by Alan Woods
Apathy, indifference, thieving… have become mass phenomena, with at the same time aggressive envy towards high earners. There have appeared signs of a sort of physical degeneration of a sizeable part of our population, through drunkenness and idleness. Finally, there is a lack of belief in the officially announced objectives and purposes, in the very possibility of a more rational economic and social organisation of life. Clearly all this cannot be swiftly overcome – years, maybe generations, will be needed. (N. Shmelev, Novy mir, No. 6, 1987)
Gorbachev’s reforms solved nothing but prepared the way for an even deeper crisis. In the same way, tsarism for generations swung from repression to concession and back again. However, the options before the bureaucracy were now extremely limited. The old system was collapsing, but nothing was being put in its place. Such a situation could not last. The economy was sinking deeper into crisis. Gosplan, the central state planning agency, was warning that, due to the collapse of central planning, production could slump between thirty to seventy per cent. The impasse of the bureaucratic system had created widespread disillusionment in the working class.
By the late 1980s, powerful illusions in the market arose among certain layers, especially of the bureaucracy and the intelligentsia (especially the economists). Gorbachev, however, still had not made up his mind to go over to capitalism. It was the government of the Russian Federation under Yeltsin that acted as the cutting edge of the pro-bourgeois wing of the bureaucracy. This wing came forward with a programme of complete capitalist restoration. Stanislav Shatalin and Grigory Yavlinsky drafted the so-called 500-day programme for the transition to a market economy, which proposed large-scale privatisation within 100 days, plus price liberalisation and the slashing of subsidies.
The council of ministers ordered a draft to be prepared by 1st May to achieve a more rapid move to a market economy. However, by late April the Presidential and Federation Councils had returned the draft ‘for further elaboration’. It was clear that Gorbachev and his ministers had backed away from shock therapy for the economy for fear of provoking strikes and unrest. These fears were justified, as events would later show.
On the 6th March the Supreme Soviet adopted Article 34 on property ownership. Abalkin said it would create the necessary conditions for Russia’s transition to a “planned market economy”. The new law allowed citizens the right to own and inherit property, mineral resources, equipment, money, shares and water. Here we have the essence of the problem. It is a striking confirmation of what Trotsky wrote in the Revolution Betrayed, where he pointed out that the bureaucracy would not be satisfied with their bloated incomes and privileges, since these depended on their positions as functionaries in the Soviet state. Their comfortable apartments, their cars and dachas remained state property that could not be inherited by their sons and daughters.
When the text of the new law says that “citizens” will have the right to “own and inherit property”, it does not refer to the coal miners of the Kuzbass but to the privileged caste of officials who were itching to get their hands on the property of the Soviet state. It was this that was the main motive force driving in the direction of capitalism. The bureaucracy was, however, compelled to tread warily for fear of provoking an explosion.
The drive towards capitalism gained impetus throughout 1989 and in the first half of 1990. But it did not come as a result of pressure from the population. As a matter of fact, the majority of Russian workers were suspicious of the idea of a market economy and were opposed to it. This was tacitly admitted by the official news agency TASS, when it pointed out that the term “private property” had been avoided because the phrase “has great emotive force” in the USSR, where people associated it with exploitation. More than forty per cent of respondents to an opinion poll held at this time said that they would prefer a return to more centralised economic management and only twenty-five per cent wanted a market-orientated system.
Within the Supreme Soviet there was a stormy session on the second reading of the bill. But on the 1st July, the law came into effect with 350 in favour, 3 against, and 11 abstentions. But this was still in the realm of calculated ambiguity. On the next day, the central government published a statement that land was the property of the people living on it and that every citizen had a right to a plot. However, much to the surprise of the pro-capitalist ‘reformers’, the rural population showed no interest whatsoever in becoming transformed into private owners of small plots of land.
Reform of pricing was another central plank of the transition, but fearing a popular explosion, the government wanted a “stage by stage introduction of market methods…” In anticipation of these reforms, it was proposed to treble bread prices on the 1st July 1990, and compensate for this with pension and wage rises. The attempted compromise satisfied nobody. On the 14th June, the Supreme Soviet rejected the proposal to treble bread prices. Panic buying forced Gorbachev to appeal for calm on television.
The workers’ patience was exhausted. In July 1989, a wave of industrial unrest gripped the USSR, centred on the coalfields of the Donbass and Kuzbass. On the 11th July, tens of thousands of miners went on strike. 12,000 stopped work at Mezhdurechensk and took control of the town. They demanded better living conditions, higher wages, increased holidays and better working conditions.
In the Kuzbass more than 100,000 miners were involved. The strike committees demanded the immediate abolition of privileges for officials, direct negotiations with central government and a new constitution. As the Kuzbass went back, the Donbass came out with similar demands. The movement affected pits at Vorkuta in the far north, Rostov-on-Don in the south-west, and Dnepropetrovsk and Chervonograd in the Ukraine.
The estimated number on strike rose to 300,000. Gorbachev said the strikes were “the worst ordeal to befall our country in all the four years of perestroika”, but added that they showed the need to eliminate “all sorts of bureaucratic obstacles along the road to reform”. The government was forced to step in to prevent the strikes spreading. The strikers agreed to return after concessions were made.
The rise of Yeltsin
Perestroika and glasnost had served only to open up a Pandora’s Box. The explosion of strikes threatened to bring the whole bureaucratic order crashing down. Gorbachev was facing removal, as happened to Khrushchev earlier. Completely disorientated, he appeared to be facing in all directions at once. Boris Yeltsin, who had been removed from the Politburo of the Communist Party in 1988, now emerged as a key figure in the move towards capitalism.
As chairman of the Russian Supreme Soviet, Yeltsin was de facto president of the Russian Federation. Under his command, the Russian Congress adopted a Declaration on the Sovereignty of Russia, further reinforcing his authority and power. He repeatedly clashed with Gorbachev, finally calling for his resignation publicly on television. At the 28th Congress of the CPSU in July, Gorbachev spoke of the end of the “Stalinist model of socialism”. He admitted that “decades of the domination of the administrative command system have alienated the working class from property and authority…” This was an astounding confession of bankruptcy. But instead of posing a clear Leninist alternative, Gorbachev, as usual, confined himself to empty generalities and ambiguities.
‘Genuine democracy’ was being established. The over-centralised Soviet state was in the process of being converted into a genuine union of “self-determination and voluntary association of peoples”. But he still insisted that his plans for a market did not signify a reversal to capitalism: “This means that by moving towards a market we are not swerving from the road to socialism, but are advancing towards a fuller realisation of society’s potential.”
Yeltsin resigned from the Communist Party; following the lead of ex-foreign minister Eduard Shevardnadze. On the very next day, the ‘reformist’ mayors of Moscow and Leningrad, Gavriil Popov and Anatoly Sobchak, also resigned. In the previous six months 130,000 had left the CPSU – 10,000 in Moscow in July alone. The pro-bourgeois wing was beginning to get organised. Three hundred deputies established an independent group within the Congress dedicated to accelerating perestroika and “to countering the pressure put on parliament by conservative forces”. Its leadership comprised Yeltsin, Sakharov, Afanasiev and Palm. They represented the openly counter-revolutionary wing of the bureaucracy. Popov and Sobchak were also representative of this layer.
In early 1990, the decision had been taken to end the constitutional monopoly of power of the Communist Party. The demoralised Party was further weakened by Gorbachev’s tinkering. In July, the CPSU adopted a new draft programme, replacing Marxism-Leninism with ‘Social-Democratic principles.’ Thus, with the stroke of a pen, the ‘Communist’ Party formally broke all links with the ideas and principles of the October Revolution, although in practice they had long since ceased to have anything to do with them.
The representatives of the pro-bourgeois wing were using their control of the government of the Russian Federation to engineer a confrontation with the Kremlin. On the 19th October 1990, the USSR Supreme Soviet finally approved a plan for a market economy. According to The Guardian (20/10/90) the mood was “sombre and desperate”. It was a compromise programme “short on detail”. During the month of October, Gorbachev issued decrees on the liberalisation of wholesale prices and the rouble commercial exchange rate (a step towards a convertible rouble).
In November, the government set the official exchange rate at $1:1.80 roubles (six years later it was $1:5,000); foreign ownership of enterprises (the right of foreign capitalists to set up in USSR, and buy shares and property) was allowed for the first time. The imperialists could hardly believe their luck. They seized the opportunity with both hands. By the end of the year, a summit was held between the presidents of the Soviet Union and the USA. At the press conference, President Bush stated he was “prepared to encourage the Soviet Union in every way” in that country’s search for “greater engagement with the international market economy”. The representatives of world imperialism were throwing all their weight behind the nascent bourgeoisie in Russia.
Gorbachev gave the state of the nation speech in an atmosphere of crisis. The food crisis worsened as the economy deteriorated rapidly.
The New Union Treaty
In spite of all the talk of ‘reform’, in the first half of 1991 GNP fell by ten per cent over the previous year. There were further strikes in the coalfields. The ‘reformers’ became increasingly bolder and clearly anti-socialist. Gorbachev tried to hold things together by balancing between the rival wings. This only led to increased tensions within the bureaucracy. The bureaucrats were only interested in maintaining their privileges, position and income, but the crisis had effectively undermined their position. The representatives of the old Stalinist wing were alarmed and increasingly desperate.
The crisis of the regime took place against a background of growing unrest in the Republics. In Georgia, open war had broken out over the question of Abkhazia. The split in the ruling elite unleashed pent-up centrifugal tendencies that had accumulated in the Soviet Union for decades. In 1991 the authority of the centre was collapsing. Republics and even cities decreed their own prices. Barter between Republics, regions and enterprises took the place of planning. A document of the Russian Federation paints a grim picture of the situation:
The economy approaches the borderline beyond which one can speak not of economic crisis but catastrophe. The sharp fall in output that is occurring in most state enterprises is accompanied by growing inflationary processes. Management is concerned not with production, but with how to find the means to pay the wages demanded by its employees and how to supply them with food and consumer goods to spend these wages on. These problems, as well as those of material-technical supply, are increasingly being resolved by the archaic method of barter… but this cannot ensure the needed supplies, so economic links are disrupted and production is halted. The degree of uncontrollability of the economy has reached catastrophic dimensions. The planning institutions are demoralised by the uncertainties of their situation today and particularly tomorrow. Information from the grass roots is lacking. All union, republican and regional orders contradict one another, which adds to social-political tensions. (Quoted in Nove, An Economic History of the USSR, p. 416)
Gorbachev, while paying lip service to ‘socialist planning’, had embraced the concept of the market as a way out, although he continually vacillated, reacting now to one pressure, now to another, like a dead leaf blown by every wind. With no plan and no clear idea of where he was going, he had effectively lost control. The New Union Treaty was creating a new focus for tension between the different wings of the bureaucracy. Shevardnadze, now firmly in the camp of capitalist counter-revolution, resigned warning of the “onset of dictatorship”.
Matters came to a head over tensions on the national question. The economic crisis exacerbated all the contradictions between the Moscow bureaucracy and the rival bureaucracies in the Soviet republics. Each bureaucracy wanted to get control over ‘its own house’. The weakness of the centre presented these elements with a golden opportunity, which they seized eagerly. Elections in the Baltics and Georgia propelled them towards independence. The red light was flashing.
Lithuania was seething with mass protests against rule from Moscow. Lithuanian youths boycotted conscription and burned their conscription cards and Lithuanian veterans of the Soviet army returned their medals and awards. Some public organizations, unions and societies, including the Lithuanian Communist Party, broke their links with Moscow. This was followed by a unilateral declaration of independence.
Lenin’s policy on the national question was based on the principle of the right to self-determination, up to and including separation. It goes without saying that the union of the peoples of the Soviet Union was a positive development that served the interests of the workers and peasants of all the republics. But Lenin always insisted that it must be a voluntary union, free from any hint of national oppression or coercion. By rejecting the right of the people of Lithuania to determine their own destiny, the Moscow bureaucracy violated the basic principles of Leninism, and furthermore pushed the people of Lithuania and other republics into the arms of the nationalists.
The attempt to crush the Lithuanian insurrection by force was completely counter-productive. Soviet troops attacked a crowd of unarmed demonstrators in Vilnius, killing 13 and wounding hundreds more. This action only had the effect of pouring petrol on the flames. In the end, Gorbachev was forced to draw the conclusion and accept that the breakup of the Soviet Union had become inevitable. This was the basic content of the so-called Union Treaty, which was due to be ratified on the 20th August.
The treaty was the result of long negotiations, begun initially in response to demands from the Baltic States, Georgia and Moldova, to leave the Union. Gorbachev’s decision to accept the Treaty amounted to an acceptance of the breakup of the Soviet Union. This was creating widespread resentment in the bureaucracy and especially in the military caste. In essence, the Treaty would leave the centre with only residual powers over foreign policy and defence. The crisis in the USSR had already unleashed extreme separatist and nationalist tendencies. They had already lost Eastern Europe. Where would it end?
What conditioned the whole situation was the absence of an independent movement of the Russian proletariat. True, there were many strikes, but, given the enormous confusion and the lack of any alternatives, the workers did not fight as an independent force. This was the determining element in the whole equation. In the absence of a mass independent movement of the workers, the whole struggle was fought out between rival wings of the bureaucracy.
The flashpoint was the move to break up the USSR with the signing of the Union Treaty. In the build-up to the meeting of the Congress of Peoples’ Deputies, the representatives of the old bureaucracy began to exert pressure on the government. Since the opposing wings were evenly balanced, a peaceful resolution was no longer possible. The conflict could only be resolved in open struggle. The blind alley of perestroika led directly to the attempted coup of August 1991.
The 1991 attempted coup
On the morning of the 19th August 1991, tanks appeared on the streets of Moscow and other cities. This attempted coup d’état was led by Vice-President Gennady Yanayev (a supporter of Ligachov’s Stalinist faction), the Prime Minister Valentin Pavlov and the minister of defence Yazov. The coup leaders announced on the radio that it was staged “due to Mikhail Gorbachev’s inability to perform his duties for health reasons”, and a state of emergency was being introduced to overcome “the profound crisis, political, ethnic and civil strife, chaos and anarchy that threatens the lives and security of the Soviet Union’s citizens”. In fact, Gorbachev had been placed under house arrest in the Crimea after refusing to relinquish the presidency.
The attempted coup represented a desperate gamble by a section of the bureaucracy to stop Gorbachev from signing the Union Treaty. Negotiations over the Treaty had dragged on into 1991. It was due to be signed by Gorbachev in August. The plotters were terrified of further power passing to the Republics, especially the Russian Republic under Yeltsin. The Soviet Union had been buzzing with rumours of a coup for months. George Bush even telephoned to say he had heard rumours of an imminent military takeover. As early as December 1990, the Soyuz group of parliamentary deputies had pressed for military action against the breakaway Republics, to be followed by the declaration of a state of emergency across the country.
The old guard were attempting to prevent the breakup of the Soviet Union and re-establish the power of the military caste. However, the coup proved to be an abortive attempt from beginning to end. Boris Yeltsin, who was in the presidential building of the Russian Republic (the so-called White House) took advantage of the situation to rally all ‘democratic’ forces against the coup. Within a few days, it had collapsed.
This coup, however, was not defeated on the streets as was later claimed by certain people on the left. As a matter of fact, the mass of workers were indifferent. According to The Guardian’s Moscow reporter (22/8/91): “Most people were too apathetic, cynical or just plain frightened of the consequences to obey Mr Yeltsin’s strike call.” The five years of perestroika ended up in a mess of empty shops, queues, shortages, spiralling inflation, chaos, and the threat of hunger. This resulted in a collapse of support for Gorbachev and a growing rejection of the whole pack of ‘reformist’ politicians.
The bureaucracy was split: one section wanted to maintain the status quo, or even go back to repression, as under Brezhnev; the other wing wanted to go down the capitalist road. However, the mass of workers saw no fundamental difference between the hard-liners and the pro-capitalist counter-revolutionaries around Yeltsin. His call for a general strike against the August coup was publicly backed by Margaret Thatcher who appealed to the Russian workers to support it. As it turned out, it was a total flop.
Reuters’ correspondent issued the following estimation:
Yeltsin’s appeal for strikes was meeting with a patchy response. In the Soviet Union’s biggest coalfield, the Kuzbass, whose miners had previously shown themselves willing to use their industrial clout as a political weapon against the Kremlin, only about half the workers downed tools. In Vorkuta coalfield of Siberia, only five of the mines were to respond positively to Yeltsin. (The Guardian, 22/8/91.)
The oil workers, a decisive section to whom Yeltsin specifically appealed to, decided not to strike. The same was true of the gas workers. There was little or no response in Moscow. A few limited strikes in Leningrad. Five enterprises in Yeltsin’s home town of Sverdlovsk went on strike. But there was nothing in the Baltics, the Caucasus or Central Asia. When the then president of the Ukrainian parliament, Leonid Kravchuk, took an ambiguous stand in relation to the coup, the Reuters’ correspondent noted “Mr Kravchuk was reflecting opinion on the streets of Kiev, where Ukrainian journalists reported that many people expressed support for the coup.” (The Guardian, 20/8/91.)
