Armageddon Averted: The Soviet Collapse, 1970-2000 (5 page)

weapons, with all requisite delivery systems. The Soviet Union also had more than five million soldiers, deployed from Budapest to Vladivostok, and hundreds of thousands more troops in KGB and interior ministry battalions. It experienced almost no major mutinies in any of these forces. And yet, they were never fully used—not to save a collapsing empire, nor even to wreak havoc out of spite.

Of course, the Soviet break-up was accompanied by more than half a dozen civil wars—in Chechnya, Karabakh, Ingushetia, Ossetia, Abkhazia, Adjaria (all in the Causcasus), Moldova (another mal-intentioned Stalin contrivance), and Tajikistan (bordering Afghanistan). These conflicts resulted in many thousands of deaths, several million refugees, and a number of internationally unrecognized statelets that
de facto
subdivided the fifteen successor states. Even Ukraine, which avoided a civil war, had in its far west a tiny self-declared ‘republic’ of Sub-Carpathian Rus. But bear in mind that Ukraine’s Russian population, at more than eleven million (20 per cent), constituted the largest ethnic minority in Europe. Kazakhstan had another five million Russians (about 33 per cent of its population). Overall, with seventy-one million former Soviet inhabitants (one of every four) suddenly living outside their nominal national homeland, if they had a national homeland at all, and with the horrid example of much smaller Yugoslavia’s catastrophic break-up right next door, one shudders to think of the manipulative wars, indeed the nuclear, chemical, or biological Armageddon, that
could have
accompanied the Soviet collapse.

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Who had anticipated that the Soviet Union would meekly dissolve itself ? Those few analysts who did perceive the depth of Soviet problems, and the structural impedi-ments to solving them, never imagined that such a police state would just let go, quietly. Of the twenty million members of the former USSR Communist Party, perhaps two to three million made up the higher elite—a formidable bastion of power that encompassed the party apparatus, state bureaucracy, military, and KGB. Even if suspicions abounded that many of these officials had become cynical about the official ideology, analysts remained convinced that collectively they would
never
permit the overthrow of the system, if only to protect their own interests. Thus, notwithstanding the profusion of autopsies on the Soviet collapse, a major riddle persists: beyond Gorbachev, why did the immense Soviet elite, armed to the teeth with loyal internal forces and weapons, fail to defend either socialism or the Union with all its might?

This riddle becomes even more challenging when we note that once the dangers of dissolution had become evident to the whole world, elements of the most privileged groups in the USSR gave the shaken edifice a final shove over the edge. Could the elite of a great power really have permitted and then
facilitated
its country’s dissolution
without
having suffered foreign occupation, insubordination among its massive military and police, or even sustained civil disobedience? Indeed it could. One of my main tasks in this short volume is to elucidate how and why 5

the Soviet elite destroyed its own system, keeping in mind that the greatest surprise of the Soviet collapse was not that it happened—though that was shocking enough—but the absence of an all-consuming conflagration.

Now that it is gone, the Soviet Union has revealed itself—for those who still did not know—to have been much more than a dictatorship and military behemoth. It was also a comprehensive experiment in non-capitalist modernity or socialism, and an improbable revival and transformation of the tsarist empire into a quasi-federation of states. The largest of those internal non-capitalist Soviet states was the Russian republic. A product of the Soviet Union, Russia inherited everything that had caused the Soviet collapse, as well as the collapse itself. In the 1990s, the collapse was still called ‘reform’ (albeit ‘radical’), but the public battles for and against reform were accompanied by both continuation of the collapse and tectonic processes of institutional recombination.

Herein lies another of the main tasks of this book: elucidating the importance for Russia of the Soviet inheritance.

