Something else I should have mentioned in the context of corruption in Russia and "reform" is the ideology of the so-called "young reformers," Chubais, Gaidar, etc., which was explicitly and avowedly Social Darwinist and nihilistic.
I already sent this to Michael Pollack, but this is a great account of the ideology of the reformers in the early '90s. This is from Reddaway and Glinski's book.
Reddaway was an important American specialist in the 70s and 80s on the Soviet dissident movement, and Glinski is a young Russian social scientist who, last I heard, teaches in the States.
Anne Williamson's testimony to Congress is well worth reading on this issue as well.
Chris Doss The Russia Journal ------------------
THE PROVENANCE AND CREED OF THE "RADICAL REFORMERS"
The group of economists and administrators who entered the government in November 1991 as the "Gaidar team," as well as their cothinkers who stayed out of the government to organize media support for shock therapy, shared a number of similar social traits. Most of them were born in either Moscow or St. Petersburg in well-to-do families of nomenklatura background. All of them had earned graduate degrees in institutions designed for the Soviet establishment, which inevitably required them to display their loyalty to official pseudo-Marxist dogmas of "real socialism," as well as to the existing social order and their individual patrons in the upper echelons of the nomenklatura. They proved themselves to be talented acolytes of the Party who were gradually designated for foreign travel and the chance to familiarize themselves with Western academia. They presented themselves to their counterparts in the Western establish--ment as enlightened liberals and Westernizers, almost dissidents, as people who were miraculously able to exist within the ruling elite and to withstand the pressure from the hard-liners.
As time went on, their Western contacts became increasingly excited about the "Soviet liberals," who often spoke good English, played with Western concepts and theoretical models, and were well-dressed, polished, and always smiling-in sharp contrast to the sad, exhausted faces of ordinary Russians. For the new generation of the Soviet nomenklatura, establishing credibility with Western elites was a vital necessity. After all, they were preparing to get rid of the last remnants of their Soviet and "socialist" identity and to merge themselves into the global economic order. The "young liberals'" preferential access to foreign goods and contacts placed some of them in the lucrative role of middlemen for import-oriented urban elites, currency speculators, and the voracious black market. No wonder many Russians viewed-and continue to view-them as covert lobbyists for these groups and their trading interests, tightly linked with global commercial and financial markets. Most of these future radical reformers were particularly attracted by the writings of University of Chicago economist Milton Friedman and by the laissez-faire economic policies of Thatcher and Reagan. Hence, these reformers were known in Russia as "the Chicago boys."
They were also attracted to the closely related Washington Consensus doctrine, which applies Friedman's ideas to the world economy and has underpinned most of the work of the IMF and the World Bank in the 1990s. While he was chief economist of the World Bank, Lawrence Summers expressed the core and the fervor of this doctrine when he proclaimed in 1991, "Spread the truth-the laws of economics are like the laws of engineering. One set of laws works everywhere."
While being part and parcel of the late-Soviet oligarchy, this social group was in some important aspects different from the oligarchy's other layers-such as the Communist Party functionaries, the managerial class, or the military-industrial complex (even though all these were so often intertwined by their interests and family links as to make any differences between them fairly obscure to outside observers). By their career paths, most of the future radical reformers belonged to the institutchiki stratum (members of social science re-search institutes, such as the Central Mathematical Economics Institute, the Institute of State and Law, and so forth)-the younger, privileged group, whom the apparatchiki often viewed with a degree of suspicion as being overeducated, cosmopolitan, individualistic, and having little real-life experience. Thus, being denied power positions that required political responsibility, the institutchiki had to satisfy their ambitions through the petty politics of intra-academic intrigues, competing among themselves for foreign trips with hard currency allowances. Still, they remained at the service of the Party, grinding out analytical memos, draft speeches, and policy advice, most often for the Central Committee's Economic Department.