A similar story was recounted by Morgan Stanley bank, which carried the following eyewitness report in its Review (17/9/91):
Moscow is a power vacuum. It isn’t that the centre doesn’t hold. It just isn’t there. That’s one side of it. The other is that there is no popular revolution. A rotten power clique encountered very little democratic resistance, and yet the coup, its edifice and the apparatus of power collapsed.
And further on:
Indeed, popular resistance to the coup was minimal for most of the first few days… I was struck in Moscow by the lack of popular revolt.
In other words, the majority of workers did not raise a finger to resist the coup. And this is for the very good reason that they did not trust Yeltsin any more than Yanayev or, for that matter, Gorbachev.
A Russian observer writing for the same journal spoke of a conversation on a Moscow bus on the 19th August:
One middle-aged man said loudly that he was glad of the restoration of order. No one either supported or objected. Gloom and fear, and maybe equanimity and resignation hung over the people.
Such examples could be multiplied at will and graphically show the mood at the time of the coup.
This view was reinforced by the report from the same source which wrote:
It seems that most of the public would have silently accepted the rule of the junta if the coup had been successful… Demagogic as it was, its promise of a quick economic amelioration could have given the junta a good chance. The feelings of frustration, desperation and cynicism over the state of the economy are so widespread that any rulers who look capable of achieving any progress [i.e. towards capitalism] could not expect to find popular support. I am not at all sure that the broad masses of the population understood and accept the idea that there is no alternative to marketisation and shock therapy.
The mood of the people was summed up by the BBC correspondent Martin Sixsmith:
The role of the Soviet people was also under scrutiny that afternoon: those who came to the parliament or demonstrated on the streets had made their own decisive choice in favour of democracy. But there were, in truth, not that many of them: fifty thousand people from a city of ten million is not an overwhelming percentage. Many more may have opposed the coup in their hearts, but they did little or nothing to put that emotion to practical effect. Strikes did occur sporadically, but most enterprises kept going and there were enough transport workers willing to work to keep the buses and the metro in action. At this stage of the coup, Yeltsin was facing not only the Kremlin’s tanks, but also the apathy of large sections of the population.
Even more challenging was the sentiment expressed by a considerable number of ordinary soviets that the coup leaders should be given a chance, that they could hardly do worse than the previous lot in power, and that they might at least bring back law and order. Especially attractive to many people were the plotters’ promises of ending the rise in crime, the spiralling ethnic conflicts which were dogging the country, and the attempts of independence-minded republics to break up the Union. (Martin Sixsmith, Moscow Coup, p. 37.)
Those who had rallied to the Yeltsin camp, according to a The Sunday Times (25/8/91) report, “were the people who had experienced first-hand the benefits of perestroika, who looked beyond the promise of cheaper bread and higher wages and were not about to go back easily to being treated as sheep”. This stratum was composed mainly of millions of qualified people, students, engineers, speculators and black marketeers who sensed in the movement towards the market economy the possibility of gaining power, wealth and positions. They made up the intellectual ‘reformers’, distrusted by the great majority of Soviet workers. This stratum’s hostility towards the Stalinist bureaucracy had nothing to do with ‘democracy’, far less a defence of workers’ interests, and everything to do with the thirst for their own political and economic power.
Why the coup failed
The party of Order proved… that it knew neither how to rule nor to serve; neither how to live nor how to die; neither how to suffer the republic nor how to overthrow it; neither how to uphold the Constitution nor how to throw it overboard; neither how to co-operate with the President nor how to deal with him. (MESW, The Eighteenth Brumaire of Louis Bonaparte, by Marx, Vol. 1, p. 462.)
The outcome of revolution and counter-revolution is never a foregone conclusion. In both cases the result is decided by a struggle of living forces in which the subjective factor – the quality of leadership – plays an important and frequently decisive role. The failure of the coup was by no means a foregone conclusion. The passivity of the great majority of the working class would have been sufficient to ensure the success of the coup if it had been carried out with sufficient decision. This was admitted in an article by Francis Fukuyama, a prominent strategist of capital, and consultant of the Rand Corporation in Washington, in The Independent on Sunday (25/8/91):
Despite divided loyalties in the army and police, the coup plotters could have succeeded in the short term had they been more competent and determined, as was the Deng regime in Tiananmen Square. They had sufficient numbers of loyal KGB and interior troops to arrest or kill Yeltsin, shut down the press and enforce a curfew. But the plotters were afflicted with a lack of belief in themselves and their cause.
The coup in Moscow was defeated because of the lack of decisiveness on the part of the coup leaders. The failure to arrest Yeltsin left a focal point for the opposition and exposed the plot in the eyes of key sections of the army, police and KGB chiefs as a botched operation. From an initial position of waiting on the side-lines, these sections finally decided to distance themselves from the coup leaders. These leaders, in turn, found themselves suspended in mid-air.
The coup collapsed simply from its own internal contradictions and weaknesses. This was understood by western observers: “So why did it not succeed?” asked Martin McCauley. “Astonishingly, it was poorly planned and executed.” (M. McCauley, The Soviet Union 1917-1991, p. 368.)
This opinion was shared by all the serious strategists of capital.
Preliminary assessments by intelligence analysts in Britain and America suggested the coup was hastily organised by a small group of people who fatally misjudged the mood of the organisations they controlled. There is no evidence of any pre-coup rehearsals by any security forces. (The Sunday Times, 25/8/91.)
The Sunday Times stated:
In the early part of last week there were no signs of any significant mobilisation. “This was not a revolution that failed because of people power” said one Western intelligence source. “There were fewer people on the streets than the plotters might have expected. It failed because they did not put enough troops on the ground or use them effectively”.
The panicky reaction by top bureaucrats to the Union Treaty displayed their complete lack of ability for decisive action. The leader of Gorbachev’s group in the Kremlin, Valentin Karayev, later described how they began to react, once they realised that the coup leaders were failing to act: “By the 20th it was clear to all that nothing had happened. There were no arrests, nothing.” (The Wall Street Journal, 29/8/91.)
The paper made the following observation:
But details now emerging indicate that the collapse of the putsch actually owes much to the putschists themselves, some of whom got cold feet early on.
One, Prime Minister Valentin Pavlov, started backsliding within hours of the Monday morning announcement of the takeover. A second, defence minister Yazov, had early doubts which he later acted upon. Mr Yanayev himself admitted the seizure of power was illegal within hours of deposing Mr Gorbachev… The coup destroyed itself. (The Wall Street Journal, 29/8/91.)
However, the strange lack of decisiveness on the part of the coup leaders explains nothing, since it has itself to be explained. The bureaucrats who led it had no perspective or programme other than the maintenance of the status quo, that is to say the maintenance of a discredited system that had lost the support of the masses and in which they themselves had ceased to believe. In the moment of truth, like the Tsar in February 1917, they found themselves moving phantom armies. Their power, which seemed to be undefeatable, collapsed like a house of cards.
The whole balance of forces was radically altered by these events. The power rivalry between Yeltsin, the President of Russia, and Gorbachev, the President of the Soviet Union, was over. Hitherto, Gorbachev had managed to maintain himself by balancing precariously between the opposing factions of the bureaucracy. When Gorbachev returned to Moscow on the 22nd August after the collapse of the coup, his power had gone.
Gorbachev was ignominiously forced to resign as General Secretary of the CPSU. Then the Central Committee voluntarily dissolved. Within a few days, he was forced to outlaw (‘suspend’) the ‘Communist’ Party. Its property, publications and assets were confiscated by Yeltsin’s Republic, which issued a decree banning the CPSU. The Komsomol ‘voluntarily’ disbanded itself. The Communist Party offered no resistance to any of this.
A ferocious ideological offensive was then unleashed against the October Revolution and the planned economy. Within a month, Yeltsin had banned all political activity within workplaces, a measure aimed deliberately at the Communist Party. The Yeltsinites raided the CP headquarters, seized its documents and incriminated the Party in the attempted coup. Pravda was suspended and its staff replaced. Once the coup had failed, the KGB issued a statement: “Members of the KGB had nothing to do with the illegal acts of that group of adventurers.” This subservient act failed to save it. The feared organ of repression was taken over by Yeltsin and purged. The Supreme Soviet rubber stamped Gorbachev’s dismissal of the entire government.
Every evening on Russian television a telephone number was displayed for anyone wishing to inform on neighbours or workmates who supported the coup. The official TV and radio was taken out of the hands of the CP. Pravda eventually reappeared, but it was no longer the organ of the (disbanded) Central Committee. This unleashed a deluge of propaganda against the Stalinists.
The imperialists piled on the pressure for the breakup of the USSR and the move towards capitalism. Seizing the opportunity, one republic after another declared their independence. The Baltics, Armenia and Georgia had already done so, but they were joined before the end of August by the Ukraine, Belarus, Moldova, Azerbaijan, then Uzbekistan and Kirghizia. The disintegration of the Union left Gorbachev with little say or power. He had opened the door to capitalist restoration and was now brushed aside by the powers he had conjured up. Given the collapse of the coup, the initiative fell to Yeltsin and those in favour of a rapid move to capitalist restoration.
The Supreme Soviet soon granted Yeltsin extraordinary powers to rule by decree. It appeared that the road to capitalism was now wide open. The following month, the Supreme Soviet ratified the decision to change the name of Leningrad to its pre-revolutionary name of St Petersburg. Sverdlovsk became Yekaterinburg, its original name. In December, at the Kremlin, the Soviet flag was symbolically replaced by the old Russian flag. The mayor of Moscow, Popov, collected all the Communist statues into Gorky Park and declared them all historic relics.
These moves were undertaken to eradicate the heritage of October. So far had the pendulum of history swung back that the old barbarism of the tsarist regime was now being presented in the most favourable light. The counter-revolution manifested itself in the reappearance of tsarist insignia, the proliferation of fascist groups, the idea of ‘Mother Russia’, and the restoration of the Orthodox Church, the official religion of the tsarist state.
The disintegration of the USSR created new problems for the ‘independent’ states. What relationship would they now have? Before they could answer, Yeltsin announced that those Republics that bordered Russia could be subjected to redrawn borders, as there were large Russian populations within these Republics that had to be protected by the Russian state. He now turned against the idea of independence because of the economic implications and the restive minorities within the borders of Russia. In December 1991, under Yeltsin’s initiative, Russia, Ukraine and Belarus formed the Commonwealth of Independent States (CIS), and by the end of the month eight more Republics had joined.
Gorbachev was left with nothing. He resigned as president. Silently, ignominiously, this accidental element left the stage of history by the back door, having played out his role as the stalking horse of capitalist restoration. In the presidential elections that were held four years later, the people of Russia passed a crushing and well-merited verdict on this individual. Of vastly greater import was the fact that after seven decades of the most titanic exertions and the most remarkable transformation in history, the USSR had disappeared.
The drive towards privatisation
The Yeltsin wing represented the interests of the nascent Russian bourgeoisie – the spivs, black marketeers, Mafiosi, speculators and crooks – which had risen to the surface on the basis of the move towards capitalism. They were also the agents of imperialism, unscrupulous elements who did not mind sacrificing the interests of Russia in order to feather their own nests. The other wing broadly represented the interests of the old bureaucracy, the hundreds of thousands of officials whose power, privileges and income depended upon their control of the large-scale nationalised enterprises and collective farms. The latter was, in turn, subdivided into different factions, reflecting the different layers of the bureaucracy, and constituted an extremely large and heterogeneous social grouping.
The government now embarked upon a programme of mass privatisation by means of the issue of privatisation vouchers. It was hoped that twenty-five per cent of state industries would be sold by the end of 1992. Land would also be privatised. Nevertheless, the pressure of the military-industrial complex forced concessions from the government in the form of increased subsidies. Extra funds were given to agricultural production, food subsidies, and housing for the armed forces. Against the opposition of Yeltsin and Gaidar, the Russian parliament voted Rbs200,000 billion worth of credits to industry.
The money supply was effectively out of control and inflation was turning into hyper-inflation. On the 2nd January 1992, the government abolished the state control of prices which resulted in many goods rising between three-fold and thirty-fold. In practice, prices actually rose in the region of 300-350 per cent. Fares on the Moscow metro rose from fifteen kopecks to fifty kopecks. The other ten members of the CIS were compelled to follow suit and increase their prices, since Russians would otherwise simply buy up goods at controlled prices from neighbouring republics. In March, the price of bread, milk and other staples were increased.
The reaction was intense. Mass demonstrations now took place outside the White House, the Russian Supreme Soviet building, against these massive price rises. To contain the mood of protest, the government was forced to increase the minimum wage by 100 per cent and also raise pensions. These ‘free market’ policies solved nothing, and simply deepened the crisis. Food supplies reached a critical level, with no more than twenty to forty days of stocks left.
The old guard attempted to oppose Yeltsin and his government in defence of their own interests. As The Economist (20/6/92) commented:
After six months of economic ‘shock-therapy,’ Russia’s industrial managers have found their political voice. Alarmed at the speed and direction of the Russian government’s economic reforms under President Boris Yeltsin, Russia’s industrial managers are demanding a greater say in how the country is run.
A new anti-Yeltsin alliance between the ex-Stalinists and nationalists was formed in the parliament called Russian Unity.
In April 1992, the struggle was so intense that Yeltsin was forced to beat a partial retreat. The attempt to affect a swift transition to the ‘market’ and ‘sound economics’ foundered. The Congress of Peoples’ Deputies demanded the resignation of Yegor Gaidar the finance minister and one of the foremost bourgeois ‘reformers’. Yeltsin was forced to dismiss Gaidar but still kept him on as one of his deputies. Yeltsin also announced there would be a softening of the ‘reforms’ and extra credits to cash-starved industries. The Congress pushed harder and demanded higher social provision. Strikes by teachers and hospital workers over wages led to further concessions from the government.
Yeltsin appealed to the West for aid and investment, but the aid given by them was pathetically low: $6 billion to help stabilise the rouble and a loan of $24 billion from the IMF. Yet according to Western financial experts, the amount of funding to give Yeltsin’s reform programme a chance of succeeding would amount to between $76 billion and $167 billion each year for about 15 years. And this figure did not include either the money for supporting rouble convertibility (estimated at $7-10 billion) or the increased cost of cleaning up the environment, itself a pressing task.
Russia ended up with the worst of all worlds – all the disadvantages of bureaucratic bungling and mismanagement and all the disadvantages of corrupt crony capitalism. Thousands of enterprises were continuing to churn out huge quantities of shoddy useless goods which nobody wanted. These were either stockpiled or given away to the workers, instead of wages. Other enterprises were idle, starved of raw materials and resources, where workers turned up, did no work, and only received promises of wages. The result was a colossal rise in wage arrears and inter-enterprise debt.
Throughout 1992, the contradictions between Yeltsin and parliament assumed an increasingly bitter character. In this period, an intense power struggle centred on the proposed new constitution. Deputies were incensed by Yeltsin’s increasing reliance on government by decree. The conflict increasingly revolved around the parameters of executive and legislative authority. But this was merely a reflection of the struggle of underlying material interests. Yeltsin had been hamstrung by the old constitution introduced in 1991. If he was to follow the dictates of Western imperialism, he would need to dispense with the parliament and assume far greater presidential Bonapartist powers.
In 1992 there was intense toing and froing of drafts and re-drafts of revised constitutions, each side attempting to jockey for supremacy. After the four-day extraordinary session of the Russian parliament, Yeltsin faced humiliating defeat. The old guard and its allies in the congress voted to reduce still further the president’s powers, overruling his attempt to introduce rule by decree, sacking his representatives in the provinces, and demanding the formation of a new government of ‘national accord’. Yeltsin hoped to finally break this deadlock through a referendum on his proposals which he scheduled for April 1993. His idea was to use the referendum as a vote of confidence – for or against Yeltsin. This was the method of the plebiscite – the classical method of Bonapartist politicians bidding for absolute power.
Yeltsin was held up in the West as the great saviour of democracy – the man who stood on a tank to defend the rights of parliament. Now this self-same parliament turned into his most deadly enemy. Those who stood against him were not political parties, but a coalition of rival groups and interests. Yeltsin had only two alternatives – either win over the decisive sections of the Congress, or else dispense with parliament itself. This the Congress could not tolerate. It was a fight to the death.
The different factions in parliament could all agree on one thing: Yeltsin needed to be stopped. The managers wanted to halt the reform programme. The regional bureaucrats, who ran their Republics like feudal barons, wanted more autonomy and a weak centre, not a dictator. The military caste wanted to recover its lost prestige and privileged positions, and bitterly resented the breakup of the Soviet Union, the loss of Eastern Europe and the humiliating dependence upon US imperialism on the world stage. The struggle between Yeltsin and the Congress was a graphic illustration of the unbearable contradictions in society.
