by Norman Lowe
Boris Yeltsin, who had been excluded from the new Supreme Soviet by the conservatives, made a dramatic comeback when he was elected president of the parliament of the Russian republic (Russian Federation) in May 1990.
4 Rivalry between Gorbachev and Yeltsin
Gorbachev and Yeltsin were now bitter rivals, disagreeing on many fundamental issues.
Yeltsin believed that the union should be voluntary: each republic should be independent but also have joint responsibilities to the Soviet Union as well. If any republic wanted to opt out, as Lithuania did, it should be allowed to do so. However, Gorbachev thought that a purely voluntary union would lead to disintegration.
Yeltsin was now completely disillusioned with the Communist Party and the way the traditionalists had treated him. He thought the Party no longer deserved its privileged position in the state. Gorbachev was still hoping against hope that the Party could be transformed into a humane and democratic organization.
On the economy, Yeltsin thought the answer was a rapid changeover to a market economy, though he knew that this would be painful for the Russian people. Gorbachev was much more cautious, realizing that Yeltsin’s plans would cause massive unemployment and even higher prices. He was fully aware of how unpopular he was already; if things got even worse, he might well be overthrown.
(c) The coup of August 1991
As the crisis deepened, Gorbachev and Yeltsin tried to work together, and Gorbachev found himself being pushed towards free, multi-party elections. This brought bitter attacks from Ligachev and the conservatives, who were already outraged at the way Gorbachev had ‘lost’ eastern Europe without putting up a fight, and worst of all, had allowed Germany to be reunited. In July 1990, Yeltsin resigned from the Communist Party. Gorbachev was now losing control: many of the republics were demanding independence, and when Soviet troops were used against nationalists in Lithuania and Latvia, the people organized massive demonstrations. In April 1991, Georgia declared independence: it seemed that the USSR was falling apart. However, the following month Gorbachev held a conference with the leaders of the 15 republics and persuaded them to form a new voluntary union in which they would be largely independent of Moscow. The agreement was to be formally signed on 20 August 1991.
At this point a group of hardline communists, including Gorbachev’s vice-president, Gennady Yanayev, decided they had had enough, and launched a coup to remove Gorbachev and reverse his reforms. On 18 August, Gorbachev, who was on holiday in the Crimea, was arrested and told to hand over power to Yanayev. When he refused, he was kept under house arrest while the coup went ahead in Moscow. The public was told that Gorbachev was ill and that an eight-member committee was now in charge. They declared a state of emergency, banned demonstrations and brought in tanks and troops to surround public buildings in Moscow, including the White House (the parliament of the Russian Federation), which they intended to seize. Gorbachev’s new union treaty, which was due to be signed the following day, was cancelled.
However, the coup was poorly organized and the leaders failed to have Yeltsin arrested. He rushed to the White House, and, standing on a tank outside, condemned the coup and called on the people of Moscow to rally round in support. The troops were confused, not knowing which side to support, but none of them would make a move against the popular Yeltsin. It soon became clear that some sections of the army were sympathetic to the reformers. By the evening of 20 August, thousands of people were on the streets, barricades were built against the tanks and the army hesitated to cause heavy casualties by attacking the White House. On 21 August the coup leaders admitted defeat, and they were eventually arrested. Yeltsin had triumphed and Gorbachev was able to return to Moscow. But things could never be the same again, and the failed coup had important consequences.
The Communist Party was disgraced and discredited by the actions of the hardliners. Even Gorbachev was now convinced that the Party was beyond reform and he soon resigned as party general secretary; the Party was banned in the Russian Federation.
Yeltsin was seen as the hero and Gorbachev was increasingly sidelined. Yeltsin ruled the Russian Federation as a separate republic, introducing a drastic programme to move to a free-market economy. When Ukraine, the second largest Soviet republic, voted to become independent (1 December 1991), it was clear that the old USSR was finished.
Yeltsin was already negotiating for a new union of the republics. This was joined first by the Russian Federation, Ukraine and Belorussia (8 December 1991), and eight other republics joined later. The new union was known as the Commonwealth of Independent States (CIS). Although the member states were fully independent, they agreed to work together on economic matters and defence.
These developments meant that Gorbachev’s role as president of the USSR had ceased to exist, and he resigned on Christmas Day 1991.
(d) Assessment of Gorbachev
At the time of his downfall, and for some years afterwards, a majority of people in Russia dismissed him as a failure, though for different reasons. The conservatives, who thought the USSR and the Party still had a lot to offer, saw him as a traitor. Radical reformers thought he had stayed with communism too long, trying to reform the unreformable. Ordinary people thought he was incompetent and weak, and had allowed their standard of living to decline.
However, there can be no question that Gorbachev was one of the outstanding leaders of the twentieth century, although his career was a mixture of brilliant successes and disappointing failures. Some historians see him as the real successor of Lenin, and believe that he was trying to get communism back on the track intended for it by Lenin before it was hijacked by Stalin, who twisted and perverted it. The two main disappointments were his failure to streamline the economy, and his complete misunderstanding of the nationalities problem, which led to the break-up of the USSR.