As a result, these reformers felt little in common with the conservative core of the Soviet oligarchy, but they were even more alienated from the unprivileged strata of society, whom most "liberals" despised as being too lazy, servile, and ignorant to deserve to taste the pleasures of life that were readily available to Western consumers. They also believed in the primacy of individualistic motivations, looking with scorn at the "utopian" social goals of the early 1960s and of the dissident movement. For this social layer, Dostoevsky's depiction of the nineteenth-century Russian liberals was in many ways apposite: They were uprooted from the national soil, felt skeptical about almost every coherent system of values, and harbored bold and abstract dreams of experiments in "social engineering" that would make Russia more comfortable for them (that is, closer to their image of affluent Western economies). Yet some of the Soviet liberals' beliefs about their country and the world set them somewhat apart from their predecessors in Russian history:
Market fetishism. All the reform programs compiled by "liberals" in the late 1980s and early 1990s stressed as their short-term as well as ultimate goal the "construction of a market economy." Among all the features of modern capitalism, it was the market that most captivated them. Strikingly, increased production of consumer and producer goods, or the creation of a modern infrastructure for energy, transportation, telecommunications, health services, and education, or the development of a strong and prosperous middle class, were neglected or ignored. As James Millar has pointed out, shock therapy assumes that "if monetary problems can be solved, production will be restored; that is, if one gets retail and wholesale prices right, money wages right, the interest rate right, and the exchange rate right, production will take care of itself." Indeed, any prescription for Russia's problems that required increased commodity production as a necessary part of their solution tended to be indignantly rejected. Production quotas were the obsession of communist commissars, and the reformers wanted no part of them. Their ideal was the postindustrial society, dominated by free markets and a large service sector.
Belief in simplistic behaviorism. This replacement of goals (economic success) by means (the market) led the liberal reformers to obscure the fact that some "market" economies had turned out to be less efficient in terms of production than planned or semiplanned economies (such as Japan, South Korea, or Taiwan in the 1970s, as compared with contemporary Britain). Consequently, in the reformers' "building the market" (even the phrase recalls Stalin's "building socialism"), virtually all elements of planning and control were to be abolished, while the government itself was seen not as a supreme arbiter responsible for national development, but as just another bargaining unit in the operation of "free market forces."
The obsession with the market was to a large extent linked to the liberal reformers' belief in simplistic behavioral explanations of the Soviet economic decline. Pointing to the sharply deteriorating work ethic of the population and the inefficiency of state-owned enterprises, they attributed these tendencies to the lack of "market stimuli," such as the threat of unemployment for labor and constraints on the demand side for enterprises.
Once in place, "market stimuli" would impose "rational" patterns of behavior. The reformers' reductionist creed precluded them from considering possible political, social, and moral explanations, including the legitimacy crisis of the establishment, the growing disparities and alienation between elites and the masses (which more thoughtful observers among writers and thinkers in, for example, Andrei Sakharov's circles had pointed to since the early 1960s). After shock therapy had been partially implemented and the "market stimuli" had not resulted in the expected behavioral changes, the free-market reformers predictably turned to blame Russian culture-which, they implied, invariably produced losers.
Inverted Marxism. It follows naturally from the above that the liberal re-formers, imbued since childhood with the Marxist dogmas of Brezhnev-style "real socialism," were hard-core economic determinists. No wonder they later espoused the most reductionist and deterministic of Western neoclassical economic doctrines. Essentially, they accepted the Marxian idea of unavoidable historical stages, yet without Marx's optimistic belief in a better society of the future. Accordingly, they viewed the primitive and unregulated paleocapitalism of nineteenth-century Europe, as described by Marx, as the universal stage of development that Russia had failed to achieve on time. Hence, to get "back to civilization," Russians were advised to adopt the ethic of "primitive accumulation" exemplified (though this was not usually spelled out) by the eighteenth-century British stockjobbers or the nineteenth-century American robber barons. In this catching up with the past, any moral brakes would only be an impediment to progress.
Moral relativism. A favorite slogan of the radical reformers went like this: "Everything that is economically efficient is morally acceptable." It was put into circulation in the late 1980s by Nikolai Shmelev, who in other respects was a moderate freemarketeer of the Gorbachev vintage. This view gradually became part of a shared culture of many radical reformers and was widely popularized in the media as evidence of "enlightenment." It is worth noting that many of the newly bred ideologues of this moral relativism were-and are-presented as intellectual luminaries and attained the unofficial rank of court thinkers and writers in the Yeltsin regime. Some of them preached "post-modernism" (in their interpretation). Others embraced Nietzsche, with his ideal of the Superman free from any moral inhibitions.
