Is the Soviet Union over?

John Lloyd

  • Moving the Mountain: Inside the Perestroika Revolution by Abel Aganbegyan, translated by Helen Szamuely
    Bantam, 248 pp, £14.95, October 1989, ISBN 0 593 01818 4
  • Gorbachev’s Struggle for Economic Reform: The Soviet Reform Process by Anders Aslund
    Pinter, 219 pp, £35.00, May 1989, ISBN 0 86187 008 5

A new plan for economic reform will shortly be decided on by the Soviet Government. It will be the fourth in less than a year: we cannot of course know whether it will last any longer than the previous three, which were withdrawn because of public criticism and divisions among the leadership. It is a common view among Soviet reformers that this is the last chance for perestroika – though there are many who believe that the last chance has gone, who no longer have any faith in perestroika, or in Mikhail Gorbachev, or indeed in the continuing existence of the Soviet Union.

A great number of those who, for the past five and a half years, have been Gorbachev’s closest supporters are turning away from him. Some are going over to Boris Yeltsin, attracted by what they see as his consistent support for democracy and market reform. (The populist bluster that characterised his time ‘in the wilderness’ is held to be a thing of the past.) Some have moved to a frankly neo-liberal position, discarding the various formulae which have sought to disguise the abandonment of Communist principles with a series of incantations about their renewal. New parties are being formed. The Democratic Party has made the biggest splash among the intelligentsia: but there are also social democrats, Christian Democrats, liberals and monarchists, as well as the ‘older’, semi-dissident groups of two or three years’ standing, such as Memorial and the Democratic Union. Many followed – or anticipated – Yeltsin’s renunciation of his Party membership at the 28th Party Congress in July. Alexander Tsipko, deputy director of the Institute of the World Socialist System, told me in August that over a two-week period all of his colleagues at this prestigious institute handed in their cards – even its prominent director, Dr Oleg Bogomolov, a former Central Committee member, the man who publicly announced the ending of the Brezhnev Doctrine.

These are therefore crucial times for Soviet reform, though the effect of so describing them is somewhat undermined by the fact that epithets like ‘crucial’ or ‘critical’ or ‘make-or-break’ or ‘last chance’ have already been used so often by commentators with little faith in the Soviet leader’s prospects of survival. Yet each time, with one bound or several, our hero has freed himself from the forces deemed to be closing in on him from all directions. What has enabled him to do this has been in part his consistently bold use of his powers of patronage and appointment; in part, a similarly audacious series of initiatives on the world stage; in part, the welcome (though less so now) effects of a much greater and more consistent liberality than ever before seen in the Soviet era. In my view, the benefit he has reaped from the collapse of true belief has played an equally important role. There are few people left in the upper echelons of the Party and the governing bodies who believe that Communism is bound to triumph over capitalism. Indeed, for the past two years, ever since the leadership pronounced the international class struggle at an end, it has been permitted to say as much when speaking in a world context. The position now is that there are probably too few who believe that Communism, or anything which could be called socialism, is capable of bringing about the economic regeneration of the Soviet Union to constitute a real alternative to Gorbachev under the present system. The old formula, about the present reforms leading to the renewal of Communism, is still de rigueur. But the wearier and wiser members of the Party leadership have been heard to say less and less about the marvels perestroika will bring.

The generation of political leaders which reached political maturity after the death of Stalin in 1953 – people who, like Gorbachev himself, are near or in their sixties – has pinned its hopes for its own continued existence on perestroika. Until now, this portmanteau word has been broadly enough defined (or undefined) to include both the more disciplined, cleaned-up and better-informed Brezhnevism of the old leftist Yegor Ligachev and the unillusioned social democracy of Eduard Shevardnadze and Alexander Yakovlev. But now – and this is another reason for calling the period ‘crucial’ – the semblance of a united front is no longer sustainable, nor is it seriously sustained. Ligachev criticises Gorbachev for betraying socialism. Gorbachev accuses his loyal prime minister, Nikolai Ryzhkov, of bungling the past year’s successive attempts at economic reform. Shevardnadze and Ligachev have publicly called each other liars. Those who profess to want democratic institutions, the rule of law, a civil society and a market system have now either left the Party or are giving its leaders ‘one last chance’ to make a determined stab at creating market relations – relations which, more than 66 months after Gorbachev’s assumption of power, are scarcely more evident than before. And all this is taking place at a time when the instability of production and distribution is so pronounced, and the zero or negative growth of recent years so resistant to cure, that, according to Professor Marshall Goldman of Harvard’s Russian Research Centre, ‘unless something changes soon, the country’s economy will break.’

