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CIAO DATE: 5/00
Social Sciences
Vol. 31, No.1/2000
Criminal Revolution: Fiction or Reality?
By Alexey Kiva
*
These recent years uncomplimentary epithets are often addressed to the revolutionary changes in post-socialist Russia. A well-known film director and now also a noted politician, the deputy of the State Duma S. Govorukhin has put forward an idea of a criminal revolution in Russia. The terms “nomenclature revolution”, “revolution of unrealized hopes”, etc. have appeared in mass media.
But all these are mostly metaphors, impartial labels, swear-words, and even methods of political struggle. There is no doubt that certain life realities, somebody’s positions, interests stand behind each such expression, though this has nothing or almost nothing to do with science. All these years we called the revolution arising in the midst of Gorbachev perestroika “antitotalitarian”, “anti-Communist”, “democratic”. These epithets bear much more life and scientific truth, though they are also inaccurate because they do not contain the definition of a phenomenon from the point of view of its social contents. And there are no revolutions in the genuine sense of the word without a social context.
The term “liberal revolution” widely used in democratic quarters does not reflect the reality. Some people even thought that coming to power of S. Kirienko’s government in the spring of 1998 marked already the third liberal revolution. (The first one was associated with the name of E. Gaidar, the second one—with the appearance of “young reformers” B. Nemtsov, O. Sysuyev, A. Chubais, etc. in the government of V. Chernomyrdin in 1997). Then the question arises: in what, strictly speaking, does the liberalism of the “shock therapy” and of many other measures of the first government consist? Is it in that the “prices were set free” and the well-known Bolshevist practice “grab what has been grabbed” started again? Those who were and are usually called liberals are distinguished with free-thinking, generosity, tolerance, humanness, etc. While the shock therapy was carried out with the most painful consequences for the people and the country.
As S. Chernyakhovsky fairly remarks, to be a liberal and democrat in modern Russia “means in politics to stand for a parliamentary republic, for the investigation of the participation of high-ranking officials in commercial projects, to demand the establishment of the parliamentary control over the activities of secret services, of supervisory councils on TV and equal proportion of air time between the government and opposition in the leading electronic mass media” 1 . In this connection it is interesting to note that many of those who consider themselves to be democrats and liberals in Russia demand a ban on left political parties, stand for the actual monopoly of electronic mass media in the hands of oligarchs and intellectuals oriented to the West, etc.
Walking around the circle of history
In fact, in our country a revolution has taken place and is going on which in old terms, for the absence of more successful new ones, may be defined as bourgeois-democratic. It is really the third one in succession. As a matter of fact, any bourgeois-democratic revolution solves two main problems: provides a society with that volume of political freedoms which it has grown up to; creates favorable conditions for the development of productive forces and for the development of private property in particular.
The first bourgeois-democratic revolution in Russia took place in 1905 when under the tsar manifesto of October 17, 1905 the country for the first time in its history received a number of bourgeois-democratic freedoms. They were rather limited but it was just that volume of freedom which corresponded to the general level in the basically illiterate peasant country and opened the way for its fast economic and socio-cultural development. And indeed, by the beginning of World War I Russia took the first place in the world in terms of rate of growth.
The second bourgeois-democratic revolution was accomplished in February, 1917 and gave the broadest rights and freedoms to the Russians. When, for example, the US fighters for women’s suffrage came to Russia, they suddenly found out that our women had already got the right to elect, therefore the American “suffragist” zeal as though faded away. However, the low level of civilization and culture of the prevailing part of the population did not allow to make the best use of the rights and freedoms decreed from above. In reality, the freedoms often turned against the interests of the people and the country. The state broke up at once into dozens of countries and formations (including the most queer ones) which was an inevitable prelude to a new dictatorship.
Having seized power, the Bolsheviks restored the collapsed empire with fire and sword liquidating the gains of two bourgeois-democratic revolutions, though solving in their own way a number of missions in any event connected with the ideas of such revolutions. However, they denied the civil rights and political freedoms in generally accepted sense to the Soviet people. Therefore, there should have been a new bourgeois-democratic revolution as a natural stage of social progress, though not necessarily in the form of an armed revolt and civil war. For example, in Scandinavian and some other countries the bourgeois-democratic freedoms were, as is known, the result of evolutionary development.
