Entombed in poverty. Russia - John Gray on the market madness of the post-Soviet period

Russia: experiment with a people

Robert Service <em>Macmillan, 408pp, £20</em>

ISBN 033372626X

With the fall of communism, it might have been expected that the specialists who were charged with keeping Lenin's remains preserved would be unemployed. In fact, the embalming of corpses is a thriving trade in post-communist Russia. Despite a strengthening of state power in recent years, criminal mafias continue to exercise considerable influence in many areas of life. Sentimental about their dead, the new criminal elite had prevented the art of embalming from following communism into oblivion. In this, as in other contexts, Soviet traditions live on.

The embalming of dead mobsters is only one of many echoes of the Soviet era that are identified in Robert Service's indispensably useful and arrestingly well- written new book. Not only the habits of mind and social structures of post- communist Russia, but even its physical appearance, show many deep marks of the Soviet regime. Yet it would be a mistake to think one can understand Russia today simply by looking to the regime that collapsed just over a decade ago. The deeper continuities are between post-communist and pre-communist times.

Russia as we know it today is a product of two experiments in westernisation, one imposed by Lenin, and the second by the market Leninists who ruled the country during the ill-fated years of neoliberal "shock therapy". Both were disastrous. In the wake of these failed attempts to achieve modernity by blindly following western models, Russia is returning to its pre-communist, Eurasian past. As in late tsarist times, when the country had one of the highest rates of economic growth in the world, Russia today has a highly dynamic economy that blends wild entrepreneurship with far-reaching state intervention. Today, as in the 19th century, Russia leans towards Europe, while remaining unalterably distinct from Europe in its religious traditions, culture and Asiatic vastness.

The government of Boris Yeltsin was one of a long line of westernising regimes that have sought to make Russia an unequivocally European country. Like Lenin's Bolsheviks, the market liberals of the Yeltsin era tried to reshape the country in accordance with what they perceived as the most progressive current in European thought. In Lenin's day, this was Marxism, which instructed the Bolsheviks that the only way forward for Russia was rapid industrialisation and the reorganisation of Russian agriculture on the model of factory production. As he showed in the New Economic Policy, which allowed some peasants to grow rich, Lenin recognised the necessity of tactical retreats. But he never renounced the classical Marxist view that socialism could be fully achieved only when Russia had become an industrial society. The result of the policies suggested by this orthodoxy - which, contrary to conventional wisdom, Stalin followed faithfully - was the collapse of Russian farming, ecological devastation and the deaths of millions of peasants. Those who survived did so by relying on the produce of smallholdings - vestiges of the peasant agriculture that had to be destroyed if Russia was to become a western-style modern country.

The Yeltsin era saw a rerun of the Bolsheviks' forced modernisation from above, but this time the western model was American, not European, and it demanded the creation of free markets rather than central planning. As in the past, Russia's westernising elites were keen to implement what they took to be the most advanced ideas. Western opinion had changed from the time when Sidney and Beatrice Webb had written of Stalinist Russia as the embryo of a new world civilisation; but the conventional wisdom had not become any wiser. It still insisted that the only possible future for Russia was for her to remake herself on a western model, and it continued to approach this prospect with missionary zeal. Just as in the 1930s, a stream of political pilgrims flowed from west to east - not, this time, the communists and fellow-travellers who lauded Soviet achievements while millions starved, but instead a motley band of international civil servants, investment bankers and tacky think-tank operators. They all preached the gospel of the free market as the Russian economy spiralled into one of the greatest depressions of the 20th century.

As could be foreseen from the beginning, the market Bolshevism that was imposed on Russia in the early 1990s by the Yeltsin government - strongly influenced by the IMF - was ruinous in its effects. Millions of people did not die of starvation as they had during the Stalinist experiment, but a large part of the population was entombed in hopeless poverty. As in the past, millions survived on the output of private, peasant-style plots. At the end of Russia's neoliberal experiment, the country was far from the modern society envisaged by the financial engineers of the IMF and its own romantically pro-western elites. It was trapped in a Byzantine labyrinth of crime and corruption from which it is only now emerging.

Providing a much-needed and richly informed historical perspective on Russia's development over the past decade, Alexander Chubarov tersely sums up this half-tragic, half-farcical story: "The 'shock therapy' of the early 1990s . . . inflicted great pain but gave little cure. It was a Bolshevik-style attempt to destroy an old economic system to its foundations in the hope that the phoenix of the market would rise from the ashes. This, however, did not happen."

Service and Chubarov add to a growing list of books highlighting the errors, crimes and follies of Russia's neoliberal experiment. Of this number, the most comprehensive remains Peter Reddaway and Dmitri Glinski's The Tragedy of Russia's Reforms: market Bolshevism against democracy (United States Institute of Peace Press, 2001). Reddaway and Glinski provide a penetrating analysis of the undemocratic politics underpinning this experiment, but neither they nor, so far as I know, anyone else has yet been able to explain fully how a project so manifestly absurd could have been launched, and pursued with some consistency, in post-communist Russia.

When the USSR collapsed, none of the conditions for a western-style free market existed. Something between one-third and a half of the economy was a military-industrial rust belt that had no hope of survival in the global market. There was no law of property or contract. The rule of law itself was not even a memory. Schooled by decades of Soviet experience, most people associated enterprise with crime. Against this background, the prospect of a swift transition to a market economy was sheer fantasy. Yet it was the basis of all the policies of western financial institutions and governments until Russia finally defaulted on its debts in late summer 1998. How are we to make sense of this bizarre tale?

If answers are to be found, they are in the longer intellectual history of Russia and in the recurring utopianism of the European Enlightenment. From Peter the Great onward, a section of Russia's ruling elites has sought to wrest the country from its Eurasian ambiguities and lock it irrevocably in to the west. By no means all Russians who belong in this pro-western camp have believed that the west supplies a simple formula for modernising Russia. In their different ways, the liberal Ivan Turgenev and the radical Alexander Herzen believed that Russia would make progress only in so far as it entered fully into European culture, but neither of them imagined that this could be achieved by mechanically replicating European models. Unfortunately, Turgenev and Herzen are not characteristic of the Russian intelligentsia, which has always been attracted to the most doctrinaire strands in the Enlightenment. The Enlightenment thinkers who have been most influential in Russia have not been sceptics such as David Hume or empiricists such as John Stuart Mill, but rationalists such as Fichte, Hegel and Marx. Infecting Russia's elites with a utopian mentality, the quasi-religious view of history advanced by these European thinkers has had a disastrous impact on the development of the country. Politics became a matter of absolute choice, rather than the piecemeal borrowings and evolutionary adaptations through which other countries have edged towards their own distinctive versions of modernity.

The misfortunes of Russia in the 1990s came from the interaction of its indigenous tradition of pro-western Romanticism with the new right's victory in the west. For the bureaucrats of the IMF, there was only one route to modernity, for Russia or anywhere else, and that was the narrow path of free-market development prescribed by the "Washington consensus". Never mind that the US had achieved economic development behind the high walls of protectionism. The only salvation for Russia was in joining the global free market. Many other factors lie behind the tragic comedy of Russia's "market reform" - not least spectacular corruption. Its ultimate source is in the deadly combination of the west's ideological enthusiasm for free markets with the Russian belief that modernisation can be achieved only by adopting western models. Now that the era of the free market is nearly over, it remains to be seen whether Russia - under the aegis of Vladimir Putin's subtle and flexible authoritarian regime - can at last discover a version of modernity that matches its own peculiar history.

John Gray's latest book is Straw Dogs: thoughts on humans and other animals (Granta)