Post-Soviet Russia

A Journey Through the Yeltsin Era

Roy Medvedev, George Shriver

• Editore: Columbia University Press
• Anno: 2000
• ISBN:
  9780231502634
• Argomento: Politica e relazioni internazionali
• Categoria: Relazioni internazionali

Roy Medvedev, one of the world's best-known Russian scholars and a former consultant to both Gorbachev and Yeltsin analyzes the main events that have transpired in the Russian federation since late August 1991. He looks at the plans that were meant to restructure a society in crisis but—for reasons both complex and obvious—were destined to fail. From the drastic liberalization of prices and "shock therapy" to the privatization of state owned property and Yeltsin's resignation and replacement by Vladimir Putin, this is an intricately fascinating saga of good intentions, philosophical warfare, and catastrophic miscalculations.

Among the many compelling facts detailed here are Yeltsin's utter surprise—and lack of preparation—at the failed coup against Gorbachev in 1991, when power fell virtually into his lap; his failure to heed the warnings of learned advisers like Yuri Yaremenko, who knew that Western economics could not be applied to Russia; and Yeltsin's dramatic (and unprecedented) decree in 1992 allowing anyone to sell or buy anything they wished.

In a sweeping conclusion covering the critical events of 1998 and 1999 as well as a detailed analysis of the 1995 and 1996 elections, Medvedev lays forth an exhaustive survey of recent political shifts, attitudes, statistics, and trends. From birth and death rates on the farm and in the city through a number of highly charged campaigns and elections to the new goal of the Communist Youth League (to become millionaires), this is a breathtakingly detailed survey of an unforgettable chapter in Russia's history.

PART I

MYTHS AND REALITIES OF

CAPITALISM IN RUSSIA

1

A Capitalist Perestroika: First Steps, 1992–1993

After the failed coup attempt of August 1991 the power of the central government of the Soviet Union faltered. Real power was in the hands of Boris Yeltsin, who only a month before had taken his oath of office as president of Russia. The central ministries of the Soviet government were paralyzed; officials in the central governmental structures did not know what their powers or prerogatives now were, or what their future might be. By September the Russian Federation and other union republics in fact were operating as fully independent states, and they were obliged to deal with problems previously under the jurisdiction of the president and government of the USSR.

Yeltsin and his circle, unprepared for this turn of events, didn’t know what to do first. Oleg Poptsov, a writer and Yeltsin confidant, gives this account:

During those days [August 19–22, 1991] power fell at the democrats’ feet. It tumbled down out of the heavens in all its vast dimensions and crushed to the ground the none-too-sturdy administrative organism of the democrats. Yeltsin’s whole conception had been geared toward a long, tough struggle with the central government, steadily pushing it back, denying it any right to administer Russia. That perspective within an hour’s time had disappeared. To be sure, it would have been a wearing struggle, but in the conception held by Yeltsin’s team, it had its indisputable advantages. First, it allowed the democrats a fair amount of time to get to know their own strength, to smooth out the form and functioning of their government, to maintain the potential, advantageous on all occasions, of speaking from the opposition, of accusing the central government of failure in making economic reforms. Most important, it would have allowed time to form a fundamentally new administrative apparatus, in contrast to the central bureaucratic structures.

(Oleg Poptsov, Khronika vremen “tsaria Borisa” [Chronicle of the Times of “Tsar Boris”], Moscow, 1996, pp. 205–206)

The ministries of the Russian Federation were also unsure what to do next; they had no program to follow, nor much understanding of the situation in the country. It seemed that Yeltsin himself didn’t know, or didn’t want to know, about the growing breakdown and disorder everywhere. Even the apologists Vladimir Solovyov and Yelena Klepikova, who were writing a biography of Yeltsin, were surprised by this. They had quickly flown to Moscow from New York right after the failed coup, in order to add a new chapter to their book. Here is what they reported:

Yeltsin had grown used to being in the opposition. He had made preparations for prolonged trench warfare with the Kremlin. Then suddenly power fell into his hands as a result of the conservatives’ failed coup. He had neither a concrete plan nor the habit of rule—hence the kind of stupor the new Russian rulers fell into during the first weeks after the putsch. We found the Moscow “White House” lost in dissension, intrigue, and bickering. Their enemy had disappeared, and the democrats were busy sorting out relations among themselves. Even the “Sverdlovsk mafia” . . . was disunited, its members vying with one another for the attention of their boss, as though fighting over a woman.