The struggle came to a head in December, when Congress forced the resignation of arch-reformer Gaidar as prime minister. Yeltsin manoeuvred to gain time, replacing Gaidar with Chernomyrdin while preparing a counter-stroke. An uneasy compromise was arrived at, whereby Yeltsin accepted the loss of his chief henchman, while Congress accepted holding a referendum in the spring. It was a truce. But a truce is only a piece of paper reflecting the balance of forces at a given moment and will hold just as long as that balance of forces is maintained.
The aim of the referendum was, in theory, to work out a new constitution. The one in operation, left over from the Gorbachev period, had already been amended 300 times and was full of contradictions. In practice, nobody paid a bit of attention to the constitution. What mattered was the relative strength of the contending forces. And that could only be measured in struggle, not in constitutional committees, though the latter can be – and were – used as weapons in the struggle.
Immediately upon concluding the December deal, both sides commenced manoeuvring. Yeltsin decided to make a bid for absolute power, based upon rule by decree. In March 1993, Yeltsin drafted a decree on emergency rule, but the constitutional court declared it unconstitutional. Khasbulatov, the speaker of the Russian parliament, set out to undermine Yeltsin, eliminating his powers one by one and leaving him as a paper president, to be cast aside when the opportunity presented itself.
By the end of the March Congress, Yeltsin only narrowly escaped impeachment by a paltry 72 votes, out of 1,003. In protest, he walked out of the Congress, but only a few deputies followed him. He now put all his efforts into securing a majority in the April referendum and holding new elections in October. The Congress voted to go ahead with the referendum, but added two questions of its own, “for or against Yeltsin’s economic reforms”, and also, “for or against elections for parliament and the presidency”. In addition, they laid down the norm that the referendum must get over 50 per cent of the total eligible to vote for it to be valid. Yeltsin managed to get the Constitutional Court to overrule this.
In the meantime, US President Bill Clinton agreed to a US-Russian summit where he announced a $1.6 billion US aid package and pressed the G7 to announce a further package ten days later. In April 1993, $42 billion assistance was agreed by the G7 powers. On this basis, Yeltsin promised workers and pensioners increased allowances and an increase in the minimum wage as a bribe before the referendum. This, of course, was an attempt to bolster Yeltsin’s position and affect the result of the referendum – a blatant attempt to interfere in Russia’s political affairs.
This sounds ironical today when compared with the loud protests of the American media about the alleged interference of Vladimir Putin in helping Donald Trump win the 2016 Presidential elections. But then US imperialism has never hesitated in interfering in the political affairs of other countries, including the overthrow and murder of their leaders, as the people of Chile, Guatemala and many other countries can testify.
In the end sixty-four per cent turned out to vote. It was announced that fifty-eight per cent supported the president and nearly fifty-three per cent had backed his economic programme. But there were widespread and persistent reports that Yeltsin had rigged the referendum vote which gave him a narrow majority. Rutskoi immediately dismissed the result: “There are 105 million eligible voters,” he said. “Somewhere around 32 million supported the president and his course. So, between 71 and 72 million were either against or did not go to the referendum… There can be no talk of popular support.”
Yeltsin then attempted to use his victory to change the constitution, neuter the Congress, and increase his presidential powers. After a bitter struggle the draft constitution was approved by the Constitutional Conference. Yeltsin lost no time in moving against his opponents. But this was no easy task. In May, he was humiliated when the trial of the August 1991 plotters collapsed. Matters were coming to a head. In September 1993, after some hesitation, Yeltsin took the plunge and suspended parliament by decree, calling for elections to a new state Duma in December.
Yeltsin had concentrated power in his hands. Like all dictatorial rulers, he promised future elections under a constitution drawn up by himself. He acted as judge, jury, and executioner. Immediately Rutskoi denounced the decree as an “overt coup”, and the Congress voted to impeach Yeltsin, remove him and confirm Rutskoi as president. This was tantamount to a declaration of civil war. Khasbulatov, the parliamentary speaker, appealed to all military and security chiefs to disobey all the “criminal” decrees and orders of Yeltsin.
The Western imperialists rushed to Yeltsin’s defence. Clinton declared that Yeltsin’s actions were “ultimately consistent with the democratic and reform course that [Yeltsin] chartered”. The imperialists were of course not concerned with ‘democracy’ but only with their material and strategic interests. They were not concerned with the illegal dismissal of parliament. This was in sharp contrast to their howls of protest when ‘democracy’ was flouted in the attempted coup two years earlier in August 1991. But then it was a question of the interests of the nascent capitalists being crushed or threatened. It is always their class interests that dictate their home and foreign policy. Imagine the international outrage that would have broken out if the so-called hard-liners had behaved in this fashion!
The time had come to forcibly deal with Congress. In an open act of defiance, Gaidar was re-appointed deputy prime minister and minister of the economy. The stage was set for a showdown. There was no going back. But Yeltsin’s grip on the armed forces was very tenuous. A great part of the officer caste was openly hostile to Yeltsin’s regime, humiliated by the collapse of the Soviet Union and the grovelling before the West. Many soldiers had not been paid wages for months, and there were reports from the Pacific region that soldiers faced starvation. 80,000 officers had been discharged from the army in the previous year without jobs or homes to go to. Only fourteen per cent of conscripts had responded to call up papers. General Pavel Grachev, the minister of defence, was originally ambivalent towards Yeltsin, but threatened with dismissal by parliament, he sided with him.
Opposition to Yeltsin also came from the regions. When, on the 18th September, he met members of the Federal Council and asked them to supplant Congress until the new elections, 148 out of 176 regional leaders refused to support the proposal. Even the St Petersburg city council condemned Yeltsin’s decree after rejecting an appeal from the city’s mayor, Sobchak, a Yeltsinite. Yeltsin even failed to gain the support of the regions for a new constitution with a two-tier chamber, where the regions would form the upper house. They insisted, instead, on the current constitution. His proposals were seen as a trap which would effectively clip their powers and concentrate greater power in the hands of the presidency. They were promoting their own interests which at this stage conflicted with those of Yeltsin.
The storming of the White House
It was clear that the deadlock between the president and parliament could not last for long. For many months, both Yeltsin and his opponents in parliament had been struggling for power. Yeltsin commented in his memoirs: “The goal I have set before the government is to make reform irreversible.” But that still remained a goal. In order to make it a reality, he must first remove the obstacle of the Congress. Plans were laid. He intended to occupy the White House on a Sunday when the building was empty and simply announce its dissolution. This element of surprise was foiled when news of the attack filtered through to the Congress. They took immediate steps to blockade themselves in the building, thus beginning the siege of the White House.
Even after the Yeltsin decree of 21st September 1993, the outcome of the struggle over the fate of parliament was not decided. Both sides appealed to the masses. Rutskoi even half-heartedly appealed for strikes. However, as every worker knows, to organise a strike it is not enough to issue an appeal. For two weeks, the deputies just sat in the White House, waiting for the masses to come to their aid. If, instead, they had sent representatives to the factories to rouse the workers, explaining concretely the meaning of Yeltsin’s programme and posing an alternative – even in a caricature Stalinist form – they would have got a response. But they were incapable of explaining the attack on workers’ rights posed by Yeltsin, limiting themselves to appeals to ‘defend the constitution’.
Unused to basing themselves on the masses, they were incapable of appealing in a concrete manner to the working class, and therefore they were incapable of arousing the masses to action, despite the existence of widespread discontent against Yeltsin. This helplessness was no accident. Both sides were terrified that an armed confrontation would spark off the intervention of the masses, with unpredictable consequences. In a situation of such a critical character, energetic and determined action is essential. However, the leaders of Congress showed themselves unprepared. They hesitated, displayed passivity, waited in the White House with no evident plan of action, until Yeltsin cut off the electricity, water and heat.
The real prevailing mood in the masses was ‘a plague on both your houses’, although that was beginning to change towards the end, with a section of the most active workers participating in the demonstrations outside the White House. This was one of the reasons which forced Yeltsin to make an armed assault on parliament. An indication of the hopelessly degenerate and corrupt nature of the bureaucracy was the fact that many of the deputies accepted Yeltsin’s bribe to leave the White House, in exchange for severance pay and being allowed to keep their government apartments! In the end, only about 100 of the ‘hard-liners’ remained.
Despite the inactivity of parliament, it is clear its support was beginning to increase – on the 3rd and 4th of October, tens of thousands of demonstrators broke through police lines to reach the White House. It is probable that Rutskoi and Khasbulatov mistook this for a movement of the masses, and decided to ‘go for broke’. As would-be insurrectionists, they made every mistake in the book. Having foreseen nothing and prepared nothing, they reacted passively to Yeltsin’s initial aggression, but finally panicked, and attempted to seize power without any plan or perspective. There followed the pathetic spectacle of Rutskoi’s frantic telephone calls, after the assault had begun, appealing for the support and intervention of Western ambassadors. This was like appealing to Satan against Beelzebub. The ambassadors of the imperialist powers, reflecting the policies of their governments, backed Yeltsin to the hilt.
Instead of organising a mass movement to overthrow Yeltsin, Rutskoi and Khasbulatov, in effect, attempted to stage a putsch, basing themselves on a minority. Even so, the weakness of Yeltsin’s position was shown by the fact that the rebels came close to succeeding. In the absence of a movement of the masses, the army becomes the key element in the equation at such moments. Yeltsin’s position remained extremely shaky up to the last minute. Yeltsin was in a state of panic. When the president called for troops to storm the parliament building, they remained passive. After the fall of Congress, it emerged that the army chiefs only decided to intervene to save Yeltsin at the very last moment.
This clearly shows the slender support Yeltsin had. The Congress leaders had important points of support in the armed forces, through the Union of Officers. Yet they failed to conduct agitation among junior officers – let alone the ordinary soldiers. They addressed their appeals to the army tops. Most of the generals stayed on the fence till the last moment, waiting to see who would win. Yeltsin could count on the support of only a small minority of hand-picked units. Even the support of these, as has been shown, was not firm. Yet, in the absence of mass participation, the action of a minority of the army and KGB was sufficient to tip the balance in Yeltsin’s favour.
The seriousness of the position was confirmed by Yeltsin himself. “To put it mildly,” he recalled in his memoirs, “the picture was dismal. The army, numbering two and a half million people, could not produce even a thousand soldiers; not even one regiment could be found to come to Moscow and defend the city.” (B. Yeltsin, op. cit., p. 276.) When he entered the meeting at the defence ministry, he recorded:
Overall, I must say the generals’ expressions were grim, and many had lowered their heads. They obviously understood the awkwardness of the situation: the lawful government hung by a thread but the army couldn’t defend it – some soldiers were picking potatoes and others didn’t feel like fighting. (Ibid., p. 277.)
Yeltsin also confirmed in his memoirs the difficulty of getting his elite troops to take control of the White House. He was forced to plead personally with its officers:
Deciding to take the bull by the horns, I barked, “Are you prepared to fulfil the president’s order?” In reply, there was only silence, a terrible, inexplicable silence coming from such an elite presidential military unit. I waited for a minute and no one uttered a word. I finally growled, “Then I’ll put it another way: are you refusing to obey the president’s order?” Again, the response was silence. I cast my eyes over all of them – they were strong, strapping, and handsome fellows. Without saying good-bye, I turned on my heels and strode toward the door, telling Barsukov and Zaitsev, Alpha’s commander, that the order must be obeyed. Subsequently, both Alpha and Vympel (the elite troops) refused to take part in the operation. (Ibid., p. 12.)
Even at the decisive moment, only a small number of ‘loyal’ troops participated in the crushing of parliament. The Daily Express (7/10/93) reported that:
Military chiefs were reluctant to obey orders to shoot at the parliament. The assault force was eventually cobbled together from the army, the interior ministry and sections of the KGB and police.
According to a report of bourgeois economist Alec Nove, only eight officers could be found to lead the assault, for a large amount of money, payable in dollars. Of these, two months later, two had already been killed and the other six were in hiding.
It is only natural that in his memoirs Yeltsin should try to portray himself as an energetic chief in complete command of the situation. But the truth was very different. As rebel forces seized the television centre, Yeltsin appeared to be paralysed. In the decisive moments of the attempted putsch, when the fate of this regime, and all Russia, was in the balance, Yeltsin disappeared. Western press reports describe him as in a state of panic, probably drunk and shouting incoherently at his staff. Hardly the picture of a brilliant conspirator, who succeeded in cornering his enemies by a far-sighted stratagem! For all his bluster and bravado, Yeltsin was always no more than an upstart and a political adventurer. Although equipped with a certain animal cunning, and capable at times of a degree of audacity (often intimately connected with the need to save his own skin), he was devoid of any real understanding or perspective.
The White House was taken and the leaders of the October coup, Khasbulatov, Rutskoi, Makashov and Achalov, were arrested. The deadlock between the two mutually antagonistic forces – the nascent mafia bourgeoisie represented by Yeltsin and the old nomenklatura represented by parliament – had been resolved by the former. The process of capitalist restoration had been given a new powerful stimulus. But even then, the victory of the Yeltsinites had still failed to provide a definitive solution.
Within a matter of few months, the struggle broke out again with the election of the Duma. A further blow came when both the August 1991 coup-plotters and the leaders of the October 1993 parliamentary rebellion were amnestied without trial by parliament in February 1994. In a wry comment, Yeltsin said:
Now they have all been released, they write poetry, they take part in demonstrations, and they are elected to the state Duma, the new parliament. Their cells in Lefortovo Prison have now been occupied by other people, thereby proving that the power of democracy is, alas, unstable. (Yeltsin, op. cit., p. 102.)
This did not prevent this great ‘democrat’ from immediately banning opposition newspapers, suspending local councils, and outlawing opposition parties. This despite the fact that he already had complete control of the TV and radio. He also sacked regional governors and local councillors and suspended the Constitutional Court. There was not the slightest pretence at ‘democracy’. Yeltsin hoped to move further down the road of a Bonapartist dictatorship, with a pseudo-parliamentary facade. The Duma elections would simply provide him with a parliamentary fig-leaf.
However, the precarious position of Yeltsin was revealed by the elections of December 1993 which followed the crushing of parliament. His victory over parliament was supposed to have settled accounts. It was for this reason that the imperialist powers fell over themselves to support him. The Second International also added its voice to the chorus of support for Yeltsin, while making the obligatory nod in the direction of ‘democracy’.
Yeltsin regarded the new elections as a formality. His sidekick, Gaidar was already organising the victory celebrations. He aimed to get a decisive victory for the reformist parties in order to push through a rapid move towards capitalism. However, the reformist camp turned out to be hopelessly split and impotent – Gaidar, Yavlinsky, Sobchak, Popov and Shakhrai, all put themselves forward in different parties and blocs, each vociferously denouncing the others.
The imperialists were convinced that, after the crushing of the White House, the movement towards capitalism would be plain sailing. The dominant wing of the imperialists continued to press on with the same medicine. The organ of British finance capital, the Financial Times demanded “More shock, more therapy”. After the December 1993 election, it published an editorial entitled ‘No Turning Back for Russia’, demanding that the reform programme be maintained, irrespective of the social costs.
Western politicians deluded themselves that a capitalist Russia would be weak and divided, and easily dominated by the West. But the idea that a capitalist Russia would be a semi-colony was always a piece of crass stupidity. Ted Grant explained that if the movement towards capitalism in Russia were to be completed, it would not end in a weak, semi-colonial regime, but in an aggressive and powerful imperialism, with a sizeable industrial base and a mighty army. Subsequent events have completely confirmed that prediction.
In the short-term, however, under the rule of Yeltsin, Kiriyenko, Chubais and Nemtsov, Russia became reduced to the role of an auxiliary of the West. The ruling clique of so-called reformers had been desperately attempting to push forward, following the dictates of the IMF and World Bank. But as the crisis developed, a split opened up between different wings of the Russian oligarchy. The Russian capitalists, who owned the banks and big monopolies, had their own interests, which did not necessarily coincide with those of the West.
These former bureaucrats, who turned themselves into tycoons and billionaires by plundering state assets, were just as reactionary, corrupt and degenerate as the other gang. But they did not want Russia to be transformed into a semi-colony of US imperialism and did not want to accept the dictates of the IMF which, among other things, demanded the closure of uneconomic banks, restrictions on ‘crony capitalism’ and a tax regime in which the big monopolies would be forced to pay money to the state.
The introduction of capitalism led to the collapse of Russia’s productive base. With the exception of the speculative boom in finance and services in Moscow and, to some extent, St. Petersburg, the rest of Russia was in a state of collapse. Investment had collapsed and the haemorrhage of capital continued, with the annual outflow of at least $20 billion to the West. The rouble, which had already effectively been devalued by fifty per cent, was to fall still further.
This was a matter of indifference to the voracious Russian businessmen, who were only interested in enriching themselves at the expense of the Russian people, and did not care about production. The only productive investment that continued to some extent was in extractive industries, such as oil and nickel, which the West was interested in.
