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Unpublished manuscript; copyright protected
RUSSIAN SOCIETY AFTER COMMUNISM:
FROM CHAOTIC LIBERTY TO ILLIBERAL ORDER
Sergei Plekhanov
Associate Professor of Political Science
YorkUniversity
Toronto, Canada
January 2001
In the past decade, Russia, like all other former state socialist countries, has been changing under the simultaneous impact of two kinds of processes: the processes of the continuing disintegration of the old political-economic system and the processes of the formation of a new society, a new state, and a new set of state-society relations.
Post-communist transition has entailed less hardship and turmoil in those countries where the disintegration has been better managed and the formation more purposeful. In Russia, unfortunately, the logic of disintegration dominated over the logic of formation, keeping the country in a protracted multifaceted transition crisis. In the early nineties, expectations were high about the capacity of the modern, highly educated Russian society, freed from the clutch of the Soviet bureaucratic Leviathan, to create democratic political institutions and a functioning market economy. But hopes for the country’s revival under the aegis of Western liberalism have been dashed, and in 1999-2000 Russia reverted to its habitual use of centralized bureaucratic authority to impose order, coherence and direction on a society which had become fragmented, exhausted, and in many ways dysfunctional.
It can be argued that Russia’s liberal project failed primarily because its main resource – society’s capacity for self-regulation – turned out to be much more limited than it had been assumed by the project’s supporters. But what forces, what historical circumstances imposed those limits? A combination of three explanatory approaches can be offered:
--Burden of history. For historical-cultural reasons, Russian society was not prepared to bear the heavy burden of responsibility for itself that fell on its shoulders when the Soviet state collapsed.
--Flawed reform policies. The actions of the ruling elites have not helped society to develop more adequate means of self-regulation.
--Transition shock. The transformation damaged the society so severely that it undermined even the limited capabilities that it had.
Burden of history
The transformation of Russia was initiated in mid-1980s in a traditional Russian way – by government decree, as a guided process of reform designed to alleviate the crisis of the Soviet system. Five main directions of reform, each responding to a perceived systemic need, set the framework for the changes: decentralization of state authority to provide for a more rational distribution of powers between the central government, regional and local bodies; liberalization aimed at reduction of the exorbitant scope of state control over society; marketization – legalization and development of market relations and mechanisms in the economy; demilitarization to alleviate the economic burden of defence spending; and external integration to open up the Soviet economy and society for intensive interactions with the outside world, above all – with the West.
Whatever the reasons why the reformers attempted to respond to all of these imperatives of change more or less simultaneously, such an approach produced an explosive effect of cumulative change which was next to impossible to control – and which ultimately destroyed the Soviet system. Decentralization reached a stage where the USSR was formally dissolved and replaced by 15 sovereign states. Liberalization led to the overthrow of the Communist Party and the establishment of a political system informed by the generic liberal-democratic design. Marketization became a “great leap” in the direction of full-fledged capitalism. Demilitarization drastically undercut the institutional, political and economic power of the military-industrial complex, turning it into a pale shadow of the once-mighty core of the Soviet superpower. External integration transformed Russia and the other post-Soviet states into peripheral appendages of the global capitalist economy.
The demise of a system characterized by such an extraordinary bureaucratic stranglehold over society as Soviet state socialism was widely touted as an act of liberation. But the liberation was not exactly voluntary: rather than being a case of society impatiently throwing off the shackles of the old order – like in February 1917, for example, - it was a case of a state breaking down in the course of struggle for power between reforming and conservative elites, with society participating in that struggle only in a limited and supporting role. Any society would be hard-put to respond to such a major catastrophe effectively. But when it hits a society conditioned by its history and culture to exist in a close, manifold symbiosis with the state, the challenge of creating effective new institutions as quickly as the situation requires becomes overpowering.
It is a widely shared view that successes in the project of transforming state-socialist societies into liberal-capitalist ones depend strongly on the degree of development of civil society. The more advanced the networks, habits and mechanisms of autonomous social behaviour, the more a society can influence the course of reconstruction and the shaping of the new institutions and policies. Conversely, the more helpless the citizens are to cope with their problems without bureaucratic direction, the more likely it is that the transition crisis will be deep, protracted, and destructive - and that liberal experiments will give way to some form of restoration of authoritarian rule.
Russia is a classic case of post-communist reforms being conducted by elites which proceeded to impose neoliberal policies on a country with very little concern about social costs or even social acceptance of the new ways, with citizens being unable to put significant constraints on elite actions. The hastily concocted new Russian state, formally organized as a liberal democracy, soon exposed itself as a mechanism which was efficient primarily in one task: enabling elites to appropriate public assets and maintain control over the country. What passed for “democracy” in Russia not only failed to produce any “social contract” between the government and the governed, but actually created new sources of state-society conflicts.
