'
Simis, 61, said that in 17 years as a practicing attorney, he defended 'dozens of people with connections to underground businessmen' ranging from petty swindlers to 'major personalities and talented organizers ... for whom the process of making money -- not the money itself -- has become the real aim.'
He said private industry competed successfully in the state in such readily salable items as clothing, shoes and jewelry, principally through 'efficiency and quickness' in following fashions.'
He described how the 'underground millionaires' enjoy the fruits of their wealth behind closed doors and in drab surroundings. Neighbors aren't aware of the family's wealth until the state police arrest them, he said.
Simis said the underground operations are 'simple but audacious.'
The underground business often operates under the same name and the same roof with a state factory. Alongside the official goods, which must be registered, the entrepreneuer manufactures non-registered, or 'left-handed' items, the article said. Supplies, and labor costs, are paid for by a private businessman who owns them, sells them and profits from their sale.
Simis said the simplest way to become a millionaire in Russia is to become the owner of a factory or workshop that produces easily salable merchandise but to to do this you need 'money, connections in the underground business world, or exceptional talent. Or preferably all three.'
In 1976 Simis was fired from a post at the Ministry of Justice after the KGB raided his apartment and confiscated the manuscript of a book on Soviet corruption. A few months later his wife, a lawyer, was disbarred for representing a prominent dissident. Simis was told he would be sent to a labor camp unless he left the country, which the couple did in 1977.
Simis now lives in Virginia, where he is finishing the book the KGB confiscated.
