INTRODUCTION

Western visitors to those parts of the world that before 1991 were politically organized as the Soviet Union have been impressed by the attitudes of persons toward behavior in ordinary exchanges, attitudes that seem to be so different from those in Western economies. The essential elements of an “exchange culture” seem to be missing, and this absence, in itself, may be central to the effective functioning of market economies. Individual participants in ordinary exchange relationships in Western economies act as if they understand the simplest of all economic principles, namely, that there are mutual gains from trade, that the benefits are reciprocal, that exchange is a positive-sum game. This “as if” understanding, which remains perhaps below our level of consciousness in the West, is largely missing from the public attitudes of citizens of the former Soviet Union, who behave as if the gains from trade do not exist, or at least are one-sided rather than mutual.

There is a familiar story that illustrates the thesis: “In the Soviet Union, both parties to an exchange lose; one party loses the goods; the other party loses the money.” This statement may offer a concise, if exaggerated, summary of the general attitude toward exchange that seems to describe the behavior of many (of course, not all) persons in the republics that were formerly parts of the Soviet Union.