The Penguin History of Modern Russia

by Robert John Service

  There had been a constant official prescription that crises were the exclusive characteristic of capitalism and that they could not occur under ‘developed socialism’. In reality practically every index of economic performance was depressing. The technological gap between the USSR and industrially-advanced capitalist countries was widening in every sector except the development of armaments: the Soviet Union had been left far behind in both information technology and biotechnology. The state budget in the last years of Brezhnev would have been massively insolvent if the government had not been able to derive revenues from domestic sales of vodka. The Ministry of Finance depended heavily on popular consumption of alcohol. It relied to an even greater extent on the export of petrochemical fuels at high prices. Oil and gas constituted eighteen per cent of exports in 1972 and fifty-four per cent by 1984.2

  The USSR resembled a Third World ex-colony in these and other respects. Agriculture remained so inefficient that two fifths of hard-currency expenditure on imports were for food.3 By the early 1980s, revenues earned by exports to the West could no longer be used mainly to buy advanced industrial technology and equipment: two fifths of the USSR’s hard-currency purchases abroad were of animal feed; and the purchase of energy by the countries of Eastern Europe at lower than the world-market prices deprived the USSR of the full value of its trade. Its very industrial achievements had occurred at grievous ecological expense. Large areas became unfit for human habitation. The Caspian Sea, Lake Baikal and the river Volga had been poisoned and the air in major cities such as Chelyabinsk was dangerous to breathe.

  Yet while fighting the cause of economic reforms, Gorbachëv had made many mistakes. First the anti-alcohol campaign and then the excessive investment in the machine-tool industry in 1985–6 had depleted state revenues without producing long-term gains in output. Nor was this the end of his mismanagement. The openness of the debate conducted by the authorities in 1987–8 on the need to raise retail prices had the undesired effect of inducing consumers into buying up and hoarding all manner of goods. Shortages in the shops were increasing. And the Law on the State Enterprise, by empowering workers to elect their own managers, led to a steep rise in wages. Payments to urban work-forces increased by nine per cent in 1988 and thirteen per cent in 1989.4 The Soviet budget was massively in deficit. Foreign indebtment and domestic inflation increased sharply; a decline in industrial output set in. The USSR was entering a state of economic emergency.

  Gorbachëv’s choice of collaborators, too, was far from ideal. Ryzhkov, his Chairman of the Council of Ministers, was a reformer, but a reformer who wanted ‘to go to the market’ at a snail’s pace. And whereas Ryzhkov at least believed in a further movement to reform, Ligachëv did not. Gorbachëv erred, when demoting Ligachëv in the party leadership in September 1988, in putting him in charge of agriculture. This was like trusting the fox to guard the hen-house. Under Ligachëv’s guidance not even the size of the private plots was increased.

  Even if Gorbachëv had avoided such errors, however, he would also have needed a much better run of luck than he received. On 8 December 1988, a day after he had made his triumphant address to the United Nations Assembly, the cities of Leninakan and Spitak in Armenia were devastated by an earthquake. More than 25,000 people died. Ryzhkov phoned to New York to relay the news to Gorbachëv. Projected diplomatic negotiations were abandoned. Gorbachëv left the USA for Moscow next day and straightway hurried to Armenia. He and his wife talked to ordinary Armenians near the rubble of their former homes. The Gorbachëvs shed tears over the plight of the population. But they were totally unprepared for one thing: the fact that Armenians to a man and woman were agitated more about the politics of Karabakh than about the effects of the earthquake.5

  Radical economic reform was therefore being attempted in a very unpropitious situation. The war in Afghanistan continued to involve massive expenditure until the last Soviet soldier returned home in February 1989. The Chernobyl nuclear explosion was a financial as well as a human and ecological disaster. Now the USSR’s resources, already stretched to breaking point, had to cope with the task of recovery from the Armenian earthquake. Gorbachëv could have been forgiven for cursing his misfortune.