On the other hand, his achievements were enormous. Archie Brown sums them up:
He played the decisive part in allowing the countries of Eastern Europe to become free and independent. He did more than anyone else to end the Cold War between East and West. He initiated fundamental rethinking about the political and economic systems he inherited and about better alternatives. He presided over the introduction of freedom of speech, freedom of the press, freedom of association, religious freedom and freedom of movement, and left Russia a freer country than it had been in its long history.
He began by believing that the Communist Party could be reformed and modernized, and that once this was achieved, there could be no better system. But he discovered that the majority of the Party – the elite and the bureaucracy – were resisting change for their own selfish reasons; the whole system was riddled with racketeers, black-market operators and all kinds of corruption. This discovery led Gorbachev to change his aims: if the Party refused to reform itself, then the Party would have to lose its dominant role. He achieved that goal peacefully, without bloodshed, which was remarkable in the circumstances. His achievement, especially in foreign affairs, was enormous. His policies of glasnost and perestroika restored freedom to the people of the USSR. His policies of reducing military expenditure, détente and withdrawal from Afghanistan and eastern Europe made a vital contribution to the ending of the Cold War.
(e) Was the communist system reformable?
Could Russian communism have survived if Gorbachev had followed different policies? Many Russians are convinced that it could, and that if the USSR had followed the same path as China, it would still be communist today. The argument is that both Russia and China needed reform in two areas – the Communist Party and government, and the economy. Gorbachev believed these could only be achieved one at a time, and chose to introduce the political reforms first, without any really fundamental economic innovations. The Chinese did it the other way round, introducing economic reform first (see Section 20.3) and leaving the power of the Communist Party unchanged. This meant that although the people suffered economic hardship, the government retained tight control over them, and in
the last resort was prepared to use force against them, unlike Gorbachev.
Vladimir Bukovsky, a reformer and social democrat, explained where Gorbachev went wrong: ‘His only instrument of power was the Communist Party, but his reforms weakened precisely that instrument. He was like the proverbial man sawing off the branch on which he was sitting. There could be no other outcome except what happened.’ If Gorbachev had put into operation a carefully worked-out programme of economic reform designed to last ten years, arguably the situation could have been saved.
Other observers argue that the Communist Party was beyond reform. They point out that any political system or party which enjoys a long, uninterrupted period in power becomes arrogant, complacent and corrupt. Both Khrushchev and Gorbachev tried to reform the nomenklatura, and both failed, because the elite, the bureaucracy in the government and the economic system, were solely concerned to further their own careers and refused to respond to the changing circumstances. In theory, reform should have been possible, but it might have been necessary to use force, as the Chinese government did in Tiananmen Square. Given Gorbachev’s extreme reluctance to resort to force, the prospects for success would not seem promising.
(f) The legacy of communism
Any regime in power for over 70 years is bound to leave its marks, both good and bad, on the country. Most historians seem to feel that the achievements of communism are outweighed by its ill effects. And yet no system could have survived for so long by force alone. One important achievement was that the system brought benefits in the form of promotion, and reasonably well-paid jobs with privileges, to large numbers of people from ‘lower-class’ backgrounds who had been excluded from such things under the tsarist regime. Education and literacy became more widespread; Soviet ‘culture’ was encouraged and so was sport; the performing arts, especially music, were subsidized by the state, and science was given special prominence and funding. Perhaps the greatest achievement of communism was that it played a vital role in defeating the evil regime of Hitler and the Nazis. After Stalin’s death, although in one sense the country stagnated, the system brought a certain stability and an improved standard of living for the majority of its people.
On the other hand, the Soviet system left behind a whole range of problems which would be extremely difficult for the succeeding regime to cope with. The whole system was rigid and over-centralized, initiative had been stifled for generations and the bureaucrats opposed any radical changes. The country was overburdened with its vast military expenditure. Boris Yeltsin had played an important part in destroying the Soviet system. Would he be able to do any better?
18.4 THE AFTERMATH OF COMMUNISM, YELTSIN, PUTIN AND MEDVEDEV
Yeltsin’s eight years as president of Russia were packed with incident as he and his successive prime ministers tried to transform the country into a political democracy with a market economy, in the shortest time possible.
(a) Yeltsin, Gaidar and ‘shock therapy’
Boris Yeltsin’s problem was daunting: how best to dismantle the command economy and transform Russia into a market economy by privatizing the inefficient, subsidized state industries and agriculture. Yeltsin was hugely popular, but this would only last if he could improve the people’s living standards. He chose as his vice-president Yegor Gaidar, a young economist who was influenced by the theories of the Western monetarists (see Section 23.5(b)). He convinced Yeltsin that the necessary changes could be achieved in one year, beginning with ‘price liberalization’ and going on to privatize almost the entire economy. It would be difficult for about six months, but he assured Yeltsin that things would then stabilize and people’s lives would gradually improve.