But, in any case, the third in succession bourgeois-democratic revolution took place in our country. It started in the womb of Gorbachev perestroika, reached its culmination in August, 1991, passed from the political sphere to the sphere of socio-economic relations, the sphere of property relations and actually is going on up till now. But the third in succession bourgeois-democratic revolution, the ideologists of which were orienting on the standards of Western countries with long established democracy and high material well-being, has also resulted in the disintegration of the country and has not yet solved those problems which were in the sphere of expectations of the majority of the people. If within the nearest future these expectations do not start coming true, one may predict another revolution typologically similar to a bourgeois-democratic one. The slogans of revolutions vary, while the radical problems of everyday life of the majority of the people including those in the sphere of political democracy and protection of human rights, are not solved.
P. Chaadayev long before all these revolutions stressed that the movement of Russia in history reminded of a walking around the circle. This is certainly an exaggeration born by a painful reflection of a thinker over the unenviable lot of his compatriots. Nevertheless, having already got once democratic rights and freedoms, having already gone through a painful stage of primary capital accumulation, having already gained the experience of successful managing on the basis of private ownership and competition, we have not simply lost all this during the years of socialist revolution and Soviet power. There were exterminated millions of those who were prepared by the whole course of the previous history to the achievements which old Russia had demonstrated not only in the sphere of economy but also in many other areas. And still I will quote Chaadayev’s words from his first “Philosophical letter”: “We are so surprisingly marching in time that as far as we advance our past has gone never to return” 2 .
Whether it is necessary to prove that such catastrophic phenomena as the revolution, disintegration of the state which existed for centuries, redistribution of property are practically always connected with great social commotions and extremely negative consequences?! And one of them is the criminalization of social relations . Our revolution is really civil (bourgeois) and democratic but so much crime and half-crime, swindlers and rascals have stuck to it that it has seemed criminal to many honest people and not only political speculators. The question is where the roots of crime are growing from.
Criminalization as a concomitant of the poorly thought over reforms
I believe there are few people who have seen such organized crime which exists today in Russia. One can hardly recall anything like it, neither the scope of the spheres of activities of the society covered by the criminal world, nor the funds accumulated by it, nor the tasks it raises before itself, nor the extent of cruelty with which it struggles for the achievement of its aims. No wonder that the West does not understand the depth of this problem, nor does it realize the adequate methods of its decision. My deep belief is that the Russian authorities were too much in a hurry to join the Council of Europe which proceeding from the experience of the stable and prosperous countries demands that we should humanize the methods of fighting the crime and punishing committed crimes including the grave ones. And this is regardless of the steady growth of organized crime and its more and more obvious victory in the struggle against the law-enforcement bodies.
"In the country there has been formed and quickly expands a social layer which is actively included in criminal or so-called precriminal economic behavior,—the Chairman of the Council of the Federation Egor Stroyev said.—According to the Federal Security Service (FSS), scores of thousands of economic entities and subjects including state enterprises, joint-stock companies, banks are under the control of criminal structures. The organized crime controls up to 40% of the gross national product and, according to some information, even more than that” 3 .
Having accumulated great funds the authorities of the criminal world, the so-called “thieves in law” not without the help of closely connected with them dealers of legal business, officials, politicians, officers of law-enforcement system, journalists and others are actively longing to get power. According to experts, the widely known cases when people not having broken with their criminal past were becoming mayors of large cities is only the top of an iceberg.
If we talk seriously about the roots of our present organized crime, first of all we should address to some basic things. One should take into account the world experience as well. Arising and, moreover, expanding crime is the natural answer of the society to the unnatural situation created by the most different forces and circumstances. Therefore, it by and large has an objective character. Though, I would like to stress, this concerns not so much swindle, stealing and other permanent concomitants of a human society but rather organized crime. For example, the Sicilian Mafia has arisen owing to the extreme poverty of the South of Italy against the background of the prospering North and of the remaining ancestral vestiges of the southerners. A parallel with the South of Russia, where as far back as from the Soviet times high unemployment, centers of chronic poverty, as well as strong ancestral ties have been preserved, suggests itself. The organized crime in the USA, as is known, was caused by the Prohibition. The struggle against drunkenness and alcoholism in the USSR during the years of perestroika has also “worked” much for the strengthening of the potential of organized crime. To make the issue more pointed, one should, probably, single out some landmarks, stages in the development of organized crime against the background of more global processes and phenomena.
The first stage .
The conditions for the explosive growth of organized crime in Russia were created in the womb of real socialism. The commanding planned state economy artificially constructed on the basis of purely speculative Marxist schemes under the conditions of technological revolution, especially on its second turn, has appeared absolutely unable to meet the needs of the people of quality goods, services, etc. On the lower turn of the world social production and with the actual isolation of the Soviet people from the external world it was not yet so striking. But when the mass consumption society appeared in the West the famous Soviet shortage of goods should inevitably cause and has caused a sort of parallel economy which is also called a shadow economy. For the objective need should be in any case met by somebody if there is no fierce, like Stalin’s, dictatorship in the country which decides the natural needs of the people in “its own way”.
