The struggle for power in Russia: towards dictatorship or the collapse of the state?
The present pamphlet is the transcript of a forum held in London on the eve of the election called by Yeltsin on December 12, therefore before its outcome could be known.
At the time of going to press, most of the results of this election are known. Yeltsin won support for his draft constitution by just under 60% of the votes on a 53% turnout. This means that over two-thirds of the electorate do not support - for the time being at least - his planned constitutional tightening of the screw. But even this result must be qualified. As Western journalists reported, this 53% turnout, which is just above the 50% minimum required for the referendum to be valid, was only achieved thanks to shady manoeuvres. On the one hand, within a few days, over 1.5m voters "disappeared" mysteriously from the estimated size of the electorate given by the electoral commission. On the other hand, voting arrangements were such that those voting in the parliamentary election were automatically considered as having voted in the referendum, whether they had or not. It may therefore be the case that the actual support for Yeltsin's constitution was even less and that the real turnout in the referendum was under the 50% mark.
What made the headlines of the papers here, however, was the breakthrough made by the main nationalist far-right party (and the only one allowed in the election), Zhirinovsky's "Liberal-Democratic Party of Russia", with 24% of the votes in the national party list ballot, far ahead of Yeltsin's "Russian Choice" which came second with only 13%. The final composition of the Federal Duma should be differen however, as Yeltsin's supporters seem to have scored better in the constituency-based election. But in the end, the most optimistic estimates put Yeltsin's bloc at under 20% of the Duma with the LDPR at around 17%. This means that Yeltsin will probably have to use the full authoritarian powers given to him by his constitution in order to bypass the opposition which is likely to come from the newly-elected parliament - and this even if an alliance was agreed between Yeltsin and Zhirinovsky, as has already been hinted at.
This election proves to be another step towards a return to dictatorship. For the time being, this could be Yeltsin's personal dictatorship. But there are other possibilities. So far Zhirinovsky has largely acted as a foil for Yeltsin, by weakening his main enemies both on the reformist and ex-Communist Party sides. But the far-right comes out of this election with a much stronger position. Of course, Yeltsin and Zhirinovsky already have much in common. Both of them have been tapping extensively the same Great Russian prejudices for some time. But behind Zhirinovsky's somewhat ridiculous foul-mouthed demagogy are forces which, in the present threatening social crisis, could seriously consider resorting to the sort of racist military dictatorship advocated almost openly by the LDPR. And this could turn out to be the next stage in the present struggle for power in Russia.
Yeltsin's so-called "democratic" credentials are well established by now. Two months after the final assault against the Russian Parliament, it is now known beyond doubt that what some papers here called with characteristic stupidity, the "second October revolution", was nothing but the result of a series of provocations which were carefully planned by Yeltsin and his aides in order to get rid of the Parliamentary opposition. Just as it is now established that the tanks in Moscow's streets, the shelling of the Parliament's White House and the heavy death toll among the alleged insurgents were not imposed on Yeltsin by necessity. Rather these were an expedient means for Yeltsin to eliminate some of his opponents physically in order to re-assert his increasingly disputed authority and to issue a warning to all those who might be tempted to challenge his power in the future.
So much for Major's and Clinton's attempts over the past two years at selling Yeltsin as a champion of democracy! Today the Western powers although still as adamantly supportive of Yeltsin, are scaling down their praise for his democratic pretensions. In Chancellor Kohl's own words, after his last meeting with Yeltsin on November 23, one should "not gauge too closely the democratic nature of each and every decision made by the Russian president". But then, the issue for imperialism was never that of democracy but that of stability. And, for the time being, the major powers still seem to think that it is Yeltsin who has the ability to bring Russia into the imperialist orbit while maintaining political and social stability. Or, at least, they cannot see any better choice.
Yeltsin in search of legitimacy
It is against this background that people are expected to vote throughout Russia this weekend. A new-look Federal Assembly should come out of this election to replace the Russian Parliament which was shelled out of existence on October 4th. At the same time, a referendum over a new constitution drafted by Yeltsin is organised.
This time again Yeltsin has drawn his inspiration from the Czarist days. The lower house of the new Federal Assembly is to be called the "State Duma", after the token powerless parliaments set up by the Czarist regime during the first two decades of the century. Ironically, in his craze for pre-revolution symbols, Yeltsin seems to have overlooked the fact that the first State Duma was nothing but a last ditch attempt by the Czarist system at defusing the rebellion which was then simmering in society and that, in the end, it failed to prevent the revolutionary explosion of 1917!
On the other hand, from Yeltsin's point of view, the historical analogy does fit quite nicely with his aims. Under his draft constitution, the new Federal Assembly will indeed be largely token and powerless. The president will have the power to nominate and sack the Prime Minister without the Assembly's consent. Likewise he will be able to disband the Assembly and to suspend any local executive body in the Federation at will. Whereas it will be almost impossible for the Assembly to comply with the drastic conditions required to impeach the president. In short, if this draft constitution comes into force, the Federal Assembly will have little real power except that of rubber-stamping Yeltsin's presidential decrees.
On the face of things, it is unlikely that any of the 13 parties competing in this election will come out with a clear edge over its rivals. To talk about parties in the British sense of the word would be in fact misleading. Rather they are adhoc electoral blocs which have been set up for the sole purpose of fighting the election, often around a handful of well-known figures. Rather than being the expression of different political choices, most of these parties only reflect the present web of rivalries and alliances within the still very narrow milieu of Russia's politicians. Over the past twelve weeks or so, following the Russian Parliament's defeat and the decision to call an election, an amazing number of challenges to Yeltsin's rule emerged from within the ranks of his own close associates thereby showing just how unstable these rivalries and alliances are. And there is no saying what will happen in this respect after this election. In any case, whether they are successful or not, few of these so-called parties are likely to outlive the election in their present form.
The resultant precise dosage between the various political shades in the future Federal Assembly is only a side issue in this election. The real issue is rather that of the credibility and authority of Yeltsin's regime. This is what this vote, particularly the constitutional referendum, is really about. Were voters to vote with their feet and to boycott the ballot, or were they to vote down Yeltsin's draft constitution and to send his supporters to reflect on the virtues of parliamentary democracy rather than to legislate, the regime would probably be faced with yet another crisis. To all intents and purposes, Yeltsin would be pushed back to the position where he was before his coup against the Russian Parliament in September, if not worse because his already weakened authority would be further undermined by a public rebuff.
The making of a plebiscite
No wonder Yeltsin took as little chance as he possibly could in the run up to the ballot. Whether Yeltsin secured the help of Western electoral consultants or not, he certainly used all the tricks in the book as we know them here - from systematically redrawing constituency boundaries to manipulating the media - plus a few others. Parliamentary democracy may still be new in Russia, but politicians have been quick to learn the most rotten of its tricks.