Russia was now firmly tied to the world market. Lack of investment in agriculture and the consequent fall in production meant that at least twenty-five per cent of Russia’s food was imported from the West. The collapse in production expressed itself in a severe dependence on imports, not just of manufactured goods, but of food and other basic items of consumption. The markets were full of Western goods: German beer, Dutch soap, French perfume, Swiss watches, and Polish sausages.
But the steep fall of the value of the rouble in such a situation led automatically to a sharp increase in the price of foreign imported goods. We had reports of what this meant for the ordinary Russian worker. An article in The Guardian (19/8/98) was quite revealing:
For ordinary Russians, sausages are one of the most revealing measures of post-Soviet decline. Ask a miner how much his standard of living has fallen since Boris Yeltsin moved into the Kremlin seven years ago, and he tells you how many sausages his family ate per week before and how few they eat now.
The Soviet sausage, he says, was full of home-grown meat, but its Russian successor contains Western gristle and fat. The sausage was also a salutary lesson in basic economics delivered yesterday by Mikhail Abramian, a Moscow butcher, as he gave customers the bad news, “I’ve had to raise the price of my sausages because they’re all made from imported meat. It’s not my fault,” he said. “Russia doesn’t produce meat any more. We buy sausage ingredients from abroad and have to buy in dollars”.
As The Guardian commentator said:
Flirtation with the West, its food and financial habits, is ending in tears. A conservative estimate, assuming no further rouble collapse, has Russian inflation rising from seven per cent to twenty per cent this year.
“People can’t and won’t pay thirty per cent more for their food,” said Henryk Kasparian, a food importer. “There will be upheaval. There has to be”.
The falling rouble also meant a huge increase in the cost of repayment of debts. This not only increased the indebtedness of the Russian state, which was already spending a great part of the budget paying off the interest on foreign loans, but also threatened to bankrupt a large number of Russian banks.
On Monday 24th August, the dollar rate for the rouble was seven to one. Two days later its value was almost halved. Long queues were forming outside the banks as Russians started to withdraw their savings and change them into foreign currency as soon as possible. This collapse of confidence threatened to produce a general collapse of the financial system.
The strategists of capital were drawing very pessimistic conclusions. “The market is dead,” said Al Breach, a liberal young British economist in Moscow who had watched the havoc wreaked by the Asian fallout on Russia in the past year. These were troubling words, coming from an admirer of Margaret Thatcher. Breach did not mean the stock market, he meant that the very notion of market mechanisms triumphing over adversity, central to the conclaves of Western advisers and Russian reformers over seven years, no longer applied. “Once you get to this stage it’s impossible to bring it back by market means,” said Breach.
The Russian bourgeoisie itself had little confidence in the future at that time. Andrew Ipkendanz of the Credit Suisse First Boston bank, according to the Financial Times (27.8.98), has admitted: “Russian elites have plundered the country’s capital and funnelled most of the proceeds offshore.”
A regime of decline
The French nineteenth century socialist Proudhon invented the celebrated phrase “All property is theft”. From a strictly scientific point of view that is incorrect, but in present day Russia it comes close to the truth. One Western financial strategist, returning from Moscow, confessed that he was “saddened by the pervasive sordidness and decay, the rampant corruption masquerading as capitalism… I left with a palpable sense of foreboding”, adding “that sinister events are waiting to happen”. This was a matter of months before Yeltsin’s bloody assault on the White House and the crushing of parliament in November 1993.
Moscow today is a metropolis in the grip of gangsters, drug pushers and pimps. A society where the state once ruled by fear and commerce was a crime, has been replaced by a jungle in which commerce is ruled by fear and anyone who indicts crime is blown away by a shotgun-wielding hit-man on his doorstep… Meanwhile, the wages of sin are good enough for the new rich of Russia; on a late mid-week evening in the Teatro Grill… sharp young men in designer sports jackets brandishing mobile phones like the fly-whisks of oriental despots are ordering Canadian lobster and French champagne… They share their table with burly minders in leather jackets. The moll is there too… The cynical view is that not only has Russia’s moral and social switchback ride made the mafia inevitable, but also in the medium term, it may even be necessary. Its single-minded dedication to the individual profit motive makes it an armed and lethal force against those who would restore state collectivism. (The Sunday Times, 8/5/94.)
The restoration of capitalism brought with it all the worst features of bourgeois society: destitution, homelessness, unemployment, violent crime and increased alcoholism, while destroying the welfare services. The savage cuts in funding left the health service reeling from one crisis to another. Along with the growth of deprivation came illness and disease. Alcoholism, which was a scourge under the old regime, became an epidemic. Vodka consumption rose steeply since drinking curbs were eased in 1991 and the subsequent liberalisation of trade.
During the period of ‘reform’, real wages in Russia fell by half. Millions of Russians faced malnutrition, if not actual hunger. According to the State Statistics Committee’s annual report, almost 32 million people were receiving less than the government-defined minimum subsistence income of about US$75 a month at the end of 1996. The vast majority were spending every waking hour trying to scrape a living just to survive.
A harrowing picture of Russian life was vividly portrayed in an article by journalist Neil MacKay:
In the winter of 1993, more than 1,000 homeless people were lucky. The government actually acknowledged their existence – when they cleaned their frozen dead bodies off the sidewalks… The breakup of the Soviet empire shook Russia to its foundations, the social welfare net collapsed and the ensuing chaos created the ‘new poor’… Thousands of former prisoners drift into homelessness on their release from ‘the zones’ – Russian penal colonies – and find themselves in a twilight world of numbing degradation. Ex-convicts can be seen shivering on street corners, drinking pints of vodka with refugees of the Afghan war, runaway children and the insane and infirm. (The Big Issue in Scotland, 8-21/12/95.)
But this was only one side of the picture. The desperate position of the masses presented a sharp contrast to the ostentatious wealth of the nascent bourgeoisie and its hangers-on. The move towards the market economy created an elite of super-rich capitalists, recruited from the old Communist nomenklatura, who grew rich through corruption, extortion, and the plunder of state industries. The fleets of cream-coloured Mercedes, the glittering fashion houses stood in insulting contrast to the majority struggling to survive.
According to a World Bank report, one-third of the population was living below the poverty line, while income distribution was as unequal as in Argentina and the Philippines. The 43 per cent fall in real wages between 1991 and 1993, combined with price liberalisation meant increasing numbers of people could not afford the minimum subsistence basket, estimated in November 1994 at about $30 a month.
The new class of Russian capitalists was eager to consolidate its hold on power, privileges and income by such means as death threats and assassination to eliminate business rivals.
At the top end of the market, glitzy supermarkets sell live lobster and expensive champagnes for the country’s new rich. There are ready buyers for $2,000 dresses in Russia’s shiny new fashion boutiques, and the latest Mercedes cars and stretch limousines now cruise Moscow’s streets. (Financial Times, 7-8/10/95)
The consequences of this were not lost on the more intelligent Western observers:
The growing distance between rich and poor is also more shocking to Russian eyes than to Western ones because it has replaced a communist order in which the currency of social status was a political power rather than money and the elites were careful to mask their privileges with paeans to the virtues of the working class.
For these reasons, the increasingly deep divide between the winners and losers created over the past three years by Russia’s traumatic economic and political transformation is emerging as the most important underlying factor in the country’s struggle to determine how to move forward. (Financial Times, 10/4/95.)
The Russian government estimated that apart from the foreign bank accounts and property, there may have been as much as $20 billion in US dollar bills stashed away. Reflecting this new bourgeois culture, Moscow now has the highest concentration of gambling casinos in Europe.
In 1996, GDP fell by a further six per cent. Industrial output was down by five per cent and agricultural output by seven per cent. Output in light manufacturing plunged by twenty-eight per cent and in the construction materials industry by twenty-five percent. Chemical and petrochemical production declined by eleven per cent and new housing construction by ten per cent. Russia’s 1996 grain harvest was the third smallest in thirty years. Nor was Russia’s decline the worst case. In the five years to 1994, the economies of the ex-republics of the Soviet Union plummeted by up to, in the case of Georgia, an astonishing eighty-three per cent. Subsequently there were further falls.
Anthony Robinson wrote in the Financial Times (11/11/94): “The pain has been greater than originally imagined.” Nevertheless, that had not prevented this organ of finance capital demanding far greater pain in its editorial a month earlier (7/10/94): “There is no middle way – only a choice between a Big Bang stabilisation and social economic collapse… Sooner or later, they would have to demand the kind of sacrifices from their people which they have not so far had to make.”
The magazine Newsweek (17/6/96) admitted:
The harshness of the transition has produced fury. In the coal-mining regions of northern Russia, men in the pits went months without getting paid earlier this year. Many pension payments have also been late. If capitalism doesn’t stand for a decent day’s pay for a decent day’s work – or a commitment to make good on obligations to retirees – “then what does it stand for?” asks a bitter Lyudmila Sakharova.
The economic crisis was accompanied by a frightful collapse in living standards. A large proportion of the population was reduced to living in conditions of poverty not seen since the war. Wages were not paid for months on end as a result of the huge debts accumulated by state-owned enterprises and the collapse of the central plan.
Not since the Dark Ages, after the collapse of the Roman Empire, has Europe seen such an economic catastrophe in peacetime. The collapse of production in Russia resembled the effects of a massive defeat in war, or, more correctly, in two wars. It has no parallel in modern history. From 1990 to 1995 production plummeted by around 60 per cent. It could only be described as a historic wipe-out of productive technique and industry. The steep fall in American production of 30 per cent in the Great Depression of 1929-33 was relatively minor by comparison. Each year of life in Russia was equivalent to the deepest depression ever experienced in the West.
Capitalist counter-revolution and women
The collapse of social services and increased unemployment meant that all the benefits of the planned economy for women were systematically wiped out. The growth in unemployment sentenced many more people to poverty in Russia than in the West because many benefits had been provided directly by the workplace.
As The Economist (11/12/93) at the time pointed out:
Unemployment still carries a deep stigma in Russia. Only in 1991 did it cease to be a crime. For those without jobs, absolute poverty threatens. Unemployment benefits are linked to the minimum wage of 14,620 roubles a month, a third of the official subsistence level and about one-seventh of the average wage. The jobless are often even worse off than these figures imply because most of the basic social services – such as health, schools and transport are provided by companies rather than local government, and hence are only available to people in work.
The main victims were the women. They were the first to be sacked, in order to avoid paying social benefits, like child and maternity benefit. Given the fact that women made up 51 per cent of the Russian workforce a few years ago, and that 90 per cent of women worked, the growth of unemployment meant that an increasing number of women were excluded from the workforce.
Under the previous regime, women received 70 per cent of men’s wages. The figure in 1997 was 40 per cent. Keeping a family on one wage was difficult enough in the old USSR. Now, with the dramatic rise in poverty, it became virtually impossible. On the 10th February 1993, the then labour minister, J. Melikyan announced the government’s solution to unemployment. In a language that would do credit to any right-wing bourgeois politician in the West, he said he saw no need for special programmes to help women return to work. “Why should we try to find jobs for women when men are idle and on unemployment benefits?” he asked. “Let men work and women take care of the homes and their children.”
Such language, which would have been unthinkable in the past, was now evidently regarded as something normal and acceptable. The government’s attempt to implement a ‘back to the home’ policy was reflected in several drafts of a new law that was under consideration. The first draft would potentially have nullified women’s right to abortion and banned women with children under 14 from working more than 35 hours a week. Following protests, the most controversial clauses were dropped. The law now did away with the obligation of the state to provide day-care for the children of working women. As compensation, women with three or more children were offered benefits to stay at home and look after them.
Prostitution increased enormously, as women tried to survive by selling their bodies to those with money to buy them – mainly the despicable ‘new rich’ and wealthy foreigners. Women from the former Soviet Union were exported to Western countries as prostitutes. In this humiliating slavery of women reduced to the status of commodities was encapsulated the humiliation of a land that was being compelled to submit to the yoke of exploitation in its most naked and shameless guise.
Here, more clearly than anywhere else, we see the real face of capitalist counter-revolution – crude, brutal and ignorant – a monstrous throwback to the days of tsarist slavery in which each slave was allowed to lord it over his wife and children in compensation for his own degrading condition. The position of women in Russia was thrown back more than seventy years.
Capitalism can seriously damage your health
As a direct corollary of the collapse of living standards, there was a sharp decline in health for the mass of the population. Newsweek described life expectancy as “the ultimate indicator of a nation’s overall economic health”. Even at the height of the crisis of the old regime in 1987, life expectancy for the USSR still averaged 65.1 years for men and 73.8 for women. In Britain, by comparison in 1996 male life expectancy was 74 years.
The Financial Times (14/2/94) carried a front-page article with the title ‘Russia faces population crisis as death rate soars’. The article explained that:
In the past year alone, the death rate has jumped 20 per cent, or 360,000 more deaths than in 1992. Researchers now believe that the average age for male mortality in Russia has sunk to 59 – far below the average in the industrialised world and the lowest in Russia since the early 1960s.
An article in the US magazine Time (27/6/94) commented:
For many East Europeans, the age of freedom is turning into the worst of times since the Second World War. Eastern Europe is going through a health crisis of dire proportions: demographers and health officials report rates of death and childlessness on a scale normally seen only in wartime. Ailments of both body and mind are near epidemic magnitude. In several countries, including Russia, the population is actually shrinking. “The drop is catastrophic,” says Regine Hildebrandt, a minister in the state government of Brandenburg, “it is like war.”
In Russia, Bulgaria, Estonia and Eastern Germany, deaths are outnumbering births, in some areas 2 to 1. Life expectancy in nearly every part of the East is dropping, especially among men, at a time when even the poorest third world countries are recording steady increases. In Hungary, the average is 65 for men and 74 for women, in contrast to 67.3 and 75 in 1975 and 73.4 and 81.8 for French men and women today.
Death rates in Russia soared 30 per cent after 1989, with men bearing the brunt, says demographer Murray Feshbach of Georgetown University. By his estimate, life expectancy for Russian men fell to 59, about the same as in Pakistan.
Nicholas Eberstadt, a researcher at the American Enterprise Institute in Washington, commented: “In the past, such abrupt shocks were observed in industrial societies only during wartime.” These figures are all the more appalling when we bear in mind that the Soviet Union had attained levels of health care and life expectancy as good as many advanced capitalist countries.
Disease, suicide, murder, inadequate food and despair combined with the demolition of the health service to reduce Russia to ‘third world’ levels of health. According to Rabochaya Tribuna:
The majority of Russians are chronically undernourished. The deficit of high quality protein is 25 per cent and vitamins up to 50 per cent. The energy deficit is around 20 per cent.
The death rate for Russian males was related to suicide, murder, bad food and bad conditions and also to the general lack of perspectives and loss of hope for the future.
Under the old system, at least the workers had a free health service and relatively stable conditions. The attitude of workers was reported in the media through various sources. Julika Lukacs, a Hungarian pensioner, said: “Society was not divided under the Communists. There was no crime or poverty and we lived happily.” That may be an indulgent memory, but it was shared by many. A miner from Vorkuta said he was “voting for Zyuganov, because I felt safe under the Communists”. Another Russian person who was interviewed about democracy, revealing the psychology of millions, gave the following reply:
Freedom? Yes, we have it. But freedom for what? To die of appendicitis? To buy a Western anorak for 200 Deutsch Marks, when the average wages are 5 Deutsch Marks per week. Freedom to bribe teachers $1000 a year to teach our children or to pay $50 to see a decent doctor?
Since then, the situation has improved (it could hardly get any worse). But the negative consequences of capitalist restoration were recently confirmed by The Transition Report 2016-17, which informs us that those born in a ‘transition zone’ (post-communist countries in Europe) are one centimetre shorter than their parents as a result of stress and malnutrition. The index of happiness is also lower. It is comparable to those born in a war-zone. (See Reuters world news, 3 November 2016.)
The new Transition report quotes a survey of 51,000 households in 34 countries conducted in 2006, 2010 and 2016, asking respondents to rank from 1 to 5 their agreement with the statement ‘All things considered, I am satisfied with my life now.’ “Excessive concentration of wealth (among the very rich) … may negatively affect equality of opportunity and cause a backlash against key economic and political institutions underlying market economies,” the report warned, adding it could lead to weaker growth in the long run.
Naturally the individuals’ experiences of growth differed markedly depending on their position on the income ladder. Only those in the top 27 per cent of income distribution have experienced average or above-average income growth. Some 23 per cent are actually worse off now than in 1989, while 33 per cent have experienced income growth below the G7 average.
The workers react
After six or seven years of chaos, the working class had had enough. They were looking for immediate solutions to their most pressing problems, beginning with the huge wage arrears that had built up. The drastic falls in living standards and the constant provocations against the masses had now reached a critical point. The indignation of the masses had boiled over. The outrage of the workers was expressed in a militant movement of the miners and other sectors.
On 11th June 1998 miners from throughout Russia set up a picket outside the White House. It was not only the miners, but also many other sections that were moving into struggle. This posed an extreme danger to the regime.
