Egor Gaidar (1956-2009): Architect of capitalist restoration in Russia

[Antid Oto]

REPLY TO: D66 at nic.surfnet.nl

Egor Gaidar (1956-2009): Architect of capitalist restoration in Russia
By Vladimir Volkov and Andrea Peters
18 January 2010

On December 16 of last year, Egor Gaidar died of a heart attack at his
dacha outside of Moscow at the age of 53. He was a leading figure in
the implementation of market “reform” in Russia, which had a
disastrous impact on the country and resulted in an immense growth in
social inequality.

Gaidar is widely hated among ordinary Russians, who view him as
responsible for much of the misery they have endured since the 1990s.
The dismantling of the Soviet Union and the restoration of capitalism
at that time led to a decline in living standards and life expectancy
on a scale that had never before been seen in history, except in times
of war. Many current social statistics reveal that the country has
still not recovered.

In an expression of the indifference of official society towards the
hardships and sentiments of the population at large, Gaidar’s death
has called forth effusive praise from different layers of the Russian
ruling elite. It is hard to find a rapturous epithet that has not been
used to describe the individual who directed the economic policies of
the Yeltsin government for barely more than a year, from November 1991
to December 1992.

President Dmitri Medvedev called Gaidar an “outstanding
scholar-economist” and a “courageous, honest and determined person.”

Prime Minister Vladimir Putin said, “Gaidar made critical decisions
that determined the future of the entire country. He accomplished this
difficult task honorably, displaying the best professional and
personal qualities.”

In other commentaries in the Russian mass media, Gaidar has been
proclaimed a “great statesman,” “national hero,” “definitive moral
authority,” “person of enormous abilities,” and even “a genuinely
selfless intellectual.”

Most importantly, the mantra has been endlessly repeated that at the
start of the 1990s, Gaidar “saved the country from famine, collapse
and civil war.”

This is a lie. It follows the infamous dictum of Goebbels that if you
repeat a lie many times, it will be believed, and the bigger the lie,
the better.

Under Gaidar’s leadership in 1992, Russia enacted a twin program of
market liberalization and privatization. This led to the
impoverishment of the population through hyperinflation and the
transfer state assets into private hands, vastly enriching the
country’s emerging oligarchy.

In 1991, during Gorbachev’s final year in power, prices in Russia rose
160 percent. Over the course of 1992, they increased by more than
2,500 percent. In 1993, inflation stood at 840 percent, in 1994 it was
215 percent, and in 1995 it was 131 percent.

Workers at state and private enterprises, whose accounts were wiped
out by this process, did not receive wages for months and ended up
destitute.

Between 1991 and 1995, Russian gross domestic product declined,
according to the most conservative estimates, by 35 percent.
Industrial production collapsed. For several years, a form of natural
economy, based on bartering, was widespread.

The growth of suffering and despair found expression in a sharp fall
in life expectancy, which by 1994 stood at 57 years.

The late 1980s and early 1990s also witnessed an explosion of regional
and ethnic conflicts. According to conservative estimates, 100,000
people (excluding those in Chechnya) died in these events.

The claim that capitalist reforms were the country’s saving grace from
“famine, collapse, and civil war” turns reality on its head. Only a
cynical and self-satisfied elite could rejoice in the results of what
happened in Russia over this period.

In working out the privatization program, Gaidar and others
collaborated closely with academics from the US, in particular, the
economist Jeffrey Sachs, who was a professor at Harvard University at
the time. Washington was deeply involved, directly and indirectly,
through figures like Sachs in promoting capitalist restoration.

In the memory of millions of people, the worst of the economic
catastrophe visited upon the USSR happened as a result of Gaidar’s
policies. A majority of former Soviet citizens feel that the
difficulties of everyday life in the USSR—particularly during the
better-off periods of the 1970s and 1980s—were considerably less
onerous than those that resulted from the breakdown in the foundations
of social life arising from Gaidar’s “shock therapy.”

A survey carried out recently by the Levada Center, a research
institute based in Moscow, found that almost 60 percent of Russians
“deeply regret” the collapse of the USSR and think that it should have
been averted. While there is little love lost among ordinary people
for the authoritarianism and repression of the Stalinist regime, there
is widespread anger over the fact that so many of the Soviet-era gains
in general welfare have been lost in the past 20 years.

As yet, popular bitterness over the consequences of the dissolution of
the USSR and hostility towards Gaidar and figures like him generally
fails to coincide with an understanding that the misery unleashed on
the Soviet population was the legacy of Stalinism. The progenitors of
this form of bureaucratic Russian nationalism—based on a repudiation
of the socialist internationalism that guided the 1917
revolution—defended with violent methods the narrow interests of the
ruling bureaucracy against those of the Soviet and international
working class.

