Yves here. Your humble blogger must confess to not knowing much about the demise of the Soviet Union, in part because the US intelligence services and therefore the press and punditocracy didn’t see it coming, and when it happened, they were giddy with this huge and unexpected break.
Having said that, I’m not sure that the Soviet Union’s long entanglement in Afghanistan was as damaging as Jeffrey Sommers indicates. Alexander Mercouris has argued that the military drain on the USSR was not due so much to US pressure but the fact that the Soviet Union was on a conflict footing with China after its seven-month border conflict in 1969, and then the unfreezing of US-China relations under Nixon. Mercouris claims that the Soviet Union could not bear the cost of preparedness for the real possibility of conflict with the two biggest powers of its day.
I very much welcome reader reactions to this interview. You can find Part 1 here.
By Paul Jay. Originally published at theAnalysis.news
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Paul Jay
Hi, I’m Paul Jay. Welcome back to theAnalysis.news. We’re going to continue our discussion with Jeffrey Sommers about the death of [Mikhail] Gorbachev and dig into the last years of the Soviet Union and how Gorbachev’s policies paved the way for the rise of the oligarchs. Be back in just a few seconds.
Now joining us again is Jeffrey Sommers. We’re continuing our conversation. If you haven’t watched part one, you really should because it sets us up for part two. Jeffrey Sommers is a professor of Political Economy of Public Policy at the University of Wisconsin, Milwaukee, where he also serves as a senior fellow at the Institute of World Affairs. In addition to his academic work, he’s been published in all kinds of big publications, and the list is in the first interview.
Here’s another quote from Jeff’s article that I found in Counterpunch”
Excerpt
“Gorbachev’s reforms let loose creative forces alright, just not ones making the economy more productive, but rather those that gave rise to the post-Soviet oligarch and later siloviki-dominated economy.”
Paul Jay
Which I understand means “strongman,” which mostly meant the military and intelligence agencies.
Excerpt
“… later siloviki-dominated economy.”
Paul Jay
Thanks for joining us again, Jeff. Explain how his reforms that were supposed to help democratize actually really led to a state that was far from democratic, the chaos of the ’90s, and then we get into the era of [Vladimir] Putin.
Jeffrey Sommers
So in endeavoring to democratize the economy or to improve the economy, you have in Gorbachev a figure who assumes that first, you need to democratize the society, which all sounds great. He looks to [Vladimir Ilʹich] Lenin to find inspiration and guidance on how to do this. Now, every official within the Soviet Union would have had their 43-volume, edited set of Lenin’s works, of which I would say 99% of them never cracked the spine. Gorbachev was somebody who had cracked those spines, those book spines. He knew those books, and he was in them all the time, looking for guidance on what to do. He again wanted to have his glasnost first that you needed to open the society. This was because, of course, the Soviet Union did stifle innovation, and it did suppress people voicing their opinions. How could you make an economy that was vibrant and dynamic in that kind of environment?
Paul Jay
Let me ask a question here. When you say suppressed innovation, now, the Soviet Union beat the Americans to space.
Jeffrey Sommers
Yes.
Paul Jay
It was a great humiliation for Canada and the United States. That’s innovation; that’s science. There was real innovation going on there.
Jeffrey Sommers
I have a son who is college-age, and he’s an aspiring rocket scientist, and he never fails to remind me just how incredible some of the Soviet rocket designs were and that the Americans to this day are still having to rely on some of that technology. In fact, just as an anecdote, the Americans are in this intermediary stage. They have produced their new rocket that is going to be able to launch a manned mission to the moon again. It keeps getting put off because of some engineering challenges. They’ll get rid of those wrinkles eventually. For a while, for several years, in fact, when the shuttle wasn’t working any longer, they were decommissioned. We were relying on these Soyuz rockets to get to the International Space Station.
During these tensions, of course, between the Americans and the Russians because of Russia’s war in Ukraine, the Americans were making some snide remarks regarding how backward the Russians were. The head of Russia’s space program said something to the effect of, “well, you will not have access to our rockets anymore, and you can use trampolines to get into space if you’re so advanced.” That’s absolutely right. There were certain sectors where the Soviets were always remarkably advanced. When they dumped resources and talent into areas, they could do some wonderful things. There’s no doubt about that.
Paul Jay
My understanding because I knew a guy that was one of the first people pushing containerization in North America. Apparently, that was originally developed in the Soviet Union. The whole concept of containers to transport from ships to rail. The other thing– again, I haven’t verified this, but I was also told that method of construction where the cranes go higher and higher as the buildings are built, apparently, that’s a Soviet innovation.
Jeffrey Sommers
Yeah, interesting.
Paul Jay
As you say, there was innovation. How did it get so much more bureaucratized and so paralyzed?
Jeffrey Sommers
Yeah, so you have these different tiers of the Soviet economy, just like you do in any economy; there are different tiers. It was all those very top tiers that were displaying that kind of dynamism. The lower tiers of the economy, especially those dealing with consumer products, etc., services, are just not vibrant at all. Not that there was never any dynamism or vibrancy even there. In fact, there have been some interesting books published on the Soviet consumer culture because there was a consumer culture for the middle class, especially in places like Moscow and Leningrad, at that time, but overall, not very innovative and not rewarding. People who displayed some degree of entrepreneurial spirit–
Gorbachev decided that he was going to democratize society, and then he, on the perestroika front, the politics and the economy front, started to think about how to deliver on this innovation there.
Now this problem of the Soviet economy being stagnant was one that had been recognized for quite some time. Leonid Brezhnev, the guy who deposed Khrushchev in ’64 and then died in ’81, his successor, Yuri Andropov, was a guy who was the head of the KGB and very, very smart. He certainly recognized that the Soviet economy was one that had failed to modernize and keep up with the West and that had to be changed. He knew that just like during the 1930s in the Soviet Union, lots of new machinery and technology would need to be purchased to modernize the economy and that investments, big investments, would need to be made in improvements of its transportation.
For instance, the rolling stock, in other words, the trained cars, locomotives, and various container cars, etc., the state of the rail itself was in abysmal shape by the early 1980s. You have to remember the country is really big. There are a dozen time zones, which in part, was an advantage if you were planning for World War III.