(Solovyov and Klepikova, Boris Yeltsin, Moscow, 1992, pp. 9–10)

Within a few weeks after their coming to power a reshuffling of the personnel on Yeltsin’s team began. In late September his longtime associate Ivan Silaev submitted his resignation from the post of prime minister. During September and October 1991 Yeltsin considered various candidates as a replacement.

Yeltsin rejected quite a few promising candidates—first of all Vice-President Aleksandr Rutskoi, who in the fall of 1991 was very active in various fields of administration, from the consolidation of Russia’s new borders and the creation of a new customs service to problems with Chechnya and the fate of the former Soviet armed forces. Yeltsin and those closest to him viewed Rutskoi’s initiative and independent activity with disfavor.

Mikhail Bocharov, chairman of the Supreme Economic Council of the Russian Federation, was an experienced economic administrator and legal expert, but from Yeltsin’s point of view, he was aiming too high. A prime minister, in Bocharov’s opinion, should direct the work of all cabinet ministers and be solely responsible, based on the principle of unified management. In the fall of 1991 he sent Yeltsin a long letter on the situation in Russia and ways to emerge from the crisis. It had been Yeltsin’s practice to consult frequently with Bocharov and take his advice to heart, but now Yeltsin refused even to meet with him. Soon Bocharov withdrew his candidacy and resigned.

Grigory Yavlinksy had for several months worked as Silaev’s deputy and headed the Government Commission on Economic Reform. But Yeltsin rejected him with the comment, “He’s a Gorbachevite.”

A more difficult problem was the candidacy of Yuri Skokov, who was part of Yeltsin’s inner circle. When the government of the Russian Federation had been formed, this tough, experienced administrator was appointed first deputy premier, and twice during 1991 Yeltsin spoke of his desire to see Skokov in the premiership. Now, however, the only post Yeltsin offered him was that of adviser on security affairs.

Nikolai Petrakov, a distinguished economist, was another rejected candidate, as was Oleg Lobov, who had long worked with Yeltsin in Sverdlovsk. Yeltsin himself had invited Lobov to come work in the government in Moscow, but Lobov had not distinguished himself in his position as one of several vice premiers.

Not until November did Yeltsin make his choice—Gennady Burbulis, another old associate from Sverdlovsk, but one who had no experience in government or the economy. On Burbulis’s advice Yeltsin himself assumed the post of premier, but not the actual responsibilities. He named Burbulis first deputy premier, assigning him to form a cabinet and chair its meetings.

Gennady Burbulis was from a working-class family and as a young man had been a metal worker for about a year. After graduating from Uralsk University he earned a candidate’s degree in philosophy and for fifteen years brought edification to students at technical colleges in the field of Marxist philosophy and “scientific communism.” His political opponents often reproached him for his many years’ work of propagating Marxism-Leninism and Burbulis answered his critics with the cautiously vague and flowery rhetoric so typical of him: “I would refer to that period in this way: a turbulent interweaving of selfless sincerity, professional university-level functioning, and naive self-deception. . . . Yes, I loved educational work. I love it still. There are still powerful homiletic-confessional chords in my soul; sometimes they are manifested more, sometimes less” (Rossiya, September 11–17, 1991, p. 3)

In 1988, a time of ideological ferment and widespread challenging of official doctrine, Burbulis had been active in forming party clubs and forums for discussion, and soon became a candidate for the USSR Congress of People’s Deputies. He made Yeltsin’s acquaintance in March 1989 and immediately proclaimed himself a Yeltsin supporter. This helped him win election. But he also helped Yeltsin, who was then taking his first steps as a leader of the democratic opposition.

Burbulis quickly became part of Yeltsin’s inner circle. He was not a good speaker and did not know how to dialogue in a straightforward way with people of competence, but with his vague and pseudo-scientific line of argument he was able to captivate the none-too-well-educated politician, Yeltsin. The latter has acknowledged this influence. “Our intimate communication pleased me,” Yeltsin has written:

I will not hide the fact that my conversations with Gennady Eduardovich [Burbulis] inspired me to new ways of thinking. He knew how to look ahead. How to lend a broader, strategic, global assessment to immediate events. A conception of a new politics, a new economics, a new governmental system and system of daily life for Russia was sketched out ever more vividly, clearly, and distinctly. . . . He made a powerful impression on me with his erudition as a professional philosopher. And we had common roots. Memories of Sverdlovsk meant a lot in our relationship. Last but not least, he was a serious soccer enthusiast. Like me, he loved sports.