Indeed, Gaidar’s elevation to political power and the implementation
of his policies reflected the fact that in the mid to late 1980s, a
decisive section of the Communist Party bureaucracy came to support a
restoration of capitalism.

While the Soviet elite—having usurped political power from the working
class and exterminated the Old Bolsheviks, along with socialist-minded
workers and the socialist intelligentsia—was able for several decades
to maintain its privileges and power on the basis of nationalized
property relations and state control over the economy, by the 1980s
objective pressures on the economy were increasingly undermining the
viability of this parasitic arrangement.

The Soviet economy was in crisis. Labor productivity had been
stagnating for nearly a decade. The production and distribution of
goods and services were beset with problems because of the irrational,
arbitrary and bureaucratic manner in which the economy was overseen by
state authorities. This fueled the growth of the shadow economy and
social differentiation.

The Stalinist program of “socialism in one country” meant that the
USSR was largely cut off from the resources of the world economy, with
the exception of dollars earned from sales of oil. As the world
economy was becoming increasingly integrated through the globalization
of production and finance, the Soviet economy remained nationally
autarkic and comparatively backward. Furthermore, as the
administration of US President Ronald Reagan had hoped, the country’s
coffers were being drained by the war in Afghanistan and efforts to
compete with Washington in the Cold War.

The thinking of the Soviet ruling elite was also deeply affected by
the Solidarity experience in Poland in the early 1980s. At that time,
masses of workers mobilized to form an independent movement in
opposition to the Communist Party bureaucracy, challenging
authoritarian rule from the left. (A variety of international factors,
combined with intensive intervention by the US, ultimately brought the
movement under the political control of right-wing elements allied to
the Catholic Church).

The Kremlin was extremely wary of the possibility that, particularly
as the country’s economic crisis worsened, something similar could
develop in the USSR. In an interview given in 2000 to the Public
Broadcasting Service’s program “Commanding Heights,” Gaidar responded
to a question about the influence of Poland on the thinking of the
Soviet elite by saying, “It was understood that it had a most direct
relation to what could happen in the Soviet Union.”

Under these conditions, leading sections of the Communist Party
bureaucracy decided that they needed to find a new economic foundation
for the defense of their privileges and power in the form of ownership
of private property. While there were disagreements over the speed
with which this should be pursued, the different factions were united
in the overall goal of bringing back capitalism.

The alternative, which the ruling bureaucracy implacably opposed, was
the re-integration of the Soviet Union into the world economy on the
basis of a program of world socialist revolution. This could have
occurred only through the return to power of the working class in the
USSR by way of a political revolution that overturned the Communist
Party bureaucracy.

The program of capitalist restoration was carried out in alliance with
a privileged layer of the Soviet intelligentsia, which felt contempt
towards the working class and all those associated with socialism. The
policy of glasnost’ implemented under Mikhail Gorbachev, which allowed
for greater freedom in the media and public speech, was aimed at
giving the intelligentsia a political stake in the reform program and
endowing it with a democratic gloss.

Gaidar came from the social milieu courted by the Communist Party at
this time. He grew up in a family of the Soviet elite. Both of his
grandfathers, Arkadii Gaidar and Pavel Bazhov, were famous Soviet
writers. His father, Timur Gaidar, held the rank of rear admiral and
was the editor of the military department of the newspaper Pravda.

Having received an elite education in economics at Moscow State
University, at the beginning of the 1980s Gaidar was among a circle of
young economists whom the Soviet bureaucracy invited to participate in
the behind-the-scenes working out of market reforms. Beginning in the
fall of 1984, two groups of economists—one from the
Engineering-Economics Institute in Leningrad headed by Anatoli
Chubais, and the other from the Institute of Systemic Research in
Moscow under the leadership of Stanislav Shatalin, (which Gaidar
joined)—were brought together in a government commission “on the
modernization of the economic mechanism.”

Gaidar was a doctoral candidate in economics at the time of
perestroika and an employee at the Institute of Economics and
Forecasting of Scientific-Technological Progress of the Soviet Academy
of Sciences. In 1987, he was head of the economics department of the
journal Kommunist, the leading official organ of the Central Committee
of the Communist Party of the Soviet Union. In 1990, he led the
economics department of the newspaper Pravda.

In 1989, in the weekly newspaper Moskovskiie Novosti, Gaidar, writing
in an official capacity, made clear that he did not believe the market
reforms could be implemented without provoking mass opposition, or by
democratic means.