Beyond the myriad surviving agencies and ministries— such as the State Procuracy and the KGB—one could see in newly founded institutions remnants of the Soviet era, from the Central Committee apparat (Presidential Administration) to the State Planning Commission (Economics Ministry). Indeed, all Soviet-era office buildings were still standing, and in some cases they were enlarged, to accommodate both former and additional cadres. The ‘new’ people were not, of course, from Mars, but from 6

elite Soviet schools and the Communist Youth League, members of the second and third echelons who rose more quickly in the chaos of dissolution, and who combined a mixture of new and old. In addition, the entire non-market Soviet economy, ten time zones of antiquated heavy industry and decaying infrastructure, was also still in place, providing the bedrock of communities as well as of social constituencies. These were the political and economic structures that had caused the Soviet Union to fall further and further behind the West starting in the 1970s, and they served as the building blocks of the new Russia, which fell even further behind.

The idea that the collapse suddenly ended in December 1991, and that a handful of new ‘democrats’ or ‘radical reformers’ had come to power, was silly. Yet, to most analysts, it proved irresistible, whether they cheered or jeered Russia’s ‘transition’. What seemed to matter was not the make-up of society and the economy, or the working of state institutions, but only solemn pronouncements of intent and streams of presidential decrees, most of which went unimplemented. In the United States during the same decade, commentators properly scoffed at President Bill Clinton’s plan to overhaul the US health-care system.

Remake one-seventh of the US economy, against a vast array of entrenched, powerful interest groups! Yet many of these same people assumed that Russia’s ability to transform its
entire economy and social structure
—seven-sevenths— was merely a matter of ‘will power’ on the part of ‘reformers’ or even of a single man. Technocratic ‘reform’
in some
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other country
is the opiate of experts and pundits. Give any country some 15,000 rust-belt factories, perhaps two-thirds of them non-viable in market conditions, as well as several million brigands empowered to act in the name of state, and see how quickly such a place achieves the ‘transition’ to paradise.

Predictably, expectations of an immediate, total transformation gave way to profound disillusionment, and an equally off-the-mark, and similarly widely shared view that Russia was a unique, reformer-induced disaster. As of 2001, amid the ongoing and immense Soviet collapse, Russia was indeed a mess. But it was also a stable mess, and, although written off, it was finally groping towards the very institutional reforms that people erroneously thought were taking place during the 1990s.

Too often Russia has been judged far more harshly than, or without reference to, the rest of the former Soviet Union, despite the fact that on most political and economic indicators Russia compared favourably with every former Soviet republic except tiny Estonia. And, stuck as it was in a multigenerational slog to institutionalize a market economy, and maybe also something resembling a Russian version of a liberal polity, it had already mastered many of the distinguishing attributes of another very large country that used to be its main rival: gross income disparities, contempt for the public interest, mass corporate tax evasion, pervasive recourse to political power in the market place, hyper-commercialized media, money-besotted elections, and demagogy.

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The following overview of the last two decades of the Soviet Union and the first decade of post-Soviet Russia is organized partly chronologically, and partly analytically.

It does not focus on supposed cultural proclivities or deficiencies, imagined nationalism, evil oligarchs, or Western advice, whose significance (good and bad) has been grossly inflated. Rather, the analysis focuses on elites, and proceeds in terms of structural considerations: a Communist Party generation, led by Mikhail Gorbachev, profoundly shaped by socialist idealism, which emerged to the fore when the previous leadership finally died off; the world view and hopes of 285 million people living within the socialist ideological space; the planned economy and its cost-unconscious, oppressively heavy-industrial physical plant; and, especially, the institutional dynamics of the Soviet state and of the Russian state. Since there is no history without contingency, the narrative also spotlights the attempts to articulate and implement policies, and their unexpected consequences. Ultimately, though, the Soviet collapse and post-Soviet Russia’s contradictory first decade would remain inexplicable except as part of broad changes in the world during and after the Second World War. Mine is therefore both a historical and a geopolitical analysis.

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1

History’s cruel tricks

Then Leonid Ilich [Brezhnev] appeared . . . We lived fabulously, quietly stealing, quietly drinking.

[A voice interjects: not quietly.]

So be it.

(Ion Drut¸a

˘, Moldavian writer)

Plant closure has become a depressingly common-place feature of industrial life. . . . Millions of people . . . have experienced directly or indirectly the consequences of closure upon their own lives or upon those of their friends, relatives or communities.

