Борис Бурда
Author: Boris Burda
Journalist, writer, bard. Winner of the «Diamond Owl» intellectual game «What? Where? When?»
Liberal Arts
6 minutes for reading

BORIS BURDA: how to make money from trading without trading

BORIS BURDA: how to make money from trading without trading
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Relief depicting members of Hatshepsut’s trading expedition to the mysterious «land of Punt» from the temple tomb in Deir el-Bahri / wikipedia.org

 

ATTENTION — QUESTION!

 

The plane from Frankfurt am Main, which could not land in Novosibirsk because of weather conditions, was driven all the way to Omsk to the limit of range — it had to land without fuel, purely on aerodynamics. Meanwhile, on the way, there were many airports even closer. What was not in them?

 

ATTENTION — RIGHT ANSWER!

 

Customs — the airplane is foreign, and you can earn so much money…

 

AN ALTERNATIVE TO ROBBERY

 

An important stage in the development of the ancient states of Mesopotamia and Egypt was the transition to a trading economy. People began to produce more goods than they themselves could consume and sought to sell them or exchange them for other goods that they lacked. Intermediary merchants appeared, who bought up commodity surpluses and carried them by caravans to where they could sell them.

A merchant is a relatively free man, where he intends to go with his goods, he will go there. And it is a sharp knife to the lords of those lands — how is it — he will leave and take away what he wants, and what about taxes? What will they use for feasts, paying officials, waging wars? Let’s not let the criminal merchant go anywhere! And if we do, it won’t be for free. Let him share!

This is without taking into account the fact that on the way, the merchant came across a lot of fortresses, valleys, and oases, which were inhabited by a lot of petty tyrants. They, too, had to pay their subordinate bandits. But those who were taking everything from the merchants quickly saw that no one else was traveling past them. Then, they began to demand a portion of the merchants’ goods — for protection from other bandits.

The ruthless market quickly established acceptable norms for such payments. Those who took too little — began to envy their neighbors and demanded more. Those who took too much — lost traffic so quickly that they often did not even have time to think: they were overthrown by those who were better. So customs grew up on the borders of all possessions — a legal form of robbery, as well as all taxes.

 

HOW IT STARTED TO WORK

 

Back in Ancient Egypt, 3 customs houses were set up on the main roads leading out of the country, keeping vigil that no goods crossed the borders without proper payment to the Pharaoh’s treasury. And in Palmyra (modern Syria), they even found a stone on which were carved tariffs: for a slave pay this much, for cloth — that much, and so on, the entire nomenclature of goods of those years.

It was not possible to import goods to ancient cities without duty: if you did not pay, you would not be unloaded from the ship. By the way, exactly there for the first time, they came to such an idea: if you reduce the duty, the turnover can grow so that the money you get is not less, but more. So already under Alexander the Great, they began to take not a tithe from the goods, but significantly less — sometimes only a hundredth part.

Only the Greeks invented a form of tax collection that was extremely harmful and useless — payoff. The authorities decided how much they should get this year’s duties, and some citizens paid this money to the state at once and then collected the duties: what remained — all to them. This form simply pushed for violations, which are also extremely difficult to control.

As early as 2600 years ago, Rome introduced a duty for the import and export of goods called «portorium», which was collected not only in the harbors but also at the exit from the country. It was also collected by the taxpayers, who were called «publicans». The speeches of Roman orators at the trials against the publicans left an impression of universal hatred towards them — and hardly only from envy.

 

Мраморная плита «Пальмирский тариф», один из древнейших письменных таможенных тарифов, содержащий закон, изданный 18 апреля 137 года н.э.
The Palmyra Tariff marble slab is one of the oldest written customs tariffs, containing a law issued on April 18, 137 AD / wikipedia.org

 

TORTURERS AND BRIBERS

 

The new civil service multiplied enormously in the Middle Ages. I’m not going to say that there were more states then, and merchants had to cross borders more often — it is understandable that every tiny grand duke has to maintain a court and fight with neighbors; how else to feed them all? But the matter was not limited to the countries.