The shadow economy can develop if there is not just a demand for its services but the solvent demand. Therefore “it is important to emphasize that the formation and flourishing of the shadow economy have become possible only due to great financial injections not supported by adequate changes in the structure of national economy. The shadow economy dealers have accumulated the funds “injected” by the state into the economy, first of all, through the cashes of military enterprises and as money allowances of the representatives of different law-enforcement structures. And by the middle of the 80's we had already a powerful sector which became a criminal market component of real national economy” 4 .
However, the objective necessity of the solution of the problem of unsatisfactory demand is only one aspect of the matter. Another and also an objective aspect is that it is natural of man to strive for self-realization. In the West they counted long ago that in each society there are not more than 5-7% of people capable of being successfully engaged in business. At least several per cent of them have an irresistible desire for self-realization particularly in business. For this sake they are ready to risk, be exposed to persecution, suffer punishment as in the Soviet times, and get down again to old business.
How can a parallel economy function? Naturally, it is against the official law but in accordance with the logic of the laws of criminal community. Therefore, in the USSR underground shops and separate underground enterprises started to appear, smuggling grew, the number of illegal businessmen, intermediaries, etc. increased. Raw materials, trading outlets, the favor of authorities and the reliable cover on the part of law-enforcement bodies were required. All this led to the growth of corruption ties, to the inevitable link of illegal businessmen with criminals.
Already in that period the corruption environment was formed in quite an open way—by means of expensive and very expensive “gifts” to necessary officials, often high-ranking persons including the first persons in the state, with the purpose of getting additional financial and supply resources being in shortage and also solving, including at the highest level, major economic problems in the interests of these or those regions or local circles. The famous “cotton case” of the end of the 80's, when about 4 billion pre-perestroika rubles were spent during a few years, testifies to the amount of sums spent on the latent and sometimes open bribery of the Soviet nomenclature. Thus, yet in Brezhnev times there was forming the infrastructure of organized crime, the “valuable” experience was gained, the primary accumulation of criminal capital was under way.
The second stage.
Some innovations of power already in the course of Gorbachev perestroika were the next major step on the way to the growth of the potential of criminal world. Among them there was a law giving state enterprises the right to create as if affiliated companies for the fast organization by them of the manufacture of goods being in high demand of the population. The key moment here was the fact that such new formations, as against state enterprises, got the right to cash cashless funds. It became a powerful channel of pumping of funds from public sector over to the hands of swindlers of different type. I am sure that it was not the intention but a mistake of the reformers of those times. And it came from that M. Gorbachev and his team were looking for a way to preserve planned state economy, vowing fidelity to socialist ownership, and also to give an incentive to the manufacture of high-quality consumer goods.
In reality there appeared some “mutants” which made not so much high-quality goods but rather robbed state enterprises. These “mutants”, on the one hand, were often used in the mercenary purposes by their management and, on the other hand, literally before our eyes they acquired criminal ties. Criminal world appears where there is a source of easy money. But at the same time one should not forget that Gorbachev and his team in that period could not have openly stood up for the transformation of inefficient state economy into a market one, the basis of which is private ownership, if they did not want to lose their posts at the first CPSU Central Committee Plenum and to jeopardize the process of democratization of the society and liberalization of the economy.
Ways of God are inscrutable
Of course, after a few years one can clearly see what grew from what and in which succession. But history develops in such a way that the cause and effect relationship of the phenomena, processes, tendencies, etc. in most cases cannot be seen by the majority of actors on the political stage, and the lesser evil is often taken for the greater one. Today’s difficulties, collisions, threats often close the horizon which covers far more terrible ordeals and dangers of tomorrow and the day after tomorrow. If it had been otherwise the democratic forces of Russia in 1917 would have struggled against the Bolsheviks instead of Kerensky and would have preferred the general L. Kornilov’s dictatorship (which as well as any other military dictatorship not interfering with the sphere of ownership and not breaking the structure of society, as a rule, has a limited resource of existence) to the dictatorship of V. Lenin, i.e. the dictatorship of the top of the Bolshevist party under the cover of the dictatorship of proletariat. As well as in Germany in the 30’s the German communists would not have struggled against social-democrats but together with them against fascists.
