Commissars, Consultants, And Catastrophe

This past month marks the tenth anniversary of Boris Yelstin shelling Russia’s parliament.  That dreadful event witnessed at least a hundred protesters killed, and brought to an end the period of open possibilities for Russia’s future.  This tragedy brought to a close the rich interest in politics that marked Gorbachev’s rule.  For a brief moment a lively discourse reined that put to shame any existing in the US with the spectator-sport politics run by its corporate media.  Clamoring to the defense of Yelstin were a broad spectrum of Washington sponsored institutions and their intellectuals who cheered as Yeltsin brutally suppressed dissent.

American political leaders surely recognized that strangling Russian democracy by Yeltsin would serve the economic interests of the powerful constituencies they represent.  American intellectuals by contrast were often more naïve, that is some, for others were merely opportunistic in their support of policies leading to Russia’s abyss.  Many of them actually believed the neoliberal nostrums they espoused as twenty and thirty-something café society expats.  They lived the high-life abroad, where the CIS (former Soviet world, minus the Baltic states) currencies were worthless and the dollar was at all time highs.  As Jean McKenzie, now an IREX director in the CIS noted in The Moscow Times reflecting back on that period, these “Twenty-something expats, who were barely off the dole at home, could afford the high life in the ‘Wild, Wild East.’ The Russian population, tied to the ‘wooden’ national currency, was not so fortunate.” They arrogantly preached Thatcherite privatization and Sachs shock therapy doctrine to highly-trained specialists in the CIS who were now often reduced to driving taxis or hawking goods on the streets.  If female, young and attractive, those goods might be their own bodies.  This too was self-serving for the men among these expats “rebuilding” the former Soviet Union; for at night they were often more than willing to partake of the low prices in the flesh trade.  Yet, to be fair, especially among academics outside of economics, I met many eminently decent people who felt neoliberal policies were the key to helping the former USSR recover.

I had many encounters with these self-styled “revolutionaries” (revolutionaries in the same fashion that Wall Street speculators and Silicon Valley hustlers pitched themselves in the 1990s).  In 1995 I shared dinner with an IMF advisor from the US to Latvia in one of the few Riga cafes that catered to “Marriott Brigade” advisors sent in to school post-Soviet officials in the art of “speaking neoliberalism”  Their pupils, formerly instructed in necessity of “speaking Bolshevik” only a few years before, had learned their new lessons quickly.  This young American Berkeley-trained economist I dined with expounded on how they were dizzy with success in the former USSR.  The irony that the cosmopolitan city of almost a million people we were in was mostly dark during our conversation for lack of funds to power street lights had eluded him.  Applying the same logic, a Brit consultant who married a local Latvian told me in 1999 while I was in Riga that “it was good his Latvian father-in-law, formerly a highly trained electronics specialist, was now installing car stereos for a living.”  He was “now providing something of value,” presumably on the cheap for consultants such as himself.  Out of courtesy in a social situation I passed on the opportunity to ask him what of value he produced.  Production had plummeted and the best-educated people in the country were out of work the former USSR was deindustrialized and returned to its pre-1917 status as a resource colony of the West. 

One cannot resist but make comparisons to the young Soviet commissars and specialists of the 1930s whose careers were launched on the wreckage of a devastated Russian peasantry.  While a stretch, one can even see elements of Khmer Rouge like zeal among the young Western adventurers wrecking havoc in the CIS throughout the 1990s.  Although while the Khmer Rouge youth shared in some of the misery they caused, their 1990’s Western counterparts enjoyed fashionable sushi bars and evening whoring sessions while delivering hardships to the population of the CIS. 

As the downward spiral continued in CIS economic, health, and social indices, at some point it became apparent neoliberal doctrine had brought misery to Russia second only to Stalin’s policies of the 1930s.  By 1998 the neoliberal experiment clearly failed on the merits of the rhetoric of prosperity employed to defend it.  Of course, by the standards of the “right” people making Gilded Age fortunes and this experiment was a grand success. 

In the summer of 2000 I attended a Fulbright orientation for scholars headed to East/Central Europe.  Given the catastrophe in the CIS a hand-wringing session ensued whereby Fulbright staff and invited speakers proclaimed bewilderment as to what went wrong.  That was the liberal end of debate.  The other extreme was that all was fine and those saying otherwise were clearly mentally unbalanced.  Psychologists in Brezhnev’s political prisons would have nodded in approval at this reasoning.  Yet, the obvious conclusion nobody entertained, or at least was willing to voice, was that Russia’s problems arose from the toxic prescriptions these intellectuals wrote out for their sick patient.  The situation was rich in irony, for the Fulbright program was named after one of the very US Senators who came to question official doctrine espoused by the “experts” on the Vietnam War.  They now became like the very experts who refused to concede policy failure on Vietnam 30 years before.