New class struggle, ideological warfare, and cultural revolution. In Russia, this moral relativism logically implied a decisive and radical rupture with the cultural traditions of Russia's older generation (which was assumed to consist of "natural" Communist sympathizers) and particularly with those of Russia's traditional intelligentsia, including first and foremost its moral imperative of always siding with the weak and the oppressed. In the 1990s, a vast amount of media coverage was devoted to the reformers' ideological warfare against the traditional intelligentsia for its "socialist" proclivity to "worship the people." "The 'people' does not exist," proclaimed one of the favorite postmodern writers of the new elite, Sergei Gandlevsky, "there are only individuals." In one of his re-cent essays, Gaidar himself attributes the European revolutions of the nineteenth century and the invention of Marxism to nothing more than the radical intelligentsia's lack of respect for property and its unwillingness to adapt to "progress."
The most striking feature of this campaign of social hatred (in some ways a version-if a much milder one-of Mao's Cultural Revolution) was the fact that its most ardent activists themselves appeared to belong to the intelligentsia, at least to judge by their educational and professional careers. Therefore, in many cases the anti-intelligentsia rhetoric involved an unabashed renunciation of their own previous experience and family background. A cutting and credible account of this mass apostasy, welcomed and often promoted by the new oligarchic elite, is found in the posthumous book of Andrei Sinyavsky.
Contempt for or indifference to public opinion. The instant ascent of the Gaidar group was due to backstage court maneuvering, not to a public debate about what form the reform program should take. Neither Gaidar nor his associates belonged to the democratic movement, which made them deeply apprehensive about their acceptance by society, nor were they among Yeltsin's supporters during his "populist" campaigns of 1988-90. Until early 1991, Gaidar himself was a leading economic columnist of mainstream Soviet publications, such as Pravda and Kommunist, where his often well-argued articles repeatedly warned the public about the threats of market radicalism.
In September-October 1991, Gaidar obtained privileged access to Yeltsin's ear through the president's closest associate, Gennadi Burbulis, a former teacher of Marxism and a vain man intensely disliked by the public. Gaidar's appointment served Burbulis's purpose, because it ensured that Yeltsin would not appoint someone who was either more popular than Burbulis (such as Yavlinsky or Svyatoslav Fyodorov) or more influential with Yeltsin (such as Yuri Skokov and Oleg Lobov), thus endangering Burbulis's position at court. One of Yeltsin's reasons for picking Gaidar for the job of "leading re-former" was that his bland and aloof manner in public made him an unlikely future contender for elective office, even if his reform package were to turn out to be successful and popular. Thus Yeltsin would not risk any future upstaging. Beyond all this, not only did the government's Gaidar reform team not possess even a semblance of legitimacy (either electoral or in terms of national traditions and culture), it did not even bother to acquire such legitimacy. Instead, it took an aggressively confrontational posture toward the beliefs and ways of life, as well as the opinions, of ordinary citizens. As we will see, two election defeats in 1993 and 1995 did not stop the "liberal reformers" from keeping or quickly regaining dominant positions in the government, nor from launching a second round of shock therapy in March 1997.
This account of the "liberal reformers'" fundamental beliefs and modes of operation should make it obvious that the shock therapy carried out in 1992 was far from being an isolated set of purely economic measures and has to be judged by standards other than those that apply to economic theory alone. In line with this logic, we cannot limit our review of alternatives to shock therapy to questions such as whether the Russian government had a better option than the deregulation of prices on January 2, 1992. At this point, we will just say briefly that, in our view, Yeltsin would have served Russia much better by appointing a team that was very different from the shock therapists as a social and political group. We believe that even a similar set of drastic economic changes, had it been carried out within a different sociopolitical and ideological framework, probably would have resulted in a much less disastrous outcome, and that Russians would have accepted some of the inevitable suffering with much greater understanding and tolerance. In other words, part of the problem from 1992 to 1998 was the personal profiles and worldview of the reformers, which were alien and obnoxious to the majority of everyday citizens.