The Economist of 22nd August 1998 described the scenes:
Outside parliament trade unions are demanding that their unpaid wages around 78 billion roubles ($10 billion at the new exchange rate) should be adjusted to compensate for the 20% devaluation seen this week. They have called a strike for October 7th. Labour protests, although disruptive, have not yet crystallised into national strikes, but will become more virulent if the economy slumps.
The following extracts from material published by the miners’ union gives us a clear indication that the period of working class ‘passivity’ was over.
Train carriages from Russia’s Far North descended on Moscow on June 11 carrying 150 disgruntled coal miners who made the 40-hour journey to the capital to stage a protest against wage arrears. They came to Moscow with the support of all of Vorkuta, teachers, doctors, pensioners, all contributed whatever they could to the funds to pay for the miners’ travel.
They remain there now. They came prepared for a long vigil. At a press conference, leaders of the trade unions said that the action would last as long as the miners could hold out and that miners had come to Moscow with one-way tickets and that for the time being they didn’t have the money for their return fares!
This time the miners came with political demands as well as demands for unpaid wages. Their demands were made clear by the posters the pickets held, reading: “Down with the President!”; “Yeltsin, give our money back!” and “Yeltsin, we brought you up, we will bring you down!”
But apart from the payment of their wages, “virtually all Russian miners” are now demanding “the resignation of the president and the holding of early presidential elections” in the words of Aleksandr Sergeev, the President of the union.
The miners of Vorkuta were quickly joined by up to 400 others from the Kuznetsk coalfield, and Rostov Region. Others have joined the protest at various times including miners from Sakhalin Island, Chelyabinsk, the Urals, Norilsk, Kemerovo, Tula and Rostov. A small contingent of nine workers representing the giant AvtoVAZ car-maker in Togliatti joined the protest. Protesting scientists, students and Moscow metro workers also have joined the protest at various times.
Although they are largely being ignored by the government, the demonstrators are certainly not being ignored by the rest of the city, the protesters have been accepting offers from city factories and sympathetic residents, many of whom regularly deliver food and support to the picket.
The miners’ picket outside the White House was not an isolated incident, as reports from other areas showed:
On the morning of 31st July, practically the entire adult population of Partizansk [known as the mining capital of the Maritime Territory in the Russian Far East] and the miners’ satellite townships attended meetings near the Avangard and Uglekamenskaya pits and took a unanimous decision to adopt political demands, including calls for the resignation of President Boris Yeltsin and the Cabinet of Ministers.
In the town itself, there are frequent rallies involving almost all the population. Wives of the coal miners recently said if wages remain unpaid, they will hold a ‘women’s rebellion’. The situation becomes more explosive by the day. Coal miners say that they no longer believe promises. Reports say that most families do not even have basic foodstuffs. In unison with their wives, coal miners have threatened ‘to take pitchforks and crow-bars’ to force the payment of their delayed wages.
This involvement of the women cannot be sufficiently underlined. When the women begin to get involved at this level, it is always the symptom of a deep, underlying reawakening of the whole of the working class. We must remember that the Russian Revolution began precisely with a movement of the women workers in February 1917. The miners’ picket set up its headquarters on the Gorbaty Bridge in Moscow and they published material in the bulletin of the Independent Miners’ Union. The translator of their material in the July 16th issue of the bulletin made the following comment:
I believe these materials give a fairly true picture of the present ferment within the nascent labour movement of Russia. Personally, I am specially fascinated by the resurgence of the tradition of Russian plebeian democracy and grass-roots activism, reminiscent of 1905 and 1917, which seemed to have been long lost.
He reported the speech made by Vyacheslav Revuzov, “the head of a delegation from the city of Tula, the home of the Kalashnikov machine gun and a traditional centre of arms production.”
When Vyacheslav Revuzov was asked the question: “You have women among them. Does it make it more difficult?” His reply was:
On the contrary, you have no idea what kind of women they are. Some of them I would not exchange for any man. One of these women is Yevmenenko. She is the chairwoman of the strike committee of the military plant ‘Shtamp’. I would go on any dangerous mission with her. They could not find a single man to lead the labour movement there. So, she took the burden on herself and they have accomplished a lot: fired one director, appointed another. De facto, they completely control the plant which presently has about three thousand workers. They summon to the committee their chief engineer, the mechanic, the energy manager and ask them: why has production stalled? They can fire them any moment and appoint other specialists. This is what workers’ power in an enterprise is all about.
What was significant was the development of embryonic Soviets. In fact, in his speech, Vyacheslav Revuzov explains that he is “Chairman of the City Soviet of Workers, Specialists and State Servants. The Soviet includes the representatives of the nine largest enterprises of Tula. Now we incorporate in our soviet regional representatives as well. Mainly, these are strike committees.”
As the above quote from Vyacheslav Revuzov shows, the phenomenon of factory occupations was becoming widespread. The workers were taking over the factories and running them through their own democratically elected committees. For example, in Vyborg, historically the stronghold of the Bolsheviks during the 1917 Revolution, the workers in a paper factory took over the management. They turned out the owners and after a struggle with the OMON, the special police, the workers were de facto running the factory.
Very rapidly the strike movement began to put forward political slogans. Central to the miners’ demands was the resignation of the government. At a joint protest meeting of coalminers and power engineering workers in Vladivostok, dismissal of the cabinet was demanded. The meeting was attended by delegates of all enterprises affiliated to the regional Primorskugol and Dalenergo joint stock companies that ran the mining and power operations in the Far Eastern Russian territory.
Spontaneously-organised workers’ councils… are taking over local government functions and posing a direct challenge to regional authorities and trade union leaders alike. The ‘salvation committees’ are essentially the same idea as the ‘soviets’ of workers and soldiers that spread throughout Russia during the revolutions of 1905 and 1917. [They] have spread to every major community of the Kuzbass region … and are growing increasingly confident. (Hindustan Times 4/12/96)
The miners of the Neryungri open-pit mine in Southern Yakutia, which was considered the largest mining enterprise in Russia’s Far East, stopped supplying coal to their consumers but were taking care of their own town’s needs. In this decision, we had potentially the elements of workers’ control. The workers concluded that they had to begin to take over the running of distribution. This was a very important development which in some areas led logically to the setting up of elected strike committees – in effect embryonic soviets.
A report in The Guardian (18/12/96) stated that:
In a move reminiscent of the creation of workers’ and soldiers’ soviets, which preceded the 1917 Revolution, they have set up a ‘salvation committee’ to co-ordinate protests and take the initiative from the ineffectual local authorities.
“It’s like Lenin said: if the authorities can’t govern in a new way, and the masses do not want to live in the old way, a third force appears,” said Valery Zuyev, aged 42, a mine electrician who heads the salvation committee.
The committee movement, which began in September, has spread to other towns in the Kuzbass region. There have been calls to buy weapons and Moscow is worried. Unlike the strikes by unpaid miners and teachers, the committees unite workers from all sectors. “If they drive you into a corner, if your children are hungry, if the constitution isn’t respected, the only thing is to demand the government be changed,” said Mr Zuyev. “If you can’t achieve that peacefully, you do it by force”.
The workers did not call them soviets, but that is what they were. This fact was of the first order of importance. It showed that the traditions of the revolutionary past, despite everything, were still alive in the hearts and minds of the Russian proletariat, which was actively seeking a way out, relying on its own strength and its own methods. However, the victory of the working class requires something more than just favourable objective conditions, numerical strength or even the willingness of the masses to fight for a change of society. The subjective factor is also indispensable. Without the leadership of Lenin and Trotsky, the October Revolution would never have taken place.
The problem facing the Russian working class could therefore be summed up in one word – leadership. There were big strikes and protests of the workers. But they lacked organization and leadership and their aims were confused and contradictory. With no lead from the Communist Party, from the unions, or from anyone else, they set up democratically elected committees in Kuzbass and other areas. But in the absence of leadership and no programme or perspective, this proved to be an ephemeral phenomenon.
In 1997, Russia’s economic growth was positive for the first time since the formation of the Russian Federation in 1991. Nevertheless, the situation was still very fragile. It could not be argued that a functioning market economy existed in Russia at this stage. Certainly, Western observers remained sceptical and their fears were increased by the events of 1998. The crisis that started in Asia and rocked the world’s financial markets immediately affected Russia. On 13th August 1998, the Russian stock, bond and currency markets collapsed as a result of fears of a rouble devaluation and a default on domestic debt. Annual yields on rouble-denominated bonds rose to more than 200%. There were sharp falls on the stock exchange.
This was followed by what can only be described as a financial and economic meltdown. In September of the same year the Russian central bank decided to allow the rouble to float freely. It sank like a stone. The immediate result of this sharp depreciation was huge price increases. Inflation rose to 27.6% in 1998 and 85.7% in 1999. As a result of food price increases, social unrest grew and people started to take to the streets in various cities. Russia was now bankrupt. In November, the Russian Deputy Minister of Finance Mikhail Kasyanov declared the country would be able to repay less than US$10bn of its US$17bn foreign debt. In the following weeks, there was a run on the banks as alarmed depositors queued up to withdraw their savings.
The Russian economy contracted by 5.3% in 1998. GDP per capita reached its lowest level since the formation of the Russian Federation in 1991. The IMF was piling on the pressure, pushing for faster movement in the direction of capitalism, while attempting to squeeze the Russian people for cash repayments. On June 23, the government presented the lower house of the Duma with an emergency anti-crisis plan to raise taxes, but the IMF remained implacable. It held up the payment of the next tranche of its loan to Russia, saying that the government was not doing enough to collect taxes.
The Russian government asked for an additional $10-$15bn from the IMF to stave off financial collapse, thus exposing to the whole world its humiliating dependence on imperialism and Western bankers. By their actions, the latter were pushing Russia towards the abyss. The result was a foregone conclusion. On August 25-26th, the rouble fell sharply, losing 40% of its value against the German mark. Trading in the currency had to be suspended.
In a statement, the US said that Washington appreciated the ‘difficult’ situation faced by Russia. But almost in the same breath, the United States government called on Russia to act swiftly to restore confidence and implement all economic reforms agreed with the International Monetary Fund (IMF), thus making a difficult situation more difficult still. In 1998, over a six-month period, the currency lost more than 70 per cent of its value. Inflation rocketed, incomes plummeted, banks and enterprises across the country collapsed, and Russians were left jobless.
Sovereign debt restructuring took place in 1999 and 2000. An IMF agreement of US$4.5bn concluded in July 1999 was meant to help Russia to regain access to the international financial markets. However, allegations of irregularities in the banking sector again had a negative impact on the country’s financial market access and government bond yields remained high. It was an unparalleled social and political catastrophe and led to a massive backlash against capitalism.
The subjective factor
There was nothing inevitable about the victory of capitalist restoration, but here the subjective factor played the dominant role. It is a crushing comment on the degeneracy of the Stalinist ruling caste that, 80 years after October, they preferred to push the Soviet Union back to capitalism rather than hand power back to the working class. Yeltsin felt confident because he had the backing of the decisive majority of the bureaucracy that was eager to lay its hands on the property of the people. And behind that faction stood the might of world imperialism.
It is true that there were deep contradictions within the bureaucracy. Before the Second World War, Trotsky had spoken of the Butenko and Reiss factions in the bureaucracy. What Trotsky meant was that, within the ranks of the bureaucracy, there were a whole range of tendencies, from open counter-revolutionaries like Butenko up to genuine Leninists like Ignace Reiss. Trotsky also added that the former were much more numerous than the latter, especially in the upper reaches.
But not even Trotsky could have foreseen the appalling levels of degeneration of the Stalinist bureaucracy after decades in power. The prolongation of the bureaucratic regime for almost three generations had profound effects on all classes and strata of Soviet society. The degeneration of the upper layers – now the grandchildren of bureaucrats ‘born in the purple’, as they used to say of Byzantine emperors – went far further than Trotsky, or we, had ever thought possible.
Decades of monstrous totalitarian Stalinism had had the effect of throwing consciousness back. The physical extermination of the Old Bolsheviks succeeded in cutting the umbilical cord connecting the new generation with the traditions of the Revolution. The very successes of the planned economy brought about a drastic change in the composition of the proletariat. Large numbers of former peasants emigrated to the towns and cities where they were absorbed by the growth of industry. In general, this meant an enormous strengthening of the working class. However, the consciousness of the new generation of Soviet workers was not the same as the generation of 1917. Their perception of the Revolution and socialism and communism was coloured by the experience of life under Stalinist rule.
The absence of an independent movement of the working class was the decisive factor that has conditioned the whole situation ever since. For Ted Grant this situation was unexpected. He found it hard to believe that nothing had remained of the traditions of Bolshevism-Leninism in Russia. It is an undeniable fact that the consciousness of the Russian masses was thrown back a long way by the long nightmare of totalitarian rule. Even among the miners at that time, particularly their leaders, there were some illusions in capitalism. Some of the miners’ leaders imagined that it would enable them to sell their coal on world markets. They had not yet enjoyed the joys of a market economy.
However, it is entirely false to claim that the demand for the return of capitalism came from the working class. On the contrary, throughout this period there was a growing mood in the population against the imposition of a market economy. The movement against capitalism was gathering strength even before the collapse of 1998. The growing disillusionment was reflected in all the opinion polls and also in a mass protest movement of the working class. The polls showed big majorities against the market economy. As we have seen, an opinion poll in 1994 saw support for reform fall from 40 per cent, to 25 per cent five years later. The same poll found a majority believing privatisation to be “legalised theft undertaken for the benefit of the nomenklatura and criminals”. Another opinion poll conducted by the US International Foundation of Electoral Systems in November 1995 found that three-quarters were deeply dissatisfied with the current situation. Only twenty per cent thought the economy would improve over the next two or three years. And significantly, more than half wanted the re-establishment of state control over the economy. (Source: Financial Times, 29/11/95.)
Three months earlier, a poll by the All-Russian Centre for the Study of Public Opinion and the University of Strathclyde reproduced in the Financial Times (17/8/95), revealed that two-thirds assessed positively the pre-perestroika period, compared with just fifty per cent in 1992. A third wanted the return of the Stalinist regime, while ten per cent said the return of the Tsar would be better. In an all-Russian survey published in Segodnya (24/1/97), forty-eight per cent of respondents agreed or were inclined to agree with the proposition that “socialism is preferable to capitalism as a system for Russia.”
Those that disagreed or were inclined to disagree numbered twenty-seven per cent, while the remainder took an intermediate position. Forty-three per cent agreed or were inclined to agree that Russia’s economy should develop mainly on the basis of state rather than private property, while nineteen per cent took the opposite view.
Following on from similar experiences in Lithuania, Ukraine, Poland, Hungary, Romania and East Germany, in the December 1995 Duma elections in Russia, those parties that stood for reform were humiliated. It was a massive victory for the Communist Party and their allies, pushing the nationalists into second place.
But the economic collapse of 1998 produced a qualitative change in the mentality of millions of people. Many formerly privileged layers who had benefited initially from the growth of the market economy now found themselves without work and without perspectives. There was an angry reaction against capitalism in the middle class. The ground could not have been more favourable for the advocacy of anti-capitalist policies.
The role of the ‘Communist Party’
If ever there was a moment the Communist Party could have halted the movement to capitalism in its tracks this was it. The working class was rapidly recovering from the disorientation and trauma caused by the collapse of Stalinism and the movement in the direction of capitalism. It was drawing its own conclusions from the frightful collapse of the economy, living standards and culture that had resulted. In this situation, the Stalinists played a criminal role. In comparison with the conduct of the Russian Stalinists, the betrayal of the Social-Democratic leaders in 1914 was child’s play.
If a genuine Bolshevik party had existed, it would have already been on the eve of taking power. But there was no such party. After repeated purges, the content of the old Communist Party had been completely transformed to the point where it had nothing in common with the Bolshevik Party except the name. It was really not a party at all, but an organ of the state composed of 19 million members, among whom were undoubtedly a layer of honest workers, but in the main consisted of an army of opportunists, thieves, stooges and careerists of all kinds. This had nothing in common with the party of Lenin and Trotsky, which had been destroyed in the Purges.
Immediately after Lenin’s death this process was accelerated. In the process of building up his own position and packing the Party with people who could be relied upon to support him, Stalin, as First Secretary and very much at grips with Trotsky, proclaimed the so-called Lenin Levy. This was in effect a mass enrolment of new members designed to swamp Stalin’s opponents. Thus, at the 12th Party Congress in 1923 membership stood at 386,000; a year later, at the 13th Congress, it had risen to 735,881. By 1929, with Stalin supreme and preparing to liquidate his senior colleagues, this figure had doubled: there were 1,551,288 Party members.
The next development was a most astonishing change in the composition of the membership. Between 1930 and 1934 the Party ceased to be a workers’ organisation. In 1930 actual workers formed nearly 49 per cent of the membership; in 1934 this proportion, as reflected in the Party Congress, had dropped to 9.3 per cent. Hand in hand with this went the virtual monopolising of the Party by the rising boss class. Thus in 1923 only 23 per cent of all the factory directors in the Soviet Union were Party members. By 1936 the figure was close to 100 per cent. And so it continued until, in the year of the German invasion of Russia, there were nearly three million Party members, most of them engaged in administration of one kind and another. (Edward Crankshaw, op. cit., pp. 63-4.)