Now the Soviets haven’t gone through being, to their minds, attacked during World War I. Certainly, being attacked in World War II. They assumed that there would be World War III and they would be attacked again. Germany would rise, and this probably may be in conjunction with the United States, and they would again be attacked in a generation or so. They planned for it. So instead of building their industry in places that were the most rational in terms of reducing transportation costs, they would do just the opposite. They had planned inefficiencies. They put their manufacturing capacity and spread it all over the vast expanse of this country so that it would survive a war.
Now the problem is that it introduced all sorts of costs: transportation costs, energy costs, and time costs. It was a more expensive way to run an economy, but it was a way to survive World War III. So that was a problem. The drop-off was going to begin addressing that and several other things. Of course, he kicks off. He has kidney failure, and doesn’t last very long. Then he’s replaced by another Brezhnev-like fellow, [Konstantin] Chernenko, who doesn’t do anything. He doesn’t last very long. He was very ill.
You have to remember the Soviet economy had also become dependent and somewhat lazy in terms of their use or reliance on these big oil and gas discoveries in western Siberia in the 1960s. This is something that Vladimir Putin, by the way, has recognized. He’s talked about. He just hasn’t been able to fix it. Brezhnev just relied on this cash cow. The oil came in, and that allowed him to keep upping the game in terms of the Soviet military. Don’t worry so much about agricultural productivity. Why? Because you can buy food from the global markets, including the United States. They started buying from the United States.
During the Brezhnev years, especially the 1970s, if you speak with people who were alive at that time in that part of the world, they’ll tell you all the good years everything was stable. Brezhnev was delivering in terms of basic consumer products, food, etc.
By the time you hit the 1980s, there was huge neglect in investments in terms of the economy, and of course, as we know, Paul, I know you’re familiar with this, as I suspect many of your listeners are. The United States began to launch somewhat of a counter-attack against the Soviet Union. The United States and the Soviet Union were in the Cold War. In the 1970s, the United States looked to be on the losing end of this as the Soviets were funding revolutions all over the world, creating instability that’s increasing commodity prices which were very bad for the West. There’s Vietnam, which the Soviets are supporting.
By the time we get to the late [Jimmy] Carter administration, you have this Polish nationalist, Zbigniew Brzezinski, who is the head of the National Security Agency. He literally says that we have to give the Soviets their own Vietnam. He has his own kind of personal foreign policy for the United States, which he implements. He says, “hey, we’re going to bait the Soviets to invade Afghanistan. There’s no way they are going to tolerate Islamic fundamentalism right on the border of the Caucasus where the Soviets have plenty of Muslims.” He’s absolutely right. So bate them in, give them known Vietnam, as Brzezinski said in his own words, and then we cooperate with the Saudis to drive the price of oil down. The big thing that the Soviets sell in international markets. We drive the price of that down to $10 a barrel, and the Soviets find themselves with their pants down. They got a war in Afghanistan, the price of oil has crashed, and they have to somehow figure out how to modernize without cash, which kind of sounds like the 1930s again with those collapsed grain prices.
They proceed anyway. They have no choice. Gorbachev issued in 1987 the directive on enterprises. What he’s thinking at this time is that “well, we’ve got the centrally planned economy…” just as we were discussing earlier, Paul and all these state-owned factories have to produce x quantity of this product or x quantity of that product. It does not satisfy the needs of the Soviet people, especially in terms of their desire for consumer goods. That was followed by the directive on cooperatives in 1988. What Gorbachev says to the state factories, “hey guys, our bet is that you see all sorts of opportunities for making and selling things in the economy that we don’t see with the central plan, with glasnost plan, and we’re going to free you up. Go at it. If you see something that you think you can produce that there’s a market for, do it, sell it and keep the money.” This was thought to be the way to begin modernizing the Soviet economy.
Now, what happens? Well, first, let me give some examples of successes. These might appear trifles too. You might just kind of laugh a little bit, but nonetheless, this is an actual way in which it was working. Let’s take a look at the Soviet Republic of Latvia at this time. There are big kolkhoz, a collective farm, and some of these are pretty big businesses, by the way, in a place called Ādaži. In Ādaži, the co-host director decides that, well, instead of just growing potatoes and then every year when harvest comes and grabbing a bunch of college students and making them harvest these things as part of their contribution to the state for no labor, for no wages, doing it for the revolution and then dumping them somewhere where they rot, let’s do something different. Let’s make potato chips. In Ādaži, they start a potato chip plant, and it’s gangbusters. People love it. People in Latvia are buying these things up left and right. They love them. Who doesn’t like potato chips with their beer? So they are selling these things like crazy. Next thing you know, they’re buying pickup trucks and SUVs from Toyota, and they’re driving around, and everyone’s saying, whoa, look at those guys. Aren’t they special? It’s still the biggest potato chip company in Latvia. So it worked well.
Then there was another collective farm that started making beer, [inaudible] beer. They did the same thing. So that was how it was supposed to work. Other things were happening as well. So instead of making basic consumer goods, some company directors decided, “well, boy, there are some opportunities here.” So let’s say you figured out that, “well, as a state enterprise, instead of making things that the economy needs, I’m just going to use whatever procurement I’m allotted of, say, oil and brass or whatever, and I’m going to sell it on the world market. I’m going to pocket the arbitrage between the state prices, which is next to nothing, and with world prices.” Now, this is kind of hard to do because you’re going to need connections, and you’re going to have to get stuff out of the country. You’re going to have to start utilizing things like offshore bank accounts. This is where this whole new world emerges. Not only that but some of these enterprises were told that they could create their own banks. They start creating their own banks, and they start making their own money. In fact, they start issuing debt, which the central bank has to back up. So it turns into the Wild West very quickly. Just to elaborate on this Latvia example, for inference–
Paul Jay
Just quickly reminding everyone this is under Gorbachev. This is not under Yeltsin. We’re still supposedly the Soviet Union.
Jeffrey Sommers
Yes, this gets the steroid shot under Yeltsin, and it really goes wild. This is happening under Gorbachev. The biggest port for the export of Soviet oil was in a place called Ventspils. It’s a charming little port city on the Baltic coast in present-day Latvia. Well, if you can figure out how to get oil and metals trans shipped there and then out, you’re going to start making money.