Did you know, for example, that D’Artagnan and his friends, in order to leave Paris and enter it, had to prove to the customs officer that they were not hiding excisable goods under the hat? However, what about the times of Louis XIII — Hašek has a story about an honest customs officer who would not let a goose cross the Prague bridge without paying the kreuzer of duty…

The name of this service speaks volumes. In Slavic languages, the duty was called «mito» (tax) and its collector «mitar» (tax collector) (even the Evangelist Matthew served in such an office, and now he is the patron saint of his former colleagues). The passage of the outpost collecting the tax was called «mytarstvo» (ordeal) — that is, torture and torment, which it obviously often was.

The origin of the Russian and Bulgarian words denoting this organ is not very pleasing. The Mongols, who then enslaved a considerable part of the Slavs, called «tamga» a stigma, which, among other things, was put on the inspected goods. Paying their money in favor of the Horde did not please anyone, but the word took root. Where do you put a tamga? At customs, of course.

There was nothing pleasant about these words in my mind. «Mitnik» is Ukrainian for «customs officer», but in Serbian? It turns out that in Serbian «mitnik», or «primalac mita» — «bribe taker»! This does not seem to be a coincidence. And the personal integrity of this customs officer did not play any role in the attitude towards him — he suffered for the whole corporation.

 

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PROTECT OR RELEASE?

 

Such a widespread practice did not wait long for its theory. Since the ignorant people, as was already shown above, were not happy about the fact that beyond the sea, not only you can buy goods cheaply, but transportation is costly, but also — customs clearance, it was essential for the customs to substantiate their claims also scientifically. Volunteers were quickly found.

Indeed, if the native industry produces something expensive and bad, who will buy its goods if over the same conditional sea do the same good and cheap? They will take only someone else’s goods, no one will buy their own, people will lose their jobs, they will go on strike, and the country will go bankrupt — it is necessary to defend it; protection is needed! So, this theory was called protectionism.

There were those who objected to this theory. Raise duties on goods that are expensive — you will preserve your technical backwardness, and you will pay idlers for the fact that they work worse. If there is no competition, the prices of unimportant goods will rise anyway. We need to get rid of duties and introduce free trade.

In reality, as always, the task has come down to finding the golden mean between the two extremes. Protectionism can give results if it is not permanent, if protective duties are gradually reduced as the own industry becomes stronger. And developed countries tend to gravitate towards completely free trade — they are doing just fine without duties.

 

HOW TO FOOL CUSTOMS

 

In general, it should be recognized that customs are not liked, and people always try to bypass them. Sometimes, there is even some benefit from such attempts. For example, when, because of the Hundred Years’ War, the only possible way to deliver alcohol from France to England was smuggling, they thought about how to transport the same amount of alcohol but in a smaller volume and created cognac.

Even more complicated was the smuggling of alcohol during the years of the American «Prohibition». Whiskey was carried on boats in crates filled with salt. At the sight of customs officials, the crates were thrown overboard, but the spot was marked. After a while, the salt dissolved, the crates became lighter and floated, and the smugglers returned just in time to pick them up and carry them on.

Drug smugglers are particularly resourceful — they often try to smuggle drugs inside their bodies by swallowing special containers, hiding them where not everyone would look, and feeding them to animals. They do it even easier: a drug courier hid her goods in a basket with a cat, explaining that that’s why the dog barks… But she became recognizable, and the basket was checked.

 

Контрабандисты, перевозящие алкоголь в виде кирпичей
Smugglers carrying alcohol in the form of bricks / facebook.com

 

And recently, British customs were interested in why Ukrainian vodka of the same brand was being brought to Abu Dhabi from London. They did the right thing — it’s a very pure vodka, there are practically no syrupy oils in it, and the pure water diamonds hidden in the bottles are not visible at all. Diamonds are not mined in Ukraine yet, but there is already excellent vodka…

A man named Hermann Mark, who emigrated from Germany bypassed Nazi customs in an extremely ingenious way. All the valuable emigrants cleaned under the broom, and old worn suits on cheap wire hangers squeamishly threw him — bring, say, this trash… And the fact that the wire from which the hangers were made was platinum, they did not realize.