  It must be mentioned that there had been a rise in the USSR’s net material product by eleven per cent in the half-decade after 1983; but this had been obtained primarily through the tightening of labour discipline and the sacking of incompetent, corrupt officials. Such a strategy had been initiated by Andropov and resumed by Gorbachëv. It had a distinctly limited potential for the permanent enhancement of economic performance; and certainly it was unsustainable once the decentralizing decrees of 1987–8 started to have an impact. Between 1988 and 1990 net material product tumbled by nine per cent. The per capita consumption of factory-produced goods rose annually by less than 2.5 per cent in the five years after 1985. For food, the increase was 1.4 per cent; and — admittedly, mainly because of the anti-alcohol campaign — there was a decrease by 1.2 per cent for beverages and tobacco. Urban housing space per person rose merely by twelve per cent to a pitiful 13.1 square metres in the 1980s.6

  The reorientation of the industrial sector towards the needs of civilian consumers was an unattained goal. Gorbachëv had promised much material improvement, but delivered deterioration. Instead of an advance to universal material well-being there was a reversion to food-rationing. Soviet queues, already legendary for their length, became longer and angrier in the course of 1989.

  A rationing system had existed for food products in certain provincial cities even before 1985: it was one of Ligachëv’s taunts at Yeltsin that, during his tenure of the local party secretaryship, he had issued the inhabitants of Sverdlovsk with ration-cards to do their shopping. Steadily the system was geographically extended. Already at the end of 1988, meat was rationed in twenty-six out of fifty-five regions of the RSFSR. Sugar was even scarcer: only two regions managed to get by without rationing.7 At the same time the hospitals were reporting shortages of medicines and there was no end in sight to inadequate provision of housing and everyday services. It is true that the annual growth in the output of agriculture rose from one per cent in the first half of the decade to just under two per cent in the second.8 But production remained inadequate for the needs of consumers. Throughout the 1980s, agricultural imports constituted a fifth of the population’s calorific intake.

  To the stupefaction of the Politburo (and nearly all commentators in the USSR and the West), a full-scale economic crisis had occurred. Its abruptness was as impressive as its depth. Suddenly Gorbachëv was faced with two life-or-death alternatives: either to abandon the reforms or to make them yet more radical. He never gave serious consideration to the former; his experience in his Stavropol days and subsequently had proved to him that Brezhnev’s policies would lead only to a widening of the gap in technology and organization between the USSR and the capitalist West.

  Boldness therefore seemed to him the only realistic choice. When the Law on the State Enterprise and other measures failed to produce the desired results, Gorbachëv talked about the need to go further and create a ‘socialist market economy’ — and while he refrained from defining the term, several of his advisers suggested that it should involve more market than socialism. Perhaps Gorbachëv was at his most relaxed when speaking about agriculture. Already in 1986, for instance, he had authoritatively proposed that each sovkhoz and kolkhoz should be run on the basis of ‘family contracts’.9 By this he meant that a family or household would take over a particular function on the farm and be rewarded for any increase in productivity. As his critics noted, this would involve a reversion to peasant forms of farming; but Gorbachëv faced them down by openly advocating the need to turn the peasant into ‘master of the land’.10

  But this change in ideas was not yet realized in policy, far less in practice. Basic positive changes in agriculture did not occur, and the situation in industry and commerce was no more inspiring. On the contrary, officials in every republic, r
egion and province implemented only such aspects of legislation as did not damage their immediate interests. Initially their inclination was to show outward enthusiasm for Gorbachëv while disobeying his instructions. But in some localities the attitude was sterner and officials engaged in blatant sabotage. For example, the Leningrad city administration gave orders to withdraw sausages from the fridges in its warehouses and bury them in a specially-dug trench on the city’s outskirts. These were the politics of criminal provocation. Life without beef and chicken was bad enough for ordinary citizens; without sausages it became intolerable, and Gorbachëv got the blame.