Now, who are the figures that start brokering this? Well, this will help you to understand some of the tensions within the current Soviet Union between the oligarchs of the Yeltsin period and those strong men today that are backed by Putin. In the 1980s under Gorbachev, the mid-late ’80s, Gorbachev tasked the KGB to help these factory directors start businesses because some of the products it was assumed they were going to be sold abroad, etc. He says, “Hey, you guys know that stuff– the KGB. You are sophisticated. We’ve been having you use offshore bank accounts for generations to fund revolutions, whether it’s Sandinistas in Nicaragua or something else. You know how to use all this shady dodgy infrastructure to move money around. So help these directors.”
Now, these directors, a lot of them, will become the new oligarchs. They’ll get fantastically rich. They’ll shove the KGB guys to the side, and they are very resentful. They have been stewing for years over this. It’s Putin that actually slowly begins putting those KGB guys back in charge.
Paul Jay
They’re stewing because these guys who are doing factory– the directors of these enterprises, they’re starting to cash in.
Jeffrey Sommers
Oh, yeah. They make them rich.
Paul Jay
The quote-unquote “strong men” are not getting their taste.
Jeffrey Sommers
No, exactly. Just as you put it, they did not get their taste. And, man, are they angry about it. Getting back to the Gorbachev period now, so if you want to start selling stuff, again, commodities, getting world prices, all that stuff– and there are figures waiting now, like Marc Rich in the United States, who Bill Clinton famously pardoned on his last day in office, something that–
Paul Jay
The guy that created Glencore.
Jeffrey Sommers
Yeah, and several other dodgy enterprises in Vienna to facilitate all this stuff. Jimmy Carter, of course, said, “this is one of the most disgraceful things any U.S. President has ever done.” He was a huge contributor– Marc Rich to the Democrats and to Bill Clinton. People like Marc Rich started seeing this potential to engage these new figures emerging in the Soviet Union to get the stuff out on the global markets. Then what happens is you get the Komsomol guys in. These are fast movers, shakers, young guys, mostly guys. These are the Young Communists. They’re ambitious. If you are young and ambitious and are looking to make a mark for yourself in the Soviet Union, you joined the Young Communists. Not only does it give you a channel for upward mobility, but a Soviet-wide network for doing so. They have conferences. They all know each other.
Paul Jay
Now, in your article, you talked about how most of the leaders over the decades were actually believed. They believed in Lenin’s objectives, vision, and so on.
Jeffrey Sommers
Most of the top leadership.
Paul Jay
You say they weren’t posers. These guys are– are they not the posers?
Jeffrey Sommers
Oh, yeah. They’re just opportunists. An old friend of mine who was the head of not just publishing but of all information for the Soviet Latvian Republic during Gorbachev’s reforms, she was appointed by Gorbachev to open information up in Soviet Latvia. She told me that the Communist Party is just filled with hacks and opportunists. Every once in a while, you’d come across a true believer. The Communist Party people hated these true believers. They were like, “oh, God, you’re a dupe, and you’re slow, you’re stupid, and you still believe in all this stuff. Just get out of our way.” The people at the very top of the system, a lot of them, still were true believers. Not all of them, but a lot of them.
At any rate, these Komsomol guys, who were from Vladivostok in the east to Riga in the west, they were all in touch with each other. They all began opening these new enterprises to make money, figuring out things to sell or steal, sometimes legitimate, sometimes illegitimate. In 1990 this had gotten to the point where these cooperatives had started creating enough hard currency cash flow that they needed institutions to handle it.
The first legal currency exchange was set up in the Soviet Union in 1990 in Riga by two Komsomol guys. They had first made their money by– they were very enterprising, hauling around Soviet rubles in duffle bags on trains. There was a really slight arbitrage rate between Riga, Leningrad, and Moscow. They were making money just hauling it back and forth between all these places and making that little time. Then what they learned, of course, was imagine if you could start getting all the Soviet rubles from all of these new cooperatives and exchange it for dollars, for Swiss francs, for British sterling. Imagine the cut you could get on that. So these guys do that. They form the first legal currency exchange. They’re very blunt and open about what they’re doing. They have a sign. It became known as Parex, which was the first and the biggest bank in Latvia. It finally went down in 2008 during the financial crisis. These guys are worth hundreds of millions of dollars. At any rate, the sign that they used to have in their window said, “we accept all currencies; we ask no questions.”
Guys from these cooperatives are coming from all over the Soviet Union, switching out the Soviet rubles for hard currency. Then they used to have another sign. This was in 1985 that said, “do your business with us. We’re closer than Switzerland.”
Paul Jay
So it’s money laundering. Is that what’s driving it?
Jeffrey Sommers
Well, that’s what it becomes. The metaphor–
Paul Jay
Because otherwise, who wants to buy the rubles?
Jeffrey Sommers
Everyone wants to get rid of these things as fast as they can. Especially the people who actually see how the economy works. They know this system is going to collapse.
Paul Jay
If you can send some suitcases of drug money there and convert them to rubles, then you wind up with some real products.
Jeffrey Sommers
Well, there are all sorts of opportunities, no doubt. What happens is that you have this massive offshore financial infrastructure that is developed in Riga, but not just there. Tallinn a little bit. Vilnius a little bit. You can think of the Soviet Union after it collapses. It’s like this huge sequoia that falls down and dies of old age, and then all these mushrooms begin sprouting off and living off of the dead tree. Well, that’s the Soviet economy in the 1990s. It’s a big, huge tree that has fallen over, and there are all these mushrooms that are sprouting on it. Well, all that money has to go somewhere and hopefully out of the country because you never know if you’re going to have a new government that’s not going to be friendly to you. So everyone is anxious to send their money via Regan to London or New York. The Americans are quite keen on this in the 1990s. They love it. So something like a quarter of a trillion dollars in money from the former Soviet Union ends up in the U.S. stock market in the 1990s. Now, the U.S. gets a little upset about it when eventually, the Iranians start making use of it– and the North Koreans and also the Taliban and others. Maybe this does need to be a little bit regulated. In the 1990s, gloves are off. Do whatever you want. Let’s send all this money–
Paul Jay
They’re competing with some western banks that like doing the same thing.
