This brief history of the wreckage of the 1990s provides context for Alexandr Buzgalin’s comments on who benefitted from Russia’s conversion to “capitalism.” Since the 1980s, Professor Buzgalin has taught economics and self-management at Moscow State University and now also directs the Center for Modern Marxist Studies. In 2018, Paul Jay interviewed him on “Reality Asserts Itself” on The Real News Network. In 12 short episodes, he recounts his life and hopes first as a child, then as a young dissident on the left platform of the Central Committee of the Communist Party. Author of over 20 books and articles, he helps edit the journal Alternatives and is a leader of Russia’s opposition democratic socialist movement called “Alternatives.” This is a chance to hear from a democratic socialist Russian economist and leader of a democratic socialist movement on what’s really happened in Russia and what future US-Russia relations could be like.
“Soviet” means “workers’ council.” After 1917, the USSR’s republics aspired to be unions of workers’ councils--worker self-management was their aim. When the Berlin wall fell in 1989, factions behind Mikhail Gorbachev did not militarily suppress the USSR’s dissolution with the Red Army. Gorbachev let them leave avoiding bloodshed for which he deserves credit. But a coup removed him in 1991 and Boris Yeltsin, the then President of the Russian Republic, side-lined him.
In the chaotic early 1990s, the Soviet elite “nomenclatura” and black marketeers united to steal the state’s wealth and privatize access to luxuries. “Wealth” was elite access to large apartments, the black market, cars, country houses, travel, vacations - what we in the west buy with “money.” But the “nomenclatura” faced a dilemma: how to pass their status as unelected managers to their children. Privatization was the answer taught by armies of western advisers, the IMF and the World Bank. Russian President Boris Yeltsin and his Prime Minister Yegor Gaidar delivered these as “shock therapy.”
It worked fast. By 1992 most Russians were in poverty. Life expectancy plummeted; theft of state property was pervasive; former “black marketeers” became legitimate businessmen; and former leaders of state enterprises became CEOs. An unholy alliance of former gangsters and bureaucrats formed. In December 1993 Yeltsin had the Russian army shell Parliament where the government met in its official building the Russian White House. Shortly thereafter, Yeltsin staged a dubious election to ratify a new Constitution giving himself wide powers as President. By the late 1990s, 3,000 to 4,000 mafia-like organizations were operating in Russia and round the world. Production and investment had fallen over 50%. Only another world war could have wreaked the social and economic destruction that Yeltsin and his western advisers wrought. Its worth noting that the Chinese got the same IMF/World Bank “advice” but followed none of it.
The 1990s were chaotic. President Bush Senior and his Secretary of State James Baker promised Gorbachev in early 1990 before the dissolution of the USSR that NATO would not expand “one inch” to the east. Putin, taking over in 2000, asked if Russia could join NATO. But Russia was needed as an enemy, and NATO advanced to Russia’s doorstep! Putin was rebuffed. This period’s political, social and economic destruction, added to theft of the Former Soviet Union’s vast resources - disguised as capitalism - is to me one of the great tragedies of recent times. The Russian people have not forgotten the US government’s role in collapsing their living standards as oligarchs (their former bosses and black marketeers) rose to fabulous wealth and power. Their leader, Putin, was kept in the enemy role. Beneficiaries of US-Russian relations since 1989? The US military-industrial complex on the one hand and the former nomenclatura and black marketeers recast as Russian capitalists on the other.