Thursday, November 15, 2012

Return of the Wild Wild East

Back in the early 1990s, just after the fall of communism in the Soviet bloc, there was a minor stampede of young people from English-speaking countries into the former communist states--including me.

Motivations differed. Some wanted a cool place to hang out. I was interested in learning Czech as part of my bizarre path from music school to economics. Pretty much all of us were drawn by the relatively cheap cost of living and the easy ability for a native speaker of English with a college degree to get a job teaching English.

And we were drawn by a sense of adventure.

though the commentary there suggests a lack of awareness of the background
Here was this great, world-historical event: the end of the Cold War, the collapse of the system that had been the great ideological opponent of the U.S. for decades. We arrived in a society that on the one hand was emerging from having been frozen in time, and on the other, everything was new; the ability to travel abroad, the ability to host Westerners without fear, the ability to start a newspaper, vote for parties that actually disagreed with each other.

It was an unavoidably chaotic process. When you live in a society that has had relatively continuous political evolution for decades, or even centuries, is how much custom and law there is that develops slowly over time, with people's habits adapting to the law, and the law adapting to changes in people's habits. Laws governing property rights, the technicalities of opening a business, regulation of banking, the existence of banking. These are all things that we take for granted, but that had to be created, and in short order.

The result was a fair amount of chaos. You had a desire to try new things, new governments that, in principle, were in favor of letting people do whatever was harmless, combined with bureaucratic habits of controling and forbiding, embodied in bureaucrats who knew they no longer had the same latitude as before to control and forbid. Sometimes, the old habits and the laws that hadn't yet been changed meant that there was less freedom of action than one was used to in the West. In other respects, the absence of law and/or the authorities' insecurity about applying what law there was meant that if you had gumption--and particularly if you had the right connections--there was very little that was strictly impossible.

It was the Wild Wild East.

It had the feel of an odd sort of frontier. In the usual frontier society, people move away from their settled civilization and construct a partial version of it out in sparsely settled "new" land (though the land may well be "new" only to them, as with the frontier in the U.S. in the 19th century). In post-communist Europe, the people didn't go out to the frontier; they stayed where they were, and the frontier came to them as the old structures fell apart and they had to construct a new society as if they were themselves newly arrived.

As with the Wild West, the looseness and freedom brought not only opportunity and latitude, but also particular kinds of insecurity and criminality. One of the accomplishments of the last two decades seemed to be that this was brought down to tolerable levels. Corruption has persisted in various forms, and politics has fallen short of the vision that the dissidents had of a better way, but many of the post-communist countries have become more or less "normal" societies. They've outgrown their frontier stage, they're no longer the Wild East.

But I'm getting more and more nervous about the Czechs.

Yesterday there was an article in Britské listy, How I became the victim of the debt collectors. In brief, a guy ignored his late father's advice never to borrow: he took a loan so that he and his girlfriend could pay the deposit on an apartment. He set up automatic payment, but the final payment didn't go through. He didn't find out about it, because he listed his permanent address as the Town Hall, which he implies is a common practice for people who live in sublets and tend to move with some frequency.

So his final payment of a couple of thousand crowns (about $100) turned into a debt of tens of thousands. When he finally got that straightened out and--at great sacrifice by him and his girlfriend--paid off, the exact same thing happened again: "For some reason incomprehensible to me, they didn't deduct for themselves the final 2,139 crowns. Today, nobody can explain to me why they didn't. In any case, in this way the whole merry-go-round got started up all over again." His almost-repaid debt had grown back to 33,873.

Now, he obviously made a mistake--twice!--in not faithfully checking his mail drop at the Town Hall (he apparently never heard of "once burned, twice shy"). But it also seems like there's an intent here to take advantage of debtors and get in the way of arranged automatic repayment so that unustified debts can be stacked up against them. (There's been some evidence that analogous practices have been followed in the housing mess in this country.)

For instance, Jan Čulík, the editor of Britské listy, writes, "I'm only hysterical about checking my mail when I'm in the Czech Republic, because I know how gigantic a debt can quickly and artificially be created out of an unpaid 20 crowns [$1]. In Britain, I don't have to do that."

Another contributor works at a bank and describes the combination of fear and financial illiteracy that keeps people from taking the best (or least bad) course of action when they get into financial trouble and makes them ready victims for unscrupulous debt collectors.

And as Čulík comments at the end of another post, "In Western countries this problem doesn't exist. In Western countries the possibility of parastically abusing any sort of unpaid sum by astronomically inflating it is a criminal act."

But not in the Czech Republic.

Welcome back to the Wild Wild East.

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