Jeffrey Sommers
Oh, yeah. What the western banks are doing is they’re setting up offices in Riga. So there’s actually a professional association for offshore banks called Shorex. They were holding meetings openly in Riga. It costs $10,000 to attend one of their meetings in which they would teach you the ins and outs of how to use all these offshore networks. So if you were a factory director in Minsk, let’s say in Belarus, and you wanted to steal a bunch of money and not pay taxes, they showed you how to do that.
Paul Jay
When I interviewed Buzgalin, I asked him if, by the last months or year or so of Gorbachev, had he essentially become an instrument or even a pawn for these rising, very wealthy, so-called communists? Buzgalin, more or less, said, “yeah, Gorbachev actually really becomes a real facilitator rather than someone whose policies didn’t go where he wanted them to go.”
Jeffrey Sommers
Yeah. There’s a debate on this. There’s this one school, the Revolution from Above School, which states that the top leadership of the country wanted to take it down and then profit off of it. Well, there’s a lot of that, no doubt, but not at the level of Gorbachev.
I know Buzgalin. I have immense respect for his integrity and intelligence, which is much higher than my own, but I don’t know if I would agree with that on Gorbachev. I think it was more a matter of Gorbachev’s vanity. At a certain point, he loses control of the system. He is a decent man. He does not want to use violence. You think about other empires, and when they unwind, there is just tragic violence that occurs. He was being implored by loyalists to get off the stick and take care of this before it was too late. There was only one time that he did that in any significant way, and that was in Armenia. That was because in Armenia, because of the whole ethnic issue with the [inaudible 00:28:02] and the Iranians right on the border, and all the rest, their border started becoming way too porous. That was the one instance in which he used force, and 200 protesters were killed. His late wife, Raisa [Gorbacheva], said he was never the same after that. He was just broken by the need to do that.
I think what happened with Gorbachev was that as he was unable to reform the economy in the direction that he wanted, and as he was losing control over it, he retrieved it into the one area where he could exercise agency, or at least where he felt he could, and where he was applauded and celebrated for doing so. That was in the realm of nuclear disarmament.
How could you say that what he was doing was anything but admirable in that regard? I mean, he was unilaterally calling off the Cold War to say, we’re not playing anymore. Now, one could argue that he should have made use of that card to get more resources from the West to fund a transition. But even by the time he was able to get pennies because the western leaders– so now we’re talking Bush ’41, etc., they knew the game was kind of coming to an end, and they were just handing Gorbachev crumbs, and those crumbs were disappearing. They were not being used for anything but theft. They were supposed to be used for things like pulling the Soviet trips out of the GDR, and building them new apartment buildings in Russia or the Soviet Union. None of that happened. That money just disappeared somewhere in the black hole, the Soviet Union. They were begging for food.
The whole damn thing had pretty much just collapsed by the end. It just wasn’t functioning at all. They couldn’t even feed themselves in the last half year of the existence of the Soviet Union. I think he retreated into this one world where he was still respected by international leaders and where he thought he could actually accomplish some good. Of course, the whole thing was falling apart. Yeltsin was humiliating him on a near-daily basis.
This is where I would maybe take a little issue with Buzgalin as well. Again, a person who I have huge respect for. He’s so smart, and he’s invited me actually to Russia a few times. I think the world of what he’s done intellectually and his political contributions. He knows the place so much better than I do. I think you couldn’t even just go to the people anymore. I think Gorbachev wanted to– he really was a democratizer in a lot of ways. You could say, all right, he’s trying to just create Swedish-style democratic socialism, which means private business and some government regulation thereof.
Tragically, I call him a figure of Greek tragic proportions. He wanted to go to the people and have them back him, and they just loathed him. So he went to rallies with industrial workers in Russia and in Ukraine and said, “Hey, we really want to keep this union together, and we really want to democratize it to your benefit.” By the end of that last six months, Yeltsin would be able to counter and say, “no, we want to get out of this union.” They had these really primitive ideas about economic development. Yeltsin thought, he literally believed this, that if you dissolved the Soviet Union that Russia would get rich. That Russia was supporting, because in its central budget, all the other republics, which was true with the exception of one republican Central Asia. He thought that’s what it was. It was a simple accounting thing.
It’s kind of like the argument that some people will make in the United States. We could just get rid of all these welfare bums and imagine how rich we would be. So that’s what Yeltsin is saying. The workers are like, “yeah, get rid of those bums in the other republics.” In Ukraine, the workers were saying the same damn thing. I mean, so when you had Gorbachev in Ukraine trying to get the workers behind them, they were like, “imagine how rich Ukraine would be if we just detached from the Soviet Union. We got the Donbass with all this industry. We got the Black Earth Belt, which is one of the richest agricultural regions in the world. You just untether us from the Soviet Union, and we’re going to be fabulously rich.”
Now, as we know, even up until this day, three decades later, the Ukrainian economy still– its GDP is not equal to where it was during the Soviet period. So it’s just tragic in terms of the results for them as well, in terms of their economy.
The people were not behind him. The people were not behind him. Then, of course, you have the nationalists in the Baltic republics and in the caucuses as he kept unleashing freedoms. They, quite understandably, were like, “alright, we got a taste of this. Let’s just go all the way. I mean, this is our opening.” They ran for the exit doors. So the Latvians, Estonians, Lithuanians, and Georgians, they just shot straight for the exits. They did everything they could to acquire or reacquire, in the case of the Baltic states or even Georgia, to some extent, they’re independents, understandable. Gorbachev was getting no cooperation from anyone.
Paul Jay
You called him the wrong man at the wrong time.
Jeffrey Sommers
Yead. That said, I don’t know if there was a right man.
Paul Jay
Yeah, but I think that was the point. By that point, the writing was on the wall.
Okay, so in the next segment, we’re going to talk about this split between the oligarchs that emerged in the ’90s, which emerged largely from the party and the bureaucracy. There’s always a good question, the public assets were sold off in the ’90s. Where did these guys get money to buy these assets? Even if– was it Buzgalin telling me? One of these factories was worth billions, and somebody bought it for four or five million, but where did they get the four to five million if there was supposedly socialism in the party? Anyway, we’re going to talk about this split between them and the state security, the military, and then eventually, the rise of Putin and who he represents. So that’s the incoming segment and segments.
