On the first night of a month-long stay in Moscow last September, I flipped on the TV right in the middle of a special on "Enterprise in the USSR." A young man interviewed on the street was saying, "We were taught for 70 years that an entrepreneur is an exploiter, a grabber. Actually, enterprise is not even motivated by the desire to get rich but by the desire to leave one's mark on the world." A man in his 40s, standing in front of Moscow's famous McDonald's, offered this view: "We have always been told that capitalists were bad, but now we can see that they prosper themselves and help the rest of us."
Where were the Russians we always hear about? You know, the ones who prefer universal poverty to unequal wealth and want not to catch up with a more successful neighbor but to burn his house down? The ones who opt for the squalor of security over the rewards of risk-taking and favor communism for its social guarantees? Of course, the selection of responses in the documentary was probably somewhat tendentious, but it seemed that the camera crew did not have a very hard time getting pro–free-market comments.
Still, the belief that Russians are not taking well to market-oriented change has become something of an axiom. To explain this by inherent genetic traits would smack of racism (even if it's not the kind that brings a knock on the door by the sensitivity police), but cultural heritage coupled with decades of communist indoctrination will do just fine.
"For great masses of Soviet people," writes Hedrick Smith in his best-selling The New Russians (published in late 1990), "capitalism is still a dirty word, and the fact that someone earns more, gets more, is a violation of the egalitarian ideal of socialism." Besides ideology, "this hostility toward those who rise above the herd reflects the collective ethic of the obshchina," the village commune which, in czarist times, apportioned equal strips of land to peasant households, made most farming decisions, and frowned at "anyone who tried to advance beyond his peers."
In this neat scheme, large parts of Russian history disappear into the memory hole. Smith does mention that the commune system was deliberately fostered by the czarist regime as a supposed bulwark of stability. What he does not say is that in 1906, when violent peasant rebellions had proved this belief quite wrong, Prime Minister Pyotr Stolypin launched an ambitious land-reform program enabling households to withdraw from the commune and claim their plots as private property. Leo Tolstoy wrote to Stolypin denouncing the measure as evil, but many peasants apparently felt otherwise: By 1915 (when the Stolypin reform became a casualty of World War I), up to 50 percent had title to their land.
Smith also forgets that through most of the 192Os, after the specter of famine and revolt had forced the Communists to retreat from their hard-line ideological stance, nearly all Russian peasants worked as individual proprietors. They did so well that, in the 1930s, eliminating those who had grown too indecently prosperous and persuading the rest to join collective farms proved an arduous job that cost millions of lives.
The view offered by Smith is more than just a Western misconception. For the ultra-right Russian nationalists, it is an article of faith that Russians are not interested in material things, only in higher spiritual ones—presumably such as killing the Jews. ("The Russian is no money-grubber, no American," emoted one such "patriot" at a spring 1990 press conference. He'd be chagrined to learn that when Soviets were asked in a recent poll what lifestyle appealed to them most, 65 percent said "American.")
But liberal Soviet intellectuals echo the same themes, often—perhaps unwittingly—romanticizing the very traits they wish to deplore. In the April 11 New York Review of Books, the prominent writer Tatyana Tolstaya argues that Russia, unlike the West, has always elevated emotion over reason: "How many scornful pages have great Russian writers dedicated to Western pragmatism, materialism, rationalism? They mocked the English with their machines, the Germans with their order and precision, the French with their logic, and finally the Americans with their love of money. As a result, in Russia we have neither machines, nor order, nor logic, nor money." It's a nice point, but Tolstaya overlooks the fact that great Western writers have not been far behind their Russian brethren in bashing Western materialism, rationalism, and technology.
There is also the tenacious notion that Soviet people are used to having the state provide, if meagerly, for their basic needs and to having it relieve them from the trouble of fending for themselves. Widespread among Western pundits—including many conservatives, who seem to see the Soviet Union as something of a bigger, poorer, nastier Sweden—this idea is also surprisingly popular among Soviet reformers and radicals, who ought to know better.