(Rossiya, September 11–17, 1991, p. 3)

At the time of Yeltsin’s election as chairman of the Supreme Soviet of the RSFSR in 1990 Burbulis was his chief of staff, just as he was when Yeltsin was elected president of the Russian Federation in July 1991. A special post was created for Burbulis, not provided for in the Russian constitution—secretary of state of the Russian Federation. Officially his job was to “oversee” several important ministries, but in the unofficial Table of Ranks he held second place to no one in Russia but President Yeltsin himself.

Burbulis understood the dangers facing the reformers, but he convinced Yeltsin it was necessary to carry through a rapid transformation of the entire social system, not just try to solve particular problems from moment to moment. It was a harsh and utopian program, similar to those of the left-wing Communists of spring 1918 and fall 1920, only heading in the opposite direction. Yeltsin approved this program.

In choosing his first deputy premier, Yeltsin had been guided mainly by concern for preserving his own personal power. Burbulis did the same, choosing his team from among those for whom he would be an indisputable authority. His choice of a chief figure to carry out the “reform” program fell on a young and little-known economist, Yegor Gaidar.

Gaidar had no experience in industry or administration. He was a typical representative of that small cohort which in 1991–92 rose from being heads of research departments to become government ministers. He grew up in a family that was very well provided for under the Soviet system. He never knew poverty or want. His paternal grandfather, Arkady Gaidar, was the author of “classic” works of Soviet children’s literature. His maternal grandfather was also a writer well known in Russia, Pavel Bazhov. His father was a naval officer and celebrated journalist, Timur Gaidar. While still a university student, Yegor Gaidar married the daughter of the science fiction writer, Arkady Strugatsky. He joined the CPSU as a student and received a Lenin scholarship to Moscow State University, testimony to his academic achievements and ideological loyalty. Graduating with distinction, he went on to write a dissertation for a candidate’s degree on the relatively narrow topic of value indicators in the Soviet system of “self-financed” enterprises. The central idea of this dissertation was the not very profound observation that, whether under capitalism or socialism, an enterprise has to make a profit.

After defending his doctoral dissertation, Gaidar was put in charge of the economic policy department of Kommunist, the main theoretical magazine of the CPSU Central Committee. In 1990 Gaidar became head of the economic section of Pravda, the CPSU’s main newspaper. His prominent posts in the party press made Gaidar an influential figure in party ideological circles. He supported perestroika and called for full utilization of the potential of the socialist economy while freeing it from the mistakes and deformations of the past. He favored a cautious introduction of the principles and mechanisms of a socialist market economy. He openly withheld support for the programs and proposals of the radical marketeers Shatalin and Yavlinsky. In early 1990 Gaidar wrote: “There exists an entire industry for producing pseudo scientific constructs and providing an aura of scientific respectability for these unwise programs. Among professional academics this occupation is not highly regarded; on the other hand, it is quite lucrative” (Kommunist, 1990, no. 2, p. 33).

Actually, at the time, Gaidar himself was enthralled with an idea that could hardly be called scientific. Writing in Pravda on April 16, 1990, he called for the abolition of government control over prices—arguing that the “liberalization” of prices should be the first and most important market-reform measure. An entire series of transformations would follow in a logical chain. “In economics,” he wrote, “everything must be paid for. The time is past when the economy could be stabilized without difficult and unpopular measures. It is a frightening thing to unfreeze prices given the present rates of growth of the total currency in circulation. But it can be done by making a decision once and for all. We must simply shut our eyes tightly and leap into the unknown.”

In April 1990 no one either supported or criticized Gaidar’s proposal. It just didn’t seem serious. In the fall of 1990 the Gorbachev government did make an attempt at unfreezing prices on bread, tobacco products, and beer, but so much protest erupted that Gorbachev and his prime minister of the time, Nikolai Ryzhkov, retreated.

At the end of 1990 Gaidar was given the opportunity to organize a new research center, the Institute of Economic Policy. Among the young economists brought in to work at this new institute were Andrei Nechaev, Vladimir Mashits, Vladimir Mau, Aleksei Ulyukaev, and Aleskandr Shokhin. Some Western analysts have tried to argue that as early as the mid-1980s Gaidar, Chubais, and Shokhin held anti-Communist views and were working within the socialist system to get to know it better, so as to be able to eliminate it more quickly. This is empty conjecture—although it is true that for Gaidar personally it was not a difficult psychological transition to reorient toward capitalist methods and accept the advice of Western experts. He had long been called a “Chicago boy” (referring to the Chicago school of neo-liberal economists).