In October, taking full advantage of his victory over the Russian Parliament, Yeltsin started by banning a host of political groupings alleged to be "both communist and fascist extremists ". The most prominent figure of the chauvinist far right, Vladimir Zhirinovsky, was however, not among the targets, nor was his organisation, the Liberal-Democratic Party. But then of course, Zhirinovsky had been wise enough to side with Yeltsin in the last days of his confrontation with the Russian Parliament... Meanwhile the Moscow police raided the town's markets and railway stations for "unlawful foreigners ". According to official figures, 17,000 mainly Caucasian peddlers and seasonal workers were deported out of Moscow while tens of thousands more were arrested and eventually released. Yeltsin claimed that he was cracking down on ultra-nationalists and criminals when in effect he was only whipping up xenophobic reactions - a familiar ploy on his part which goes back to his association with the anti-Semitic Pamiat group when he was the CP boss in Moscow in the mid-80s.
During the days of early October, fifteen national newspapers known for their critical stance towards the regime were banned, as well as many other national and regional periodicals. Several TV programmes were shut down. Vladimir Chumeiko, a former deputy prime minister who had been sacked in August because of his blatant links with the mafia, was invited back as first deputy prime minister and given responsibility for censorship... To date, at least two ultra-nationalist papers - the daily Sovietskaya Rossiya (Soviet Russia) and the weekly Den (The Day) - remain banned. And Pravda has only been allowed back in the streets provided it changed its title, no doubt because the regime cannot bear any reference to the paper founded by Lenin, however remote Pravda may now be from Lenin's ideas.
Then Yeltsin proceeded to lay down the law for the coming election campaign. Having gone a long way to ensure that his supporters were in total control of all television and radio programmes, he was not going to allow the opposition access to these programmes under the pretext that an election campaign was underway! Elaborate conditions were therefore imposed for any organisation to be able to register candidates. For instance, to run a national slate for the State Duma (which has half of its members elected from national party lists on a proportional representation basis) one had to collect 100,000 signatures of bona fide citizens. In the end, eight of the 21 electoral blocs which applied for registration were disqualified amidst allegations of midnight raids by uniformed men and stolen signatures.
Then came the political pressures. In October, pro-reform parties were told to get their act together to prevent their on-going rivalries from undermining Yeltsin's camp: they were "not to get in each other's way and not to shoot arrows at each other" or else they would be denounced publicly by the regime. Then, after the publication of Yeltsin's draft constitution, the pro-reform camp was strongly invited to close ranks behind Yeltsin. As it turned out, this invitation was not all that effective. To the extent that on November 25, just three days after the beginning of the legal election party broadcasts on television, Yeltsin had to urge political parties "not to lash out at the constitution and the president ", while his press spokesman accused the candidates of "swamping potential voters with streams of lies, inventions, demagogy and bad language ".
As regards the opposition, the official attitude was much more direct and confrontational. On November 29, Chumeiko ordered the electoral commission to disqualify the party lists of those representatives who were speaking out on television against the proposed draft constitution. The Russian Communist Party and the Democratic Party of Russia were specifically targeted. This effectively amounted to a ban on any public criticism of the Constitution in front of the electorate. There were also even more direct pressures. The most publicised case was that of two judges sitting in the constitutional court - the body appointed by Yeltsin to provide a so-called "independent" view on the constitution and its implementation - who were suspended indefinitely, one for having spoken out against the draft constitution and the other for having his name on the list of the opposition Agrarian Party.
As far as legality was concerned Yeltsin went as far as he could to ensure if not a victory, at least a result that he could portray as a success. For instance by moving the goal posts early in November with a decree which reduced the 50% of the electorate required to make any consitutional change valid down to 25%. Despite this, Yeltsin's extensive manoeuvres aimed at intimidating or eliminating opponents show, if anything, that he was far from confident as to the outcome of the ballot.
Indeed there are signs of rebellion in the provinces. For instance Tatarstan announced long in advance that it was not planning to organise a referendum ballot while Chechnya said that no ballot at all would be held on its territory. And considering that the organisation of the ballot depends entirely on the regional authorities' goodwill, there may well be all kinds of quirks during the vote itself. Besides, over the past week, the regime has been faced with a wave of strikes by tens of thousands of miners who have not received any wages for the past three months. Despite a hasty settlement thrashed out by vice-president Gaidar himself, 30,000 Vorkuta miners have decided to stay out until they see their money and other mining areas may follow their lead. And there must be other cases of rebellion against the government. Otherwise what would be the point of the last minute announcement, two days before the ballot, that both the minimum wage and government workers' wages are to be doubled? If not because Yeltsin has indeed very good reasons to be worried about the outcome of this ballot!
The struggle for power within the bureaucracy
The showdown between Yeltsin and the Russian Parliament and its consequence, this weekend election, are just the latest episodes in the long struggle for political power in what is left today of the former Soviet Union - the latest episodes, but probably not decisive ones and, in any case, certainly not the last ones.
The roots of the present struggle for power go as far back as the early days of the emergence of the bureaucracy, in the 1920s, when the layer of functionaries who were administering the state set up by the October revolution, stepped into the vacuum left by the weakening of the working class during the civil war. Eventually this bureaucracy seized political power from the hands of the Soviet working class. But the seizure of power was only completed thanks to the ruthless dictatorial methods of Joseph Stalin, the man whose regime was to personify the power of the bureaucracy for nearly thirty years. And this was the one fundamental feature of the bureaucracy: it proved incapable of taking and exercising power without banning all democracy, including within its own ranks.
This characteristic feature of the bureaucracy stems from its very nature. It is fundamentally a parasitic layer, living off the plundering of a society that was set up by others. It has no ambition, no independence, no ideas of its own. It is conservative out of fear that any changes might disturb the status quo which has allowed its emergence. It is afraid of the working class and of its strength which constantly threatens its petty bureaucratic thefts. It is afraid of the world bourgeoisie because it fears any kind of open competition. In many ways the outlook of the average bureaucrat is similar to that of the Western shopkeeper whose world stops at the end of his shelves.
The relationships between bureaucrats were once compared with that of small dogs fighting for the same bone: the smaller they are the more noise they make, but their bites can be quite vicious when they think no-one is watching them and when one eventually manages to snatch the bone for himself the others immediately run after him slavishly in the hope of a small piece. The life of the bureaucrats was just that: each of them was constantly struggling to preserve his own fragment of power, which was at the same time his main source of privileges and grey income, seeking the protection of more powerful bureaucrats while grabbing any opportunity to infringe on the patch of the next bureaucrat. Their world was made of microscopic struggles between rival cliques at every level of the state machinery.
To keep their hectic world going and settle their internal rivalries, the bureaucracy needed a referee whose authority would be unquestionable. Stalin's dictatorship provided just that. The bureaucracy was all the more thankful to Stalin, despite the high toll claimed by his repression within the ranks of the bureaucracy itself, because the fear of a new proletarian uprising was still vivid in the consciousness of many bureaucrats.