Irina Ratushinakaya, a poet and former political prisoner who emigrated in 1986, is much closer to the truth when she writes in her 1991 memoir, In the Beginning: "If you are what our radio hails as 'an ordinary Soviet citizen' and have no access to special shops for the privileged…you will have learned from your childhood that you must fend for yourself, expect nothing from the state, and hope that the authorities will leave you alone."
While a Soviet citizen may have been provided with work, medical care, and cheap housing (though with glasnost have come shocking disclosures about homelessness and unemployment), the quality of these "benefits" was, in too many cases, not just low but unbearable: A family of five might be crowded into a damp, drafty room the size of an American prison cell. If you wanted or needed something better than what you had, you could either pester the authorities or trade with someone else for their space; either way, you had to scramble and scheme for even the basics.
A middle-aged Soviet émigré once told me about a three-way apartment exchange her family had arranged to move from a communal apartment to a separate one. It sounded as complicated as a leveraged buyout and remained confusing even after she drew a chart to illustrate the deal. At no time in the history of the Soviet state were ordinary people relieved from the necessity of scrambling and scheming and foraging for clothes, furniture—even food beyond a few basic staples. A few years ago, a Muscovite shown on ABC News remarked that Soviet life was "like a chess game" where you always had to think about the next move.
Add to this the fact that most people from all walks of life have always dabbled in the "shadow economy," inventing the most unlikely ways of making money. Burned-out light bulbs are sold so that people can quietly pocket a good light bulb at the workplace and replace it with the burned-out one. When the government issues an idiotic decree taking 100 and 50 ruble notes out of circulation, permitting only a limited amount of money to be exchanged for smaller bills, people quickly devise ways to get around that, such as buying railway tickets, which can be returned later for at least a partial refund.
When all is said and done, survival in Soviet society, even in the relatively "prosperous" 1960s, required far more energy and ingenuity than in any Western country. Meanwhile, the economy kept slipping, for the simple reason that all of this energy and ingenuity were applied to essentially nonproductive pursuits—not to making the pie bigger but to securing a slice of it.
This sort of "self-reliance" may not prepare people very well for the transition to a market economy. Over the years, Russians have developed specific survival skills required under socialism; many have even come to take satisfaction in their talent at beating the system. But a market economy requires a whole new set of skills. In many cases, economic reform has already disrupted the arrangements people had carefully devised for themselves over the years. On the other hand, Soviet émigrés have proven quite capable of fending for themselves once in the West; perhaps the central survival skill that people develop under communism is adaptability.
Black-marketeering habits, entrepreneurial though they may seem, could also prove a mixed blessing for future Soviet capitalists. Much of this experience, after all, is based on deceit and trickery; real business, unlike scamming, demands not only ingenuity but responsibility. Still, such behavior is a perfectly rational response to the rules of an irrational system. Change the rules, and behavior will change, too—perhaps faster than most people think.
Property ownership is a great educator. Remember the movie Trading Places? As part of an experiment by two rich amateur sociologists, the petty thief played by Eddie Murphy is installed in a beautifully furnished house. His first move is to steal a vase. His "patrons" point out that he does not have to steal anything: Everything in the house is already his. Before long, having gathered his street friends for a wild party, he quickly realizes they are trashing his place and throws them out.
But the restoration of real property rights is exactly what the Gorbachev regime balks at. Land ownership has become an especially bitter and contentious issue. Gorbachev's initial attempts to encourage individual farming by allowing people to lease plots of land as well as machinery from collective farms have completely failed to upgrade Soviet agriculture or improve food supplies. Is this because Soviet peasants have lost the habit of hard work? (How is it that, allowed to keep tiny personal plots and sell the produce grown there at unregulated prices, they somehow managed to produce 30 percent of the Soviet Union's food on about 2 percent of its tillable land?) Are they reluctant to wean themselves from the security of collective farms and resentful of those who strike out on their own?
