Yeltsin
Page 32
The price reform, postponed two weeks at the request of the Ukrainians and Belarusians, clicked in on January 2, 1992. Budgetary restraint took effect forthwith. On January 29 Yeltsin’s Decree No. 65, “On Freedom of Trade,” pulled the plug on a state monopoly dating back to the late 1920s. Outside of a few interdicted items like firearms and narcotics, Russians were at liberty to buy and sell anything without asking permission; in effect, exchange had been decriminalized. One of Gaidar’s first decisions as deputy premier was to select another youthful economist, Anatolii Chubais from St. Petersburg, as chairman of the State Property Committee and ask him to work out a design for denationalization. Chubais confected a white paper in December 1991, with the preferred formula to transfer assets to “work collectives” (employees and managers) and to call off government output quotas and subsidies. In the first half of 1992, Gosplan, Gosstroi, Goskomtsen (the State Prices Committee), Gossnab (the State Supplies Committee), Gosagroprom (the State Committee for the Agroindustrial Complex), and their ilk were disestablished, while all except for a few of the Soviet industrial ministries were stripped of their command rights and reorganized as holding companies. On August 20, 1992, a year after the 1991 coup d’état, Yeltsin trumpeted a program to call forth “millions of owners rather than a few millionaires” by distributing vouchers citizens could use to purchase equity in 15,000 government-owned companies.
The immediate aftershock of these measures, as is well known, was fearsome. Counter to Yeltsin’s rubicund forecast, conditions did not meliorate in the autumn of 1992, or the next year, or the year after that. Consumer prices rose 296 percent in January 1992; inflation hit 2520 percent for the year 1992 and thereby shredded the ruble savings of millions—most of them in Soviet paper printed in the Gorbachev years and stowed under the mattress or in bank accounts because there was nothing in the shops to buy with it. Real national output fell off every single year through 1996 (by 14.5 percent in 1992, 8.7 percent in 1993, 12.7 percent in 1994, 4.1 percent in 1995, and 3.5 percent in 1996), ticked up (by 0.8 percent) in 1997, and fell again (by 4.6 percent) in 1998 to a low point of 40 percent less than it had been in 1989 and 35 percent less than in 1991, the year Yeltsin took office. Fear of layoffs was pervasive in the workforce, as factories were weaned off of state subsidies and contracts and the government budget was squeezed. In 1993 and 1994, the withholding of wage payments and government pensions and allowances became common practice, with the arrears for some extending months and even years.75 As downturns go, Russia’s in the 1990s ranks with the Great Depression of 1929–33 in the United States.
The statistics on gross domestic product and consumer welfare provoked a political firestorm then and cast a pall over later evaluations of the Yeltsin era. They are why no defender of him and his reforms fails to leaven bravos with caveats.76 Recall that it was Yeltsin, as he went on pension in 1999, who vented remorse at having let down the buoyant hopes that Russia could coast from its despotic past to a bountiful future.
Yeltsin’s critics in the West, who are legion, rely on the economic and socioeconomic distress of the time to fuel their indictments. One oft-voiced criticism rivets a Burkean animus against social engineering to left-of-center political values. Historian Stephen F. Cohen, for example, argues that Gorbachev had shown Soviet communism to be reformable and that piecemeal adaptation of the old system, statist and respectful of Russian custom, was preferable to throwing caution to the winds. The drive to rebuild Russia from the ground up, abetted by an evangelizing America, was guilty of the “de-modernization” of a great industrial nation: “Never . . . have so many fallen so far.”77 Political scientist Peter Reddaway and Russian coauthor, Dmitri Glinski, agree with Cohen on the noxiousness of the changes of the 1990s (Russia was “slowly succumbing to shock therapy’s sequelae while the world watches”), but save their sharpest harpoons for the “market Bolshevik” techniques used to bring them about. Yeltsin and company, in the service of anti-Marxist objectives, were like the Marxist revolutionaries of old in exemplifying “the self-confident, almost messianic vanguard mentality of a self-anointed elite that sees itself entitled to impose ‘progress’ and ‘development’ . . . on the ‘backward’ majority.” Shock therapy, they say, was an “administrative revolution from above” comparable to Stalin’s collectivization of Soviet agriculture.78 The titles of the two books—Failed Crusade: America and the Tragedy of Post-Communist Russia, by Cohen, and The Tragedy of Russia’s Reforms: Market Bolshevism against Democracy, by Reddaway and Glinski—give away their contents.
