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.

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