July 23, 2012
No doubt, Eastern Europe is a part of the world where people are accustomed to being abused by politicians.
After decades of Soviet Rule, the cultures in places like Ukraine, Moldova, Azerbaijan, Belarus, etc. have been inculcated with a strong mistrust of government. All government.
One obvious sign of this is how little confidence people have in their own national currencies.
Here in Ukraine, for example, people who have any level of wealth whatsoever hold hard currency– dollars and euros, rather than the local hryvna.
(Naturally, their relative confidence in dollars and euros is misplaced, though I was pleased to see that gold is starting to penetrate the cultural psyche here.)
They even have a funny nickname for these regional currencies that get inflated and devalued by corrupt central bankers and politicians– rabbits… because they grow and multiply in such huge numbers so quickly.
As two different economics students this weekend told me, ‘we are starting to look at the US dollar in the same way…’ I guess that makes the euro a dodo bird.
Anyhow, Ukraine is definitely a country on the move. It had been nearly two years since my last visit, and some things have improved substantially.
As I’ve often written, there are two paths to prosperity– you can either build wealth by creating value, or you can steal it from others.
Ukraine used to be a country that was almost entirely the latter (theft)… but it is slowly beginning to move towards the former (value creation). It still has a long way to go.
Corruption and graft are still ubiquitous. One friend told me a story of how her father was relieved of his air conditioning business after a few bureaucrats decided in their sole discretion that he was cheating on his taxes.
No trial, no defense. They just came in with police, locked the place down, and said, ‘it’s up to you to prove that you are innocent.’
It sounds shocking, but this type of civil asset forfeiture is happening all the time in the West now as well.
It seems like almost every day there’s a new story of a motorist who gets relieved of thousands of dollars in cash at a routine traffic stop because some ignorant police thug finds such an amount ‘suspicious’.
It’s amazing that in ‘free societies,’ police and government agencies have nearly unlimited latitude to take away someone’s life savings without charge, and then putting the burden of recovery back on the individual to prove his/her innocence.
This is one of the most disgusting perversions of authority that I know… and as governments are now increasingly forced to acknowledge their fiscal reality, it’s becoming obvious that civil asset forfeiture is on the rise.
The Wall Street Journal has reported, in fact, that asset seizures in the US have more than doubled in five years.
This is not the sort of trend that one sees in a free society.
Sure, it happens everywhere… but they key difference is that Ukrainians don’t delude themselves into thinking that they live in the land of the free, and they take appropriate steps to protect themselves based on that outlook.