Armageddon Averted: The Soviet Collapse, 1970-2000 (16 page)

The Yeltsin entourage also annexed the Soviet finance 108

waiting for the end of the world ministry, mint, Academy of Sciences, and archives. Many observers labelled these actions a ‘counter-putsch’.
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Yeltsin was not alone in undermining the Union. Kravchuk, while taking steps to claim Soviet military personnel and equipment on Ukrainian soil for a Ukrainian army, also announced a referendum on independence for 1 December. About 90 per cent voted in favour; there were large pro-independence majorities in the ethnically Russian provinces of Eastern Ukraine. Even in the third Slavic republic, Belarussia, the pro-Union yet survivalist leadership declared its independence after the putsch, while sponsoring a hasty name change to Belarus. The Belarus leader, Stanislav Shushkevich, lobbied Yeltsin to cut a deal with Gorbachev. But, whereas Yeltsin at least attended the Union Treaty negotiations, Kravchuk did not. On 5 December Yeltsin told journalists that a Union Treaty without Ukraine would be impossible. The Union seemed dead, but the republic leaders could not figure out how to get rid of the Soviet president. An opportunity to resolve the uncertainty arose with a previously scheduled bilateral Russia–Belarus meeting near Minsk for 7 December, which Kravchuk agreed to attend. The night before the three-way gathering, one of Yeltsin’s top advisers sought out an acquaintance, the head of an American NGO in Moscow, to try to clarify the difference between a commonwealth, a federation, and a confederation.
35

Aides to the three leaders worked most of the next day and night. At noon on 8 December, they suddenly sought to contact Nazarbaev, who turned out to be on a plane to 109

waiting for the end of the world Moscow for a meeting with Gorbachev scheduled for 9 December. Without Nazarbaev, the three Slavic leaders announced that, ‘since the USSR is ceasing to exist’, they had established a Commonwealth of Independent States (CIS). The CIS had no common parliament, president, or citizenship, only a vague pledge to work on collective security. Shushkevich was assigned to call Gorbachev, but only after Yeltsin had called US President George Bush.

Not long before the August 1991 putsch, Bush had delivered his ‘chicken-Kiev’ speech in the Ukrainian capital, where he had warned against ‘suicidal nationalism’, but, in an about face, Washington leaked that it would recognize Ukrainian independence sometime after the 1 December referendum. As always, Gorbachev had been counting on the leverage of an enormous Western aid package.
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Instead, Bush became one of the last of the opportunists to abandon the Union for the republics.

On 10 December, after the announcement of the CIS, Gorbachev, still technically commander in chief, appealed to the military high command, but the next day the generals received Yeltsin and chose to back him as the real power and the only hope for salvaging a unified Armed Forces. On 21 December a meeting to expand the amorphous CIS to eleven members—all but Georgia and the three Baltic republics—took place in the Kazakh capital. The leaders of the Central Asian republics, Belarus and Russia, hoped, each for its own reasons, that the CIS

would become a workable entity, but the Ukrainian leadership wanted merely to bury the Soviet state, which the 110

waiting for the end of the world assembled republic leaders formally dissolved. Two days later Gorbachev met Yeltsin and agreed to step down as USSR president. On 25 December the red hammer and sickle was lowered from the Kremlin, and replaced by the red, white, and blue flag of Russia. On 27 December, four days prior to the date Gorbachev was supposed to vacate his Kremlin office, the receptionist called him at home to report that Yeltsin and two associates were already squatting in the coveted space, where they had downed a celebratory bottle of whisky. It was 8.30 a.m.

Long fearing the ‘conservatives’, Gorbachev had mesmerized and browbeaten them at party forums and behind the scenes with what must have been intoxicating wizardry. In the attempt to re-energize the system, he had led them into territory they had never imagined; they hated him for it, but were petrified of being left without him. After he drew close to them in late 1990 only to semi-abandon them in April 1991, they finally acted, yet their scheme was based on his willingness to join in!

Yeltsin was a different matter. He would have been eaten alive in Gorbachev’s position. But he achieved what Gorbachev never dared: power rooted securely in the ballot box. If Yeltsin’s memoirs cannot conceal the fact that Gorbachev grudgingly provided him with the possibility of office, and the cover for reckless taunting of the Soviet establishment, Gorbachev’s cannot disguise his misplaced scorn: the world renowned lion-tamer of the establishment was upstaged by the guy who climbs out of the Volkswagen. In the end, the Russian president proved too 111

waiting for the end of the world spiteful and the Soviet president too vain for the two to embrace each other and save some form of the Union, yet their complementary roles helped defang a dangerous, well-armed police state.