Thanks very much, Jeffrey. Thank you for joining us. Don’t forget to donate button, subscribe, get on the email list, and the next part will be coming soon.
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Minor transcription errors: “The drop-off” —> “Andropov” and “known Vietnam” —> “their own Vietnam”
Slightly OT, but the BBC just recently released Adam Curtis’ Russia 1985-1999: TraumaZone, described as the story of “how a society of millions of people stopped believing in all politics. Not just communism, but democracy too. Something that no-one else has experienced in the modern world. Yet.”
Looks like it’s available on youtube now too – it wasn’t when I first looked a few days ago.
Also of his – Cant get you out of my head, from last year covered quite a bit too – well worth a watch. Still on iplayer and I guess elsewhere
He wrote about this new TV show here https://www.theguardian.com/tv-and-radio/2022/oct/12/russia-adam-curtis-extreme-capitalism-liz-truss-traumazone
I like Adam Curtis stuff and will watch this but some of his interpretations seem back to front to me.
Having had the occasion to see the demonstrations in East Germany on TV in the run-up to the fall of the Soviet Empire, what struck me at the time was that Honecker did not, ala Tiananmen (which was fresh on the minds of everyone), start shooting the demonstrators en masse.
So what was it that prevented Honecker’s state from using force? A quick duckduckgo search turns up a 1989 NYT article suggesting that there was some sort of internal to the East German communist party/government coup, or the like. Or, was it the type of rot described in this article giving rise to an inability of the East German regime to issue those types of orders? Or, was it Gorbachev telling Honecker that there would be no support for him should he open fire on the demonstrators? Who knows, but perhaps a combination of the above and more. It seemed to me that once it was clear that the East German regime would not shoot the demonstrators it was game over, thankfully, for the Soviet Empire.
I had the very good fortune to be able to walk through the Brandenburg Tor on October 3, 1990. The overwhelming feeling I felt coming from the crowds was that of joy, pure unadulterated joy. My feeling was that this night somehow also in a small way marked the end of WWII.
So, Gorbachev, by hook or crook, by design or happenstance, successfully presided (along with others of course) over the break-up of the Soviet Empire and he did so without having the world breakdown in conflagration. Thank you Mr. Gorbachev. That said, Gorbachev failed to get the promise of no NATO expansion in writing, thus in part planting the seeds of our current era’s difficulty, a difficulty that was predicted at the time of the Soviet Empire’s break-up by George Kennan and others.
Regarding East Germany, given their surveilliance system, one should think that they hardly needed a Tiananmen, they could just arrest the leaders. Or maybe that was what they thought, but things didn’t work out that way?
I think the combination of Honecker being a leader in physical decline, Hungary opening its borders to Austria, and the Soviet union not cracking down, gave a situation where the options where to a) open up or b) go full North Korea and close all borders and crack down internally. Without a strong leader that wanted and could create b, only option a remained. Notably this happens at a time when losing the labour force in emmigration was seen as a large problem and immigration wasn’t (or West Germany would have blocked the immigrants). Full employment policies makes quite a difference.
Then when opening up, the new leaders quickly lost control of the process. There is a clip from a press conference where the new leaders present the new rules on emmigration and there is a question and answer that goes something like this:
Journalist: When does these new rules go into effect?
New leader: *Checks the paper in front of him.* Now, I think?
I also remember an interview with a border guard officer that tried calling all his superiors to find out what they where supposed to do. No one answered, and realising that it was apparently his call, he opened the check point. Of course, the large crowd demanding that the check point be opened (they had heard the new rules) meant the guards would have a very hard time doing anything else, so it was the reasonable thing to do.
Power is a very real thing, but if enough people decides it isn’t there anymore, then it isn’t.
I guess I’ll be the one to point out that the student protestors at Tienanmen were not shot. Where there was killing was as part of fighting in the side streets between the more radical workers revolt and the authorities that the workers escalated against when they started lynching and setting unarmed cops on fire.
Xi Jinping’s opinion on the matter and the long gradual process of internal demoralization:
“Why did the Soviet Union disintegrate? Why did the Communist Party of the Soviet Union fall from power? An important reason was that the struggle in the field of ideology was extremely intense, completely negating the history of the Soviet Union, negating the history of the Communist Party of the Soviet Union, negating Lenin, negating Stalin, creating historical nihilism and confused thinking. Party organs at all levels had lost their functions, the military was no longer under Party leadership. In the end, the Communist Party of the Soviet Union, a great party, was scattered, the Soviet Union, a great socialist country, disintegrated. This is a cautionary tale!”
To be perfectly honest I think Xi’s explanation is the most coherent for a number of reasons.
First and foremost the CPC studied the collapse of the USSR and CPSU intently for obvious reasons- not wanting to meet the same fate, and “scientific” reasons- how to advance Marxist Socialism in changing historical contexts. I belief they have the most comprehensive understanding of the impact of the economic and political forces that were unleashed, restrained and redirected, upon the viability of the Soviet system.
Second, historical nihilism is more than an expression of “taste”. Denying the historical actors, ignoring the forces they wielded, and forces they fought to create the Soviet Union certainly created a demoralization and disunity within Soviet society. How can one interpret the unifying victory over Nazi Germany in the crucible of WW2 with pride if the person at the helm was to be ignored? It fractured society and led those Baltic “nationalists”, and Ukrainian ones, who’s granddaddy’s marched East instead of West to harbor historical grievances and revanchist politics.
Third and in my opinion most important was the devolution of political power. The Chinese also underwent a transition of their own “glasnost” and “perestroika” into “socialism with Chinese characteristics”; this undermines the belief that it was simply introduction of these “freedoms” and “market reforms” that undid the Soviet Union. Rather as Xi puts it, these reforms were coupled with a devolution of the power of the CPSU; they took out the nervous system of the Party from the body politic of the Soviet Party state, leaving an immobile mass. This is regarded by many to be Gorbachev’s principal sin, and in hindsight is odiously stupid. He gave away his own power but didn’t give it to anything, simply into the ether. At the end Gorbachev resorted to the non-existent power of democracy to save the USSR. The peoples of the Soviet Union voted overwhelmingly for union. But Gorbachev and the CPSU had no legal/political power with which to implement the results of this referendum. He had tossed his agency away in thrall and spasms of his liberal wet dream. And millions of people would pay heinous price for this.