Flawed Reform Policies
If market forces are given free reign in a country where effective control of resources is in the hands of bureaucratic elites, the inescapable result will be that those elites will have overwhelming natural advantages in using the market forces to their benefit. The liberal project in Russia was remarkably blind to the inevitability of the bureaucratic dominance in the command system easily being transformed into the dominance of wealth in a bureaucratic-market system. The resulting distribution of wealth would have nothing to do with market competition for the highest economic efficiency, but everything to do with access to administrative power and to the money flow. The integration of such an economy into the global system would not constrain this usurpation of economic power by the bureaucracy: on the contrary, it would only magnify the advantages of transforming administrative privileges into wealth as quickly as possible – and, at the same time, make it vastly more difficult to reorganize production to make the economy competitive in the open market milieu.
The built-in proclivity of state socialism towards transforming itself into crony capitalism can be somewhat alleviated by the ability of civil society to put at least some brakes on the process, relying on democratic political institutions. Social resistance to the elite’s power grab, strong frictions between democracy and privatization are inevitable and healthy processes which should be regarded not as obstacles to progress, but as essential requirements of it. The stronger the democracy, the more circumspect the elites – and the more likely it is that social resistance will take democratic forms. In a country like Russia, with its exceedingly weak democratic institutions and traditions, both the elites and the resisting social forces, spearheaded by the Communist Party, quickly exposed their authoritarian habits, undermining fragile democracy from both sides and turning their conflict into a brutal “Kto kogo?” slugging match which made a mockery of the rule of law and the will of the people.
The West bears a heavy responsibility for the failure of Russian liberalism, since Western governments and international agencies involved in the Russian reform process joined this fight on the side of the champions of crony capitalism, putting their stamp of approval on the policies which were pushing Russia further and further away from both democracy and economic recovery. The green light given by the West to Yeltsin’s reforms had a profound corrupting influence on the thinking and behaviour of Russian elites. Having concluded that the West had no problem with crony capitalism so long as this capitalism maintained a democratic and pro-Western façade, Russian “reformers” felt free to continue with more of the same. Some of the most disastrous economic decisions of the “reformers”, such as the “loans for shares” privatization of 1995, were made at the time when they enjoyed their strongest Western support.
Obviously, in a society undergoing a systemic transition, many elements of the old system will continue to exist and interact with the new ways in all kinds of forms. But while some of such transitional interactions between the old and the new can help society adjust, others can produce the disastrous effect of combining the worst of state socialism with the worst of capitalism.
Transition Shock
The first decade of Russia’s post-communist transition saw a catastrophic reduction of the country’s productive potential. The halving of Russia’s GDP in the 1990s threw the country back down the scale of socio-economic development.
Russia's share in world trade shrank from 2.6 percent in exports and 2.7 percent in imports in 1990 to 1.3 and 0.7 percent, respectively, in 1999.
The output of the textile, leather and fur, and footwear industries fell by nearly 10 times, the garment industry - by 5 times, and the meat and dairy industries - by 3 times. The share of science-intensive products manufactured with the use of electronics, computer technologies and mathematical software has dropped from 45.3 to 25 percent of the GDP. Russia is lagging more and more behind industrialized countries in production growth rates and the volume of fixed capital accumulation. More than 70 percent of Russia's fixed assets have been exploited for more than ten years. The situation is worsening more quickly in the aircraft-building and aerospace industries, electronics and communications industry. Labour productivity in Russia is 5 times lower than in the United States.[i]
The economic depression delivered a double blow to the livelihoods of most Russians: a decline in their incomes was aggravated by a drastic reduction of social services for which they depended on the state.
