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  • What Went Wrong in Russia?The Ravages of “Market Bolshevism”
  • Dmitri Glinski (bio) and Peter Reddaway (bio)

On 17 August 1998, the collapse of the Russian market in Treasury bills, the government’s default on its debt, and the devaluation of the ruble, all the work of the cabinet of “young reformers” that had recently been extolled in the West, marked the end of an era in Russian history. Yevgeny Primakov’s subsequent appointment as Russia’s new prime minister, at the insistence of the Duma and over the head of the corporate establishment, will probably be seen by historians as Russia’s most substantive step toward representative democracy since August 1991. This event undercut the political influence of the two elite groups that, while frequently quarreling with each other over slices of the budgetary pie, had jointly steered Russia through the period of so-called reforms. Gone were the enforcers of authoritarian market reforms, and so was the backroom political influence of the self-styled “oligarchs”—the infamous Seven Bankers and the chief executives of large semi-private monopolies in the raw-materials sector who had reaped enormous benefits from the conduct of “reforms” at the expense of productive manufacturing industries and the nation’s impoverished majority. Both groups had managed to portray themselves in the media as each other’s opponents, even as they cooperated within the same governments and switched back and forth between positions in government and major corporations. The always shifting balance between these two groups was one of the basic traits of the “Yeltsin regime,” as it existed from 1992 to 1998. Thus even though Boris Yeltsin is still president, only a few of the building blocks of “the Yeltsin regime” remain in place. [End Page 19]

To say, however, that this regime is gradually becoming a thing of the past does not mean that it has already been replaced by something qualitatively new. The old players will continue their strenuous efforts to regain control over national policy making for some time, especially through their dominance of powerful mass media and their influence on Yeltsin himself, who is apparently determined to complete his term of office no matter what it costs the country, even though his public approval rating is around 2–3 percent. Any political jolts that may still be caused by those groups, however, will be decidedly peripheral to the overarching theme of the coming years—Russians’ search for a strategy of national recovery and development that will enable them to transcend the Manichaean antagonism between “reformers” and “antireformers” that has paralyzed society for the last decade.

Given that Russian elites across the board, lacking an inspiring vision of the nation’s identity and future, have been unable to steer the country away from decline and bankruptcy, and that the utopian image of “the West” as a selfless savior and sponsor has long since faded, Russians will need to muster their internal civic and cultural resources to help pull the nation out of its present troubles. (This widespread understanding is reflected in the large billboards that appeared all over Moscow in late 1998: “Nobody will help Russia but we ourselves.”) Such an internally driven recovery requires a comprehensive analysis of the sociocultural and political legacy of “the era of reforms.” We must focus on the causes of the decay of Russia’s social capital, which appeared robust in the late 1980s but has now been weakened by pervasive mistrust and apathy, and on the series of more promising alternatives that, had they been taken, might have spared Russia from its present plight.

Democrats vs. Radical Marketeers

Let us begin by examining a misleading but widespread cliché: the assertion that in 1990–91 political power in Russia was seized by “democrats.” Although this claim is at the least inaccurate, it has been propagated by both wings of the Russian political elite—the radical marketeers and the Communist opposition. Moreover, support for the “democracy and market reforms” that were allegedly developing in tandem became the mantra of U.S. government policy toward Yeltsin’s Russia. This position reflected an uncritical projection of the American system—based on a “peaceful coexistence” between capitalism and constitutional...