Is it worth living for? Part 3

Part IPart II

What was so attractive in going West for a Soviet professional amateur? Money of course and very good money at that. How it was made? Read on…

I’ll have to throw some numbers here because without them, you won’t be able to appreciate what kind of money I’m talking about.

For example, it wouldn’t make much sense for me to make reference to Soviet roubles, you wouldn’t know what they were worth 25-30 years ago. Converting them to American dollars, a currency everyone seems to understand and is comfortable with, won’t help either. The official rate in the 70s and 80s was 100 USD = 63 RUB. It was fixed. It fluctuated by a point or two just to make it look like a true conversion rate but it was fixed nevertheless and had no relevance to how much a Soviet rouble was really worth – the rouble wasn’t traded on the currency market. Important to note here is you couldn’t legally buy or sell American dollars, or any other “hard” currency for that matter, it was a criminal offence to do so. It was also a crime to be found in a possession of any “hard” currency. Depending on the circumstances and the amount, you could be locked up for a long time for having some US dollars on you, especially if you’re caught at the Customs when entering or leaving the USSR.

But you can’t lock up the market though. This is what the fathers of socialism have never managed to grasp when they were devising their evil plans to build a better society (and those who follow in their foot steps today, still don’t seem to get it either) – you can’t regulate, tame or otherwise be in control of the market, you fail every time. And so it was, even though it was illegal to buy, sell or be in the possession of any “hard” currency, it was still available on the “black” market (or simply a free market in disguise). Of course here, the conversion rate was truly reflective of the supply and demand law. In 1984, when I bought my first US dollars, the rate was 100 USD = 400 RUB. By 1986, it shot to 500 RUB. By 1987 to 1000 RUB. In 1989 it was 5000 RUB and by 1990-91 nobody wanted roubles anymore, but I won’t go into that period. The country has completely disintegrated by then and I left it in 1991 and never went back.

At any rate, if I told you I spent 200 roubles on a pair of jeans in 1984, a simple conversion via official rate at the time would give us roughly 300 USD. Somewhat an expensive pair but nothing outrageous. If, on the other hand, I used a “black” market rate of 1984, this would be a US$50 pair. So which price would give you an idea of how much that pair cost me back in 1984? Neither. Both of them are misleading.

If, however, I told you that 200 roubles was a pretty good monthly salary back then, a sum of money you could live on comfortably well for a month, I’m sure you could easily relate to that. For example, I would say that here in Australia, a $4,000 a month after tax could easily be compared, in buying power, to the 200 roubles I just mentioned. That is, you can meet your day to day needs with this money and even save some but you wouldn’t call yourself wealthy. Therefore, it’s best to relate to what I’m going to talk about by means of these monthly incomes, say 200 roubles is an equivalent to an income of about $4,000 after tax in Australia. It will be different in the US or Europe but I’m sure you know what a decent salary is in your country. Point is, whatever it might be today, it’s roughly equal to about 200 roubles in this discussion.

Hence, that pair of jeans I mentioned above cost me about A$4,000 if I bought them here at the Levi’s store. I’m not kidding. This is why you could easily sell those jeans for half the price you paid for them after wearing them for a year if you looked after them. And wouldn’t you look after them if you paid $4,000 for them? I’m sure you would.

Let’s get back to cycling though. Why were we training 3 times a day, clocking 40,000km a year, not seeing our families literally for months? To be the best in the world? Yes, that too but mostly to be good enough to be sent to race abroad. Going West would skyrocket your income.

Let me give you some examples of how the money was made. If you’re a cyclist, you know what a tubular is. If you’re not, don’t worry, a tubular is a type of tire you put on your wheels. Back in the 80s, and before, these things were made in Europe, not China as it is today and they were expensive. How expensive? A good tubular would cost anything between US$50 and US$100 retail, some were cheaper of course but a racing tubular would cost you. USSR was making tubulars too, they were not very good, but they were acceptable. You couldn’t buy them in a shop though, not available. “Black” market? Not a problem. 400 roubles for 100 tubulars.