Even Hedrick Smith, wedded as he is to the "culture of envy" theory of the Russian character, concedes that "the fundamental failure [is] not the mind-set of the farmers but the failure of the reformers…to provide attractive and viable conditions for private farming on anything but the kitchen-garden scale." Without real land ownership, the farmers remain "sharecroppers" at the mercy of local bosses (often the very same people who turn around and blame the lack of progress on the peasants' poor attitudes).
Nor can they ever be certain that they'll get to keep the fruit of their labors. Many still remember how, in the early 1960s, Khrushchev moved to cut the size of household plots and ban individual ownership of cows; the ban was later repealed, but few peasants ventured to raise cows again. A farmer who contributed a "My View" column to the weekly Moscow News last September went to the heart of the matter. If his property rights were guaranteed, he wrote, he would have no trouble getting his adult children to come back from town and work with him; but how could he risk it when in 10 years, the battened farmers might lose not only their land but their lives?
Moreover, selling produce in the cities is far from problem-free. The number of farm markets is small, and official restrictions help inflate the prices to levels far beyond the reach of the average (angry) citizen. The November 9 Izvestia ran a letter from a farmer who had raised two pigs and traveled to Moscow to inquire about selling the pork; he found that meat-selling spots at every market were limited by the state-appointed administrators, with long waiting lists for vendors, bribes to pay, and a high minimum sale price. He gave up, went home, and smoked the pork for his own family.
It is much the same in other sectors of the economy. Cooperatives and small businesses are dependent on the whims of various levels of local government—and of the central state. On a Moscow street last year, walking behind a couple in their early 30s, I overheard the man say, "Why start a business when I don't know if six months from now it's still going to be my business or not?" Overnight, a new decree can make your business illegal, triple your taxes, cut you off from vital supplies. Often, the restrictions represent barely disguised extortion: A 1989 package of legislation severely limited the scope of activities in which private businesses or "cooperatives" could legally engage unless they were "affiliated" with state enterprises, i.e., unless state enterprises were cut in on the profits.
To the credit of the Russians, these conditions have not killed their entrepreneurial drive, but they have warped it. The arbitrariness of the rules fosters a "take the money and run" mentality. If your company is built on quicksand, why worry about your reputation? The necessity of wangling shady deals with officials reinforces the habit of approaching a business venture as if it were a scam.
Lifelong communist indoctrination, which taught that private enterprise was just a different name for cheating, may also play a perverse role: If it's all right to be an entrepreneur, many infer that it's all right to be a crook. Journalist Natalya Severin describes an example of this mindset in the September 1990 issue of the newspaper Demokraticheskaya Rossiya: Two young men in a Moscow park discuss an opportunity to make a quick million or two by turning an about-to-be-junked airplane into a passenger shuttle. ("The landing gear keeps giving out, but it'll hold out for a while.")
This incident prompts Severin to reflect sadly on the state of commerce in the Soviet Union now that "everyone is trading." Ventures of all kinds spring up and shut down almost immediately, not because they fail but because the entrepreneur makes a killing and moves on to greener pastures or simply quits on the entirely reasonable assumption that he might just as well "retire" on the money he's got while he can still keep it.
Ironically, Soviet "free enterprise" today resembles nothing so much as the old Soviet propaganda image of chaotic, jungle-like, fleece-your neighbor, ethics-free capitalism—which could be seen as poetic justice if it weren't for the sad fact that those most responsible for the propaganda will suffer least, and vice versa. All Soviet entrepreneurs should not be tarred with the same brush, but unethical practices (to put it mildly) are sufficiently widespread to make popular resentment somewhat easier to understand. Is there also an element of envy in it? Sure there is. We don't have that kind of thing here in America, do we? Tell that to Michael Milken. Of course, affluent Americans are predictably less bothered than the pauperized Russians by the presence of the super-rich among them.