The changes Yeltsin set in train in 1991–92 deserve more nuanced analysis than this. There are several perspectives from which this is true. One pertains to the circumstances of the reforms. The slump of the 1990s was to be bad but not as bad as frequently depicted, and the government data that track it exclude the illegal and informal sector. Economic shrinkage was ubiquitous in the post-communist space in Eastern Europe and Eurasia. In that the coming apart of the Soviet Union wreaked havoc on supply networks and trade flows among the CIS nations, they were all at a disadvantage compared to their neighbors west of the pre-1991 Soviet border. On output loss, Russia fared perceptibly better than the CIS average, and was not in a league of its own.79 It did so despite unique handicaps going into the reform maelstrom. Russia was saddled with 80 to 90 percent of the bloated military-industrial complex of the Soviet Union, demand for whose wares tumbled after the Cold War. It would have had an easier time of it had it not agreed to bear all of the USSR’s debt, the bulk of it incurred by Gorbachev, and if it had controlled its money supply out of the starting gate and not waited until 1993 or 1994 for the ex-republics to jettison the ruble. Russia would have been much better off if world prices for oil, its most precious natural resource, had not dipped below $20 a barrel for most of the post-Soviet decade. The petrodollars that producers were to be flooded with in the 2000s would have limited the sag in Russian GDP and kept the Yeltsin government out of the red.80
Another corrective comes from pondering the Yeltsin revolution in time. The troubles that stimulated his attack on communism did not come out of thin air. Derived from defects hardwired into it by Lenin and Stalin, they heaped up over decades. Well before Yeltsin moved from Sverdlovsk to Moscow in 1985, system decay was manifesting itself in economic decline, social division, and anomie. Once the myopia about these problems was dispelled, large segments of the elite and the population chafed, as they were bound to, at what they took as half-solutions to them. Panglossian assessments of the reformability of the Soviet regime elide this impatience and the rudderless changes and mismanaged mini-reforms that made the everyday life of most Russians bedlam in the perestroika years. Reforming the system from within, as Gorbachev meant to do, was a respectable choice. Heading for the exits was a cleaner and better one.81
Economic liberalization fused to political autocracy and a strong state—not to Gorbachev’s muzzy humanism—was effected in communist China after the death of Chairman Mao Zedong in 1976. The Soviet Union could possibly have pursued this formula, although it was more industrialized and did not have China’s ethnic uniformity and its sea of rural labor. The window of opportunity for adopting a Chinese model was the Kremlin tenure of Yurii Andropov, the righteous former chairman of the KGB, in 1982–84; Andropov was not in power long enough, or definite enough on his policies, to be its guiding spirit. In 1991, after a half-decade of upheaval, atomization of the political class, and state deconstruction, the window was long since closed.82 Decontrolling prices was the sine qua non for uncorking market forces. When Yeltsin decided to let prices go, Gorbachev, who had refused to drink from this chalice for years, was pleased, one of his aides felt, that Yeltsin “was ready to take upon himself the responsibility for reforms fraught with serious social shocks and to relieve Gorbachev of it.”83 The prime alternative was to recentralize and rebureaucratize the economy, with the option of embarking at a later date on reforms in the mold of Deng Xiaoping. Institutional malaise, the legitimacy de
ficit, and the nationality problem made such a course impractical without a clampdown that could have rivaled the 1989 massacre in Beijing’s Tienanmen Square.84 The one option not on the table was to do nothing.