Stalin's death opened a new era because it left a vacuum. By that time powerful rival cliques were emerging from within the bureaucratic fabric and they soon made their bids for power. From then onwards, this power struggle was open. And even when a dictator like Brezhnev was able to topple his rivals and to stay in office for a significant number of years, it was usually at the cost of allowing one clique or another to consolidate its power against its rivals. The question of power was therefore never actually resolved. Despite the many years of social stability the bureaucracy enjoyed after Stalin's death, it never managed to evolve democratic mechanisms, within its own ranks at least, which could perhaps have provided a more lasting solution to this on-going struggle for power.
Gorbachev prepares the ground for Yeltsin
Gorbachev's period, from 1985, was not different in this respect. Except that it coincided with a number of factors: the economic situation in the Soviet Union whose resources were stretched by the impact of the world capitalist crisis and the requirements of the arms race; the catastrophic war of intervention in Afghanistan; the emergence, within the bureaucracy, of new generations whose aspirations were more turned to the West and who were less worried by the threat of the proletariat. To win support among these new generations Gorbachev chose to express their aspirations to social stability, open prosperity and, above all, at least a measure of democracy. But in so doing he unleashed social forces which, in turn, pushed him further than he initially probably intended to go initially.
In the event Gorbachev was soon overbid on his own chosen ground - pro-Western, pro-market demagogy. New rivals emerged riding the tide of liberalisation that he had initiated. Most prominent among them was Boris Yeltsin, who owed his high profile and popularity to being an ex-member of the Politburo, where he had been a colleague as well as a supporter of Gorbachev, but one who had clashed with the leadership of the Communist Party of Russia at a time when it was no longer dangerous but not yet quite so fashionable.
By mid-1990, although Yeltsin had already become a symbol of radical reformism, at least in Moscow, he seemed to be getting nowhere while Gorbachev seemed solidly entrenched and was concentrating unprecedented powers in his hands. It was at this point that Yeltsin's Great-Russian demagogy provided him with the springboard he needed. Ironically this springboard was the job of president of the Supreme Soviet of Russia, the very same body which was later to become the Russian Parliament. And Yeltsin's godfathers in the election were none other than General Alexei Rutskoi, then the leader of the so-called "democratic" faction within the Communist Party, and Ruslan Khasbulatov - the very same two now sitting in the Lefortovo jail after leading the White House resistance this October!
By mid-1991, Yeltsin, the champion of national independence who was calling on the Soviet republics to "seize as much sovereignty as they can ", was elected president of the Russian Federation with Rutskoi as vice-president. By then not only had Yeltsin become the rallying point of all those who saw Gorbachev as a "wet", he had also won the credit and the legitimicy attached to being the only high-ranking official in the country to be elected rather than nominated.
What followed is well known. In August 1991, a group of top-level officials in the state machinery attempted a coup, probably in a bid to win the support of the army to prevent the predictable collapse of the Soviet Union. But the army refused to get involved and the coup was aborted. Yeltsin, who had been careful to get himself filmed by television crews standing theatrically on top of a tank outside the White House, came out as a victor. Gorbachev, whose silence throughout the coup had been more than ambiguous, was pushed in the background. In September the Russian Parliament suspended the constitution and voted full powers to Yeltsin. Within the following three months mobs got busy dismantling statues of soviet heroes and burning flags throughout Russia, the Communist Party was banned and disbanded, the Soviet Union was officially dissolved and Gorbachev was thrown out of the Kremlin. At the cost of losing control of the former Soviet republics, Yeltsin seemed to have finally won his bid for power, or so it seemed.
Yeltsin prepares the ground for... whom??
1992 was the year of reform. Gaidar, Yeltsin's newly appointed prime minister, launched his plan for economic reforms. The watchword was capitalism everywhere. However the year's official balance sheet hardly fitted Gaidar's promises: 2,000% inflation, a 20% drop in output, a 40% drop in average real wages. As The Economist put it at the time, without the slightest shade of irony: "The reforms had some success: prices were freed without causing riots ". That the absence of riots should be seen by The Economist as a measure of success showed how worried the West was of the risk of social unrest.
Yeltsin probably had fewer illusions in the success of his economic reforms in the eyes of the Russian public than The Economist. In any case he began to worry about the risk of the economic breakdown undermining his power and proceeded to take steps to prevent this.
Yeltsin was proved right. Early in January 1993 he was faced with a rebellion by his former ally, the Russian Parliament, led by his former protégé Ruslan Khasbulatov who had replaced him as president of the Parliament. Under its pressure, Yeltsin had to sack Gaidar and to replace him with Tchernomyrdin, another bureaucrat straight out of the top circle of the national Gas Trust and therefore more reluctant to jump the gun with hasty privatisations along Gaidar's lines. However this compromise solved nothing. Two months later a new row erupted, this time over the Parliament's refusal to renew Yeltsin's full powers. Yeltsin threatened to disband Parliament who threatened to impeach him. Again a compromise was found.
But the roots of this ongoing conflict between Yeltsin and the Russian Parliament were too deep for a lasting compromise. The same Yeltsin who, less than two years before, in his fight against Gorbachev, had been striving to build support by demagogically encouraging the aspirations to autonomy throughout the USSR and the Russian Federation, was now at the top of the Federation. And, ironically, to defend his position he had no other choice than to try and tighten up his control over the Federation as a whole, at the expense of all aspirations to autonomy. It was precisely this tightening of the centralisation of the state that the Russian Parliament was determined to oppose. Either Yeltsin or the Russian Parliament had to give in at some point. Thus the carefully planned offensive by Yeltsin against the Russian Parliament, starting with a frame-up against Rutskoi accused of corruption, then his sacking from his position as vice-president, followed by the disbanding of Parliament on September 21 and the final storming of the White House on October 4.
But has Yeltsin's victory over the Russian Parliament settled the problem? Are all obstacles now removed in the face of Yeltsin's drive to reinforce the centralisation of the state? As far as politicians are concerned, the answer is definitely no. It seems every time Yeltsin wins in a confrontation, some of his former allies decide to challenge his power. It was already the case with Rutskoi and Khasbulatov, his former allies against Gorbachev. It is now the case with a number of his former allies against the Russian Parliament as is graphically shown in the present election. Thus eleven of Yeltsin's ministers are either standing on lists put up by parties opposed to Yeltsin's "Russia's Choice" electoral bloc, or have gone on the record opposing the president's draft constitution. Among them, Sergei Shakrai, a deputy prime minister and one of Yeltsin's old associates, has set up his own party, the "Russian Party for Unity and Agreement", and has announced that he will stand against Yeltsin in the future presidential election. So has Anatoly Sobchak, the mayor of St Petersburg and another long-time Yeltsin supporter, who set up the "Movement for Democratic Reforms" with the same publicised aim. The more opponents and rivals Yeltsin eliminates, the more there seem to be left!