This ‘shock therapy’, as it was called, began in January 1992 with the removal of price controls from about 90 per cent of goods, and the ending of government subsidies to industry. Prices rose steeply and kept on rising after the first six months. By the end of the year prices were, on average, 30 times higher than at the beginning; there were plenty of goods in the shops but most people could not afford to buy them. The situation was disastrous, since wages did not keep pace with prices; as sales fell, factory workers were laid off, and over a million people lost their jobs. Thousands were homeless and were forced to live in tents outside the towns. Many people had to rely on food parcels sent from abroad.
When the privatization programme began, it seemed as though the intention was for all big state industries and collective farms to be transferred to the joint ownership of all the people. Every citizen was given vouchers to the value of 10 000 roubles as their share, and there were plans for workers to be able to buy shares in their enterprise. However, none of this happened; 10 000 roubles was the equivalent of about £35 – a minute amount at a time of rapid inflation; nor could most workers afford to buy shares. What happened was that managers were able to buy up and accumulate enough vouchers to take over the ownership of their plant. This continued until by the end of 1995 most of the former state industry had fallen into the hands of a relatively small group of financiers, who became known as the ‘oligarchs’. They made enormous profits, but from government subsidies, which were reintroduced, rather than from the market. Instead of reinvesting their profits in industry, as the government intended, they transferred them into Swiss bank accounts and foreign investments. Total investment in Russia fell by two-thirds.
Long before this stage was reached, Yeltsin’s popularity had dwindled. Two of his former supporters, Alexander Rutskoi and Ruslan Khasbulatov, led the opposition in the Supreme Soviet and forced Yeltsin to dismiss Gaidar, replacing him with Viktor Chernomyrdin. In January 1993 he reintroduced some controls on prices and profits, but at the end of 1993, after two years of ‘shock therapy’, according to one report: ‘Our country has been thrown back two centuries to the “savage era” of capitalism.’ As a first experience of any kind of ‘democracy’, it was a grave disappointment for the vast majority of people. In the words of Daniel Beer, ‘the Yeltsin government presided over an economic collapse so vast and devastating that for most Russians the term became synonymous with chaos and the plunder of state property (that is, society’s) by a small clique of robber barons. ... By 1993 Russians were bitterly referring to dermocracy – dermo being the Russian for “shit”.’ Sadly, corruption, fraud, bribery and criminal activity became part of everyday life in Russia. Another report, prepared for Yeltsin early in 1994, estimated that criminal mafias had gained control of between 70 and 80 per cent of all business and banking. One Russian writer, Alexander Chubarov, recently described the government’s policies as ‘deformed capitalism’. It was an attempt to create in six months the sort of market capitalism which had taken generations to evolve in the West.
(b) Opposition and the ‘civil war’ in Moscow
The leading politicians lacked experience of democracy as well as of how to organize a market economy. At first there were no properly organized political parties on the western model, and the constitution, a leftover from the Soviet era, was unclear about the division of powers between president and parliament. However, in November 1992 the Communist Party was legalized again, and other groups began to form, although Yeltsin himself did not have a supporting party. A majority in parliament strongly opposed Yeltsin’s policies and tried to get rid of him, but in a referendum in April 1993, 53 per cent of voters expressed approval of his social and economic policies. Yeltsin’s success surprised many, and suggested that although he was unpopular, people had even less confidence in the alternatives.
Yeltsin now tried to neutralize parliament by producing a new constitution, making parliament subordinate to the president. Khasbulatov and Rutskoi were determined not to succumb. They rushed to the White House, where the Supreme Soviet met, and barricaded themselves in, together with hundreds of deputies, journalists and supporters. After a few days the building was surrounded by troops loyal to Yeltsin; some supporters of parliament attacked the mayor of Moscow’s headquarters and a television station, whereupon Yeltsin
ordered the troops to storm the White House (3 October 1993). Eventually the deputies surrendered, though not before around 200 had been killed, some 800 wounded and the White House badly damaged. Yeltsin’s new constitution was narrowly approved in a referendum (December 1993). In elections for the new lower house of parliament (the Duma), Yeltsin’s supporters won only 70 seats out of 450 whereas the Communist bloc won 103. This was a clear rebuff for Yeltsin, but his power was not affected since the new constitution allowed him to dismiss parliament and rule by decree if he chose to.
Although he had great power, Yeltsin knew that he could not afford to ignore public opinion completely, especially since presidential elections were due in 1996. He tried to avoid confrontation with the Duma and relations improved. Meanwhile the move towards privatization continued and the creation of a new, wealthy property-owning class was completed. Yet the state treasury seemed to benefit very little from these sales; what had happened was that, in effect, the state enterprises had been sold off to former managers, entrepreneurs, bankers and politicians at knock-down prices. Strangely, Yeltsin, who had once been the scourge of corrupt officials in Moscow, did very little to restrain his underlings. For most people there were no obvious signs of improvement: prices continued to rise during 1995; the number of people living in poverty, unemployment and the death rate increased; and the birth rate declined. The situation had not been helped by the outbreak of war with the Chechen republic in December 1994.