Looking back at the putsch, some commentators cite Gorbachev’s ‘failure’ to break out of the Crimean dacha and discrepancies in when communications were halted to suggest a wait-and-see complicity.
37
Chief Investigator Evgenii Lisov concluded that Gorbachev had offered no hints, obliquely or directly, to suggest that he was with the plotters, but they nonetheless calculated he would join them after a few days. We may never learn the full story.

The more important point is that at various times Gorbachev might have tried to institute martial law and did not. Flabbergasted by the fact that his socialist renewal was leading to the system’s liquidation, Gorbachev more or less went along. In sanctimonious, selective, and occasionally distorted reminiscences, he presents this acquiescence as an activist strategy—a disingenuous and, ultimately, superfluous exercise. Yugoslavia’s bloody break-up, as well as the careers of Slobodan Milosevic, Franjo Tudjman, and their tinpot henchmen, will forever provoke additional shudders over how events might have turned out across northern Eurasia and the satellites of Eastern Europe.

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5

Survival and cannibalism in the

rust belt

[The Soviet economy’s] past is written into the composition and location of its capital stock, the patterns of its roads and railroads, the size and type of its plants, the distribution of its manpower, the kinds of fuel it burns and ore it uses. Even a perfect leader and a perfect reform, whatever those might be, could not right in a generation what has taken two generations to form.

(Thane Gustafson, Russia specialist, 1989) ‘I think’, says Ivan to Volodya, ‘that we have the richest country in the world’.

‘Why?’ asks Volodya.

‘Because for nearly sixty years everyone has been stealing from the state and still there is something left to steal.’

(Hedrick Smith,
The Russians
, 1976) At the end of George Orwell’s 1945 ‘fairy tale’,
Animal
Farm
, something extraordinary occurs. Recall that having 113

survival and cannibalism in the rust belt overthrown Mr Jones in the Great Rebellion, the animals of Manor Farm set about building a new world without exploitation when the pigs, who assumed a leading role, announce they are moving from the communal barn into Mr Jones’s old manor house. The pigs even take to wear-ing clothes and walking on two legs. Such a turn of events, the pigs insist, is absolutely in keeping with the spirit of the Rebellion and in any case is vital, because all the surrounding farms are still run by people, and remain hostile.

Sure enough, a neighbour, Mr Frederick, attacks with his men. Entering into an alliance with another human neighbour, Mr Pilkington, Animal Farm survives Frederick’s onslaught.

To celebrate their improbable, draining victory, the pigs host a visit of their wartime human ally. Curious, the rest of Animal Farm’s creatures, who live badly yet retain a sense of honour as inhabitants of the world’s only farm owned and operated by the animals themselves, huddle against the outer windows of the manor. Looking in, they discover an uncanny resemblance between the pigs and people. They also overhear Mr Pilkington compliment the pig leader, Napoleon (Caesar in the French translation), for the low rations, long working hours, and absence of pampering of the lower animals on Animal Farm. Grati-fied, Napoleon squeals that the pigs have just decided to abolish the outmoded revolutionary name Animal Farm and revert to the original Manor Farm!

Orwell vividly captured the betrayal of the people by the elites as a key characteristic of the Soviet regime, but he 114

survival and cannibalism in the rust belt got it only half right. Much of the Communist upper class, enjoying
de facto
ownership of state-owned property, mocked its slogans about the proletariat and social justice, yet, even four decades after Orwell’s masterpiece, seg-ments of the Soviet elite resisted abandoning the spirit and practice of the Animal Farm ideology. Once Gorbachev’s reforms broke everything loose, however, even ideologue ‘pigs’ got swept up in the pursuit of property.

The KGB and the army began wheeling and dealing commodities, from arms to computers, for institutional and private profit. The Central Committee, still railing against the market, also established private businesses.

Individually, officials signed over to themselves deeds for state dachas, vehicles, anything under their watch, at bargain prices, if they paid at all. In the words of one penetrating analyst, those in power ‘rushed to claim . . .

assets before the bureaucratic doors shut for good’.
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In fact, the doors to property appropriation and self-enrichment were only just opening. As the republics cast aside the Union carcass and a rapid turn to the market became official policy in Russia, the seizure of the state-owned wealth of the USSR evolved into frenzy.

