Economics and Communism in Table for Two
Amor Towles has a new book with some great economic lessons
I have enjoyed several of Amor Towles’ books, including A Gentleman in Moscow and The Lincoln Highway. His new book, Table for Two, was released in April and contains a number of short stories. To be honest, I liked it but not as much as his previous works, One highlight, however, is there are a number of great economic insights throughout. I’ll highlight a few here. Naturally, there are some modest spoilers, so if you want to read it without knowing anything, wait to come back to this later!
All of these, actually, are from the first short story, about a couple and their adventures in the newly founded Soviet Union in the late 1910s and 1920s. There are a number of gems in the story, so I hope you enjoy the lessons.
“How does one get fired from communism?”
I don’t know that there is much economics in the line, other than the fact that it’s referring to an economic system. But it’s a funny line that Irena exclaims when her husband was dismissed from his factory job because of incompetence. Under most communist systems, people were indeed virtually guaranteed jobs.
“In the next two hours, Pushkin advanced as many blocks”
Pushkin was sent by his wife to get bread, so found the long line. Spending two hours in a line wasn’t uncommon in the former Soviet, as the average person spent more than one hour every day in line. So this is realistic portrayal of life people endured in the former Soviet Union.
Most of the time, these lines were for necessities, but here is a queue that formed when a McDonalds opened:
Markets create an equilibrium where the quantity supplied equals the quantity demanded, and long lines are rare. That wasn’t the case in the Soviet Union, where people wasted many hours that could otherwise have been used productively but instead were spent in lines.
For more another article on a realistic portrayal of communism, check out my article on how The Hunger Games illustrates what life is like under a communist system.
“The State would determine who should get what after taking careful account of the greater good”
The Soviet Union moved away from a market system. Under a market system, demand and supply factors determine what is produced, how products are produced, and market forces allocate the products to consumers.
The goal of communist leaders was to come up with a system they hoped would be more efficient, and to have government officials determine compensation schemes, benefits, and more. The communist government would therefore determine prices and salaries for various jobs and roles.
Unfortunately for the USSR or anyone attempting a communist society, it’s virtually impossible for any central planner to be able to do better than a market system. This creates tremendous inefficiencies in both the production and consumption of products.
“And in the new Russia, there was no shortage of black marketers”
Under communism, the government sets limits on what people can receive and earn. In the process, communism outlaws free and legal markets. However, this causes many unmet wants and needs, and just because a market is illegal doesn’t mean there won’t be a market. In the US, there are still black/illegal markets for many drugs, prostitution, designer knock-off apparel/bags/etc., ticket scalping, and more.
In this story, Pushkin creates a new business - where he will wait in lines for people - and it becomes successful.
“Within a week, Petya was standing in two or three lines a day, so that Pushkin could stand in two or three more”
Pushkin found a market where he could thrive. He developed a business and found employees - his employees were people who were also willing to wait in line for others. From that business, he profited handsomely and increased his and Irena’s standard of living dramatically. And he was able to provide additional incomes to his employees.
Pushkin’s payments sometimes came from the people he waited in line for directly and at the time of waiting in line. These could be valuable products that were sometimes hard to fine. Every so often, however, his payments came from government officials who used their political powers to grant Pushkin special and rare favors in exchange for his help. This included nicer living accommodations.
“The human race is famously adaptive, but there is nothing a human will adapt to more quickly than an improved standard of living”
In the story, this line is referring to Irina and Pushkin’s standard of living improving because of Pushkin’s success in business. There is a lot of truth to this statement in general, however. Living standards in the USA are high and have improved over time.
Median incomes in the USA are many times what they were 100 years ago. If you can imagine the average family back then, making $15,000 annually, they probably would be stunned to think that the average American family today still feels financial stress, given the poorest families now are still better off than the average family then.
But as Americans, we have gotten used to bigger living spaces, electricity, air conditioning, cell phone service, better clothing, and all the other products and services that have increased our standard of living over the past century.
Table for Two
I found Table for Two enjoyable and educational. If you read this book and can think of different economic lessons that were fascinating, please leave a comment below!