Considering the Yeltsin record as de-modernization or a tragedy from start to finish sheds more heat than light. From the vantage of 1992 or 1995, there was little to show statistically for shock therapy. By the day Yeltsin called it quits in 1999, the cradle of state socialism boasted a market economy of sorts. Sixty to 70 percent of material and financial assets, everything from newspaper kiosks to coal mines and aluminum mills, were off the government’s books, and most goods and services traded at a going price set by profit-oriented private firms. Anatolii Chubais’s privatization had few precedents in Russia, where history and the cultural fiber are congruent with state power, and was the largest divestiture of state resources anywhere in history. Inflation was wrestled down into the double digits by 1996, jumped in 1998 when Russia was in financial crisis, and receded to double digits in 1999 and henceforth. Russia by 1999 had a stock exchange (it first appeared in Moscow in 1994), commodity exchanges by the dozen, private banks by the hundred, and scads of business schools. Most pertinent politically, economic growth had resumed, and there has been no stopping it since then. Russia overshot the CIS norm in length of the economic contraction after communism; it undershot it in magnitude of the contraction. With better leadership and better public policy, the economy might have bottomed out several years sooner—on average, output was lowest in the twelve CIS countries in 1996, versus 1998 in Russia—and it might have begun to expand, and the standard of living to improve, several years sooner.
Yeltsin’s post-communist reforms transcended the economy. By relaxing the hammerlock of the state on production and distribution, Yeltsin parted with dogma and breathed into being new social categories, and ones that did not necessarily meet with social approval—a propertied middle class, people of means (parodied in the popular culture as the crass “New Russians”), and the super-rich parvenus, “the oligarchs.” In daily life, for all the problems, within six months Russia was done with artificial scarcities and the lineups in which the average Soviet adult had wasted one hour per day, waiting to buy sausage or vodka or matches, in 1990. Home ownership went up from 33 percent in 1990 to about 60 percent in 2000. Reform also created political space by enlarging citizens’ autonomy, breeding new interests, and making new resources available for acquiring influence in the public domain.85 And sweeping changes, economic and non-economic, had sweeping implications worldwide as well. Russia, as Yeltsin was to say from every podium offered, no longer had any foundational reason to stand apart from the United States or the Western alliance.
These facts all belie any deep equivalency between Yeltsinism and Bolshevism. Lenin and the revolutionaries of 1917 were violent utopians, hellbent on building a brave new world on universalist precepts inimical to those of the capitalist democracies. On Soviet territory, they were monopolists, centralizers, and annihilators of the tsarist ruling stratum and of lesser social groups, such as the kulaks, whom they saw as uncongenial to the new order. On the international stage, they were a disruptive force. In sum, the Bolsheviks sought to make a Great Leap Forward, blazing the trail for others to follow. Yeltsin sought a Great Leap Outward. He meant for his de-monopolizing revolution to make Russia more similar to the rest of Europe and mankind by affording it the ABCs of a market economy and of a democratic social and political order, as he conceptualized them. Russia, in his mind’s eye, needed “to catch up, to strain every nerve, and to make super efforts in order to become like the rest.”86 He parceled out power and had nothing against old-timers from the previous regime going into politics (like Yegor Ligachëv, who was elected to parliament in 1993, and Nikolai Ryzhkov, elected in 1995) or into business. In foreign policy, he was a joiner of transnational organizations and a realistic taker of terms from stronger powers.87
In the political realm, Yeltsin after 1991 infracted democratic principles more than once and resorted to military force to quell opponents in 1993 against the Congress of People’s Deputies and in 1994 against the separatist rebels in Chechnya. However, there were extenuating circumstances in both these cases, as we shall see. Viktor Sheinis, a distinguished foreign-policy scholar and legislator, who took strong issue with him on specifics, strikes an appropriate balance in his memoirs on the things Yeltsin did right:
Now that Boris Yeltsin’s career is completed and the sternest accusations have been made against him, I would like to underscore something opposite: that the undeniable authoritarianism in his style of behavior and rule had its limits. It was limited by his recognition of certain democratic values, far from all but very important ones, which he did not drink in with his mother’s milk but to which, once he had assimilated them, he remained loyal. These would include the right of people to have and express their opinions, freedom of the press and freedom to criticize the government, and the free movement of citizens. Curbs on political pluralism and straightforward suppression of opposition, unless it itself had moved to violent actions, were in a forbidden zone for him. It is impossible not to take into the perspective one other noteworthy factor. From the earliest phase of his ascent to power, starting in 1990, Yeltsin displayed a quality exceptional for a person of his age and circle—an aptitude for educating himself and for intellectual growth.88
As president, Yeltsin confined himself by and large to pacific means of realizing his goals. Unlike the Bolsheviks, he did not put his opponents before an execution squad or behind razor wire. He would slough off powers and revenues to the provinces, enlarge media freedoms, and win mass consent through election. For the first sustained period in modern times, Yeltsin’s Russia was to be a land without political censors, political exiles, or political prisoners—a museum was built in 1994 at the last camp, Perm-36, which Gorbachev had closed in 1987. Both Peter the Great and the early communists made a cultural revolution in Russia. Peter ordered his subjects to shave their beards, forsake traditional clothing, and take communion once a year. Lenin and Stalin prescribed atheism, discipline on the factory floor, and reverence for the party and backed them up with terror and cradle-tograve indoctrination. Yeltsin had no stomach for interventions in matters of manners and morals and would continue the trend under perestroika away from state controls over the individual.