Most ordinary people had anticipated the onset of American-style affluence, combined with European-style social welfare. After all, these were the rosy images of the outside world, transmitted by glasnost, which had helped destroy what was left of their allegiance to socialism. But instead, the people got an economic involution and mass impoverishment combined with a headlong expansion of 115

survival and cannibalism in the rust belt precisely what had helped bring down the Soviet Union— the squalid appropriation of state functions and state property by Soviet-era elites. Some functionaries ripped out the phones, carpets, and wood panelling before flee-ing. But most returned to their old desks, or reshuffled to new ones, and used their official duties—licensing power, affixing of state seals, authorizing or blocking investigations—to enrich themselves far more than they could or would have under Communism. Thus did the lead Zeppelin of post-Communist euphoria crash and burn, and the finger pointing begin.

Numerous analysts blamed the supposedly dogmatic monetarist reforms, which were derided as ‘Thatcherism’

and ‘market Bolshevism’.
2
But these critics neglected to
demonstrate
that Russia underwent ruthless neo-liberal reforms. It did not. Nor could it have. The same goes for pie-in-the-sky alternatives. Critics of Russia’s rhetorical neo-liberalism failed to specify
who
was supposed to have implemented their suggested stateled ‘gradualist’

policies—the millions of officials who had betrayed the Soviet state and enriched themselves in the bargain? No Russian leadership, rising to power by virtue of the spiral-ling collapse of central (Soviet) state institutions, could have prevented the ensuing total appropriation of bank accounts and property that the state owned on paper, but that were in the hands of unrestrained actors. Of course, members of the Yeltsin inner circle and his appointed government, unable to halt the mass expropriations, did not even try to do so. Far from it—top officials pumped 116

survival and cannibalism in the rust belt out decrees and orders that brought them lucre. But so did their subordinates, and their subordinates’ subordinates, while factory directors reclassified profitable operations inside ‘their’ factories and pocketed the proceeds, a legalization and enlargement of long-standing black-market practices.

The infinite variety of scams that came to the surface eloquently testified to entrepreneurial skills acquired from decades of having engaged in ‘extra-plan’ dealings for both plan fulfilment and personal gain. Now, there was no plan. And there was no Communist Party discipline to enforce even a meagre degree of control. There was, however, a ten-time-zone Russian rust belt, whose combination of economic deadweight and scavenging opportunities defined the decade of the 1990s. Nothing revealed the bankruptcy of the late Soviet Union more than the bankruptcy of post-Soviet Russia. The country’s predicament was, therefore, not some supposed ‘cultural’ lack or peculiarity, or an excess of bad foreign advice, or a small band of thieving ‘oligarchs’.
3
It was a problem of institutions, as the story of Russia’s economic ‘reforms’ in this chapter demonstrates, and as the story of Russia’s mish-mash political order in the next chapter sums up. The Soviet collapse continued throughout the 1990s, and much of what appeared under the guise of reform involved a cannibalization of the Soviet era.

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survival and cannibalism in the rust belt
The illusions of reform . . .

Yegor Gaidar had an impeccable Soviet pedigree. Grand-son of perhaps the Soviet Union’s best-loved children’s writer, son of a top
Pravda
correspondent, he grew up abroad in Tito’s Yugoslavia. As a teenager in the late 1960s, Gaidar claims to have read a 1938 edition of Adam Smith, Paul Samuelson’s basic economics textbook, and, more importantly, a Marxist indictment of property monopol-ization,
The New Class
, by the former second in command to Tito, Milovan Djilas. Gaidar also acquired first-hand experience of Yugoslavia’s touted industrial management reforms. At university in Moscow in the 1970s, Gaidar claims he read the copies of John Maynard Keynes, John Galbraith, and Milton Friedman kept in the library’s ‘secret collection’, as well as Marx. More practically, he closely studied Hungary’s ‘goulash Communism’, with its small private sector. By his own telling, Gaidar remained ‘an orthodox Marxist’. But he wondered—like Gorbachev, whom he had advised on perestroika’s Yugoslav– Hungarian inspired 1987–8 economic reforms—how to escape the cul-de-sac whereby state socialism empowered a sclerotic bureaucracy while ‘market socialism’ proved difficult to realize in practice. As of November 1991, however, when Boris Yeltsin tapped the academic to head the Russian government, all that was moot. ‘We were in a situation’, Gaidar later admitted, ‘where theory was powerless’.
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