Vekslování (Czechoslovakia)

Vekslování 🇨🇿
Location: Czechoslovakia
Definition: an illegal money exchange by veksláks (currency hustlers)
Keywords: Czechoslovakia – Survival‏‎ – Off-the-books
Clusters: Informal entrepreneurship – Redistribution – Market
Author: Iva Novakova
Affiliation: Alumna of the UCL School of Slavonic Studies

By Iva Novakova, Alumna of the UCL School of Slavonic Studies

Vekslování can generally be described as the illegal exchange of money. This practise was carried out by veksláks, currency hustlers, who formed a distinguished subculture in Czechoslovakia in the 1970s and especially in the 1980s and became one of the symbols of late socialism. After the Velvet Revolution took place in Czechoslovakia in 1989, many of the veksláks became extremely wealthy entrepreneurs, underworld bosses, and lobbyists, often interfering in Czech politics in the 1990s. More than thirty years after the end of communism in Czechoslovakia, vekslování have not entirely disappeared in the Czech Republic. However, the social status and practises of current veksláks have shifted considerably. As vekslování was illegal, the hustlers were charged with ‘a crime of threat to the foreign exchange economy’, ‘a crime of speculation’ and ‘a crime of parasitism’ and veksláks including their contacts were carefully monitored by the StB (plainclothes communist secret police in former Czechoslovakia). However, vekslování was quietly tolerated by the authorities. This illegal activity played an important role in Czechoslovakia’s grey economy and was beneficial to the state, which was experiencing a hard (foreign) currency deficit (Bren 2012).

Academic literature dealing with the phenomenon of vekslování is almost non-existent in the Czech Republic. Considering how widespread and recognised vekslování was in the former Czechoslovakia, and how deeply this informal practise has been rooted in Czech consciousness, the term is still commonly used in the Czech media and is well-known to all generations of Czechs.

By the mid-1980s, at the latest, the economic and social situation in Czechoslovakia was ready for change. This was caused, among other reasons, by a deterioration in the economic situation and the living standard. The planned economy was proving unsuccessful. Around this time, the population developed an unofficial culture, lifestyle and an unofficial economy in which a practice of vekslování played a significant role (Krejčí & Machonin 1996). As previously mentioned, vekslování was illegal, but widely tolerated. This informal practice was not only beneficial for the state economy, but also to many state officials for whom veksláks opened new opportunities for financial and material gain (Kroupa 2017).

The words vekslovat (verb), veksl, vekslování (noun) and vekslák (a noun, meaning a currency hustler) come from the German word wechsel meaning exchange. The word vekslovat can be already found in Jungmann’s Czech-German Dictionary published in Prague in 1835-1839. In late socialism the meaning of the word shifted and became more specific, describing an illegal exchange of hard currencies and vouchers called bony. It is a slang word with a highly pejorative connotation.

Veksláks would profit enormously from the use of bony, a type of parallel currency, creating a double economy in Czechoslovakia. Officially, 1 bon was equal to 1 Czechoslovak crown. However, on the black market, 1 bon sold for between 4.8 and 6 crowns. Veksláks often formed a kind of cartel and were selling bony to ordinary citizens at fixed prices, usually 5 crowns for 1 bon. Overall, there were two main reasons for opening access to hard currency shops to Czechoslovak citizens. Firstly, the state desperately needed foreign currency for foreign trade and secondly, consumers were becoming more satisfied. Teenagers were longing for ‘real‘ denim jeans, parents wanted to buy Donald Duck chewing gum for their children, and men were eager to buy Western video recorders and stereos (Bren 2012). In late socialism, veksláks were virtually unavoidable for citizens of Czechoslovakia.

A Czech bony. Source: unknown. © unknown.

Veksláks could be found in foreign coach car parks, hotel lobbies and bank vestibules. They offered to buy Western currency from foreign tourists for significantly more favourable exchange rate than was the official rate offered by the state bank. This exchange was profitable for both parties involved. The veksláks would then either exchange the capitalist currency in a bank for bony which they would resell to Czechs and Slovaks, or they would sell the foreign currency to Czechoslovak citizens who needed more hard currency than the state bank could sell them if they obtained a rare permit to travel to the West (Bren 2012). The hustlers created a kind of capitalist market within the socialist planned economy. Another way the veksláks made their profit was by exchanging foreign currency for highly overvalued roubles, usually through corruption, and then exchanging them back for Czechoslovak crowns. Veksláks always had perfect knowledge of all exchange rates and had many contacts in the state apparatus and the StB (Kroupa 2017). Many veksláks also profited from scams. Some would offer invalid currency left over after the 1953 monetary reform, or they would pretend to be StB agents who would arrive in the middle of the ‘transaction‘, disappearing with a startled tourist’s money in their hands. There were numerous techniques for how to deceive a client.

Veksláks earned hard currency in several ways. From foreign tourists, from Czechs and Slovaks working abroad, from Czechoslovak citizens who had relatives abroad, from other veksláks or by offering various services to Western tourists. One of these services was prostitution; another illegal activity associated with vekslování (SocietyMag). Women who offered sexual services to foreigners in exchange for hard currency were called tuzex girls, or ‘T-girls’. These women were not full-time prostitutes, but housewives or students who occasionally decided to earn some hard currency on the side, which helped them to pay for a car or household appliances. Many of the housewives were apparently selling their bodies with the knowledge and consent of their husbands. Furthermore, on Friday nights, girls from all over the country would come to the big cities, often pretending to be visiting a girlfriend, but in reality, earning extra money servicing hustlers and foreigners (Bren 2012). T-girls, the open secret of Czechoslovak society, were authentically depicted in the 1987 Czechoslovak film Bony a Klid, which caused many unpleasant reactions among the public and state authorities (Prazsky Patriot 2013).

Veksláks can be perceived as a specific subculture that emerged in Czechoslovakia in the 1970s. Most of the hustlers worked as waiters and taxi drivers, if they worked at all– many of them had fake jobs. They were earning more money than Gustav Husák, the president of Czechoslovakia at the time (Malinda 2018). According to 2017 interviews recorded by Czech national TV with former veksláks, some of them were earning 300 000 crowns per month. The average monthly salary at the time was 3000 crowns. These men were easily recognised because they wore Western clothes, drove foreign cars, and often behaved extravagantly. This social class had its own hierarchy and slang expressions. At the top of the pyramid was ‘a head’, followed by the collectors, called ‘skupky’, who were in charge of the so-called nohy (legs), who were pawns operating in the streets. Another common slang word was, for example, škvára (cinder), meaning money (Bren 2012). In the 1990s, after the fall of communism, many of these men became influential figures in the newly established Czech Republic: politicians, businessmen, lobbyists, criminals.