The collapse of the states authority
Unlike the direct confrontation that took place between Gorbachev and Yeltsin in 1990-91, the present crisis is no longer centered around a struggle between high-powered rivals. The various bids which have been made to replace Yeltsin in a future presidential election are long-term bids, all the more so as Yeltsin has already said that he will stay in office until the end of his five-year mandate in June 1996. For the time being at least, none of these potential rivals represents a direct threat. But at the same time Yeltsin's own credibility and acceptability seem to be shrinking in the eyes of the population.
The crisis of power is still not resolved. But rather than being a direct struggle between rivals, it is now centred around the consolidation of power exercised by one successful contender. In opposing Yeltsin's attempts at reinforcing the centralisation of the state, the Russian Parliament was not just expressing the opposition of a few hundred deputies determined to prevent Yeltsin from strengthening his position. They were expressing something more fundamental in today's Russian society, the hostility of the bureaucracy to a reinforcement of the authority of the state.
Among the most important social forces unleashed first by Gorbachev and then by Yeltsin in their struggle for power, were aspirations within the bureaucracy to get rid of the state's central control. Such centrifugal tendencies had always existed, even when they were concealed by the more or less repressive nature of the previous regimes. Every bureaucrat aspired to get on with his plundering of the state economy without having to be accountable to anyone, least of all to a central state apparatus - if only because this accountability always meant having to give away part of his takings to the more powerful.
When the struggle for power broke out into the open in the top circles of the state, the rest of the bureaucracy was able for the first time to enjoy a relative degree of autonomy. They liked it and did everything possible to use the new situation and to consolidate it. This resulted in an increasing erosion of the federal government's authority which accounts for much of Yeltsin's difficulty in getting anything done in the country.
Hence Yeltsin's drive to restore the authority of the state. But it is easier said than done. For having enjoyed so much this previously forbidden autonomy, the various sections of the bureaucracy are now determined not to give it up again, even partially, least of all for the sake of strengthening the hand of someone like Yeltsin over whom they have no control.
The rise of regional powers
Russia's autonomous regions and republics have always shielded more or less powerful bureaucratic cliques, even in Stalin's days. The sheer number of these autonomous areas shows the extent of the concessions that local cliques have managed to win from central goverment so far: 21 republics, 49 regions, 6 territories, 10 national districts, plus Moscow and St Petersburg which both enjoy a degree of autonomy, a total of 88 autonomous entities. Some of these do have an ethnic basis. But beside the fact that these ethnic roots have tended to merge into the huge melting pot of the USSR over its 74 years of existence, many of these autonomous entities have no reason to exist other than the aspirations of local bureaucrats who want sole control of the regional resources, usually oil, gold or diamonds.
As was predictable, regional centrifugal tendencies were boosted by the weakening and subsequent breakup of the USSR in 1991. This triggered a frantic movement towards greater autonomy among the local ruling circles, not just in the existing 88 autonomous entities, but at every possible level, even down to that of the small towns.
In 1991, a secession movement was initiated by two autonomous republics, Chechnya and Tatarstan, which proclaimed their independence from Russia - although both still remain within it in reality. Others have followed suite since, but without formally declaring their separation from the Russian Federation. A third of the 21 republics have declared that their own constitution would supersede any present or future federal constitution. And a patient researcher worked out that in the first nine months of 1992 alone, 13,000 laws were passed by local parliaments which contradicted one or several federal laws. No wonder the decisions, laws and decrees issued by the federal government have remained largely ineffective.
What is meant by independence or autonomy, coming from regional entities which are often tiny, is primarily the right to retain most if not all the taxes paid by the population, the right to borrow money and issue bonds without having to go through the federal institutions and more generally the right to plunder the local economy without being accountable to the federal authorities. This does not mean that the local ruling cliques have given up their claims to federal subsidies. On the contrary they want more or else they threaten to break all ties with the federal government. This has resulted in a sharp growth in the subsidies distributed to the regions - an estimated total of $73bn for the first six months of 1993 alone, or 22% of the GDP.
The relaxation of central control gave the local bureaucratic cliques the chance to scale up their pillage of the local economy. In the process they found many new ways of increasing their share of the spoils. The liberation of prices allowed them to engage in profitable speculation, often creating artificial shortages in order to boost price levels. Another practice became widespread: local cliques force factories to sell them part of their products with a large rebate, as a tax in kind - of sorts. The goods are then bartered against other goods or sold to intermediaries. Needless to say, the profits made in such transactions often disappear into the pockets of the local top bureaucrats. This particular trade seems to have developed considerably, to the point of involving an average 15% of the ouput of local firms last year.
There was no shortage of attempts by the federal government to restore some order in the regions. As Yeltsin could not rely on the effective support of the local KGB or military who tended to side with the local bureaucrats, he appointed a host of governors and prefects with extended powers. To no avail. When his envoys did not close ranks with the local bureaucrats in exchange for a share of the regional pickings, they were soon locked in guerilla warfare with the local parliaments, much in the same way as Yeltsin himself was, with the Russian Parliament in Moscow.
The Parliament crisis and the regions
The biggest regional rebellion took place in the summer of this year, in response to Yeltsin's increasing threats against regional misconduct. A tax rebellion was declared in several major towns, including Moscow itself which stopped paying any taxes at all to the federal government. At the same time 50 independent republics were proclaimed across Russia. If nothing else this did not leave Yeltsin with many possibilities: either he managed to reverse the centrifugal trend or his power would soon be limited to the Kremlin walls, if even that.
The attitude of the regions during Yeltsin's confrontation with the Russian Parliament was a graphic illustration of Yeltsin's problem. Within five days of the Parliament's dissolution, 48 regional entities had condemned Yeltsin's move. Within a week, a meeting bringing together representatives of 14 Siberian regions met in Novossibirsk to issue an ultimatum to Yeltsin and to draw up plans for a Siberian republic. Meanwhile another meeting involving representatives of sixty regional parliaments demanded that Yeltsin should cancel all the decisions he had made since and including the dissolution of Parliament. At the same time the usually docile consultative Federation Council, made of the two top officials in each autonomous entity, joined the rebellion by demanding that Yeltsin himself should stand for re-election at the same time as the deputies.
The storming of the White House was not likely to frighten the regions into toeing the line. Yeltsin knew this all too well as was shown by the very cautious tone of his decrees despite his victory. While the decrees ordering municipal soviets in the large towns to disband could leave no illusions as to Yeltsin's determination to resort to force if necessary, the decrees aimed at the regions politely invited the regional parliaments to dissolve themselves. The response showed that Yeltsin had good reason to be cautious: 22 regions simply turned down his invitation, while 33 issued statements saying that they no longer recognised Yeltsin's decrees.