Now here’s your business transaction when you went West:

  • You buy 100 tubulars at the cost of 400 roubles and take them with you to Western Europe.
  • When you’re there, you sell them to riders from the Western teams, US$15 a pop or US$1,000 for the lot. With the cheapest tubular anywhere in Europe at around US$30 and up, do you think it was difficult to sell these at half price of the market’s bottom? They were selling like hot cakes.
  • Suppose you sold the lot in one shot and now have US$1,000 in your pocket.
  • You smuggle this money back to the USSR. A common place where you would hide this cash was in the seat tube or inside the seatpost. Nobody would ever bother to check your bike at the Customs, don’t know why, they just never did. The common perception was, ordinarily they didn’t touch athletes because they just never knew who they were dealing with. For all you know, as a Customs officer, you might be dealing with some multiple Olympic champion who has admirers in high places. Best approach was to leave athletes alone if you wanted to keep your job, a very valuable job as a matter of fact (a source of constant bribes of all kinds). Eventually, I stopped hiding this money in the bike and just kept it in my pocket thinking that if someone ratted me in and they know I’ve got dollars on me, they will find it regardless of where I hid them, if nobody ratted me in and I behave myself when entering the country, they won’t touch me.
  • Finally, you sell your US$1,000 on the “black” market for 4,000 roubles (I don’t want to go into details about why it was possible to buy and sell dollars at 4 RUB per 1 USD, but it was).

If you’re getting lost with the numbers, here’s the summary: you invested 400 roubles into buying tubulars and a week or so later you’ve got 4,000 roubles. If you forgot how much 4,000 roubles was, I’ll remind you – it’s 20 very good monthly salaries. In Australia, 20 good monthly salaries, after taxes, would be 20 x $4,000 or $80,000. You do 5-8 trips like this a year and you’re looking at some nice income. This is why I said previously your regular salary you’re paid for racing a bike becomes trivial and unimportant as soon as you start going West. Going West is how you make money, who cares what your salary is.

Now, imagine you’re 15 years old and someone who has done this business very successfully for several years in the past tells you what this game, road cycling, is all about. And this is exactly what my first coach has done and explained to me why I should devote everything I could to this sport:

“Olympic Games, World Championships and the Peace Race, yes it’s all good and very romantic, but before you get there, if at all, make sure you’re good enough to go West and then play the game right, don’t be a fool.”

The tubulars transaction I described above is simple and straightforward but wasn’t the only one you could make money on. For example, instead of bringing the cash back to the USSR, you could buy a couple of stereos, say $US100 each and sell them for 1,500-2,000 roubles at home (7-10 monthly salaries or A$28,000 – A$40,000 in today’s buying power). You couldn’t bring more than 2 though, they would ask you at the Customs why you’re bringing 10 stereos into the country, and more importantly, where did you get the money from to buy 10 stereos in the first place? Two stereos was easy to explain – one for me, one for my mother in law. Where I got them from? Oh, these are race prizes I won.

Since you still had some cash left after buying stereos, you could also buy 5 pair of jeans for example. With jeans, the most important thing was that they should be of a recognizable brand in the USSR. Levi’s, Montana, Lee, Jordan or something like that. Who cares if you bought them at some Polish shop for US$10 a piece and they were fake, you don’t need to tell this to your buyer and you sell them for 200 roubles very quick (A$4,000). You could easily bring 5 pairs into the country without any trouble and you’re looking at A$20,000 in today’s buying power.

And on it went. Pure entrepreneurship, whatever you fancy. Walkman? Sure why not, these cost a fortune back home. Adidas or Nike shoes? Same thing, you pay US$40 for them in France and you sell them big time back home. Important thing was to spread your $1,000 worth of merchandise across many different items so that you will have a smooth sailing through the Customs and if you’re not an idiot, you can easily do that.

Funnily enough, you were actually allowed to bring your prize money back if you won any but you had to declare it at the border and then surrender it to the government at the official rate of 100 USD = 63 RUB. Obviously, no one was stupid enough to do that. However, if you had somewhat too much merchandise with you, the official letter from race organizers about how much money your team was paid was a legitimate cover to explain the excess of goods you’re bringing in – you won some money, a few stereos and some shoes and you bought the rest of the stuff really cheap on sale. Most of the time though, they wouldn’t even bother asking. “Sportsmen? Come right through…”

Making this kind of money, and the way it was made, do you really think anybody cared about “admiration and respect of our nation”?

In the last part of the series, I’ll talk about why winning Olympic Games, World Championships or a Peace Race was the ultimate monetary prize a Soviet racer was rewarded with.