Scattered Opposition

Cathy Young from the March 1993 issue

(Page 3 of 4)

The radicals contend that the hardships of transition have been made much worse by a badly flawed economic reform plan–above all, the decision to deregulate consumer and food prices while keeping production, distribution, and retail trade in the hands of government monopolies for at least another year. As a result, Russians face both shortages and skyrocketing prices; markets cannot clear because no real markets exist. Such "reforms" have enriched the very nomenklatura who benefited most from the old system.

"Sacrifice was inevitable. Everyone knew that," says Salier, a 56-year-old geologist from St. Petersburg who left the Communist Party in 1988 after she became active in the pro-reform Leningrad Popular Front. "But we were horrified by the scope of the hardships. Besides, we saw that these sacrifices were not being made for democracy but for something altogether different."

Salier says some of the democrats who have defected to the "red and brown" communist/nationalist coalition were pushed in that direction by the absence of a credible democratic opposition to Yeltsin. When the "red-and-browns" speak of rampant corruption and plunder disguised as privatization, she admits, they are telling the truth. "The establishment democrats" lie to put a better face on things.

With well over 90 percent of commercial and industrial properties still in government hands, about the only privatization taking place is the kind known as "nomenklatura privatization": The state-appointed directors of an enterprise turn it into a "joint-stock company," dividing the shares among themselves. Other slices of the pie go to former apparatchiks and the families of high-level army brass. (In a bitter pun on the Russian word privatizatsiya, this has been dubbed prikhvatizatsiya, something like "pilferization.")

The problem is not just that prikhvatizatsiya isn't fair but that it doesn't create a real market economy. As economist Boris Pinsker puts it, "the umbilical cord connecting these properties to the government is not cut." The new owners use their official connections to make deals, demand subsidies, and keep out unwanted competition.

The nomenklatura still enjoy most of the privileges– special stores, dressmaking shops, health spas–that Yeltsin once vigorously campaigned against. Last spring, the president issued an executive order (marked "not for public release" but leaked to the press) that exempted from privatization a long list of establishments catering to apparatchiks. And Salier notes that even the Gaidar privatization plan contains a suspicious number of exceptions. She points to the text: "Entities to be privatized are listed on one page, followed by a seven-page list of what cannot be privatized, or can only be privatized by special permission–i.e., for a bribe."

Economist Larissa Piyasheva, who resigned in August as Moscow's figurehead privatization chief (see "Russia's Real Radicals," April 1992), denounces the plan for leaving too many enterprises in the hands of the state. Even when an enterprise is "privatized," at least 20 percent of stock will be maintained in government holdings, which retain the right to approve major decisions on business strategies. The result, warns Piyasheva, who has joined Salier's Constituent Union, is an unprecedented model of mixed ownership–"a mutant that will make the creatures of Chernobyl look good." And, she adds, the government's high taxes and confusing regulations actively discourage the creation of new jobs; stagnant mass unemployment is the likely outcome.

Not everyone is so critical. As the Gaidar privatization was getting under way in October, both democratic politicians and most members of Russia's fledgling business community expressed the view that this program, for all its flaws, was probably the best that could be done. Reflecting a common attitude, economist Vasily Selyunin, who had worked closely with Piyasheva in the past, guardedly endorsed the reform program: "Of course it's bad, but no better plan is possible." Fearful of a Civic Union victory, Selyunin dismissed Afanasiev and other radicals as frustrated careerists and chided his old friends for their inflexibility: "At least [with the Gaidar plan], we'll get something started; otherwise, we'll be set back by God knows how many more years."

The moderates who now make up DemRussia maintain that their declining popularity is the inevitable price for painful market reforms. "We're doomed to support unpopular measures," DemRussia chief coordinator Vladimir Boxer argued in October. "Other parties and movements were afraid to assume this responsibility."

And though few moderate democrats dispute the facts that make up the radicals' indictment of the Yeltsin regime, many wonder how things could have been different. Says Arkady Dubnov, a journalist at the weekly Novoye Vremya who is sympathetic to the radicals, "Piyasheva talks as if 99 percent of people didn't understand that things are bad for them, as if only she understood it. They do understand. They just don't want things to get even worse."

Dubnov fears that a new Russian revolution would almost inevitably turn into a bloodbath. The transition to democratic capitalism, he says, must be an evolutionary one, and that means giving the nomenklatura a chance to benefit from reforms.

But Russian democrats have a low capacity for compromise, whether because of the totalitarian legacy of the Soviet past or because of their longtime marginality. Disagreements over political or economic strategy are cast in stark moral terms. (Piyasheva has referred to Gaidar's economic policies as "criminal" and "evil.") And disputes are often personalized: Someone with whom one agrees on 90 percent of policy issues but differs on the remaining 10 percent becomes not just an opponent but a bad person.

Explaining that an attempt last summer to create a radical reform group, the Liberal Union, failed because the people involved were no good, Salier remarks that one of its would-be co-founders, economist Vladimir Tikhnonov of the Entrepreneurs' League, "really likes [DemRussia leader] Lev Ponomaryov–he told me so himself." Her contemptuous tone leaves no doubt that this attitude self-evidently disqualifies Tikhnonov from the venture.

Moderates, for their part, scoff at the radicals for pulling out of Yeltsin's coalition. "By [that] logic, as soon as the Christian Democrats [in Western Europe] have brought a government to power, they should go into opposition. It's ridiculous," says Pyotr Filippov, a leader of the DemRussia faction in parliament.

Reformers, such moderates believe, have enough trouble overcoming opposition from the conservatives. Facing such foes, they say, democrats can only hurt their cause by fighting with each other or officially opposing Yeltsin. They are particularly exasperated with those who went into opposition early in 1992.