  Even so, the central party and governmental bodies remained powerful enough to secure the establishment of a rising number of small private-sector co-operatives in most major cities. The trouble was that these new enterprises were distrusted by the rest of society, especially by people on low fixed incomes: the pensioners, the war invalids, the poorly-paid unskilled workers. The co-ops had a reputation as scams for speculation, and certainly they did little to expand manufacturing output. This was not exclusively their fault since the local political authorities usually withheld licences for private industrial enterprises. Co-ops operated mainly in the economy’s service and retail sectors and flourished in the form of private restaurants and clothes-kiosks which bought up goods in supply and put a large mark-up on them.

  The consequence was that these same goods were not being sold in state-owned enterprises. The co-ops aggravated the shortages in the shops and raised the cost of living. They also added to the problems of law-breaking since their owners had to bribe local government officials in order to be allowed to trade; and often it was impossible for them to obtain raw materials and equipment except by colluding with venal factory directors. The Kremlin reformers called ineffectually for honesty. But the reality was that they would have found it even more difficult to install co-ops if the members of local administrative élites had not benefited materially from them. Illegality had to be accepted as companion to the re-emergence of private economic activity.

  By the approach of winter 1989–90, all this brought notoriety to the Politburo’s reforms. Milk, tea, coffee, soap and meat had vanished from state retail outlets even in Moscow. The dairy-product shops were hit particularly badly. They often had to function for days at a time without anything to sell: cartons of milk had ceased to reach them, and the staff had nothing to do but explain to an ill-tempered public that they had nothing to sell.

  Not all citizens were willing to tolerate their plight. A great strike was organized by coal-miners in Kemerovo in the Kuz Basin and their example was followed by the work-force of the mines in the Don Basin — and the miners in Karaganda in Kazakhstan also struck in the first half of 1989. A further strike occurred in November in the mines around Norilsk in the Siberian far north.11 All these strikes were settled in favour of the strikers, who demanded higher wages and improved living conditions; and in contrast with Soviet political practice since the Civil War no repressive sanctions were applied against the strike leaders.12 Independently-elected strike committees were in operation. The Council of Ministers under Ryzhkov did little else in these months but try to effect a reconciliation with those segments of the working class which threatened to do it damage. The government feared that a Soviet equivalent of Poland’s Solidarity was in the making.13

  But the Soviet authorities weathered the storm. The strikers lived in far-flung areas, and Ryzhkov and his fellow ministers managed to isolate them from the rest of society by quickly offering them higher wages. Yet the government was faced by a society embittered against it. Elections to the Congress of People’s Deputies had duly occurred in March 1989, and the result administered the greatest electoral shock to the communists since the Constituent Assembly polls in 1917–18. Across the country thirty-eight province-level party secretaries were defeated.14 So, too, were city secretaries in the republican capitals in Kiev, Minsk and Alma-Ata. Even Yuri Soloviev, Politburo candidate member and Leningrad communist party boss, was rejected by voters. Unlike Lenin, Gorbachëv did not overturn the elections. To those of his party comrades who had incurred the people’s disapproval he signalled that they should step down from their posts in the party and other institutions.

  None the less the Congress was not without its problems for Gorbachëv. Eighty-eight per cent of the delegates were full or candidate members of the Communist Party of the Soviet Union, and most of these disliked proposals for further reforms.15 Yuri Afanasev, who was committed to just such reforms, denounced the Congress as a ‘Stalinist-Brezhnevite’ body with ‘an aggressively obedient majority’.16 Gorbachëv thought him ungrateful and irresponsible; for Afanasev had needed his protection to consolidate himself in public life.

  Gorbachëv also felt betrayed by criticisms he suffered in the non-Russian republics. In November 1988 the Estonian Supreme Soviet declared its right to veto laws passed in Moscow; in January 1989 Lithuanian nationalists held a demonstration against the continued location of Soviet Army garrisons in Lithuania. The official authorities in these countries decided to drop Russian as the state language. Latvia was not far behind: in the course of the elections there was a protest rally in Riga against the Latvian Communist Party Central Committee’s repudiation of ‘anti-Soviet and separatist’ trends of thought in Latvia. The mood of the majority nationalities in the Baltic republics was shared in the Transcaucasus, but with fatal consequences. A demonstration in favour of national independence was held in the Georgian capital Tbilisi in April 1989. Gorbachëv returned from abroad in the course of the crisis, but his efforts to prevent bloodshed were frustrated by Georgian communist leaders and Soviet Army commanders. Nineteen unarmed civilians were killed.17