Since then painstaking negotiations have been taking place. Yeltsin made a number of public concessions. For instance his initial plan to turn the old consultative Federation Council into the upper house of the new Federation Assembly was scrapped. Instead, the new Federation Council will be made of two elected deputies per region for the first two years, and then it will be up to the regional authorities to decide how their representatives to the Federation Council should be designated. Other concessions have been made in the economic field, for instance the agreement signed in October with Yakutia, which now wants to be called the republic of Sakha, whereby Yakutia will stop paying any tax to the federal government except for a fixed 5% of its royalties on diamond sales. In return some of the rebel regions, Yakutia among others, have publicly agreed to disband their regional parliaments.
Meanwhile another round of authoritarian decrees have been issued by Moscow. For instance on October 19, regional and local assemblies were deprived of any control on 2,400 existing local newspapers. The following week an ultimatum was issued to the regions demanding that all taxes due to the federal government should be paid immediately or else all credits and centrally distributed supplies would be suspended from November 1st.
Have these last two decrees been implemented any more than dozens of others before? It is difficult to say. But at best their implementation must have been very patchy. For instance, Tatarstan, Tuva and Bashkortostan failed - yet the threatened drastic sanctions dont seem to have been implemented against them.
More centralising measures are included in Yeltsin's draft constitution, such as the president's power to disband any regional body, the ending of separate citizenship rights and the requirement that all foreign trade links should be organised through federal channels. But there again, whether Yeltsin has the leverage to get these measures implemented remains to be seen.
Havoc in the State machinery
As was pointed out before, the rebellion against the federal authority, far from being confined to remote Siberian regions, is taking place just under Yeltsin's windows, so to speak, in Moscow itself. In fact it is even taking place within the institutions which should be Yeltsin's most reliable allies, those of the federal state itself.
The most obvious example of this is the army. Despite the extensive cuts in military expenditure, the army retains part of the special status which it enjoyed in the old days. It is by far the largest single organisation in Russia. It still has enormous economic means at its disposal, including a fully-fledged production machinery still under its control. And it certainly retains, unlike most other surviving soviet administrations, a prestigious image among significant sections of the population. Last, but not least, it still exists at the scale of the CIS, not just the Russian Federation, since Russian units are still stationed in many areas of the former USSR.
Yet, over the past few years, particularly during the peak crisis situations in 1991 and 1993, the army has been mostly prominent by its absence. While the protagonists both during the August 1991 coup and during the showdown with Parliament this year, were working hard at trying to convince the generals to choose sides, the intervention of the army never went beyond a token presence, and even then only when everything was practically over.
This probably reflects a number of things. The generals have been conspicuously unwilling to choose sides without clear guarantees that this would result in a lasting success, in other words lasting political stability. Moreover, by taking the army into one camp in the middle of a confrontation they would have taken the risk of splitting their own troops right down the middle (which is exactly what seems to have happened to the Interior Ministry Dzerzhinsky regiment in October) - thereby probably precipitating the downfall of their own power basis. It is not surprising that the generals should be unwilling to take such risks. And the odds are that they will not intervene other than symbolically as long as the stakes are not higher than they have been so far - in other words, as long as a major social crisis does not threaten the existing privileges.
But, on the other hand, the army's passive stand has its own drawbacks. Army units have been settling down where they were stationed with the officers engaging in profitable long-term business relations with the local bureaucrats. The newspapers have reported cases of unit commanders stationed in distant regions refusing to obey orders to move their units back to Western Russia - probably they felt their leverage and comfortable life would be much reduced once in a Moscow barracks. Meanwhile, as the life of a business man is a busy one, the army cadre fails to maintain discipline in the ranks. The large towns are full of deserters looking for petty jobs, often ending up as mercenaries for the mafia.
Extreme cases have been reported, such as that of the 14th Russian army which is stationed in Trans-Dniestra, a breakaway region of independent Moldovia. Trans-Dniestra's independence seems mostly due to the presence of the 14th army. On the other hand commandoes of the 14th army have been reported fighting as mercenaries alongside the Abkaz in the Georgian civil war. This could well be army policy, although the army bosses deny it. But what if it is not? What if units of the former Soviet army start intervening here and there in regional disputes? How long will it take before warlords emerge out of the officers ranks and carve out a territory for themselves? Judging by the secession of Chechnya under Dydaiev, an ex-army general who conveniently came back to his ethnic roots to bid for the job of local dictator, this is not such a remote possibility.
Therefore, even if Yeltsin was able to secure the active support of the army bosses, he would not necessarily be able to rely on the army itself. In any case, for the time being, he certainly cannot rely on it, which makes the reality of his state power rather questionable.
And the army is only the most blatant example of the present disintegration of the state machinery. Every cog in the state is basically busy playing its own hand, and if it so happens that government's decisions do not fit with what functionaries or institutions consider as their own interest, they simply look the other way. Of course, with time, this breakdown of discipline in the state machinery has become obvious to everyone, leading to a further weakening of the state authority over the population as a whole - why should people bother with the law if those who are supposed to enforce it don't?
The ever-growing parasitism of the bureaucracy
However unreliable official economic data may be, the tendency is obvious and the collapse of the Russian economy unquestionable. According to the various figures available, industrial production in Russia has dropped by between 40 and 50% over the past three years. What is more questionable is the reason for this drop.
The most widespread explanation offered in the West amounts to saying that this is due to built-in "flaws" of the economic foundations that were laid down by the October Revolution. Why then did not these "flaws" prevent the Soviet Union from developing into an industrial power? Why has it taken over 70 years before these "flaws" have resulted in collapse? Talking about flaws, the "flaws" argument is not without its own!
Facts are more stubborn than ideological bias and social prejudices. What they show is that the primary cause of Russia's economic is the considerable scaling-up of bureaucratic plunder.
But let us listen to one of the least crude among our Western economic pundits, namely "The Economist " again. In a special supplement published in December 1992, this paper gave its own answer: "The answer in both 1991 and 1992, was the collapse of central planning and a sharp fall of foreign trade. The collapse of central planning broke long-standing contracts between companies and led to shortages of energy and spare parts ". The Economist did not elaborate too much on what exactly was meant by "the collapse of central planning " nor where this collapse exactly came from. But at face value, one could have been led to think that there was the assessment of a closet communist operating as a mole in the most capitalist of all British weekly papers! After all if the collapse of central planning is the cause of the Russian slump, there must be something positive in central planning... more positive in any case than the "spectacular progress made by the Market" so optimistically hailed throughout the same supplement.
Of course there is some truth in what "The Economist " says provided one fills in what it does not say or does not connect.