Many of my Soviet acquaintances who grumbled about cooperatives tried to make it clear that they were not against private enterprise, only against the sordid kind burgeoning in their society; some stressed the distinction between Soviet and Western business. ("This isn't like the West, you know," a young cab driver said. "There, any capitalist is concerned about putting out a good product and creating good conditions for workers." No wonder Ralph Nader was livid when he came back from a trip to Russia.) The readiness of vast numbers of Soviets to work for Western firms—despite their supposedly ingrained Marxist fear of exploitation by a private employer—is evident both from polls and from everyday life.
What is difficult for people to understand, or at least to accept, is that until the market is saturated enough to become less skewed in favor of the seller and the employer, the conditions that offend them will persist. Perhaps the tragedy of all the countries making the transition to the market at this late point in history is ill timing. The initial stage of capitalist development, nearly always accompanied by hardships and disruptions, is taking place just as economies teeter on the brink of disaster and the public is teased by ubiquitous images of far higher living standards abroad.
Despite these complications, it seems clear that the majority of Soviet people now support some version of capitalism. Last August, a poll of Muscovites found that 75 percent of the population—including 82 percent of those under 60 and 70 percent of workers—favored the market, though most had reservations about the speed of transition and (rightly) about the government's plans to raise prices without deregulating the supply of goods. Even more interesting figures come from a survey of delegates at the first congress of Soviet miners in June 1990. Only 3 percent were in favor of a centrally planned economy, while 55 percent supported a "regulated market economy" with a social safety net and 34 percent endorsed a "free-market economy."
In her New York Review of Books essay, Tolstaya looks back on Russian history with its tortures, slaughters, and intolerance and seems to despair of the country's ability to ever choose freedom. Yet every country's past has its share of horrors. Even America's unusually benign history includes religious persecution, slavery, and a bloody civil war.
It would be silly to argue that nations do not develop distinctive habits or traits, but what we see from modem history is that "national character" is far from immutable. Japan, a non-Western country with no democratic or individualist tradition, has succeeded quite well at capitalism. True, it retains a strong collectivist ethos, but even that is being eroded by two generations of prosperity. Meanwhile, Holland, once a Calvinist pioneer of free enterprise, has gone down the path of permissiveness and welfare statism—and is beginning to worry about a younger generation that seems to be losing all sense of a work ethic.
Even the Soviet Union's ruling Communist elite, the nomenklatura, has probably given up hope of restoring the past; the structure that supported totalitarianism seems to have been broken beyond repair. But that does not mean the Communist bosses have given up their positions of privilege. Quite a few are now using their powers and their de facto control over valuable properties to set themselves up in private business. Radicals such as Moscow Mayor Gavriil Popov speak of the dangers of a "nomenklatura-style privatization" in which Communist bosses will turn themselves, without batting an eye, into "capitalist" owners.
Popov and other free-market economists concede that even this oligarchic capitalism is better, in the long run, than no capitalism at all. Still, such a path is fraught with dangers. If the nomenklatura combines its new "capitalist" incarnation with its traditional hold on the levers of state power, it will be in a position to stifle the true entrepreneurs. In a speech at the Cato Institute in Washington last February, Popov suggested that the recent Soviet decree vastly expanding the KGB's powers to investigate private businesses for "improprieties" may be an attempt to protect Communist-officials-turned-businessmen from their competitors.
Perhaps more dangerously, under this scenario ordinary people can have no stake in privatization. It won't take long for the common folk to realize that their old oppressors have swindled them again, and this realization will come at a time when the celebrated Russian patience is wearing quite thin. Since the swindle will be passed off as a "transition to the market," one possible consequence could be a surge of support for Pamyat-type nationalists, who inveigh against capitalism as much as they inveigh against the Jews (and whose current following is about the same size as that of the LaRouchies in the United States).
Many Western commentators and liberal Russian intellectuals would, of course, see this as more evidence of the exotic and irrational nature of the Russian soul. In fact, if it does happen, it will be something else altogether: In one of the saddest ironies of modern times, new, reconstructed, profit-minded Communists will have succeeded in giving capitalism a bad name.
Cathy Young is the author of Growing Up in Moscow (Ticknor & Fields).