I wonder if such historical nihilism is setting in elsewhere in recent years, as we continue to see previously highly regarded figures be tarnished and almost wiped from history texts.
I was thinking the same. Widely known and believed symbols, whether factually true or not, are powerful, capable of bringing a society of millions together or tear them apart. We have been busy tearing down unifying myths in the West and replacing them with divisive ones last few decades.
“Historical nihilism” as I understand it is just realism and pragmatism unimpeded by ideology. We need a lot more of it, especially in the West.
I wonder what he was smoking at that time?
” It fractured society and led those Baltic “nationalists”, and Ukrainian ones, who’s granddaddy’s marched East instead of West to harbor historical grievances and revanchist politics.”
This comment says it all. Succinctly. Perfectly.
I remember 2014, in the months following Maidan, interacting and arguing with people on political establishment media comments boards (WaPo & NYT) about events in Ukraine. I recognized immediately, from the nature of posters’ remarks, that they were Americans of Ukrainian descent whose understanding of Russian, Ukrainian, and Soviet history was so very un-Russian, and un-Soviet. Strikingly so.
I assumed at first that their grandparents were Ukrainians who had fought in the Austro-Hungarian army against Russia in WW1. That perhaps this was the origin of their worldview. Only later did it occur to me that they must have been descended from Ukrainians (west of the Dniepr) who had aligned with Hitler politically and militarily, and who had escaped the Soviets in 1945.
But yeah…I sensed immediately, as you put it, “their granddaddies marched east instead of west” and that their historical POV was all about grievances and revanchism.
It was economic. The US forced the Soviet Union into bankruptcy by using the arms race as an economic tool.They reached the point where developing and producing new arms took more money than they had.There economy collapsed and destroyed their government.
Ronnie Ray-gun to the rescue. USA! USA! USA!
Nah. According to most people who actually looked into this – and the contemporary Soviet leaders – the Soviet MIC was very cost-effective (even if it did occasionally do stupid). At no point (not including WW2) did Soviet expenditure on military exceed 15% of GDP.
What Andropov saw a the main drain of Soviet economy were the satellites and allies. Most of the extra income Soviet Union got from the energy sales in the 80s went to prop up Eastern Europe, Vietnam and Cuba. He believed that without these obligations (or “vulgar theft” as Andropov said) Soviet Union would have been able to fix her own issues in two years.
ISTR reading that, after the Soviet Union collapsed, one of the top generals was interviewed. He was asked by how much the Reagan military buildup hastened the collapse of the USSR.
His answer: By about two weeks.
Sorry, I don’t recall where I read this. If anyone else read the same interview and can cite the source, I would be most grateful.
“The US forced the Soviet Union into bankruptcy by using the arms race as an economic tool.”
I’m pretty certain that’s just 1980s neocon propaganda, part of the Reagan myth. Another such myth is that the Reagan Administration’s Afghanistan policies defeated the Soviet military and forced it back to the USSR. It’s all hype and rhetoric for US domestic consumption.
The USSR collapsed because Soviet elites didn’t know how to manage their economy, and because Gorbachev’s reforms were idealistic and impossible to execute without triggering political and economic chaos. To put it bluntly, leadership was inept.
Just consider the careless manner in which Gorbachev, Yeltsin, and other ex-Soviet elites managed the break-up of the USSR. Ditto for their stupid failure to hammer out treaties with the West limiting future NATO expansion. That says it all regarding the talent poor leadership of the USSR/RF of that era.
Andropov was not a nice guy. Far, far from it. But he was probably the last of the truly formidable Soviet leaders. The last of the good ones, you might say. Too bad he was DOA when to took power in 1983.
BTW one of the ‘Chicago boys’ Jeffrey Sachs who was instrumental in applying the overnight capitalist neoliberal reforms in Russia has since done a complete 180 and has become an outspoken critic of neoliberalism and also America’s interventions abroad. Multipolarista recently had a clip of him on main stream media (Bloomberg I think) completely trashing the Ukraine war efforts.
He seems to have had a come to Jesus moment years ago and he has a lot of common sense stances on world affairs going by his Wikipedia page. Maybe it came about when he realized that through his ‘shock doctrine’ in Russia, that he was part responsible for the premature deaths of millions of people there and nothing could change that.
https://en.wikipedia.org/wiki/Jeffrey_Sachs
Amen
Not to justify neoliberal shock treatment, but there was almost zero foreign aid to Russia despite all the problems of pensioners not being able to buy food, etc. It is possible if the US had forked over some foreign aid to smooth over the worst of the transition, the Western liberals wouldn’t have lost all credibility with the people, and Russia would be a lot more sympathetic to the West than it currently is. But Russophobia: Americans are supposed hate the Ruskies, even when it undermines their own rational self interest.
My definition of American foreign aid is the extend loans at exorbitant to countries and make them hock their valuable assets as collateral. When the loans become due, the financiers (banksters) put the clamps on and do an asset grab. It usually requires a strong man in the victim country to pull this off who gets bribed.
I don’t think anything good would’ve come out of US foreign aid.
https://en.wikipedia.org/wiki/Marshall_Plan
They could have done a Marshall Plan in Eastern Europe, including Russia. They didn’t, and are paying the consequences now. The Marshall Plan included grants.
And we may see why if we now examine who is at the top in US politics.
Many of the names seems to have ancestry that fled eastern Europe during the communist takeover, and that has transferred the resulting “blood feud” onto present day Russia.
“Not to justify neoliberal shock treatment, but there was almost zero foreign aid to Russia despite all the problems of pensioners not being able to buy food, etc.”
Are you sure? I was last in Moscow in 2019, and was very surprised that Russians I met recalled subsisting on American food aid in the early 1990s. They had fond memories of that American food. Meanwhile, I’m American, and never realized the US provided such assistance, or that the fledgling RF even needed it.
Cluborlov dot com. Dmitri Orlov wrote a book about the parallels between the US and old USSR—essentially it was like dying of sepsis and cancer at the same time.
the US elite has much of the same symptoms as the old USSR elite. IMO, I don’t think the US is on the same trajectory as 1990-94 USSR-Russia, but there the next 10 years are going to a period of deflation, then stagflation.
https://www.goodreads.com/author/list/1060522.Dmitry_Orlov
Thanks for this. I don’t think that Afghanistan was a fundamental factor in the USSR collapse, western history of the conflict is pretty self serving in terms of military impact. It was, however, psychologically painful for the Soviet people.