Yes, unquestionably, the sharp fall of foreign trade was an important factor in the slump. Taking again official figures with all due caution, Russia's trade with the rest of Eastern Europe fell by around 3/4 over the two years 1991-92 while the drop of Russia's trade with the rest of the former Soviet Union is estimated to have been even larger. Given the fact that trade with Eastern Europe accounted for about half of Russia's share of the Soviet Union's foreign trade, and that trade within the Soviet Union itself was even more important, The Economist could have actually wondered why the drop in Russia's industrial production has not been larger!
One factor, among others, is that the terms of trade between Russia and the capitalist world changed as a result of the scaling up of bureaucratic plundering. Bureaucrats who were powerful enough to lay their hands on large amount of goods engaged directly in the export business. Not that such practices did not exist in the past. They did, but it was a dangerous business in which those who were caught were liable to long terms in jail if not to the firing squad. Whereas now, exporting goods, dealing with foreign currencies and establishing links with the West was commendable and encouraged by the top circle of the bureaucracy. One problem of course was to conceal the thefts. But given the relaxation of all controls by the federal government, this must have been child's play for bureaucrats whose apprenticeship in stealing went back to the dictatorship! The other problem was to find customers in the West. There the solution was simple. All that was needed was to sell under world market prices, even if it meant selling well under production costs: after all, the production costs came out of the state's pocket, not out of those of the exporters. The result of this is that lower export value may actually conceal much higher volumes of goods sold and therefore produced in Russia - and by the same token, increased wastage at the expense of the Russian economy.
But these exports hardly contribute to the funding of the Russian economy, simply because a significant proportion of the proceeds never reach Russia as the exporters are careful to deposit them with foreign banks. Estimates of the total amount stashed away in the West vary wildly and probably none is anywhere close to the truth. But just to give an indication of the order of magnitude, for 1992 only these estimates vary between $5bn and $27bn. If this latter figure is the right one, it means that 10% of Russia's GDP is stolen in this way every year, which is a very significant amount. There again, this is not new. It is well-known that in the past some bureaucrats managed to build very comfortable nest-eggs for themselves, in Switzerland in particular. What seems to be new is the scale of the theft.
Planned economy versus bureaucratic plundering
Blaming "the collapse of central planning ", as The Economist does, is assuming that central planning did operate nicely and smoothly in the previous period. But this was far from being the case. Historical circumstances forced the bureaucracy, back in its early days, not only to use the elements of central planning put in place by the October Revolution, but actually to develop them on a much larger scale. The bureaucracy had to do it because it was the only practical way for it to take over and operate the existing economy of the Soviet Union, and more importantly to build from scratch a heavy industry, in what was the world's largest country and at the same time one of the poorest.
But while collectively the bureaucracy did maintain central planning, individually each bureaucrat strove to divert it for his own benefit, thereby undermining the efficiency of the whole system. Blindfolded apologists of capitalism like the writers of "The Economist " have always failed to admit and probably to understand this fact: it was thanks to the central planning system and despite its being sabotaged by the bureaucracy, that the USSR built up the second most powerful economy in the world, in terms of production if not of productivity, at a speed and on a scale that no other capitalist country can boast of having done during the same period.
The constant sabotage of the planned economy by the bureaucracy did however create a situation of continual looming economic crisis in the Soviet Union. The economic fits and starts, the innumerable production bottlenecks, were described by Trotsky as early as the mid-1930s. Therefore, the existence of an economic crisis as a result of bureaucratic plundering is nothing new. And this, at least in the past, never prevented the Soviet economy from going forward, although at a slower pace than it might otherwise have.
What started to change things was the scaling up of the plunder by the bureaucracy. This began under Brezhnev, with the bureaucracy enjoying more stability than ever before and therefore feeling more confident to carry out its theft on a larger scale. In economic terms the consequence at the time was that the previous fast economic growth was replaced by stagnation. Under Gorbachev, and even more so under Yeltsin, the confidence of the bureaucracy, its audacity in ripping off society, reached new heights, accounting for a considerably larger diversion of wealth away from the productive sphere. All this contributed eventually to the present slump.
Unquestionably, the increase of bureaucratic plundering has further weakened the central planning system. But contrary to what The Economist implies, central planning has not collapsed due to some alleged built-in flaws. In fact, however moribund it may be, there are still some elements of it operating in Russia which have prevented the slump from developing into an irreversible catastrophe, so far at least.
There again had The Economist been just a bit less into prejudiced cliches, it should have wondered how on earth, given the circumstances, industrial production is still at half its previous level. It should have pondered at an alarmed survey published in 1990 by some Western financial agency which said that in the Soviet Union "an estimated 30-40% of total industrial output is accounted for by products for which there is but a single manufacturer ". And of course, these "single manufacturers " just happened to be scattered all over the Soviet Union, not just in Russia itself.
For the sake of understanding, let us just imagine that half of every industrial estate and half of the factories of every company in Britain was taken over by some foreign power, surrounded with barbed wire fences and guarded by armed militias preventing any movement of goods. Can one think of any company that would manage to maintain production? Without its usual suppliers, or only half of them? Without its usual sales network, or only part of it? Would Ford's or Rover's assembly plants be able to carry on producing cars without supplies from their engine plants or their press shops? Of course not!
Yet, judging from the production figures, half of Russia's production machinery managed to do just that by adapting to the new circumstances and, once again, despite the extensive plundering and sabotage by the bureaucracy. Allegations that the West stepped in to fill in the gaps created by the breakdown of the Soviet Union are a joke. If the West did step in it was to fill the gaps in very specific fields ranging from luxury perfumes and cars to hamburgers and porn-videos. But as to filling gaps in heavy industry, Western companies did not want to sell on credit, Western banks did not want to make any loans and Western government did not want to risk any subsidy.
In the end of the day, whether The Economist likes it or not, it was what is left of the planned economy, crippled and moribund as it is, which managed to make up partly for the loss of single suppliers and for the splitting up of whole industries.
The bureaucracy and the attempted capitalist restoration
Aspirations to the restoration of capitalism are not new within the bureaucracy. In the 30s already, Trotsky talked of a "bourgeois party" within the bureaucracy. By this he meant a current of opinion, whose expression was perceptible periodically, which existed in a more or less diffuse way within the ranks of the bureaucracy itself. Trotsky noted that, at the time, Stalin's regime repressed this "bourgeois party" and that, in doing so, although with its own bureaucratic methods, it was protecting the gains inherited from the October revolution against the restoration of capitalism. In doing so, Stalin also expressed a concensus within the bureaucracy as a whole which was more attached to its parasitic existence and more afraid of the working class than it was attracted by the risks involved in trying to restore capitalism.
Trotsky however did consider the possibility that at some stage this "bourgeois party" may come to power in the name of the bureaucracy. If this happened, added Trotsky, the state could become the instrument of a bourgeois counter-revolution, by which he meant not just the reintroduction of private property but also the formation of a new bourgeoisie, that is of a social class whose role in society is based on the private ownership of the means of production.