In other words, the present Russian devastation, as well as corruption, and crime, and the absence of spirituality, and the actual dependence of the country upon the West, as well as the mass-media monopolized by “money bags”, and the fantastic wealth of persons, heaven knows where they have come from, and, on the contrary, the poverty of many of those who only yesterday were considered to be the pride of the nation, and many other things like that—all this, as I guess, is not what the reformers were striving for. And everything started, as in the Russian folk fairy tale, with a turnip which a grandfather planted but could not pull out together with a grandmother, grand-daughter, a dog named Zhuchka and a cat. It remains only to find out what in our reforms corresponds to a turnip and where that mouse is the efforts of which are needed to pull out the half-destroyed economy from the gulf. Some analysts have seen this mouse in the government of Evgeni Primakov, the others—in the established socio-political organization Otechestvo (Fatherland) led by Yuri Luzhkov.
When as a result of the putsch in August 1991 the Communist regime collapsed those who as against Gorbachev reformers were called democrats and followed the new leader B. Yeltzin were in their majority not ready to govern the country. They themselves spoke about that not once. This is because the democratic movement was too young while the most experienced politicians were all the same in the Union structures. And because there were few analysts capable of supposing that the old regime would dig a grave for itself by organizing the August putsch. The most optimistically minded anti-Communist reformers orientated themselves on coming to power at the best after the next elections to the USSR Supreme Soviet which should have been held in 1994.
There was an unprecedented situation. In the course of the putsch the reforms started by Gorbachev were developed into a revolution, and an extremely profound revolution touching practically all the aspects of the life of the society—political system, property relations, philosophy, ideology, spiritual and moral principles, stereotypes of behavior, social orientations, motivations, habits, etc., but the bearers of the ideas of this revolution were extremely weak. It is not that their leaders had no taste for the theory, they just slighted it. If Gorbachev reformers were guided by the ideology of the representatives of the 60’s (“socialism with a human face”), the democrats who replaced them in power were guided either by nothing at all, or by the dissident philosophy and simplified Western values.
Usually long intellectual work precedes the change of one social system by another. The best minds of a nation are involved in the process of the preparation of theoretical bases of a new system, new life in general. It was the case before all great revolutions. I would risk to assert that the success of profound social changes which have started in our country since 1985 required at least several major prerequisites.
Firstly, there was a need of a new philosophy, a new concept of the social system, new ethics. In other words, the bearers of the idea of the destruction of the old system should be at the same time the bearers of the idea of the construction of a new social system. We had a gap: the process of the destruction of the foundations of real socialism, which in some sense became an end in itself for those who called themselves democrats, has not developed into a meaningful process of construction of new being at a conceptual level. Neither the idea of democracy, nor the idea of universal human values, nor the idea of the market by themselves can give an answer to the question about what type of society should arise on the ruins of real socialism in the nearest and distant prospect. The fact that “wild capitalism” and quasioligarchy, sharp social stratification and mass poverty were quite unexpected for the people just testifies to that. The reforms have been developing in the dark actually all these years from the beginning of shock therapy to the financial collapse in August 1998 which also certified the failure of the imposed from outside radical liberal monetarist model of the reforms.
Secondly, in transition from one system to another a new power, as is known, faces with great difficulties and the struggle against them not always ends successfully. If it stands the test then it is only due to the wide social base, its own authority and, no doubt, the attractiveness of the ideals and principles it advocates. The new power also faces with legal collisions: many old laws which were called upon to serve the interests of the former regime, already do not function, while the new ones are still to be adopted. So the reliance on the force of law is limited, and the reliance on the force of arms, if this is objectively possible, can be realized only in the paradigm of a violent bloody revolution and dictatorship, as it was the case after the Great French or Great October revolutions. In fact, profound social changes in other epochs were accomplished only in such a way.
As far as new Russia is concerned, as is known, it (as well as the majority of other post-socialist countries) has decided to move from communist authoritarianism to the democratic forms of life within the framework of a democratic paradigm. But in such a case the strong state power which is objectively necessary in transition period might not come true again for the objective reasons. The old state structures including law-enforcement bodies were so permeated with ideology that it was dangerous to rely upon them. The state machinery should have been radically changed but this process is sensitive and long and besides it requires considerable funds.