(Tony Dickson and David Judge, on the capitalist world in the Brezhnev era) Between 1970 and 1973, the world market price for crude oil moved steadily upwards. A nearly two-decade run ended during which supply had outpaced demand. More than that, spare capacity had disappeared, meaning that limited cutbacks in production could expect to have dramatic effects on price. When, in October 1973, the Arabs 10

history’s cruel tricks

and Israelis suddenly went to war for the fourth time, Arab states, including the previously reluctant Saudis, announced a decision to roll out the ‘oil weapon’. After so many years, such talk had come to seem like crying wolf.

This time, however, the Arab nations made good the threat. And, whereas the Middle East war concluded as abruptly as it had started, when Egypt agreed to a ceasefire in late October, the coordinated cutbacks in oil output took on a life of their own. Arcane oil jargon— ‘differentials’, ‘inventory build’—spread into water-cooler conversations and White House policy sessions.
1
Public relations firms spun stories to show why big oil companies were not at all to blame. Government and industry belatedly initiated campaigns to encourage energy conservation among consumers who only the day before had been being goaded to indulge. But probably the most absurd moment of the ‘oil shock’ involved stepped-up exhortations for America to switch from energy-intensive industries to what were called knowledge-intensive industries, as if the US economy were governed by Soviet-style planners, and not the market.

Oil prices rocketed up 400 per cent in 1973, in just a few months, and the car industry, whose products were defiantly large and gas guzzling, suffered a crushing blow.

Also clobbered were broad sectors tied to cars, such as steel manufacture. Of course, before 1973, many giant, energy-intensive ‘Fordist’ factories, producing big batches of capital goods, had experienced competitive troubles.

But for those that had been muddling through, the oil 11

history’s cruel tricks

crisis brought an inescapable day of reckoning. Between 1973 and 1975, US GDP dropped 6 per cent, while unemployment doubled to 9 per cent. Western Europe, which was far more dependent on oil from the Persian Gulf, suffered proportionately. Japan, probably the country most dependent on Middle East oil, saw its GDP drop for the first time in the post-war period. Beyond the immediate downturn, the entire fossil-fuel industrial economy—which had arisen in the late nineteenth century and which in the first half of the twentieth century had adopted mass production—seemed to be heading towards extinction.

In 1970s England, Sheffield and its surrounding industrial zone lost more than 150,000 jobs in steel; many more jobs vanished in engineering industries, and the city council became Sheffield’s largest employer.
2
During the same decade, Germany’s powerhouse Ruhr Valley and its multitude of steelworks shed 100,000 jobs. In Pennsylvania—which had once been championed as the ‘Ruhr Valley of America’—‘Black Friday’ (30 September 1977) delivered a body blow to Bethlehem, whose steel had gone into the George Washington Bridge connecting Manhat-tan and New Jersey, the Golden Gate Bridge across San Francisco Bay, the National Gallery of Art in Washington, DC, and many of the silos for Intercontinental Ballistic Missiles. The US’s entire industrial heartland of the eight Great Lake states—Ohio, Michigan, Illinois, Indiana, Wisconsin, Minnesota, New York, as well as Pennsylvania— was devastated.

12

history’s cruel tricks

More than 1,000 factories closed in the US over the 1970s.
3
In a howl of desperation, two authors wrote that ‘we are currently witnessing the decline of industrial America, the bankruptcy or deterioration of some once-mighty manufacturing enterprises’.
4
Other commentators more accurately noted the end not of industry
per se
, but a wrenching changeover to what was called flexible manufacturing.
5
Yet, although manufacturing in the American Midwest began to grow again in the mid-1980s, manufacturing employment failed to recover at the same rate.

In a few instances, even Big Steel pulled itself out of a hole, but the communities stayed down. ‘The Gary Works represents one of the most impressive turnarounds in the history of US industry,’ a steel industry analyst told a reporter in 1988. But, after a reinvestment of $2.9 billion over seven years, the restructured factory complex, which had once employed 21,000 people, had just 7,500 employees, with further reductions anticipated. ‘It’s a great success story for the company,’ Gary’s mayor told a reporter, ‘but it has been a painful experience for us’.
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