It was this "bourgeois party" within the bureaucracy that Gorbachev chose to appeal to in order to consolidate his position in power. For Gorbachev this appeal was probably pure demagogy. So was Yeltsin's choice to go further in this direction. But when Yeltsin, once in power, initiated the drive to restore capitalism, he was clearly no longer just wooing the "bourgeois party" but acting as its representative. In that sense Yeltsin's era seems to fit with the possibility envisaged by Trotsky several decades before. Judging by the statements of hosts of Russian politicians over the past two years, it is also visible that this "bourgeois party" is now dominating the political scene, all the more arrogantly as it has still met with no serious resistance from any quarter.
Assessing the real extent of the private sector in Russia, let alone the development of private capitalism, is almost impossible given the wild differences between the various estimates available - Whether they are government figures often aimed at pleasing IMF officials, or figures published by the media or international agencies, who tend to believe what official documents say has happened instead of going to look at what is really happening on the ground. However there are many facts showing in an indirect way that the reality is very far from the tide of enthusiastic privatisations often described here by the media.
A first indirect evidence of this is the contrast between the radical and authoritarian tone of the Russian regime's decrees and what seems to have come out of them some time later. For instance the issue of the liberalisation of prices. The decree freeing 90% of all prices on January 2, 1992 was welcomed with enthusiasm by all the British media - although the freeing of prices is not in itself a specifically capitalist measure, it was said to herald the reintroduction of capitalism. Twelve months later, in December 1992, one of the most enthusiastic supporters of Yeltsin's decrees, The Economist, complained with a vexed tone that oil was still being sold 20% under world market prices, that the prices of 150 goods were kept under ministers' control, that trade barriers removed on paper by the central government were often restored by regional authorities, that former municipal shops, sold off as a result of a decree issued in April, were limited to mark-ups of a miserly 25%...
Likewise with privatisation. In June 1992, Gaidar issued a series of decrees ordering all medium and large companies to turn themselves into share-holding companies. By the end of the year, this was said to have been achieved for 75% of them. Yet, in April 1993, the Financial Times which can be unquestionably considered a warm supporter of Gaidar's measures, reckoned that 1,547 of the 26,000 companies employing more than 200 workers had been privatised and that the aim for the end of 1993 was to reach the figure of 5000. A far cry from Gaidar's marching orders! Unless of course one is to understand that what was meant by "share-holding company" was a purely administrative device which did not necessarily imply a change in ownership.
Likewise again with the recent decree issued by Yeltsin in the run-up to the present election, which gives the right to buy, sell or rent land. Workers in state farms will be allowed to buy plots at discounted prices. A new state body with offices in all regions will be set up to organise land sales. The only thing new in this decree is the setting up of yet another administration which, no doubt, will be an effective and convenient cover for thousands of bureaucrats to deal in real estate, steal state land and make hefty profits. But the privatisation of land in itself is already an old story, and the subject of several past decrees. Except that they were either not implemented or met with very little response.
According to the "Financial Times ", private farmers still control under 4% of Russia's land, and if the FT says that, it is probably a very optimistic estimate. On the one hand farm employees show no particular interest in rushing to buy their own plot of land, on which they would probably starve anyway. On the other hand managers of collective and state farms seem to be doing all they can to keep the farms intact in order to have something to barter with whoever is prepared to do business. They seem to think that privatisation in the form proposed by the government would end up being less profitable for themselves.
There is one area on which all the apologists of the restoration of capitalism in Russia agree, and that is the success of the small private trade. Thus, notes The Economist in December 1992, "one of the achievements of reform has been the explosion in the number of kiosks ". In May 1993, the Financial Times is even more lyrical, hailing "the growth of an unofficial, unmeasured, often anarchic, but increasingly significant private economy, which appears to be liberating a vibrant entrepreneurial streak (..) - street markets, private banks, unofficial taxi services, new restaurants and stores selling imported goods ". Then, in December 1993, the American International Business Week celebrates "these entrepreneurs (who) may well end up transforming their operations into the kind of fully fledged retailing that Westerners take for granted ". Again, the subject of such enthusiasm is the mushrooming of kiosks or street markets, the grand symbol of private enterprise, or so they hope!
But what are these kiosks? In Moscow, there are now 15,000 of them. Often, they are just decrepid metal stalls on the pavements, not more than 5 yrds by 3. Sometime they sell cigarettes, whiskey, biscuits and chocolates. But often they sell just about anything the stallholder has been able to lay his hands on. If this is the evidence of "a vibrant entrepreneurial streak " for the Financial Times, then this paper should concentrate on the large overpopulated towns of the Third World. There it would indeed find a similar vibrant streak, only on an even larger scale! If any form of wealth could grow out of such activities, there would no longer be a Third World...
Shares without a market, capitalism without capital
There seem to be two main mechanisms for privatisation. One is the setting up of joint-stock companies owned by the workforce - this was the first form of privatisation and affected mainly the small companies in the service sector and shops. The other form has been carried out through the distribution of vouchers to workers - ironically the total face value of the millions of vouchers thus distributed amounted to less than the total of unpaid wages at the time!
The theory was that workers would sell their vouchers for cash which they need badly so that individuals would be able to accrue significant numbers of vouchers and acquire sizeable stakes in privatised companies. Instead it seems that a large proportion of workers have chosen to keep their vouchers in order to buy a tiny number of shares of their own factories if and when it was privatised.
These privatised factories are theoretically bought 51% by employees, the rest being divided between private outsiders and the state. Except that in many cases there are no private outsiders and the state ends up being effectively the largest shareholder. Ironically, this has been a motive for regional bureaucratic cliques to push for this kind of privatisation. In ensuring that the regional state acquired a majority stake in the local companies, they aimed at taking these companies away from the control of the federal government. But rather than privatisations, these transfers from the central state to the local state should be more accurately called something like "sub-nationalisations"...
It has happened that in some factories the management team pooled their resources to buy a majority stake. They soon discovered that things were not necessarily as simple as they seemed. If they only wanted to carry on things as before, sharing the spoils of the factory with the local bureaucracy, everything was fine. But if they wanted to make any changes, they immediately came up against the reality of the situation of the industry - its dependence on the state for everything, from supplies to sales and credit.
Credit in particular is a major stumbling block. In the current monetary debacle, companies have been able to carry on trading only thanks to issuing debt certificates to each other. Unlike in the West, these certificates cannot be sold anywhere, there is no market for this. So that each company is piling up certificates which they can only recoup provided they continue to trade with the same companies. And as the state sector is still by far the largest it makes private companies even more dependent on the state companies which used to be their partners. The only way out, to free private companies from this catch 22 situation, would be for the state to buy back all the debt certificates issued in exchange for cash - as the banking system is totally incapable of providing so much cash, even assuming it was willing to do so, which is certainly not the case. But the volume of these inter-company debts has now grown much beyond the total money in circulation. So that for the state to do this would mean immediate bankruptcy...