The weakness of the new power in Russia was also the result of subjective reasons. First of all, from my point of view, this is a false model of reforms the realization of which, figuratively speaking, has put the country on “hungry rations”. Those who came to power strongly exaggerate the spontaneous principles in transition from one forms of life to others while almost completely ignored the peculiarities of Russia. This was also the result of the negative attitude of the ruling radical liberal pro-Western elite disposed to uncritical borrowings, to the state as an institution, its dislike for the theory, for any ideology, for the ideas uniting the society, etc. If in case of a society with weak traditions of self-organization but at the same time with strong traditions of state patronage there emerges a vacuum of legitimate power, it is inevitably filled up with criminal and half-criminal power.
Thirdly, since the transition of a society from one system to another without consequences, catastrophic for it, cannot be made instantly, there objectively arises a need of a transition stage , a need of a study of a question about its duration, phases, stages, the sequence of transformations, etc. When speaking particularly about Russia the question is what succession with the least losses for the society it should have followed on the way to developed market relations and advanced democracy. Alas, the radical reformers did not even raise these questions.
One of the reasons was that a transition period is a whole historical stage taking many years. It cannot go on without a definite plan. Such plans, as is known, there were in Japan, as well as in France, and in many other countries. But for domestic radical reformers worshipping spontaneous development, the elements of market principles any planning including an indicative one was perceived as a return to real socialism and was anathematized at once. The radical liberals have reduced the many-sided problem of transition from one system to another to economy, to be more exact, to the unpretentious and primitive formula “market will put everything on its place”.
Many people naively relied on Western aid. The new power led by Yeltzin did almost everything what Washington demanded from it for the sake of the establishment of trust and stable relations with Western partners. The new ruling elite of Russia expected that the West led by the USA, free from fear for future and from expensive arms race, would adequately react to that. It would offer if not a new “Marshall Plan” for Russia, then render wide economic assistance to it.
Unfortunately, the Russian liberals did not obviously understand the Western, and in particular American, mentality based, on the one hand, on Puritan ethics, and on the other—on bare reckoning. The latter prevails in serious business. According to the living in the USA professor of Russian origin D. Shlapentokh, the discrepancy between words and deeds is organically peculiar to America. Thus, “the terrible dictatorial and amoral China is getting great investments, while the free Russia—absolutely insignificant sums... During the whole period of “cold war” the West as a whole and America in particular asserted that they struggled not against Russia but against the “empire of evil”, against the country which is governed by the people with nasty bloody antidemocratic ideology, and as soon as these ideology and regime ceased to exist the relations with Russia would change radically. After the fall of the Soviet regime this idea continued to be emphasized and was joyfully picked up by A. Kozyrev. However, as well as with the investments, these declarations did not brought particular actions. Everything was quite the reverse: soon, still in Kozyrev’s times, they started talking in the West about the necessity of NATO expansion which took place in 1997”. And further: “The practical mind of western politicians realized that the struggle against the USSR was not at all the struggle against “bad” totalitarian ideology and totalitarian regime but against Russia as a powerful opponent. Now this enemy is weakened as never before, ousted to the borders of the 17th century, and it is necessary to do so that it will never rise. And hence, there goes the expansion of NATO to the East” 5 . Is it not the reason of the emergence of the model of shock therapy which was so actively supported by the USA and which led to the disorganization of economy and the impoverishment of the greater part of the Russians? Hence, one may presume, there come the IMF recommendations objectively directed on the liquidation of scientific and technological potential of Russia and its transformation into a raw appendage of the developed countries.
The bitterness of our failures on the way to the reformation of the country makes many politicians and analysts address once again to the Chinese experience. Some people are still asserting that the Chinese model could have been also applied in Russia. I am sure that it could not have been applied. I was convinced in that before my trip to China in 1997 but after it my conviction grew even stronger. A model functioning well under the conditions of Confucian civilization will hardly be effective under the conditions of European Christian civilization. And the levels of the development are also different. The historical ways are different. The cultural heritage is different. To say nothing of the phenomenon of Russian intelligentsia which does not exist in China.
Receiving a delegation of the RF President’s Human Rights Commission, the general prosecutor of the Peoples’ Republic of China told in detail about the struggle against crime in his country. Answering our question he said that capital punishment in China is provided by Article 51 of the new Criminal Code and mainly for economic crimes. Including those to which we do not pay attention at all. The rights and freedoms there are interpreted not in the way it is done in Europe and in our country. In other words, one may say: what is considered normal by the Chinese, will be perceived as arbitrariness and tyranny by the Russians.
However, the point is not only in that. The Chinese reforms according to the model of state capitalism, on the one hand, were successful due to the active participation of Western capital, Western technologies, etc. The West was interested in the final alienation of the Peoples Republic of China from the USSR and rendered assistance to China at first more due to political rather than economic considerations. That means that the West did what was profitable for it. On the other hand, the Chinese reforms are based on the party, on the army, on the Marxist-Leninist ideology, even if it is ever more turning into insignificant rhetoric.