  There was further trouble in the republics before the Congress of People’s Deputies convened. The Soviet Army was dispatched to Uzbekistan, Estonia and Latvia in reaction to the possibility of protests on the Georgian model. The Soviet ‘empire’ was going to be maintained by force. Such actions were not guided primarily by Russian nationalism: the Politburo would have done the same in Leningrad or Saratov or Kursk. But this is not the way it appeared to the republican protesters. In June, Estonia proclaimed its economic autonomy and Lithuania declared its right to overrule the USSR’s legislation. Even quiet Moldavia had a popular front that rejected the area’s annexation by the Soviet Union in 1940.

  So that the Congress, whose first session lasted from 25 May to 9 June, reflected the political divisiveness in the country. What once had been said privately in living-rooms was given full-throated public utterance. The proceedings were transmitted live on television and work stopped in factories and offices when sensitive issues were debated. Every citizen wanted to enjoy the spectacle. Most deputies were neither radicals nor out-and-out conservatives (in the sense of Soviet politicians wishing to avoid radical reforms). It was the middle-ranking politicians, administrators, managers and scholars who occupied a majority of the Congress seats. Such people were willing, on the whole, to support the General Secretary; but they would no longer offer automatic obedience. Shrugging off the tight discipline of previous years, they spoke passionately about the policies that bothered them. Gorbachëv had to deploy much charm, guile and patience to hold them on his side in the elaboration of reforms.

  He got his way. The specific form of this vast Congress had been of Gorbachëv’s own making: it appealed to his sense of Russian traditions, notably the mass political gatherings of Lenin’s time. He was looking back to the October Revolution with rose-tinted glasses; in particular, he did not perceive that the soviets in 1917–18 had been a forum for endless, chaotic disputes as workers, peasants, soldiers and intellectuals discussed the issues of the day.

  The turbulence of the Congress of People’s Deputies surprised him. But once created, the Congress had to be made to function. Having arranged that he should be elected Chairman of the Supreme Soviet, Gorbachëv chaired most sessions of the Congress; for he rightly judged that only he had the personal
authority and mental agility to prevent debates from running out of control. The fact that a Congress of People’s Deputies had been elected at all was a massive achievement even though the elections were marred by gerrymandering by central and local political élites. But this was not an end in itself. Gorbachëv needed to use the Congress as an institution for the ratification of his strategy for political and economic reform; he had to pre-empt its becoming simply a verbal battleground between conservatives and radicals.

  Yeltsin again caused trouble. Standing as a candidate in Moscow, he had run a brilliant campaign against the sleazy lifestyle of the nomenklatura and had won nine tenths of the city’s vote. But this victory did not endear him to the Congress; and when it came to the Congress’s internal elections to the 542 seats of the new USSR Supreme Soviet, a majority rejected him. He obtained a seat only when an elected member of the Supreme Soviet voluntarily yielded his own seat to him. Gorbachëv went along with this improvised compromise; he wanted to show that his own slogan of democratization was sincere: Yeltsin had to be seen to be treated decently.

  Yeltsin and the Congress radicals showed Gorbachëv no gratitude; they were determined to use the Congress as a means of constituting a formal opposition to the communist regime despite the fact that most of them were still communist party members. Around 300 of them gathered together in an Inter-Regional Group led by Yeltsin, Sakharov, Afanasev and the economist Gavril Popov. It included liberals, social-democrats, greens and even some communists; its unifying purpose was to push Gorbachëv into making further moves against his conservative central and local party comrades. But the Inter-Regional Group itself could not throw off all caution. Its members were outnumbered by the conservative-communist rump at the Congress; and if they had seriously tried to undermine Gorbachëv’s dominance, the only result would have been to destabilize his control over the communist party and to wreck the cause of reform.