And the author correctly concludes:
When we reflect that the old Party had been almost wiped out by Stalin during the purge years of the middle thirties, the Party functionaries all down the line were used regularly and deliberately as scapegoats for the mistakes and excesses of the higher leadership, it is clear that the post-war Party was very different from the body through which Stalin climbed to supremacy and had not the faintest resemblance to the original Party of Lenin. (Ibid., p. 64, my emphasis.)
The CPSU was a gigantic network for patronage and an arm of the state. The Party was responsible for the appointment of 600,000 key jobs and a further one million reserve jobs in the state and industry. Membership of the Party was a necessary path to a successful career. In the early days of the Soviet Union, access to prominent positions in the state was still open to talented children of working class families. This was a major difference with the West. But as time went on, this was increasingly less the case. The best jobs were reserved for the children of bureaucrats. This was a symptom of the senile decay of Stalinism, a kind of creeping arteriosclerosis. At the top stood the Soviet elite, increasingly divorced from the reality of the life of the working class in society.
These elements were held together, not by conviction or ideology, but by the Party’s link to the state feed-bag. Once this link was destroyed, it disintegrated overnight. As the political arm of the bureaucracy, it was shattered by these events. Whole swathes of ‘Communists’ deserted the Party for openly bourgeois or nationalist groupings, as rats swarm off a sinking ship.
The CPRF, which had emerged from the wreckage of the CPSU, was in a strong position to give a lead, but that lead never came and never could come from the mouth of people who had long ago abandoned any conception of fighting for socialism. Despite its huge resources, the CPRF, at the moment of truth, was unable to connect to a wide layer of the population, which was looking for a genuine democratic socialist alternative. Their policy was confined to manoeuvres and intrigues in the ‘corridors of power’ in order to form a coalition government with the representatives of the oligarchy. Despite everything, the CPRF still retained a powerful base, as Kolganov and Buzgalin pointed out:
With its 500,000 members, the CPRF was the largest political party in Russia. But as the election campaign showed, the party’s bureaucratism, together with its orientation toward ‘people of the past’ and pragmatic-minded petty bureaucrats dissatisfied with Yeltsin, made it a weak organisation, incapable of devising any effective response to the propaganda and ‘dirty tricks’ of the authorities. In circumstances where the mass media were monopolised by Yeltsin, the idea of carrying on agitation ‘from door to door’ was not in itself a bad one, but the members of the CPRF were unable to implement it in practice. They had no idea of how to perform such work, and could not find a road to people’s hearts – except for the hearts of people already inclined to support Zyuganov. The experience of the elections showed that Zyuganov does not have anything even remotely resembling a ‘Lenin Guard.’
The strengths, including its massive size and the presence within its membership of tested, experienced cadres from the Soviet Communist Party, were turned into weaknesses. Disciplined rank and file ‘party warriors’ turned out to be of little use in the conditions of a multi-party system marked by struggle between various ideologies and interests. Meanwhile, the experienced cadres had experience only of bureaucratic kowtowing, not of political propaganda work.
That was an understatement. Although there were elements in the leadership of the Soviet Communist Party that were in favour of a ‘return to Lenin’, the ‘ Reiss wing’ was so small as to be virtually insignificant. It played no role in the decisive events that led to the collapse of the Soviet Union. The Stalinist wing that wanted to maintain the old system – a system that was manifestly collapsing – showed itself to be weak, indecisive and completely bankrupt in the face of the onslaught of the pro-capitalist wing.
The truth is that the CPRF was a communist party in name only. Zyuganov had no quarrel with the market economy. He did not want to go back to the old system of bureaucratic planned economy, because he knew that he could not hold the line. The workers would inevitably, after a period, call into question the privileges of the bureaucracy and move to take power into their own hands.
If the CPRF had pursued anything like a genuine Leninist policy, the whole perspective would have been different. But the leadership of the CPRF failed to organise a serious opposition because they did not want to do anything that would rouse workers outside parliament. After decades of totalitarian and bureaucratic methods, the Party leaders had no idea how to appeal to the masses, even if they had wished to do so. And they did not wish to do so.
How the CP leaders around the world ‘explained’ the collapse of the USSR
The once mighty Third (Communist) International was dissolved by Stalin in 1943 as a gesture to the imperialists. Gorbachev even suggested that there should be joint celebrations between the Soviet ‘Communist’ Party and the West German Social Democrats to celebrate the anniversary of the Second International! This meant that the Russian bureaucracy considered that there were no longer any differences between them and the reformist parties of the West. Evidently for them, everything that Lenin had ever spoken about and written was all nonsense and the entire history of the Communist movement since 1914 was all the result of a slight misunderstanding! This is where decades of Stalinist miseducation had ended up.
After decades of opportunist politics, and with the enormous pressures of capitalism in the long post-war upswing, the process of nationalist and reformist degeneration of the Communist Parties was completed. They became just like any other reformist organisation. Breaking from Moscow, they felt increasingly under the pressure of their own capitalist class and bourgeois public opinion. This was the real meaning of so-called Euro-communism.
In many countries, the Communist Party has collapsed. The British Communist Party ended up in a complete fiasco, split into four tiny groups. Its former ‘theoretician’, the late Eric Hobsbawm, turned into the advocate for Tony Blair’s New Labour. Chris Myant, the international secretary of the CPGB, stated that the October Revolution was “a mistake of historic proportions.” The Spanish Communist Party, which could have taken power in 1976-77, is now a mere shadow of its former self, while the once mighty Italian Communist Party has ceased to exist altogether.
The former Stalinist parties have completed the transition to reformism by eliminating communism from their names and aims, but this was only to recognise what had happened long ago. In this sense, they have become reformist parties little different from the reformist parties of the Second International. They are what Lenin called social-patriotic parties. The leaders of these parties no longer defend the socialist revolution and find the October Revolution an embarrassment.
With the fall of Stalinism after 1989, this process was further intensified. The collapse of Stalinism sent new shock waves through the ranks of the Communist Parties, causing a ferment of discontent, questioning and discussion. Naturally, they had no explanation for the fall of the Soviet Union. For decades, the Stalinist wing of the labour movement had deliberately concealed the real situation in Russia, hiding behind mendacious phrases about the alleged ‘building of socialism’.
The same people had reprinted without comment many of the crimes of the bureaucracy revealed in the Soviet press. They lied to and deceived the rank and file of their parties, among whom were a large number of the most militant and courageous class fighters whose understandable loyalty to the October Revolution and the USSR was shamelessly abused. Now these leaders – those of them who still remain – are silent about their own past role.
The questions and protests of the rank and file remain unanswered to this day. In fact, they have no answer. Having abandoned Marxism and Leninism decades ago, they have now also abandoned Stalinism, the crimes of which they defended enthusiastically, only to go over to reformism and Social Democracy. In most cases, they have even ditched the name of communism altogether, arguing that it has been discredited. In reality, it is not communism that is discredited, but only a monstrous caricature called Stalinism. And it is these very leaders who are responsible for this blackening of the spotless banner of October. This is a crime which can be neither forgotten nor forgiven.
It is really an astonishing fact that the publications of the Communist Parties, even at the present time, still persist in describing the former Stalinist regimes of Russia and Eastern Europe as ‘socialism’ or ‘real socialism’. In other words, they have learnt absolutely nothing about the real character of these regimes. Displaying the most incredible confusion, they talk about the need for ‘more democracy’ – as if it were possible to mix democracy with totalitarianism! This kind of statement shows that they do not have the slightest inkling of the nature of the problem. They have not grasped the elementary fact that the totalitarian regimes in these states were a necessary adjunct of the rule of a privileged bureaucratic caste and were absolutely necessary to preserve this rule.
We reproduce here some extracts taken at random from statements made at Congresses and Central Committees of different Communist Parties at the time (my emphasis throughout):
Indian Communist Party:
The reverses suffered by socialism in the Soviet Union and earlier in Eastern Europe have altered the world balance of forces in favour of imperialism for the present. The process of the restoration of capitalism in the countries of Eastern Europe, the course of dismantling socialism in the Soviet Union and the break up of the USSR in its old form are accompanied by a new imperialist offensive. This has grave repercussions for the socialist countries and the Communist movement… (Statement issued by the Communist Party of India (Marxist), January 1992. From Documents of the 14th Congress of the CPI(M), Madras, 3-9 January 1992.)
French Communist Party:
Although the imperialist forces are using the upheavals in the USSR and other socialist countries in Europe to their profit, attempting to reinforce the political and military domination over the rest of the world… The Communist Party of France has expressed its fundamental divergence from the conception of socialism that prevailed in the USSR, and drawn lessons for itself from this unhappy experience, the crisis and the reversals that have taken place. (Statement issued by the French CC, January 1992.)
Sri Lankan Communist Party:
It is particularly so in view of the major set-back suffered by socialism in the Soviet Union and Eastern Europe. The world balance of forces has changed in favour of imperialism. These developments have adverse effects on the other socialist countries and for the forces of peace and democracy, particularly in the third world countries. (CC statement, January 1992.)
Portuguese Communist Party:
In the new international situation marked by the dismantling of the USSR, following the collapse of the socialist states of central and Eastern Europe, new difficulties will be put to the Communists and other revolutionaries in their struggle for social progress and socialism. (CC of the Portuguese Communist Party, January 1992, my emphasis throughout.)
This is the punishment for decades of opportunism. The leaders are powerless to explain the collapse of Stalinism to their members. To this day, we await an explanation from these people of what happened in Russia and why it happened. For decades, they praised the Soviet Union to the skies and indignantly denied the crimes of Stalinism. Now they pass this over in silence.
Simply a ‘misunderstanding’?
Some of them at least did make a show of trying to explain things, but failed miserably. The late Joe Slovo, who was the General Secretary of the South African Communist Party (SACP) until his death, wrote:
The commandist and bureaucratic approaches which took root during Stalin’s time affected Communist Parties throughout the world, including our own. We cannot disclaim our share of the responsibility for the spread of the personality cult and a mechanical embrace of Soviet domestic and foreign policies, some of which discredited the cause of socialism. (Joe Slovo, Has Socialism Failed?, p. 24 (1990), emphasis in original.)
Joe Slovo’s pamphlet was written in response to “the dramatic collapse of most of the Communist Party governments of Eastern Europe” in 1989. Their downfall, he admits, “was brought about through massive upsurges which had the support not only of the majority of the working class but also a large part of the membership of the ruling parties themselves. These were popular revolts against unpopular regimes; if socialists are unable to come to terms with this reality, the future of socialism is indeed bleak.” (Ibid., p. 1.) On this point at least, we can agree with comrade Slovo. But the question is: how was it possible that after decades of this ‘socialism’ the majority of the working class found itself involved in popular revolts (Joe Slovo’s own words) against the regime? Something was clearly badly wrong. But what?
He says that “commandist approaches took root during Stalin’s time”, but where did these ‘approaches’ come from? What did they reflect? What class interests did they represent? To these questions, no answer is forthcoming. Nor is any reason given as to why the terrible phenomenon, which mysteriously appeared “during Stalin’s time”, should have continued to exist for decades after Stalin’s death, and reached the point where they led to “popular revolts” supported by the majority of the working class. Such developments cannot be ascribed to insignificant little deviations (“spots on the sun” as someone once put it) but must be the product of profound and irreconcilable differences of interests between different social groups. What groups? Again, no answer is given.
Slovo stated that:
The fundamental distortions which exist in the practice of existing socialism cannot be traced to the essential tenets of Marxist revolutionary science. If we are looking for culprits, we must look at ourselves and not at the founders of Marxism.
Nevertheless, throughout the pamphlet he persists in describing these regimes as ‘socialist’.
These lines were an improvement on the position held by the leadership of the SACP for decades which, in common with Communist Parties internationally, was one of uncritical support for the Russian bureaucracy. For example, let us recall the report of Yusuf Dadoo (national chairman) and Moses Mabhida (General Secretary) of the SACP on their visit to the 26th Congress of the CPSU as recently as 1981:
The Congress hall was filled with delegates who had, by their honest labour and toil for the common good, richly deserved the highest honours and distinctions which the CPSU and Soviet government could bestow on them. These delegates were no armchair theoreticians. They were the life and blood of the heroic Soviet people…
Here were the heirs of the great Bolsheviks, no less fervent in their commitment to create a better life, not only for their own people, but for all humanity. There is no other party which has produced such selfless, devoted and disciplined Communists, such tenacious fighters for peace, freedom and socialism. (African Communist, 3rd Quarter, 1981, p. 48, my emphasis.)
At that time the bureaucracy had already ceased to play a progressive role. The economy was in trouble. The corruption of the bureaucracy was common knowledge, but it would seem that these comrades saw nothing, heard nothing, knew nothing. Yet, as Joe Slovo tells us, the conditions were already being laid for a massive social crisis – including popular revolts!
From time to time, the Communist Party leaders criticise the ‘bureaucracy’ of the former Russian and East European regimes, but this very criticism shows that they do not know what bureaucracy is. They confuse it with mere red tape, i.e. the most superficial and trivial manifestations of bureaucracy and thus draw attention away from the essence of the matter: a monstrous ruling caste of privileged functionaries, engaged in looting the state and lording it over the working class. Such a ruling caste needs an oppressive totalitarian regime, with secret police and the complete denial of workers’ rights and can exist on no other basis.
In some cases the deformations experienced by existing socialist states were the result of bureaucratic distortions which were rationalised at the ideological level by a mechanical and out-of-context invocation of Marxist dogma… In other cases, they were the results of a genuinely-motivated but tragic misapplication of socialist theory in new realities which were not foreseen by the founders of Marxism. (Slovo, op. cit., p. 11, my emphasis.)
So, there we have it. It was all a tragic mistake, the result of a little misunderstanding by sincere but misguided people. The membership, however, needs to know the truth. It is no accident that none of these parties has proposed going back to Lenin, that same Lenin who worked out the famous four points which are the prior conditions, not for communism or socialism, but for the initial stages of workers’ power, that is, for a healthy workers’ state at its very inception. Nor have they understood the causal relationship between the bureaucratic degeneration of the Russian Revolution and the theory of socialism in one country, which they still accept. They still have not understood that this idea was an expression of the interests of the bureaucracy, not the working class.
The false position of the official Communist Party leaders in relation to Stalinism is only the other side of the coin of their abandonment of Marxism, their attitude to capitalism and the bourgeois state and all that flows from it. One thing flows from the other. Having in the past accepted uncritically all the crimes of the Stalinist regime, with the collapse of Stalinism, they abandoned the revolutionary road altogether.
After the fall of the USSR, the USA became the only superpower in the world. With immense power came immense arrogance. The ‘ Bush doctrine’ was supposed to arrogate to the USA the right to intervene anywhere in the world, to interfere in the internal affairs of supposedly sovereign states, to spy, to bring down governments, to bomb, to assassinate and if necessary to invade with impunity. The collapse of the Soviet Union allowed US imperialism to intervene in what were formerly Soviet spheres of influence. They brought Poland and other Eastern European and Baltic states into NATO and then set their sights on former Republics of the Soviet Union.
American imperialism took advantage of that to start to seize the Balkans, Yugoslavia and Iraq – former Soviet spheres of interest – which they would not have dared to touch in the past. The breakup of Yugoslavia and the bombing of Serbia contributed to a feeling that Russia was being encircled and under siege. Together with the economic collapse and general impoverishment, this produced a deep sense of national humiliation.
Moscow was overrun by an army of foreign businessmen, speculators and similar human scum. These people acted as if they owned the place, which in part they did. The Yeltsin government consisted of the local agents of imperialism, anxious to lick the boots of their foreign paymasters. To economic collapse and unbearable poverty was added an even more unbearable sense of national humiliation. A proud people that had toiled and sacrificed to build the Soviet Union found it ruled by a drunken clown and a gang of thieves in the pockets of foreign bankers.
Both Stalinism and capitalism entirely failed to solve the national question in Russia and the former Soviet Union. Only by guaranteeing equal rights to all the peoples could a lasting fraternal union be established. But this is impossible under Stalinism or capitalism. Only a return to workers’ democracy offers a way out for the working class and the oppressed nationalities. Such a regime would return to Lenin’s policy of national emancipation and fraternal relations between the peoples, with all rights for the national minorities.
The October Revolution made great strides forward in dealing with the national question, which as Lenin pointed out, in the last analysis, is a question of bread. On the basis of the development of the productive forces and society moving forward, the national question receded. It was this policy that prevented the breakup of Russia after the October Revolution, but was cynically betrayed by Stalin. Within the borders of the USSR were 15 republics, with 100 nationalities and 400 ethnic groups. Sixty million people lived in republics other than those of their ethnic origin.