More generally, empires and nations fall in their own ways but for the same reasons. It’s the internal contradictions which become untenable. Sometimes there’s an external force that shocks them, sometimes none is needed. Historians like to argue about the real or primary cause of a collapse. Each one finds their own reason and tends to elevate it as primary, even when they acknowledge the importance of other reasons that other historians see as primary.
The USSR had plenty of internal contradictions by the 80’s, including a gerontocracy deep state which is why so much of the history being teased out now is contextualized in the push-pull between the established bureaucracy that was focused on maintaining its position and younger people working around the system rather than through it. But again, these are the common internal contradictions exhibited by failing nations where the question becomes whether the new guard will usurp state powers or end up collapsing them.
One facet of this interview that I don’t think gets enough historical attention is that during this period of looting and then the massive looting of the early 90’s the money got poured into western markets, particularly Wall Street both as a means to leverage the cash and launder it. I don’t have enough financial understanding to tease out the details but I’ve long wondered how much of the market boom of the 90’s was related to the looting of the USSR? It seems like it would have an outsized effect since this was effectively money created out of thin air being injected into the stock market(s).
Indeed how much. I was three years in on a trading desk on a large American investment bank in August 2008. There were a lot of margin calls when the Russians went into Georgia and pulled out of the rules based order. Geopolitics have only now started to “matter” on the Street; but I always thought this was the cascading event in the GFC and that our analytical lens would never really let us understand its true impact.
“It was, however, psychologically painful for the Soviet people.”
With all due respect, I call this observation into question.
I followed the Afghanistan war closely in the 1980s, reading everything I could on an ongoing basis in US media and through whatever books were published at the time. Additionally, I heard from a family member (who travelled to the USSR several times back then) about Soviet society’s attitude toward the war.
Based on everything I’ve read and heard, in the minds of the Soviet population, Afghanistan was barely a war. Soviet media hardly said anything about it. The Soviet army stationed there was rather small (105,000 soldiers vs 4,000,000 active duty troops remaining in the USSR). It simply didn’t garner much attention or awareness among vast swathes of the Soviet population.
It’s really a myth that Afghanistan was to the Soviet people what Vietnam had been to the American public. The US’s Vietnam foray was a much bigger military operation than the USSR’s involvement in Afghanistan. Vietnam involved lots of Americans in one way or another. Afghanistan didn’t involve too many Soviet people.
In 1991, Soviet journalist Artyom Borovik published a book about Afghanistan called “The Hidden War.” It was aptly titled, because the conflict was the dirty little war the Soviet government successfully kept out of public focus in the USSR.
It terms of the war being “psychologically painful” to any Soviet people, I think that’s true only with respect to some of the USSR’s plebs, people spread out all over the country, whose families provided conscripts that were sent to Afghanistan. Those were the only Soviets, IMO, who truly felt the bite of the war.
Thanks Yves for flagging these videos.
A few years ago I was having dinner with a Russian colleague. I knew very little about what really happened in the late 80s / 90s in Russia so expressed the view that tends to be the “mainstream” here that Afghanistan bankrupted the USSR and that Reagan “defeated” it. Naive. I know.
Anyway, he completely refuted that for some of the reasons you give Lex. His view was that the system collapsed from within and that Gorbachev’s reforms destroyed the already rotten edifice.
I did study the Soviet Union briefly under a specialist Sovietologist at Oxford in 1986 just before the main changes happened. I then did not stay up to date until recently. Yves is spot on that none of what happened to the USSR was remotely predicted or even discussed as a scenario back then. There was some recognition though that reform could unleash forces that could not be controlled. This had been an earlier challenge under Khrushchev we learned and partly explained the reaction that Brezhnev had led. This was also the era when positive biographies of Gorbachev had already been written (I recall the one by Zhores Medvedev that had just been published and which I read) and there was a view that the whole system had atrophied. Gorbachev was being likened at that point to Khrushchev so the historical experience of that era was very much a lens used to frame the situation.
The overwhelming view in 1986 though was that the party was still very much in control. I recall our tutor describing the deep control that the Soviets allegedly had over society as far deeper than that which the Nazis had had in Germany, for example. Zero consideration that this was in reality less real than it appeared. Fascinatingly, the whole multi national, multi republic feature of the USSR that became significant in the break up was also not a discussion topic!
There is a view that authoritarian or totalitarian regimes (we can debate which term applies to the USSR by the mid 80s) are most at risk when they seek to reform. I tend to think that President Xi’s analysis referred to above that Gorbachev failed to retain control through the party is a prime explanation for what happened. It is broadly consistent with the Jeffrey Summers narrative but he focuses more on economic drivers that led Gorbachev to need to reform. These were partly internal with respect to meeting consumer needs but also external with respect to the oil price. I agree with Yves that Afghanistan is heavily overplayed in the west. However it was no doubt symbolic. Interestingly, Summers did not seem to mention Chernobyl as symbolic of the way that the system had atrophied by that time. In Europe, people of my generation always think of it.
Summers is right that the break up of the USSR was one of the (if not the) most peaceful dissolution of an empire in history. Western mainstream narratives give zero credit to this and never compare it to our own experiences of dissolving empire such as in India and Algeria. The potentially major wrinkle here is that the war we are now seeing is at least in part linked to unfinished business associated with the collapse of the USSR. There is still a lot to play out. Mao’s comment on it being too early to tell the full impact of the French Revolution feels appropriate.
By the way, the specialist Sovietologist I studied under now leads a NATO funded think tank in a Baltic state and seems to make his living by telling everyone to be afraid of the Russian Federation. Odd how people are able to make careers like this that we tax payers ultimately fund.
Just the obvious point that “The Soviet Union” was a political structure, like the Hapsburg Empire, the United States, the United Arab Republic or the European Union, which came into existence after the Civil War. It was a complex and many-levelled structure. The collapse of the Soviet Union as a political entity is different from the end of Communist Party rule, and different again from the end of the economic system that had endured since the 1920s. A lot of the confusion on this issue is the result of forgetting that, whilst these three things are linked, they are not the same. The outcome, especially at the political level, could have been very different.