Later that year the Russian ruble collapsed.  A boom is only one for the right people if at some point it goes bust when too many try to get in on the action.  There are no free lunches for all, only for a few, and endless returns on declining economies are unsustainable.  The idea for those in the know is to sell before the ponzi scheme collapses.  In Russia this led to the collapse of the ruble.  After destroying the Soviet currency a strong Yeltsin era ruble was a central pillar of the neoliberal program.  The Yeltsin created ruble’s collapse should have led to the further erosion of Russia’s economy according to respectable opinion of the day in 1998.  Yet, the opposite happened.  The low-valued ruble made Russian products again cheap and foreign goods again expensive, the exact opposite of the Yeltsin/Gaidar years.  Russians began to buy their own goods again and an investment in new equipment for Russian factories began for the first time since the Soviet collapse.  This is exactly what Keynesian economists (the chief intellectual rivals of neoliberals) predicted would happen.  Russia’s demand driven recovery was of course also given a boost by a rise in oil prices too.  Neoliberals were liberated from needing to establish cause and effect to validate their theories. When competing schools of thought did this, they were ignored.  After all it is power that makes one correct, not truth.

Today, much is still a mess in the former Soviet Union and most of it has not reached the levels of production seen in 1989 before its collapse.  Yet, parts of it have recovered from the disaster of the 1990s, and in a few unique cases in the Baltics, quite impressively.  Like the scene at the end the movie Dr. Zhivago from atop a great hydroelectric dam when we see how out of the trauma of revolution the USSR finally industrialized, parts of the former USSR today prosper.  Moscow has a significant middle class that partakes of all the consumer goods many in the rich world enjoy.  Granted, this comes chiefly at the expense non-Muscovite Russia.  Yet, some of this prosperity is the product of domestic demand and Adam Smith’s observation of people’s propensity to truck and barter, and not the radical Washington social and economic engineering that was pushed on the under the guise of  free markets and democracy.  The Baltic States have observed a turnaround since 1998 too, especially Latvia.  In Latvia a combination of outside investment, cheap global credit fueling a real estate boom, timber and transit trade, but most importantly domestic demand, have led their fortunes to rise: again, for some, not all.  Perhaps most telling is that among the most successful entrepreneurs in Latvia are ethnic Russians, who Western social scientists made a cottage industry of telling us were culturally backward communalists incapable of thriving in a market economy.  Clearly, Latvia shows culture has nothing to do with development as the peddled by some thinking classes in the West.  Indeed, the Latvian case reveals the ridiculous racism and cultural chauvinism that passes for cultural studies in many American academic departments.

Reflecting on the shelling of Russia’s White House a decade back we see confirmation of the worst fears of what Yeltsin and Gaidar would bring. While fortunately Russia did not devolve into civil war, its fate has proved about as bad as one could have expected just short of war.  Its people have paid a high price for the plunder of their society.  Only now are some of them recovering and in no way thanks to the policies of Western consultants, pundits, and their liberal Russian counterparts.  When small business people in the former USSR have prospered it has been in spite of the obstacles placed before them by the policies of Yeltsin and Gaidar. 

Almost all the American advisors and intellectuals I met during this period in the former Soviet Union lived a sheltered existence enjoying the fruits of affluence in an impoverished society.  Many were well intentioned.  Most had almost no contact with the common people whose lives they ostensibly sought to improve.  The lessons of Vietnam, Russia, and now Iraq clearly reveal that in the US we have our own commissar class.  Many of them believe in the doctrines they espouse, but they have their positions of influence because they serve the powerful, knowingly or not, and they censor those not sharing their views.  Little to no funding was available from IREX, Fulbright, SSRC, or the NSF for research critical of Washington Consensus neoliberal policies in Russia.  The gatekeepers were those often enjoying the good life in the CIS world.  Genuine debate and democracy cannot occur under these conditions and perhaps that was the point of Yelstin’s shelling of the White House and the kudos he received from Washington and their intellectuals?


Jeff Sommers is an Assistant Professor of World History at North Georgia College & State University.  He has spent several years in the Baltics, including this academic year, and previously worked in the American labor movement.

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