In 1992 the Russian magazine Business People (Delovye Lyudi) wrote that Gaidar was “a thoroughly Americanized professional” for whom many terms were easier to pronounce in English than in Russian. The magazine went on: “There is nothing in him that could appeal to the man in the street: he doesn’t play tennis or volleyball, like Yeltsin, or fly a plane, like Rutskoi. He has no interest whatsoever in cars, horses, stamps, or playing cards. In this sense Gaidar is said to be something of an outsider in his own country” (Delovye Lyudi, July–August 1992, p. 83).

Soon after the failure of the attempted coup of August 1991 Burbulis began putting together a large group of young economists to work out economic policy and a program of economic reform for the Russian Federation. Gaidar was placed at the head of the group. A number of Western experts, headed by Jeffrey Sachs, were also drawn into this work. The standard recommendations of the International Monetary Fund (IMF) and International Bank for Reconstruction and Development (IBRD) were adopted as the basis for this work, even though these recommendations did not take into account the structure of the Russian economy and its particular features. On the contrary, these proposals carefully guarded the interests of the wealthy Western countries, whose contributions of course are the basis for virtually all international financial institutions.

Burbulis introduced Gaidar to Yeltsin in late October 1991. They had a very long talk. Gaidar explained to the Russian president the general outlines of his program, especially its central feature—“liberalization of prices.” He assured Yeltsin that prices would rise only by a factor of three, or four at the most, and that liberalization was indispensable if the economy were to be healed and genuine market reforms instituted. The population would, of course, be against this measure and the overall risk was very great, but passivity and a wait-and-see policy were even more dangerous. Moreover, Yeltsin could always demand the resignation of his cabinet, which would take full responsibility for the drastic measures.

Yeltsin took a liking to Gaidar. “He knew how to talk simply,” Yeltsin wrote in his memoirs,

And this was tremendously important. First of all, sooner or later it would be necessary to talk with our opponents, and he could do this, not me. He did not oversimplify his conception, but spoke in simple terms about complex matters. He is able to make his ideas catch on, and the person he is talking to begins to see clearly the road ahead. Finally, there were two other decisive factors. Gaidar’s scientific conception coincided with my own inner determination to get through the most painful part of the journey quickly. I couldn’t make people keep waiting, postponing the main events and most important processes for years to come. Gaidar let me know that an entire team of very young and highly varied specialists stood behind him . . . independent, eager to go, and free of psychological complexes. I understood that, in addition to the hidebound old Russian wheeler-dealers, this kind of “brazen youth,” if you will, were bound to enter the Russian business scene. And I very much wanted to give them a try-out, to see them in practice . . . In addition to that, you know, it’s a curious thing, but I couldn’t help being affected by the magic of his name. After all, Arkady Gaidar—entire generations of Soviet people had grown up with that name. Including myself. And my daughters. And so I had faith in the inherited talent of Yegor, son of Timur, grandson of Arkady Gaidar.

(Zapiski Prezidenta, Moscow, 1994, pp. 164–165)

A few years later, reminiscing about his first meetings with Yeltsin, Gaidar wrote about the Russian president’s personal qualities as follows:

His is a complex and contradictory character. In my view, his greatest strength is his ability to intuitively sense the public mood, and to take that into account before making decisions full of the greatest consequence. In matters of fundamental importance he trusts his own political instinct far more than any advisers. Sometimes in this way he makes the absolutely right decision, but sometimes he is seriously mistaken. As a rule, what is to blame in such cases is his mood, which changes fairly often and leads him astray. One of his great strengths is his ability to listen. A personal appeal to him, one that echoes with him convincingly, can influence him more than the finest, most carefully written document. But a danger is concealed here: whoever gains his confidence and manages to persuade him also has a chance to abuse this confidence, something that has happened more than once, including in the making of extremely important decisions. I have often caught myself thinking about the similarity between Yeltsin and that hero of medieval Russian epics, Ilya of Murom, who at one moment was bravely slaying Russia’s foes and the next, was sleeping on the stove.

(Gaidar, Dni porazhenii i pobed [Days of Defeats and Victories], Moscow, 1996, pp. 105–106)

Gaidar managed to win Yeltsin’s confidence quite quickly. While everyone else was suggesting a period of three to five years for their economic plans or programs to be carried out, Gaidar convinced Yeltsin that a fundamental change for the better could be accomplished in just one year. Within a few days of meeting Yeltsin, Gaidar and his team were occupying offices on Old Square and New Square, the main locations of Russian government agencies at the end of 1991. The new v...