I’m not sure if the end of CPSU dominance and the fall of USSR can be separated. USSR was the ultimate “party state,” in that all political power resided in the structure of the Communist Party: people held formal positions, but their actual influence came from their standing and role in CPSU. Creating a substitute for CPSU may have been theoretically possible, Gorbachev definitely tried it–ie creating the office of the presidency of USSR–but no replacement in the end emerged and the political-bureaucratic structure of USSR had no other force holding them together.
This gets me thinking that USA beat USSR by unleashing the “power” of finance during the 80s. But finance is like a steroid, and has by now exhausted the nation’s “body”.
100 pct this. We used leverage to bring nearly a century of consumptive capacity forward. The piper was going to come calling one day. Its ironic that is our lack of access to the commodity base of the former Soviet Union that made the music stop.
For those interested, StalkerZone shared some excellent info on this subject when Gorbachev died. In this article they presented facts that I had personally never heard before:
Gorbachev, Instead of an Obituary
For those interested in foreign policy and deep state issues I would highly recommend American Exception by Aaron Good. A very detailed analysis of how the elite and corporations have made the CIA their instrument to exploit evry other nation in the globe to increase their wealth. I am flabbergasted that the media would let this pass their censorship. It’s available on Audible. I find myself rewinding constantly and listening to some chapters again and again. Gripping truth telling.
One should never forget the personal factor when examining historical events: Gorby and Yeltsin loathed each other. After Gorby fired Yeltsin in 1987, Yeltsin was determined to take revenge. Which he did in late 1991, by signing the agreement with the heads of Belarus and Ukraine (supposedly after a lot of vodka was drunk) to dissolve the USSR, hence depriving Gorby of a job. Without this bad personal chemistry, the core USSR (RU, UKR, Belarus, and the 5 Stans) would probably have stumbled on for many years.
I agree with the idea that RU proper was subsidizing the rest of the USSR, certainly from the 1970s onwards. RU economic performance since 1991 has outstripped that of most of the other 14 USSR republics. The 1990s transition was brutal, though.
“That guy will sell us everything” – Ronald Reagan on meeting Gorby first time.
Margaret Thatcher liked Gorby because, as she put it, you can do business with him.
“The whole damn thing thad pretty much collapsed by the end. It just wasn’t functioning at all.”
On an economic level I would argue that the Soviet path to industrialization was based on centralized command and control.
Prior to World War I the Russian economy was one of the fastest growing in the world but primarily based on agriculture. Reforms, like those of Stolypin in 1906 and 1911, made the peasants more productive but then the Russian economy collapsed following World War I, the Russian revolution and the Russian Civil War.
In the midst of this collapse Lenin imposed a policy of War communism, which produced famine and destitution but began to grow again under Lenin’s New Economic Policy that allowed for a renewal of some market activity.
Stalin’s “achievement” was to rapidly accelerate the pace of industrialization through the collectivization of agriculture and a series of 5 year plans. All of this came at huge human cost with collectivization leading to a dramatic decline in yields and mass famine (particularly in Ukraine).
The rapid pace of Soviet Industrialization succeeded in providing many basic public goods (excellent technical education and essential health care) but growth could not be sustained. I would argue that ultimately
the greater and greater centralization of economic decisions combined with corruption and rent-seeking left the economy unable to provide the average Soviet citizen with consumer goods that most desired to purchase despite repeated attempts at reforms after the death of Stalin.
Beneath the economic collapse were also growing political legitimation,
personal motivation and ecological crises.
Central Planning works well if you are transitioning from feudalism to industrialization in 15-30 years. It is also key if you are carrying out a total war. However, once you are industrialized and the war is over, it is terrible at improving productivity or quality control.
Grain prices also unluckily collapsed soon after the revolution which meant Russia was suddenly unable to afford much when the need for industrialization was paramount. I think this is mentioned in the piece. I unfortunately read 2 volumes of Stalins bio by Stephen Kotkin before someone at Jacobin trashed Kotkin as a tool of one of the Think-tank don’t remember which one. Russia’s story under Stalin is fascinating as an attempted Socialist experiment that partly succeeded? India also went through a long period of Socialist leadership but it did not work well in terms of making goods that made people excited. All those Refrigerators and Washing Machines. I mean I remember growing up there we could not even buy a decent Rain Coat or a good pair of shoes.
In India’s case the amount of corruption at all levels impeded progress. I believe the corruption was innate but accelerated by the British who bribed each of the divided parties fighting them in order to conquer them and occupy India. The description how the British did this is detailed in the book “The Anarchy” – William Darlymple.
Ahh yes. Thanks for reminding me of our famous ‘License Raj’. And also the Dalrymple book. I have it in my collection but ashamed to say I have not opened it yet. Being a good bourgeois in America is hard work. I owe my souk to the company store and all that.
I recently watched the HBO docuseries, Chernobyl: https://www.hbo.com/chernobyl. It was very enlightening to me and pointed out how dysfunctional the Soviet political system had become by 1986.
As I’ve come to learn since watching that series, Gorbachev was quoted as saying that perhaps Chernobyl not Perestroika caused the collapse of the Soviet Union: https://www.express.co.uk/news/world/1137086/chernobyl-hbo-series-sky-atlantic-nuclear-disaster-gorbachev-soviet-union-spt
I would agree. At the very least, it must have contributed to the collapse. The docuseries highlights the thick, incompetent bureaucracy that was politically corrupt from bottom to top. Chernobyl couldn’t be hidden and the docuseries clearly pointed out that the bureaucracy covered up and/or ignored what the scientists were trying to expose about how the Reactor 4 test caused the explosion.
One other point from the interview with Jeffery Sommers. He mentioned his son’s admiration for Soviet rocket science. I had similar admiration for its materials science program. In 1981, I worked in a research lab at NASA’s Ames Research Center in Mountain View, CA. The lab did work on the ceramic materials used on the shuttles. Most of the pure research on ceramics at that time was being done by the Soviets it seemed. I was impressed by the quantity and depth of work they were doing. Our lab seemed more of a development lab rather than the deep level research the Soviets were doing.