A facile parallel with Bolshevism would overrate the mercilessness and consistency of Yeltsin’s conduct over the full course of his presidency. Overrigorous design of the reforms, while sometimes a factor, was to be far from the only cause of the agonies associated with them. Policies that prolonged the needed changes, lacked cohesion, and spared the cost did as much harm, especially but not exclusively in the economic area.89 As Reddaway and Glinski note—and as flies in the face of the postulate of messianism—Yeltsin and successive subleaders to him adjusted their economic and other policies as they proceeded and seldom behaved as though they had a stepby-step scheme: “Their ruling passion was political pragmatism.”90
Pragmatism in policy generated neither mere opportunism nor an even flow of decisions. Instead, the reality in the Russia Yeltsin remade was a perplexing blend of types. Reform would be a long footslog—down a winding road, against a headwind. Its political history was studded with acts of statesmanship but also with wasted chances and spells of inaction. As will become apparent in subsequent chapters, when this discombobulated country forged ahead, as it surely did on Yeltsin’s watch, it was in fits and starts and not in a steady beat. So it went because of rearing uncertainty, institutional and coalitional politics, and what Oleg Poptsov called “swings in the social temperature.” And so it went because of the person whose hand was at the tiller. “Political arrhythmia,” as Poptsov colorfully put it, was to be a lasting ingredient of Yeltsin’s style as national leader.91
CHAPTER TEN
Resistances
Conscious beliefs and intuitions planted Yeltsin’s feet on the “civilized path”
of radical reformation. They came forth intermingled from disenchantment with communism and a search for a better future. One has to wonder in wide angle why this effort accomplished what it did and why it did not accomplish more, and why not less painfully.
Post-communism as a milieu ought to have offered scope for statecraft. Above, a commanding leader promised fundamental change and was liberated from the roles and rules of the now-vanished civilization of the USSR. In so protean a medium, “The room for individual impact—that is, the impact of such things as intelligence, emotions, personality, aggressiveness, skill, timing, connections, and ambitions—is enormous.”1 Yeltsin had all these qualities, from brainpower to timing to ambition. Below, in a time of exigency, a “rescue-hungry people” might have been receptive to charismatic inspiration and guidance.2 The angst attendant upon the decease of a tyranny, an empire, or a failed social project—and the Soviet Union was all three—should have attracted the populace to a person who acted with dispatch, calmed nerves, and said he knew of a new way. Russia after the convulsions of 1985 to 1991 looked ripe for a season of “extraordinary politics” in which claimants would temper their ordinary demands and think in terms of the common good.3 The man in the best position to identify the common good and act as rescuer was Boris Yeltsin.
As the post-Soviet reforms got under way, this was the uplifting prospect before him and his colleagues. They faced, Yegor Gaidar has written, incalculable risks but also a freedom of maneuver few governments ever have. The Communist Party, its ideology, and its organizational transmission belts were gone. The army, the KGB, and the military-industrial and agricultural lobbies were paralytic, some of their chiefs moldering in prison for their participation in the August coup. Many Russians who had qualms about Western models held their fire: They were “interested in the most ungrateful [tasks] being undertaken by someone else’s hand” so that they could later profit at the reformers’ expense.4