The Stalinist regime leaned heavily towards Great Russian chauvinism, but it was forced to pay lip service to proletarian internationalism. The capitalist oligarchy that replaced it is not constrained by any such considerations. It does not disguise its reactionary aims but openly embraces Russian nationalism in its most repulsive forms. Chauvinism, the Orthodox Church, anti-Semitism, racism and the brutal oppression of small nations like Chechnya are its stock in trade. Its policy is a foul mixture of the worst features of Stalinism and tsarism, laced with the poison of Black Hundred demagogy.
The breakup of the USSR was not in the interests of any of the peoples. The linking together of the economies of the Republics made sense and was in the interests of all the peoples. By contrast, the breakup of the Union, and the crazy attempt to sever the natural economic ties between the Republics, had catastrophic results. The newly independent states were therefore heavily dependent on trade with Russia. Russia can easily dominate the other states by using its economic muscle, particularly the supply of oil and gas. If that fails, it can use its powerful army, as Georgia and Ukraine soon found out.
In the event of the re-establishment of capitalism in Russia, we would see the rise of a ferocious imperialist power. Russia cannot be democratic and capitalist at the same time. A military dictatorship in Russia would inevitably embark on an aggressive policy of expansion, on the lines of tsarism in the past. Apart from Ukraine, which could also end up under the domination of a military dictatorship, the ‘independence’ of the former states of the CIS would be largely fictitious. Inevitably they would fall under the control of Russian imperialism, by one means or another. (Ted Grant, Russia from Revolution to Counter-revolution. pp. 408-9)
That is precisely what has happened. Contrary to the stupid argument that capitalist Russia would be a weak semi-colonial country dominated by the West – a view that Ted strenuously rejected from the start – Russia has emerged as a powerful imperialist competitor to the USA. Yeltsin’s policy of slavishly subordinating Russia to America has been replaced by an aggressive foreign policy under Putin, who has moved to reassert Russia’s control over all the former Republics of the Soviet Union. Nobody speaks any more of the brotherhood of nations and the right of self-determination.
The movement towards capitalism in the former Soviet Union invested the national question with explosive dimensions, which plunged one region after another into bloody chaos. The full horror of the situation was brought out in the following report:
Nearly 9m people have moved within or between the 12 countries of the former Soviet Union’s Commonwealth of Independent States since 1989 in what a report published today described as “the largest, most complex, and potentially most destabilising” population movements in any region since the Second World War. 1 in 30 of the total CIS population has been affected by this mostly involuntary and continuing migration, the report says. In the five Central Asian republics 1 in 12 inhabitants has moved since 1989.
…About 3m people have fled seven conflicts in CIS countries since 1988, when Armenia and Azerbaijan went to war over the enclave of Nagorno-Karabakh. The latest conflict, in the breakaway region of Chechnya, has displaced about 500,000 people. The breakup of the Soviet Union into 15 separate states left between 54m and 64m people – a fifth of the total CIS population – outside their ‘home’ territories. More than 3m of these people have ‘returned,’ mostly to Russia. Between 1936 and 1952, Stalin deported more than 3m people, including entire populations. Among them were Volga Germans, Crimean Tatars and Meskhetians from Georgia. (Financial Times, 23/5/96.)
The Caucasus is a vital area for Russia for both economic and strategic reasons. The Chechen ruling clique under the late General Dudayev took advantage of the general confusion following the breakup of the USSR in 1991 to seize control and declare independence. It was clear from the beginning that Moscow would never allow this.
Using the pretext of a threat to the unity of Russia, Yeltsin ordered the invasion of the Chechen republic to topple the ‘gangster regime’ of Dudayev. Without doubt, the Dudayev regime was heavily involved in drug trafficking and illegal arms deals, as well as having links with the Mafia in Russia. But that never affected Yeltsin’s outlook in the past. However, the Russians got more than they bargained for in Chechnya. The Chechens resisted and Yeltsin found himself bogged down in a bloody guerrilla war.
The humiliation of the Russian army in Chechnya was a striking indication of the degree of chaos and demoralisation that gripped the armed forces. An article in The Sunday Times (14/4/96) painted an astounding picture of an army in a state of virtual disintegration, with the troops on the verge of mutiny:
The desperation of Russian parents and their sons to avoid the draft is matched only by the determination of the recruitment centres to fulfil their quotas. They need to deliver 200,000 men by the end of June… Kovtun estimated that some 60 per cent of the potential recruits she sees suffer from chronic illnesses, many of them psychological and nervous disorders, that make them unfit for military service. “The worst thing is that many of the parents of ill boys then refuse to have their sons treated,” said Kovtun.
Yeltsin was forced to withdraw the Russian army from Chechnya and attempted to arrive at some sort of compromise. This withdrawal was the result of the feebleness of the Russian military effort in Chechnya, and the stubborn resistance of the Chechens. But there is no question of Moscow allowing genuine independence for Chechnya […]
In view of the enormous economic and strategic importance of the region for Russia, the generals could never allow this to happen. This means that conflict is inevitable in the future and Russian public opinion can easily be manipulated by provoking an incident in which Russian nationals are attacked. This method will be used not only in Chechnya but in other Republics if Moscow decides it to be necessary. (Ted Grant, op. cit. p. 410-11)
That is exactly what happened.
After the economic collapse of August 1998, the situation in Russia was grim indeed. The high hopes of the market reformers had been dashed. The extreme unpopularity of capitalism was partially reflected in a big increase in support for the CPRF, but the pro-capitalist policies of Zyuganov and the CPRF leaders rapidly led to disenchantment. The strikes and demonstrations that shook the government in the first half of 1998 gave way to a sullen acquiescence. The regime was in a state of complete prostration, but the workers could see no alternative.
In September 1999, a series of devastating bombings in working class districts of Moscow and other Russian cities killed three hundred people and wounded hundreds of others. The bombings were blamed on Chechen rebels and used as a pretext for a bloody second war against Chechnya, a republic in the Russian Federation. They also were crucial for promoting Vladimir Putin’s takeover of the Russian presidency as Yeltsin’s anointed successor.
There can be no doubt that these bloody atrocities were the work of elements inside the regime or the State Security forces themselves, or any other combination of the same elements. The slaughter of innocent people caused a wave of fury that was cleverly manipulated by the media and the government to whip up war fever. This is not the first time in Russian history that a regime in crisis has attempted to save itself through a ‘victorious little war’.
But nothing could save the regime. By the spring of 1999, the health Boris of Yeltsin – a chronic alcoholic – was declining rapidly. His popularity had declined even more rapidly and there was a strong possibility that his political front Yedinstvo (‘Unity’) would lose the parliamentary and presidential elections. His entourage (including his daughter Tatyana Dyachenko, Yeltsin adviser Valentin Yumashev – who later married Tatyana – the oligarch Boris Berezovsky, and Aleksandr Voloshin, head of the presidential administration) was in crisis. Yeltsin and his two daughters were accused of accumulating large amounts of money in secret bank accounts abroad through illegal transactions with a Swiss construction firm called Mabetex. Berezovsky was under investigation for embezzlement when he had been running Aeroflot.
Finally, the Yeltsin regime fell like an overripe apple full of maggots. Yeltsin was persuaded to step down in favour of Vladimir Putin, a former chief of the KGB (now renamed the FSB) in exchange for immunity from corruption charges and a more than comfortable retirement. On Sunday 7th May, Putin was inaugurated as President of Russia with all the pomp and ceremony of a tsar. Nothing was missing: a twenty-one-gun salute, goose-stepping soldiers with uniforms that seemed to have been borrowed from a Hollywood musical, and even the Patriarch of the Russian Orthodox Church.
The contrast between the sharp-suited, energetic and (relatively) coherent newcomer and the bumbling old alcoholic he replaced could hardly be greater. For the time being, moreover, Putin enjoyed the luxury of being an unknown quantity. The mass media – now firmly in the hands of the Oligarchy – launched a deafening campaign to boost the personal image of the new President. He was shown practising martial arts in the gym – and always flooring a bigger opponent, or reviewing the troops in battledress at the front.
However, the main reason for the success of Vladimir Putin was the improvement of the economy following the crisis. No economy can continue to fall forever. Sooner or later, production begins to recover and that is what occurred in Russia, particularly after the crisis and the devaluation of the rouble in 1998. Lenin explained long ago that capitalism can recover from even the deepest crisis. Unless and until it is overthrown by the conscious movement of the working class, that prediction retains all its validity. The leaders of the so-called Communist Party of the Russian Federation betrayed the movement of the working class and therefore laid the basis for the recovery of Russian capitalism.
This recovery, paradoxically, was assisted by the crisis itself. The sharp depreciation of the rouble, which continued to fall in 1999, making foreign goods inaccessible to most Russians, created a huge demand for home-produced products, thus stimulating the growth of Russian industry. Domestic industries such as food processing benefited from the devaluation. This, together with an increase of international oil prices, created the conditions for a recovery of the Russian economy, which grew by 6.4% in 1999, 10% in 2000 and 5.3% in 2001.
After that, Russia’s economy continued to improve right through to the 2008 world financial crisis, in great measure because of the boom in world capitalism at that time and the consequent demand for Russian oil and gas. Russia ran a large trade surplus in 1999 and 2000. Inflation fell from 85.7% in 1999 to 20.8% in 2000 and 21.5% in 2001. The unemployment rate, which was 13% in 1998 and 1999, decreased to 9% in 2001.
Since Russia’s economy was operating to such a large extent on barter and other non-monetary instruments of exchange, the financial collapse had less of an impact on many producers than it would have had the economy been dependent on a banking system. Finally, the economy was helped by an infusion of cash. As enterprises were able to pay off debts in back wages and taxes, in turn consumer demand for goods and services produced by Russian industry began to enter an upward spiral.
In the period 1993-99 disposable income of the average Russian had gone down by twenty-five per cent in real terms. Now the government trumpeted success. GDP was growing again after ten years of decline – with industry growing by as much as eight per cent in one year. Even allowing for official exaggeration, some improvement had undoubtedly taken place and wage arrears had been reduced. A report published in June 2009, Russia’s Economic Performance and Policies and Their Implications for the United States sums up the position very well. Its author, William H. Cooper, is a specialist in international trade and finance:
Russia experienced strong economic growth over the last 10 years (1999-2008), during which time its real GDP has increased 6.9% on average per year in contrast to an average annual decline in GDP of 6.8% during the previous seven years (1992-1998). The positive GDP trends are reflected in other measurements that point to an improved Russian standard of living throughout the period. Average real wages in Russia increased 10.5% per year from 1999-2008. In addition, real disposable income (the income that the average Russian resident has available from all sources after taxes) grew 7.9% from 1999 to 2008.
This economic recovery gave people for the first time some degree of hope for the future. It was a very important element in the equation. It was undoubtedly a factor of no small importance in shaping the attitude of many workers who adopted a ‘wait-and-see’ mentality. The worker is always a realist. If nobody offers any alternative, and things are not too bad, why not wait to see if anything comes of all the promises? People would say: maybe things are not too good but they are certainly better than before. At least wages and pensions are being paid now. Maybe some good will come of the new man in the Kremlin…
Of course, Putin did not and does not represent the interests of the Russian people and least of all the working class. He represents one wing of the Russian oligarchy that displaced another wing. However, the shift of power from one wing of the oligarchy to the other had a great significance, nationally and internationally.
The Putin wing represents the interests of the Russian oligarchs, who are not prepared to share the loot with foreign investors. Nor are they prepared to accept subordination to US imperialism. Putin’s aim is very simple: rebuild Russia’s military strength, regain control – in so far as is possible – of the former republics of the USSR and its former satellites, and force the West into recognising Russia as a major player in world politics.
The Kosovo war was a turning point for Russia because it cruelly revealed the extent to which Russia had fallen behind the USA in purely military terms. How could it be otherwise? Ten years of economic collapse meant the destruction of a large part of Russia’s industrial and technological base. Without the necessary productive investment, Russia could not maintain its powerful military machine. And now it was threatened by the rise of American global power as never before. The greed and arrogance of US imperialism was reflected, not only by advancing NATO up to the borders of Russia, or the cruel bombing of Iraq and Yugoslavia, but also by its constant manoeuvring in the Caucasus – a vital area from Russia’s point of view.
The war in Chechnya had a number of different causes, not all of them related to global and strategic considerations. Nevertheless, the desire of the Russian military elite to send a signal to Washington – thus far, and no further! – was certainly one of the elements in the situation. The struggle for control of the Caucasus and Central Asia was to play a prominent role in determining relations between Russia and America.
The series of bloody bomb atrocities in Moscow and other Russian cities were the work of elements inside the regime or the State Security forces themselves, or any other combination of the same elements. The slaughter of innocent working class Russians caused a wave of fury that was cleverly manipulated by the media and the government to whip up war fever. This is not the first time in Russian history that a regime in crisis attempted to save itself through a ‘victorious little war’.
With the aid of the mass media, Putin used the Chechen question demagogically to whip up nationalist sentiment. The Russian army occupied Grozny and the other cities. But the brutal use of indiscriminate air and artillery bombardment, and the clumsy and heavy-handed treatment of the population played into the hands of the rebels, who launched a guerrilla war that dragged on for a long time, claiming a large number of Russian and Chechen victims.
The brutal treatment of the population provided the Chechen rebels with a steady supply of new recruits, they were supplied with arms and money from Saudi Arabia and supported by mercenaries from Afghanistan. In the end, Russia succeeded in imposing its will on a broken and shattered country, but a dreadful price had to be paid both by the people of Russia and Chechnya.
Georgia and Ukraine
At the time when Gorbachev was attempting to reach a friendly agreement with Washington, President Reagan gave him an undertaking that if Russia would wind up the Warsaw Pact, America would reciprocate by dissolving NATO. Gorbachev obediently got rid of the Warsaw Pact, but NATO, far from dissolving, began its implacable march eastwards.
Following the plans of US imperialism, NATO advanced right up to the frontiers of Russia. First the Balkan states were incorporated into NATO, and then Poland joined. These were blatant provocations that enraged the military elite in Moscow. Under Putin things immediately began to change. The first concern of the Kremlin (that is, of the ruling oligarchy) was and is to reassert Russia’s domination over its old spheres of influence, starting with the former Soviet Republics that lie on its borders.
The Russian army’s advance through Chechnya brought it right up to the border of Georgia. The experts in Washington had decided that the Caucasus would be the Saudi Arabia of the next century. They very much wanted to get their hands on the oil and other natural resources the area has in abundance, but there was a problem: Russia held the Northern Caucasus and had important points of support in all the other states.
The Americans had the idea of building an oil pipeline through Azerbaijan, Georgia and Turkey bypassing Russia altogether. This would effectively cut Russia out of the picture, while simultaneously compensating Turkey, an ally of the US, for the loss of Iraqi oil. Such a plan inevitably meant war. An important part of American strategy was to install a pro-Western government in Tbilisi and get Georgia to join NATO. From Moscow’s point of view this was a step too far.
In the 2008 war in Georgia, Moscow did not hesitate to use its military power to draw a red line in the sand. The Americans received a kick in the teeth. The Russian army was sent in and Georgia was swiftly crushed. Now it was the Americans’ turn to be humiliated, as the Russians seized large quantities of arms and equipment provided to the Georgian ruling clique by Washington – even the toilet seats.
That showed the limitations of the power of US imperialism and the growing power and confidence of the Russian ruling clique. It was a clear warning to the Americans. But the US ruling circles were – and are – blind, deaf and dumb. They went on to intrigue in Ukraine, hoping to draw it away from Russia and closer to the EU and NATO.
At the time of the fall of the Soviet Union, Ukraine was a country of 52 million people, with a GDP the size of Belgium and the third largest army in Europe. It achieved formal independence but was still tied to Russia by economic factors and had a significant Russian-speaking minority (21 per cent) within its borders. But the return to capitalism was an even bigger catastrophe for the people of Ukraine than it was for Russia.
After the collapse of the Soviet Union, the Ukrainian economy soon found itself in a worse mess than Russia’s. Living standards collapsed and the people of Ukraine found themselves under the domination of corrupt oligarchs who imitated their counterparts in Russia in an even more rapacious and revolting manner, if that was possible. The desperation of a section of the masses, particularly in western Ukraine, expressed itself in a desire to join the European Union – an aspiration that had no basis whatsoever in reality, but which was deliberately encouraged by the imperialists and reactionary nationalist forces in Ukraine.
The result of these imperialist intrigues was a right-wing coup in Kiev, backed by extreme nationalist and fascist forces, which succeeded in toppling the government of Yanukovych but in so doing plunged Ukraine into an abyss of economic collapse and civil war. After the coup d’état that was supposed to liberate Ukraine from oligarchic rule, the country is still dominated by oligarchs – only a different clique. Moreover, this immediately provoked a conflict with Moscow. The idea that Putin would quietly accept the loss of Ukraine was foolish in the extreme. It was even more foolish to expect him to accept the loss of the Crimea, where the Russian navy has a big base at Sevastopol.