And on which foundations could the Russian model of state capitalism (unequivocally demanding authoritarian power) be based after the events of August 1991? It was possible to use the same basis for the restoration of the old system as in China, but for the progress of the country on the new ways the radical renewal of all foundations of power was needed. Another point is that by no means it was possible to break everything so senselessly, without a well-developed plan of the strategic vision of the consequences of the adopted decisions, as it was done by the reformers of the first wave.
The outcome was poor, and what they wanted is yet a question
I will make a reservation in advance. Certainly, the interests of practically always pragmatic West (and the USA in particular) were not connected with our euphoria of expectations of disinterested love and sincere friendship from them which prevailed for a long time in the liberal pro-Western circles of Russia including its top leadership. “Friend George”, “friend Bill” meant for Yeltzin much more than “friend Boris” for G. Bush and W. Clinton. The new political elite of Russia displayed sometimes amazing political naivety when the radical national interests were in question, made basic concessions in exchange for friendly smiles, strong shake hands, hugging, was satisfied with promises, assurances, etc. In the same row, one may assume, a practice appeared in new Russia in the time of Gaidar when American advisers, such as J. Sachs, prepared the drafts of the decrees on major questions of economic policy.
There is no doubt that the selfish interests, at least of a considerable part of the reformers, were also present. It is proved by numerous examples when the reformers or the people close to them grew suddenly rich becoming bankers, directors of companies, funds, etc. But it would be too simple to see the failure of liberal reforms only in the self-interested policy of the West and in the unscrupulousness of some reformers. It was the fear of the restoration of the communist system that pushed the first team of the reformers to speed up the privatization of the state property. The idea is clear: the economy monopolized by the state in case of the failure of the reforms can easily become an economic basis of, if not communist, then some other totalitarian system. Therefore, it is necessary at any cost to privatize it quickly as if putting aside the inconvenient questions about the fairness of a “gift horse” of free privatization, about its impact on the production efficiency, about the general consequences of the redistribution of property on an unprecedented scale and in extremely short terms.
To my mind, such an approach conceals the main defect of Russian reforms the corner-stone of which was the task of not gradual transformation of non-market economy into a market one but that of the forced creation of a “new class”. But not of a class of genuine proprietors playing according to the rules of market economy but rather a class of the rich people who were not ready to dispose of this property in the interests of the society. Instead of investing funds in the development and modernization of production the representatives of the new class ran to financial gambling, started buying up mass media, acquiring real estate, transferring money to Western banks, etc.
The idea of the development on the basis of modernization of production, its rationalization, etc. dominated in Japan, India, practically in all countries that were transforming a non-market or half-market economy into a developed market one. Market relations do exist in the poorest countries of the world too but they by themselves do not mean development. They existed in pre-Revolutionary Russia as well but at that time a rather low economic level did not allow to create a significant layer of middle class which guarantees social stability everywhere. And vice versa, the high share of state ownership in the economy of Israel did not and does not prevent its quick development providing its citizens with high living standards.
Privatization can be used for more effective and faster development of economy, and, on the contrary, in corporate interests, and for the destruction of domestic production as well. Everything depends upon the purpose set by the forces determining the adoption of appropriate decisions. Forced privatization has brought the hardest consequences for the economy, for the society and has created extremely favorable basis for the growth of organized crime.
The academician A. Nekipelov notes: “As a result of the so-called market reforms we have managed to achieve almost complete naturalization of the real sector of economy. Now 75%—85% of all deals are made without money participation. Even those enterprises which are profitable according to accounting documents have no money on their accounts. Their profit is a difference between what they owe somebody and what somebody owes them. No use of calling for tax inspection—nothing will be received” 6 .
On the one hand, the barter economy itself engenders crime, for it requires the whole army of the intermediaries among which, as a rule, there are many people with the criminal past, and on the other, it promotes the growth of crime already by poor filling up the state budget. As a result, practically all law-enforcement bodies are on hungry rations and are very inferior to the criminal world in technical equipment. Courts are generally in a poor state, judges are often defenseless before criminal elements. The situation itself promotes the spread of corruption in law-enforcement bodies.
What has made us speak about criminal revolution?