The easiest way to cheat customs is to do nothing special. One man crossed the French-Swiss border on a bicycle at least once a day, carrying only a bag with a couple or three cobblestones — what tax is there on them? He was let through unhindered and transported another expensive and high-quality bicycle across the border without duty.

 

GETTING AROUND THE LAW TOGETHER

 

Customs regulations are usually so complex that there are always questions that cannot be solved on their basis. About 100 years ago, Egyptologist Gaston Maspero was importing a mummy into France, but the customs officer was against it — he wasn’t clear on what duty to charge for importing mummies. Fortunately, he agreed to treat the mummy as what it looked like — dried fish.

And biologist Hans Selye could not get from the U.S. urine of a patient with a rare disease — also did not know how much to charge him for it until they agreed that it is «used personal belongings», which are not taxed. While this was being decided, the material spoiled, Selye refused to take it, and he was threatened that the goods would be auctioned off…

And when Gay-Lussac ordered a batch of glass tubes from Germany, it turned out that the duty was very high! His colleague Alexander Humboldt helped by labeling the sealed tubes: «Careful! German air!» No duty was charged for the packaging, no duty was charged for the goods, and the whole unpleasant collision was over to the satisfaction of the scientist and the customs officers.

Romanian sculptor Constantin Brancusi did not immediately agree with customs when he was taking his exhibition to the United States. For heavy metal sculptures were going to take a considerable duty — they say, the import of non-ferrous metal. But Brancusi found a way out — gathered a competent commission that recognized his sculptures as works of art, which are not subject to duty.

The Japanese charged Steve Wozniak a lot of money for a joystick — as if it were a «pleasure stick», a sex device; let the maniac pay! And the Swedes decided to modernize the death penalty and bought a guillotine in France. They barely got it through as «agricultural equipment». They executed one person and abolished the death penalty — they could not pay…

As you can see, it is often possible to negotiate with customs. And stubborn people could be pressed, like Alexander Galich, who was going into exile, who refused to take off his gold cross and said that together with the cross he would stay in the USSR, and the customs officers did not agree to that. So customs is neither good nor bad, the whole question is in the measure. Those who forget it should be reminded sharply!

 

Китайские иммигранты в таможенном управлении Сан-Франциско, 1872 год
Chinese immigrants at the San Francisco Customs House, 1872 / theatlantic.com

 

CUSTOMS MIRACLES

 

Before World War I, Russian customs officials unceremoniously broke their own rules by not imposing duties on optics and dyes from Germany and Austria. The army needed them badly, and the duties were foolishly set unaffordable and blocked legal imports.

Reich official Herbert Blaschke, in March 1941, went on vacation in Switzerland with a large bundle of British pounds. And his own superiors snitched on him to the Swiss — say, shake this guy. It’s just that the pounds were fake, and he wanted to know if customs would notice…

This animal has a great sense of smell, and for customs, it’s a treasure trove. But in Israel, to be allowed to work with them, you had to go to the level of the Knesset because it’s a pig. It seems to have managed to prove that customs officers do not have to eat them…

A ballerina was asked at customs if she was bringing a calf. She honestly admitted that she does, and even two — right and left. And at one time, a French clerk confiscated red caviar from a Soviet soccer player because caviar should be black, and red caviar is propaganda.

Customs also did a lot of work for art. Pavel Khudyakov’s painting «Skirmish with Finnish Smugglers», in which the customs officers defeat them, became the first work that Pavel Tretyakov bought for his gallery.

The main thing at customs is to answer honestly! When the strict guard asked the musicians whether they were exporting old or new instruments, they quickly and honestly answered: «Quite old» and were let through. They were telling the truth — there are no new Amati or Stradivarius instruments!

 


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