The past decade has been marked by an extraordinary increase in socioeconomic inequality. In the last years of the Soviet Union, the gap between the rich and poor was estimated to be 4:1, and it is usually assumed that if the gap grows beyond 10:1, society becomes unstable. According to Russia’s State Statistics Committee, in 1999 the top 10% of Russians took 33.7% of all money incomes, while the bottom 10% got only 2.7%.[ii] This suggests a gap of about 15 times, but according to the estimates of the Institute of Socioeconomic Problems of the Population of the RussianAcademy of Sciences, the actual gap was three times wider, as the total income of the 10% richest households was 44 times higher than that of the poorest 10%.[iii]
Poverty has become a widespread social condition. In 1999, the incomes of over 40% of the population (60 million people) were below the official subsistence level of 1,138 roubles a month, which was the equivalent of about US$40.[iv] The official (government-determined) minimum wage in 2000 was 132 roubles (US$ 4,74) a month.[v] The average monthly salary was 2,403 roubles (US$86).[vi] About half of all families with one child lived below the subsistence level. In 75% of families with three children, each family member had less than a dollar a day to live on.[vii] In a VCIOM poll in March 2000, 58% of respondents said that the material situation of their families had worsened in the past five years, while 19% cited improvement.[viii]
The economic depression and the neoliberal policies aimed at the reduction of state spending led to progressive shrinking of social services available to a majority of Russians. If until the mid-1990s, the costs of housing, medical care and education lagged behind inflation, by 2000 they were growing at an accelerating pace.[ix] In 1999, health expenditures in Russia amounted to 5.7% of the GNP, or US$404 per capita (For comparison, Canada spent 9.2% of its GNP on health, or $US2,158). Spending on education stayed on the same level of 3.5% of GNP as in the 1980s (World Development Indicators, Table 2.9. Education Inputs), but with the GNP contraction in the 1990s, it has meant that Russia reduced its investment in education by half.[x] Public assistance funds shrank, too. According to Russian government data, in 2000 about 200 groups of citizens, or 103 million people, were entitled to various social benefits. "The law obliges us to help these people, but we cannot do so due to the lack of funds," said Minister of Labour and Social Development Alexander Pochinok in his October 2000 testimony in parliament. Only in 14 of the country's 89 regions benefits to eligible low-income families were actually paid, while in the rest of Russia, payment arrears reached the level of 26 billion rubles (US$935 million).[xi]
The intelligentsia, which enjoyed a relatively high social status in the Soviet Union as a recipient of significant state financing, has experienced a drastic decline in material standing and prestige. In Russia today, the average scientist makes 10 times less than the average bank clerk. Many universities and research institutes are in a state of degradation, having lost most of their government funding. The numbers of scientists and researchers have fallen from 1.9 million to 0.9 million people.[xii]
The transition crisis had an especially devastating effect on the Russian countryside. Rural Russia was hit by a contraction of demand for its product (both due to the general fall in the population’s purchasing power and because of foreign competition); by the prices on the industrial goods, which were rising 3 times faster than the agricultural goods prices; by the shrinking of state subsidies and unavailability of credit resources; and by the half-reformed, dysfunctional set of economic relations in the agrarian sector, which prevented even the limited resources from being used effectively.
Overall output of Russian agriculture fell by more than half, and about 80% of agricultural enterprises are operating at a loss. The numbers of cattle shrank by 45%. The farms’ needs for tractors are satisfied for 56%, combine harvesters, for 61%. [xiii]
As a reflection of the underdeveloped condition of Russian agriculture, almost half of the total farming output is produced at small private plots, many of which owned by city-dwellers, while the 300,000 newly created private farms produce only 2-3% of the total. 45-55% of all farm work is done by hand, the percentage at private plots and individual farms being much higher.[xiv]
The economic and social infrastructure of rural communities deteriorated to a greater degree than in most cities. Funding for health services, education, social welfare, communications fell as needs became more acute. Rural Russia is plagued by growing poverty, pauperization, and lumpenization. There are many signs of real degradation of large numbers of rural dwellers, as they fell to the social bottom.
The worsening of socio-economic conditions is reflected in Russia’s demographic crisis. During the period of 1992-2000, Russia's population decreased by 6 million people, reaching the level of 145.6 million, according to the Russian Ministry of Labour and Social Development. If thenatural reductionof Russia'spopulation continues at the same pace in this century,it will dropto 138.4million by 2015, according to State Statistics Committee forecasts, moving Russia from the 7th most populated country in the world to the 14th.[xv]
In 1999, average male life expectancyin Russia was below thepension age, having fallento59.8 years from the Soviet level of 64.3. The probabilityof accidentaldeath in Russia is 4.5 times higher than the European average. The death rate due to tuberculosis, drug addiction and AIDS has also grown.[xvi] According to Dr. Oleg Shchepin of the RussianAcademy of Sciences, the general level of illness has risen 15 percent while the number of people considered as invalids had risen three times during the 1990s.[xvii]
Youth mortality rate has jumped by 30%, the number of suicides has doubled, and the number of registered drug addicts has increased by 25 times.[xviii]
The socio-economic damage inflicted on Russian society by the changes of the past decade has further weakened its ability to effect constraints on the actions of the elites. Russian society as a whole is too battered, fatigued, demoralized, and preoccupied with basic survival to be able to organize itself to participate more or less effectively in the unfolding struggles for power and property. As a result, the field of battle is left almost entirely to the elites, which have learned new ways to manipulate the public. The ease with which the deeply unpopular Yeltsin regime managed to recycle itself into the popular Putin regime with the help of the 1999-2000 elections is a vivid reminder of the amorphous and pliable condition of Russian society.