Setting a task of possibly quickest creation of an economic basis of a new system, the reformers at the same time have forgotten about many essentially important things. Firstly, the new system needs also a social base which cannot arise in an impoverished society. Secondly, the society will become by all means impoverished, if one thinks only about the redistribution of property instead of its effective use, at the same time making more than the double reduction of production possible. When the majority of Russian respondents of public opinion polls (according to the information of the All-Russian Center of Public Opinion Research as of the end of 1998) stress the item which says that “it is impossible to bear our disastrous situation any longer”, it would be simply naive to expect good, law-abiding behavior from them.
Thirdly, the society which from time immemorial has respected social justice more than any other values will never consider the system to be fair when a small group of nouveaux riches, no one knows where it came from, has profited the results of the work of several generations having become the owners of great fortunes. We witnessed the rich people springing up like mushrooms after the rain. And that was against the background of the sharp decrease of production and even sharper reduction of the living standards of the majority of citizens. Certainly, the data may vary because there are different methods of calculation, however, as a whole they coincide on basic parameters. But this way or another, in the period preceding the financial collapse in August 1998 the real average monthly wages in Russia decreased by 78% as compared with rather successful 1990, the average size of pensions—by 67%. And the gap in the incomes of 10% of the richest citizens and 10% of the poorest ones, according to one information, makes 26 : 1, and according to another,—40 : 1 7 . Under the conditions of the most severe financial crisis the situation of the vast majority of the Russians as regards the prospering minority has become even less favorable.
The redistribution of national product for the benefit of several per cent of the rich and well-to-do people; the emergence among them of the superrich (oligarchs) exerting the greatest influence on political and social life of the country; the interference of criminal methods and criminal elements with the election process; the penetration of criminal behavior into the structures of power; frequent merging of criminal and half-criminal business with legal business; the unprecedented spread of corruption links; the unprecedented growth of shadow economy; the appearance of ethnic groupings in big cities of Russia engaged in illegal business alongside with the legal one; the spread of smuggling, especially bootlegging; the implanting of drug business; the appearance of “private armies” with a strength of thousands of persons to protect the nouveaux riches ; the coming into being of the “institution of killers” who almost daily by somebody’s order kill businessmen, journalists, politicians; the address of many citizens for help not to militia which they do not trust but to the criminal world itself—all this has given grounds to those circles which initially were in opposition to Yeltzin’s policy to assert that the criminal revolution took place in the country.
At the same time many analysts who were far from being in opposition to the present regime and personally to Yeltzin come to disappointing conclusions. The historian N. Popov analyzing the results of public opinion polls during a long period points out: “The outburst of crime which is now referred to by the population as problem number 1, the general corruption of officials have led not only to the devaluation of democratic values but actually created a new mass criminal culture in Russia” 8 .
However, the estimations of Western analysts are close to the concept of the “criminal revolution”. Thus, the American scientists P. Reddaway and D. Glinsky in the article published in the Los Angeles Times on July 19, 1998 alongside with other impartial estimations of the Russian reality stressed that small and middle business in our country would be still deprived of state protection from the extortion of the Mafia; the corruption and criminal groups would strengthen their control over political institutes, and Russia would contend with Colombia and Nigeria for the first place in the fight for the title of the most corrupted country (according to the World Bank index).
The people started calling the customs which appeared with the reforms of radical liberals robbery, larceny, degradation of power. In such a situation one can easily expect what moods of the majority of the Russians might be.
Was it possible to avoid the “criminalization” of a democratic revolution?
The transfer of property worth of hundred billion dollars from one hands to another and just within some three-four years is an unprecedented thing in history. This is dozens, no, hundreds of conventional American Klondikes. And Klondike attracted like a magnet different sort of adventurers, speculators, swindlers, robbers, raiders and other ill-respected public. Was it possible to prevent the spread of organized crime in Russia, its actual transformation into a state in the state? Obviously, it was. But for this purpose it was necessary to carry out the reforms in another way. I will give a number of considerations on this matter.
The first consideration.
The character and course of the reforms were affected by many factors including objective ones. Let us recall the acuteness of the current moment, in particular the shortage of everything and all in the last months of the Gorbachev’s rule; and the situation in the national economy when planned economy did not work already, while market principles did not yet work; and the weakness of our economic science ruined yet in the 30’s; and the non-critical approach to the advice of Western experts, as well as to the experience of shock therapy in the countries with other conditions (Poland); and the haste with the introduction of free exchange (as a matter of fact, even Japan did not know that, to say nothing of the countries with transition economy) which enabled to export from the country some 200-280 billion dollars. There were also many mistakes of the reformers setting in action the mechanism of the destruction of national production and infrastructure. I might also specify a number of other factors.