What this means, exactly, even distinguished prophets of doom do not say: but presumably a ‘broken’ economy is one which, as a result of its inability to satisfy basic needs in a regular fashion, brings people out into the streets and threatens the government itself. Soviet economists, at least as prone to doom-mongering as Western commentators (indeed, they are the Western commentators’ sources), have been forecasting this for a year or more. Vassiliy Selyunin, a widely-respected former economics commentator on the paper Sotsialisticheskaya Industria (and one of these who has come out as an economic liberal), told me earlier this year that there would be widespread rioting this summer over food supplies. There have in fact been riots in various cities – as much over the shortage of cigarettes as over food – but they have not had the depth and seriousness which Selyunin forecast. Whether doom comes or can be averted depends on the mood of the Soviet, especially the Russian, people; on the success of the nationalist movements’ demands; and (to a lesser extent) on what assistance the West can give.

Even on official figures, which no one believes, growth in National Material Product (roughly equivalent to production without services) has declined from over 7 per cent a year in the Sixties and Seventies to under 3 per cent in the Eighties. According to the CIA, the figure is under 2 per cent, and according to Selyunin and his collaborator Gregory Khanin, -4.5 per cent for 1989. Even on the official and CIA figures, the fact that military expenditure had until recently been steadily rising means that, once defence production has been subtracted, the Eighties figures were around zero for the living standards of most people. If Selyunin and Khanin’s latest figures are right, the Soviet Union is experiencing an accelerating impoverishment.

At the same time, nominal wages have shot up as ministries and managers have sought to buy off trouble from newly militant workers. With drastically fewer goods to buy, this has contributed to the vast ‘monetary overhang’ of some 165 billion roubles. As a result, the currency is seen as debauched and worthless – the situation of Poland last year. Bargaining with a taxi driver to drive me 20 kilometres in March, I offered the equivalent of half a week’s wages – or £12 to me. He literally spat on the floor. Eto bumaga (‘It’s paper’). Since he was in a monopoly position I had to get dollars before I could go. The dollars he got gave him access to the world of hard-currency goods – for which most Soviets lust with a ferocity which Westerners on good incomes cannot understand.

Estimates of Soviet living standards range from under $2000 to $8000 GDP per person a year. The median – $5000 – in theory puts Soviet citizens on the level of the Portuguese, which is quite unrealistic when one takes into account such factors as climate, pollution and availability of goods. Queuing alone must reduce the quality of life by at least 10 per cent – the minimum percentage of waking hours taken up with standing in line. This might not be intolerable if things were getting better: but they seem to be getting worse.

Every main indicator is moving against the Government. The budget deficit, only recently admitted, has grown from around 4 per cent of GNP in 1985 to around 10 per cent last year (compared with a little over 2 per cent for the US deficit, the one all the fuss is about); inflation is, on official figures, around 5 per cent and is (officially) estimated to double if and when prices are freed; exports are declining slightly, especially to hard-currency countries (where in any case they mostly consist of oil, gas and raw materials: very few Soviet goods are of world quality); debt to the West has climbed from a stable $20bn in the early Eighties to $50bn; strikes are increasing dramatically, especially in the energy and transport sectors; while the nationalist troubles, a vast and separate tale of woe, have further disrupted production. The reason for the cigarette shortage is that the plants producing acetate for the filters are in Armenia and Lithuania: the first was put out of production by the 1988 earthquake, the second by the oil embargo of earlier this year.

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