The reactionary nature of Putin is clear, and so are the real aims of his foreign policy. Putin stands for the interests of the Russian oligarchy. He is no more interested in the cause of the workers of Donbass than he is in those of the working class of the Russian Federation itself. But it is also necessary to understand that, for many Russian workers, this is by no means clear. When compared to the humiliating subordination of Yeltsin to the West, Putin appears to be standing up to US imperialism.
The fact that the Kiev government based itself on the support of openly fascist elements, like the Banderists, who backed Hitler during the Second World War, provoked the understandable indignation of the workers. Its rabid chauvinism and attempts to discriminate against the Russian speaking population of Ukraine stoked the fires that led to an insurrection in the Donbass region and the breakaway of Crimea, which has a majority of Russian population. There Putin was seen as a liberator.
The attempts of the imperialists to attack Putin on this front therefore have had precisely the opposite effect of that which was intended. He was able to ride on a wave of patriotic and anti-American feeling. Gorbachev pointed out that his approval rating was now 82% and he warned that if the West continued its tactic of attacking Russia, it would rise to 120%. Of course, this is an exaggeration. Sooner or later the fog of nationalism will disperse, preparing the way for a new and even more powerful movement of the Russian working class.
The right-wing nationalists now in power in Kiev promised everything and have delivered nothing but disasters for the people of Ukraine. The country is now economically shattered and its population divided as never before. It has lost Crimea, possibly forever, and has lost control of the important Donbass region. The West, predictably, has not delivered any of its promises to the Ukrainian people. Nor have they done anything to confront Russia, despite all their fist-shaking and threats. On a capitalist basis, the independence of Ukraine has turned out to be a disaster.
Before the war, Trotsky understood the problem of Ukrainian unity and the aspirations of the Ukrainian people for a state of their own. Stalin united Ukraine bureaucratically, under the boot of the Moscow bureaucracy. What was lacking was democracy and genuine autonomy for the Ukrainian people. That is why Trotsky put forward the slogan of an independent Soviet Socialist Ukraine as a step towards the genuine unification of all the peoples of the USSR on the basis of workers’ democracy. That is the only way forward.
The nature of Putin’s regime
Russia is a capitalist state ruled by a parasitic and rapacious oligarchy. The foreign policy of the Russian oligarchy, like that of any other capitalist state, is determined by the interests and cynical aims of the Russian bourgeoisie. And since foreign policy is the extension of domestic policy, Putin does not stop at any violent means to impose his will outside Russia’s borders whenever he considers it necessary to protect the interests of the Russian oligarchs – and his own, of course.
The oligarchy owns big companies and banks that were looted from the nationalised economy. These giant monopolies are closely linked to the state – a bourgeois state – that is run in the interests of the oligarchs. The latter need a strong man in the Kremlin, in part because they fear the masses, in part to settle the many feuds between different oligarchs for the division of the loot.
All these features conform very closely to what Lenin described as state monopoly capitalism. The only difference with the older bourgeois democracies of the West is that the Western Mafiosi (who also control the state in the interests of the big banks and monopolies) have had sufficient time to disguise their dictatorship under a fig-leaf of formal democracy; the Russian parvenus do not feel sufficiently confident to allow such luxuries. In America and Britain, a discreet veil is thrown over the dictatorship of capital; in Russia, it presents itself in its naked and most obvious form. But the essence is exactly the same.
Vladimir Putin serves the interests of the oligarchy by keeping order, crushing all dissent and criticism of the present setup, and creating favourable conditions for his business friends to thrive and get rich. Naturally, these services do not come free of charge. Putin and his cronies have accumulated enormous riches at the expense of the Russian people.
As an ex-KGB bureaucrat, Putin’s idea of a strong state is fairly clear. He has increased pressure by the secret police on left-wing and dissident organisations, arrested and imprisoned opponents and rivals, castrated opposition parties and muzzled what little there was of a ‘free press’. This can only be characterised as a regime of bourgeois Bonapartism. A Bonapartist regime is a regime of crisis in which the contradictions of society cannot be resolved within the ‘normal’ functioning of bourgeois democracy.
The state tends to rise above society in the person of a ‘strong man’, who claims to stand above classes and parties, representing ‘the Nation’. Putin bases himself mainly on the armed forces, the police and the executive arm of the state, but he also balances between the classes, utilizing demagogic and nationalist rhetoric. And like every Bonapartist in history, he tries to project an image of strength by participating in foreign military adventures (Chechnya, Georgia, Ukraine and Syria).
Russia’s participation in the capitalist world economy is limited, mainly confined to the trade in oil and gas. But it is intervening actively outside its borders, both militarily and diplomatically, and is constantly coming into conflict with America, which at times threatens to turn into a direct military confrontation. However, the objectives of Russian imperialism are limited and mainly dictated by strategic and military considerations. There is little prospect of economic gain from, say, taking over the ruined Donbass. Even the future prospect of Syrian oil seems more than doubtful and, in any case, the Russians have plenty of oil of their own.
Likewise, the struggle in Ukraine was not about markets. The Russians took Crimea, not because of markets (Crimea is not a big market), but because of strategic military considerations. They could not allow their big naval base in Sevastopol to fall into the hands of the Ukrainian nationalists (that is, of NATO). Putin does not really want the Donbass, which would represent a colossal drain on Russia’s resources. That, too, is for geopolitical considerations. Nonetheless, it remains a struggle between American imperialism and Russian imperialism for control over these areas.
Though nowhere near as powerful as US imperialism, Russia managed to turn to its advantage both the mistakes of the US imperialists in over-stretching their forces and Russia’s superior forces on the ground on a regional level. In effect the Russians won in the Ukrainian conflict. The Americans blew hot and cold but did nothing. They imposed sanctions, but the only result was to drive Putin’s support up to around 82 percent. He answered by intervening in Syria. The American imperialists were not very happy about it but they were forced to accept it.
The intervention in Syria was proof of both Russia’s military might and the weakening power of US imperialism. Commenting on this The Economist (14/5/2016) states:
Russia today hardly looks like the mere “regional power” that Barack Obama once dubbed it. Any path to peace in Syria now runs through Moscow. “Only Russia and the United States of America are in a state to stop the war in Syria, even though they have different political interests and goals,” wrote Valery Gerasimov, chief of Russia’s general staff, in a recent article.
Russia’s intervention in Syria decisively changed the military situation. In Syria, it is Moscow that decides and the Americans have been compelled to accept it. However, Russia’s intervention on a world scale is limited in its objectives, which are mainly of a military-diplomatic character. Its main aim is to prevent the US from intervening in what it sees as its spheres of influence and to force the Americans to recognise it as a world power that is not to be taken for granted.
Contradictions of oligarchic rule
When people ask how it is possible for a man like Vladimir Putin to come to power and to hold it for such a long time, it is necessary to consider the objective situation faced by the Russian people before and after 1998. Under Yeltsin Russia experienced the most catastrophic economic collapse in peacetime. In order to find an adequate parallel one would have to look, not at the Wall Street Crash of 1929, but at a devastating defeat in war. Russia was not defeated in war but the proud nation that defeated the armies of Adolf Hitler was subjugated to imperialism in the most humiliating manner imaginable.
Now, on the political and military front, Russia has emerged as a powerful rival to US imperialism. Moscow’s military offensive in Syria has been successful in propping up its Syrian ally Assad and the West could do nothing about it. As a result, Russia is now in effect the arbiter of Syria’s fate. The imposition of sanctions on Russia has not weakened the regime.
Putin has benefited from his foreign successes and, even if we allow for a certain amount of rigging of opinion polls, all the bourgeois commentators have to admit that he remains popular, especially among the workers. Of course, we understand that this will turn into its opposite at a certain stage but for the present, Putin’s policy of kicking the Americans is popular in Russia. He is doing rather well out of confronting American imperialism.
Though it does not really have the economic or military strength to challenge the US in the world arena, Russia seeks to have its own independent foreign policy and wants to negotiate with the US from a position of strength. It goes without saying that this confrontation does not contain an atom of progressive content. It is the task of the workers of Russia to re-establish the genuine ideas of socialist internationalism as the only solution to their problems. Only a return to the genuine principles of Leninism can point the way to a just and lasting solution on the basis of a free union of the peoples within a socialist federation.
Putin has temporarily succeeded in gaining support by playing the nationalist card but this cannot last forever. Russia is ruled by an irresponsible and degenerate clique of oligarchs who own the banks and big monopolies. But oligarchic rule is corrupt by its very nature, while monopolistic capitalism leads to waste and inefficiency, just as much as bureaucratic Stalinism or even more. The contradictions will pile up, eventually leading to a crisis.
As always, the key to the situation lies in the economy and here there are crying contradictions. Although higher oil prices led to an increase in living standards after 1998, inequality has enormously increased since Vladimir Putin took power. Russia is now closely linked to the world economy, and is vulnerable to the gyrations of prices on world markets. The Russian economy benefited from the export of raw materials such as oil and gas. Enough wealth trickled down during the oil boom years to increase the size of the middle class, which is particularly numerous in Petersburg and Moscow. Even so, most of the provinces remain submerged in extreme poverty. And oil prices have fallen sharply in the recent period.
The crash in crude oil prices had a serious effect on Russia, aggravated by the imposition of sanctions. It is true that the economy – after a two-year slowdown – is climbing out of recession but the benefits of this recovery are not felt by the masses. Public sector salaries have been frozen since 2015. On the other extreme, a small group of incredibly wealthy oligarchs are enriching themselves while millions of Russians are languishing in poverty.
One of the main criticisms levelled against the old regime was its corrupt character but the corruption of the Stalinist bureaucracy pales into insignificance compared to the corruption of the present regime. Russia is owned and controlled by a group of oligarchs that is organically linked to the state. In the same way that the bureaucracy needed a strong man – Stalin – to defend its interests, so the present Russian oligarchy needs the services of the man in the Kremlin.
Russia is the most unequal major economy in the world, with almost two-thirds of its wealth controlled by millionaires. Sixty-two per cent of Russia’s wealth is held by U.S. dollar-millionaires and twenty-six per cent of its wealth is held by billionaires, according to a New World Wealth report from 2016.
Proportion of wealth held by millionaires
The top ten per cent of the richest Russians control eighty-seven per cent of all household wealth in the country, a share “significantly higher” than in any other major economic power, according to Credit Suisse Group AG in its Global Wealth Report (2015). Meanwhile, the World Bank predicts the poverty rate will increase to 14.2 per cent in 2016 from 13.4 per cent in 2015, returning it to levels last seen in 2007. The number of Russians considered poor already grew by 3.1 million to 19.2 million last year, the most since 2006.
For the time being Putin has succeeded in diverting the attention of the masses by playing the nationalist card, but this tactic is of limited value. Flag-waving nationalism does not put bread on the table. The workers will grow tired of the endless spectacle of chauvinism and will resent having to pay the bill for Putin’s foreign adventures.
Let us remember that in 1914 the tsarist regime succeeded temporarily in avoiding revolution by creating an atmosphere of war fever and chauvinism. Let us also remember that three years later the same workers and peasants who marched into battle singing patriotic songs turned against the regime and carried out a revolution. History has a habit of repeating itself.
The collapse of the Soviet Union is now triumphantly held up by the enemies of socialism as the final ‘proof’ that nationalisation and planning do not work and that, consequently, the human race must henceforth reconcile itself to the eternal domination of the laws of the ‘Market’, for ever and ever, amen. This is, indeed, the essential message of the celebrated ‘End of History’ of Francis Fukuyama. Yet history, in the Marxist sense, has by no means ended, and the future of world capitalism is no more secure now than it was before the fall of the Berlin Wall. In fact, it is infinitely less so.
The capitalists argued that the fall of the USSR proved the superiority of democracy and the ‘free market economy’ over ‘communism’. In reality, what collapsed in Russia was not socialism or communism but a bureaucratic and totalitarian caricature of socialism called Stalinism. And what happened afterwards? The rush to a market economy has made a handful of people very rich but caused the biggest economic disaster in history. Now there is widespread and appalling poverty in Russia, which was not the case before.
The collapse of Stalinism was supposed to usher in an epoch of peace, prosperity and democracy across the world. It has not. Instead there is a picture of general instability and turbulence at all levels: economic, social, political and military. There is war after war and terrorism is spreading like an uncontrollable epidemic. There was supposed to be a ‘peace dividend’, but now the USA is spending over $500 billion a year on arms. The barbaric war in Iraq alone cost the US Treasury about one billion dollars a week and ended in a mess. Iraq, Afghanistan, Ukraine and Syria all show the limitations of the power of US imperialism.
The organic crisis of world capitalism is exposed by a profound economic crisis, social and political instability, wars, terrorism and an all-pervading mood of pessimism at all levels of society. The old society is crumbling. It is in a state of terminal decay. This is the historic context in which capitalist restoration has taken place in Russia. And Russia will not escape from the general collapse. Despite its temporary success, oligarchic capitalism is rotten to the core. It offers no future for the people of Russia or any other country.
In 1940 a conversation took place between a French army officer and an officer of the German army that had just entered Paris in triumph. The German officer was naturally exultant but the Frenchman calmly replied: “The wheel of history has turned. It will turn again.” And so it did.
It does not take tremendous perspicacity to see that the present system is in a complete blind alley. The strategists of capital who, 20 years ago, were crowing over the collapse of the Soviet Union, are now filled with dread for the future. From their class point of view they understand what we understand. They can see the growing instability that is spreading throughout the world, the massive discontent and frustration that is undermining the old stability and upsetting the old certainties.
On a world scale capitalism now finds itself in a deep crisis. The demagogic attacks on socialism, Marxism and communism have an increasingly hollow ring, because they are made against a background of the deepening crisis of world capitalism. Falling rates of growth, permanent mass unemployment, attacks on living standards, vicious cuts, the attacks on the welfare state – this is the reality of capitalism in the advanced countries on the hundredth anniversary of the Bolshevik Revolution.
Contrary to what Trotsky had anticipated, the bourgeois wing of the bureaucracy succeeded in carrying out the counter-revolution in a relatively ‘cold’ way. In Eastern Europe, the Stalinist regime collapsed without a whimper. The Stalinist regimes appeared to be monolithic, powerful and invincible. Few people would have dared to guess that these same regimes would fall like ninepins in the face of a powerful movement of the masses. But this is what happened. And it can happen again.
The reason for this apparent paradox is not difficult to see. Once a given socio-economic system has exhausted itself, is no longer capable of developing the productive forces, and hence advance the cause of human civilisation, it begins to crumble and collapse from the inside. Under such circumstances, it only requires a single push to bring the whole edifice crashing down. History provides many examples of how an apparently solid regime can collapse overnight under certain conditions, as we saw in Eastern Europe in the late 1980s. This historic example cannot provide the capitalists and their apologists with a single crumb of comfort – quite the opposite in fact.
A quarter of a century ago Ted Grant predicted that when viewed in retrospect the fall of Stalinism would be seen as merely the prelude to an even greater historical drama: the terminal crisis of capitalism. Twenty-five years later, those prophetic words have come true. Then it was the Stalinist regimes of Russia and Eastern Europe that had exhausted their potential and were ripe for overthrow. Now the capitalist system finds itself in an analogous situation.
On a global scale, it is no longer capable of developing the productive forces as it did in the past. From an historical point of view, it is a system that has long since exhausted its potential and has become a monstrous obstacle in the path of human progress. What is required is the development of a mass movement strong enough to provide a decisive push. That movement sooner or later is going to come into existence.
In the same way that the Stalinist regimes were easily overthrown once the masses got on the move, it is possible that a bourgeois regime in Russia and the West could collapse when confronted with a massive movement of the working class, drawing behind it a big section of the middle class. That is a thought that must keep the strategists of capital awake at night, even now.
No one can break the instinctive will of the working class to change society. The whole history of Russia in the twentieth century is living proof of this assertion. The Russian proletariat has a long and glorious revolutionary tradition. They will rediscover it in the course of struggle. Of course, this process would be far quicker and more effective if a genuine mass Leninist current were present. But they will learn anyway. The Russian proletariat was the first to set up soviets on the basis of the 1905 Revolution. We must never forget that the soviets were not the invention of the Bolsheviks or any other party, but the spontaneous invention of the working class.
It is true that at present the forces of Marxism in Russia are weak and isolated. But the student of history knows that this is not the first time such a situation has existed. From the establishment of the first small propaganda circles of Marxists, to the 1905 Revolution, twenty years passed. From the period of reaction that followed the defeat of the first revolution there was a gap of ten years until the new awakening. In this time, the workers’ movement knew moments of bitter despair, but inevitably the situation changed. The present period is no different. In spite of all the difficulties, in spite of the terrible confusion and disorientation, which are the inevitable result of six decades of totalitarian reaction, the Russian proletariat will rise again.
In Greek mythology, there is a giant called Antaeus who wrestled with Hercules. Many times he was hurled to the ground but every time he would rise again with renewed strength which he derived from his mother, the earth. The working class is like that giant. No matter how many defeats and disappointments it suffers, it always returns to the struggle, because there is no alternative.
London 7th January 2017