But all this is by and large a logical consequence of some unsolved conceptual problems, faulty approaches, somebody’s lucrative interests and, one cannot exclude, somebody’s malicious will. The transition from one system to another without a concept of transition period, spontaneously, blindly, without any sort of a plan, with a focus on the development of speculative financial capital and to the detriment of production, and with actual ignoration of small and middle business could not bring other results. According to many economists, including Western ones, the Russian reformers have taken by mistake the ideas of American neoliberalism which emerged as a way of treatment of a highly developed postindustrial economy, while Russia was suited more for the ideas of J. Keynes used in his time by F. Roosevelt to take the USA out from the Great depression.
The fact that the time of Gorbachev perestroika and Yeltzin—Gaidar reforms came on the phase of the domination of neoconservatism in Western countries has also played its negative role. It seemed to many people that neoliberalism is the latest achievement in economic science, that the idea of socialism in any interpretation is done away with once and forever. Have the reforms in Russia started today, when social-democrats are in power in Europe and are raising a question about “the third way of development”, the situation, I am sure, would have been different. Russia is far closer to the development model of a social-democratic type in its initial phase: mixed economy, the active role of the state in regulating the processes of transition from one form of life to another, etc.
The second consideration.
Russia was not lucky with the first team of the reformers, as well as with its first President who is created for the destruction rather than for the construction. Gaidar and his team were too far from the real economy and from the people as well. They have remained like that not admitting their fault for those disasters caused by the destruction of economy and financial pyramids gamble.
The third consideration.
At the same time there is a number of things which cannot be explained only by incompetence or negligence. For example, the giving in by the new Russian state of many important positions in the economy, and first of all in the management of the state enterprises, and the very process of transition from one type of economy to another cannot be understood. One cannot understand, if, certainly, one takes into consideration the interests of the society, the motives of the refusal of the state from the monopoly on liquor production which in the Soviet and pre-Revolutionary times gave up to 30% of state budget revenues. It is the profits derived from liquor that the gigantic “vodka Mafia” has grown up from, to say nothing of millions of people failing to get their wages, pensions, allowances, etc. for many months because of the empty treasury. One may doubt as to the logic according to which the system of export/import privileges has gained wide scope. The criminal world was growing rich on that too.
One can hardly explain the tax policy stifling the normal development of the major domestic manufacturers but sparing the “new Russians” who were spending people’s money pumped out for their benefit with the help of state mechanisms not on the modernization of production, but on the seizure of new property, the press, on prestigious consumption. The reasons of sluggishness in putting the customs service in order, in the establishment of a more effective control over unauthorized export of currency are not quite clear. The mere purpose of the creation literally in three-four years of a class of the nouveaux riches instead of a class of the new manufacturers and, what is more, in the conditions of the sharp impoverishment of the population is doubtful from the point of view of social stability.
All this can be explained by that the power was taken by those whose purpose was not to serve the interests of the people but to create “a new class” and take into account its interests. As a result a regressive, deadlock regime has been formed, and the power has lost its support among the people relying mainly upon the West and partially upon the financial capital.
And the last.
Notwithstanding the above said the nearest future can nevertheless bring optimistic results to us. The advantage of the new Russia as against the former USSR is already that we have the democratic Constitution which allows us to change the power and political course as well.
Translated by Sergey Kamensky
Endnotes:
*: A. Kiva, D. Sc. (Hist.), chief research associate of the Institute of Oriental Studies, RAS, member of the Russian Federation President’s Human Rights Commission. The article was published in Russian in the journal Obshchestvennyie nauki i sovremennost, No. 3, 1999. Back.
Note 1: S. Chernyakhovsky. “In the Center above the Abyss” . NG-stsenarii. 1998, No. 12. p. 7. Back.
Note 2: P. Chaadayev. The full collection of works and selected letters. Vol. 1, M., 1991, p. 326 (in Russian). Back.
Note 3: Parlamentskaya Gazeta . 12.12.1998. Back.
Note 4: N. Pliskevich. “Utopianism and Pragmatism of Russian Reforms” . Obshchestvennye nauki i sovremennost . 1998, No. 1, p. 21. Back.
Note 5: NG-stsenarii. 1998, No. 9, p. 4. Back.
Note 6: Trud. 04.09.1998. Back.
Note 7: L. Makarevich. “The Difficult Situation in Russian Economy Does Not Let the Government Relax” . Finansovye izvestiya . 06.08.1998; M. Chelnokov. “The Everest of Debt” . Novaya gazeta . 1998, No. 30. Back.
Note 8: Nezavisimaya gazeta . 06.08.1998. Back.