“The idea that today one can expunge from memory 70 years of history…
and secure public approval, while transferring the means of production
into the hands of the nouveau riche of the shadow economy, managers
and international corporations, merely demonstrates the strength of
utopian traditions in our country,” he wrote.

Gaidar worked out the architecture and implementation of capitalist
restoration in close collaboration with Chubais. In 1990, the latter
wrote an article, “The Difficult Course,” which made clear that he and
his collaborators were fully aware of the looming effects of the
reforms they were preparing.

“[T]he immediate social consequences of the speeding up of market
reform,” wrote Chubais, will be a “general lowering of the standard of
living … growth in the differentiation of prices and incomes of the
population” and “the emergence of mass unemployment.”

Chubais warned that all of this would provoke “opposition to reform
among broad masses,” “create a high likelihood of economic strikes in
essential sectors of industry and political strikes in large cities,”
and “possibly provoke serious national conflicts.”

In order to keep the situation under control, Chubais argued that the
carrying out of anti-democratic measures—”the outlawing of strikes,
control of information, and so forth”—would be “inevitable.”

Chubais’ statements demonstrate the degree to which all talk about the
initiation of market reforms signifying the triumph of democracy in
the former Soviet Union was hypocritical and false.

Gaidar shared this anti-democratic outlook, a fact that found
expression in his vociferous backing of the Yeltsin regime in its
conflict with the parliament in 1993. At that time, the president
ordered the shelling of the White House (the parliament building) in
order to disperse opposition to his rule fueled by widening social
discontent over “shock therapy.” In the shelling of the parliament and
street fighting surrounding the assault, 187 people died and hundreds
more were injured.

Just prior to these events, Gaidar wrote an article in the journal EKO
defending “shock therapy” and expressing indifference towards popular
suffering. “Ignorant estimates that 90 percent of our people have
become poor should not be believed,” he wrote. “According to wholly
serious estimates, 36-37 percent of our people have now become poor.”
He admitted that this was “a very high number,” but insisted that
little could be done about it.

Gaidar and all those with whom he worked bear responsibility not for
“saving” the country, but for unleashing a class war that abolished
the socio-economic foundations of the Soviet Union, which, despite
having been vastly eroded by the bureaucracy, had continued to exist
in juridical form.

Leon Trotsky and the International Left Opposition warned the Soviet
working class about the danger of capitalist restoration at the hands
of the Communist Party bureaucracy as early as the 1930s. At that
time, Trotsky insisted that the degeneration of the revolution had
placed in power an elite whose aim was not the promotion of social
equality and the interests of the world proletariat, but rather the
parasitic exploitation of the country’s nationalized property to
secure its own wealth and power.

Trotsky maintained that the subsequent fate of the USSR would depend
on whether the proletariat was able to depose the bureaucracy in the
course of a political revolution. The working class, he insisted, had
to repudiate the program of “socialism in one country” and the entire
outlook of Russian nationalism. If this did not happen, the
bureaucracy, sooner or later, would complete its counterrevolutionary
coup and restore capitalism.

Trotsky worked tirelessly to build the new revolutionary leadership of
the working class, the Fourth International, to educate and mobilize
the Soviet and international working class, recognizing that the fate
of the Russian Revolution was indissolubly bound up with the overthrow
of capitalism internationally, above all, in Europe and America.

As a result of the betrayals of the Stalinist, social democratic and
trade union bureaucracies, revolutionary struggles of the working
class were defeated, leaving the Soviet Union isolated and enabling
the Stalinist regime to maintain its grip on power. The historical
correctness of Trotsky’s analysis was confirmed, tragically, in the
negative.

In the new period of capitalist crisis and impending revolutionary
struggles, Trotsky’s analysis and the programmatic foundations he laid
down provide the essential foundation for the revival of the
international socialist traditions of the Russian working class and
the completion of the world historic transformation that began with
the October 1917 revolution.

http://wsws.org/articles/2010/jan2010/gaid-j18.shtml

**********
Dit bericht is verzonden via de informele D66 discussielijst (D66 at nic.surfnet.nl).
Aanmelden: stuur een email naar LISTSERV at nic.surfnet.nl met in het tekstveld alleen: SUBSCRIBE D66 uwvoornaam uwachternaam
Afmelden: stuur een email naar LISTSERV at nic.surfnet.nl met in het tekstveld alleen: SIGNOFF D66
Het on-line archief is te vinden op: http://listserv.surfnet.nl/archives/d66.html
**********