Why Call It Reform?
by Stephen F. Cohen
The Nation magazine, September 7/14, 1998
As Russia's economic collapse spirals out of control, rarely
if ever has American discourse about that country been so uncaringly
and dangerously in conflict with reality. With its endless ideological
mantra of a purported "transition from Communism to free-market
capitalism," almost all US government, media and academic
commentary on Russia's current troubles is premised on two profoundly
wrong assumptions: that the problem is essentially a "financial
crisis" and that the remedy is faster and more resolute application
of the "reform" policies pursued by President Boris
Yeltsin since 1991.
Treating Russia's agony as a case of the "Asian flu"-as
merely a matter of bolstering a faltering stock market, banking
system and currency with more budgetary austerity and tax collection,
ruble devaluation and Western financial bailouts-is like rearranging
deck chairs on the Titanic. Russia's underlying problem is an
unprecedented, all-encompassing economic catastrophe-a peacetime
economy that has been in a process of relentless destruction for
nearly seven years. GDP has fallen by at least 50 percent and
according to one report by as much as 83 percent, capital investment
by 90 percent and, equally telling, meat and dairy livestock herds
by 75 percent. Except for energy, the country now produces very
little; most consumer goods, especially in large cities, are imported.
So great is Russia's economic and thus social catastrophe
that we must now speak of another unprecedented development: the
literal demodernization of a twentieth-century country. When the
infrastructures of production, technology, science, transportation,
heating and sewage disposal disintegrate; when tens of millions
of people do not receive earned salaries, some 75 percent of society
lives below or barely above the subsistence level and at least
15 million of them are actually starving; when male life expectancy
has plunged to 57 years, malnutrition has become the norm among
schoolchildren, once-eradicated diseases are again becoming epidemics
and basic welfare provisions are disappearing; when even highly
educated professionals must grow their own food in order to survive
and well over half the nation's economic transactions are barter-all
this, and more, is indisputable evidence of a tragic "transition"
backward to a premodern era.
Even if economic growth were miraculously to resume tomorrow,
Russia would need decades to regain what it has lost in the nineties,
and nothing can retrieve the millions of lives already, cut short
by the "transition." Indeed, as a careful statistical
study by Professor Stephen Shenfield of Brown University shows,
an even greater and possibly inescapable economic and social disaster
is rapidly approaching.
Why call this "reform," as does virtually every
US commentator? Certainly, very few Russians any longer do, except
to curse Yeltsin and his policies, especially those long and zealously
promoted by the Clinton Administration. Russian economists and
politicians across the spectrum are now desperately trying to
formulate alternative economic policies that might save their
nation-ones more akin to Franklin Roosevelt's New Deal than to
the neoliberal monetarist orthodoxies of the State and treasury
departments, the IMF, World Bank and legions of Western advisers,
which have done so much to abet Russia's calamity.
But when President Clinton goes to Moscow in early September,
he will no doubt tell Yeltsin publicly, as he often has done in
the past and Vice President Gore did when he visited in July,
"Stay the course!" For most Russians, it will mean that
America welcomes what has happened to their country and does not
care about their ruined lives.
Stephen F. Cohen is a professor of Russian studies and history
at New York University. His most recent book, Rethinking Russia,
will be published next year by Oxford.