Much has been said about foreign investments. The facts are that there is no real foreign investment at all - for the whole of Russia, according to the figures given by one of Yeltsin's ministers, they amount to a grand total of $7bn. This is the equivalent, for instance, of twice the market value of a rather unremarkable company such as East Midlands Electricity... for the whole of Russia and its 148m inhabitants! In fact, international bankers are quite open about it: Russia is a place worth keeping an eye on, but don't touch it! In the meantime the same bankers are prepared to lend dollars to Russian companies, only short-term though, and provided they are prepared to pay a special interest rate of 25%.
As to the so-called international "aid", there was a lot of hype around the G7 Tokyo summit in April and the figure of a $44bn package was printed all over the front pages of Western newspapers. But this figure is farcical. First because half of this amount is money that was promised last year but never actually paid. And in any case, by October only $3bn had been actually paid, mostly as loans which only increase Russia's foreign debt. In other words the Western powers are just as reluctant to invest any money in Yeltsin as their bankers...
As to Russia's famous capitalists and private sector, they are much more attracted by financial investments in the West. According to a survey published in Russia, the sum total of hard currency loans made within Russia by the 1,600 or so Russian banks amounts to less than half a billion dollars. And for the biggest among them, the only ones capable of sizeable investments, only 2 to 5% of their loans are "long-term", by which they mean five years at most. This is how far the allegedly thriving Russian capitalists are prepared to look. Hardly the image of a dynamic and entrepreneurial capitalist class!
While the "bourgeois party" within the bureaucracy dominates the ruling circles of the state, at least for the time being and as far as we can judge, it is far from being supported by a concensus among the bureaucracy. The delay and bottlenecks in implementing the reforms show that on the ground, the bureaucracy is not following the lead given by Yeltsin. Partly because many bureaucrats, who do not give a damn for ideology, are not convinced that they will gain out of these reforms. Partly because they resent the interference of the federal state in what each of them considers as his patch, and partly because they have good reason to fear that the restoration of capitalism could push a significant number among them out of the circle of privilege. After all, the bureaucracy numbers ten, maybe fifteen million individuals. They have no guarantee that all of them will retain their privileges once the economy is reduced to its bare bones as a result of a capitalist restoration.
Compared to the bureaucracy, the new "capitalists" can have no weight. These capitalists are not altogether new in fact. Already in the previous period a layer of intermediaries had developed within the grey economy, a petty-bourgeoisie that was living off the crumbs that the bureaucracy left from its plundering operations. Today's capitalists are not very different from yesterday's petty-bourgeoisie. They may be a bit richer, there may be a bit more of them, but by and large they still act as auxiliaries to the plundering of the bureaucracy and they are still hardly distinguishable from the shady fringe where grey-marketeers fuse with outright gangsters.
Despite the official claims that the voucher privatisations are aimed at creating a capitalist class, there is no evidence that this can work. First, because it is difficult for any individual capitalist to gain control of any company. And then because it is difficult to keep that company safe from the predatory raids of the bureaucracy, let alone to make it profitable in capitalist terms, at least not without massive investments for which there is no source of capital. Finally, one of the requirements for a capitalist class to develop is the mobility of capital. And there is no capital market in which to circulate.
For the time being, there is therefore no capitalist class, not even a weak one, which might be capable of taking the restoration of capitalism further. The process, if it is to take place, can only be carried out by the state with the support of a section of the bureaucracy. Given the obvious resistance to this process by the bureaucracy as a whole; given its opposition to any form of centralised state intervention, this process cannot be democratic - neither democratic as regards the bureaucracy, which has to be disciplined into obedience, nor, and even less, as regards the working class which will have to be forced into accepting massive unemployment and a further degradation of its already very low standard of living.
Yeltsin's regime is visibly taking the direction of a personal dictatorship. But a dictatorship cannot just be proclaimed, it has to be enforced. To do this Yeltsin will need the consent of at least a section of the state machinery, in other words of the bureaucracy itself. But so far, the signs are that a bureaucracy, which is not prepared to tolerate Yeltsin's decrees, is even less likely to accept his dictatorship. This may change of course, under the pressure for instance of a social threat resulting from a worsening of the economic collapse. Maybe, in such a situation, the bureaucracy would feel threatened enough to close its ranks and again accept the price of a dictatorship. But whether they choose Yeltsin, one of his present rivals, or the army; whether this dictatorship will aim at maintaining the status quo as it is or at pursuing the restoration process, only the future will tell.
One thing is certain. If the restoration process is pursued, the capitalist class and the economy that it will produce will have nothing in common, in terms of power, with that of the former Soviet Russia - assuming that the Russian Federation does not break up in the process as the Soviet Union did in 1991, under the pressure of regional rivalries.
It is worth mentioning at this point the conclusion reached by the 1992 Economist survey quoted before: "Russian industry is just too big (..) A comparison between the Soviet and American economies in the late 1980s shows that Soviet industry contributed twice as much to the economy and employed twice as much of the workforce as did America's ". What "The Economist " is really implying here, very politely, is this: due to their dominating imperialist position and wealth, the USA can afford to get part of their production done by subsidiaries or subcontractors elsewhere while maintaining a (relatively) high level of employment thanks to a vast service industry; since Russia does not have such resources, it must accept to cut down its industrial machinery by half, become a secondary industrial country and have tens of millions of unemployed, in other words it must accept the status of a Third World country! Such is the only future offered by capitalism to the Russian population.
Will the working class prevent the emergence of a capitalist class?
A bourgeois counter-revolution is in the making in Russia. But it is only in the making. The facts are there to show that it is far from being completed, that it is faced with all kinds of political and social obstacles and that it has not yet found the beginning of a way around these obstacles.
For Trotsky and for the Trotskyist tradition to which we belong, this counter-revolutionary process started long ago, when the bureaucracy took over the workers' state set up by the revolutionary proletariat after the October 1917 revolution. The bureaucracy inherited a society from which the bourgeoisie had been wiped out along with the private property of the means of production. It could only survive by protecting this state and the social basis on which it had been built. But it did so while at the same time transforming this state into a machinery of exploitation against the working class within the Soviet Union and into a machinery of war against the revolutionary aspirations of the proletariat outside the Soviet Union. Thus developed a contradictory situation, and a dramatic one, whereby a state built by the working class was being used against it. It was this contradiction that Trotsky summarised in a formula by describing the Soviet Union as a "degenerate workers' state".
In Trotsky's view, this contradiction could not last for ever. One day or another it would have to be solved by history. Either by a new revolutionary explosion in Russia which would bring down the power of the bureaucracy and restore the gains of the October revolution. Or by a bourgeois counter-revolution which, one way or another, with or without the consent of the bureaucracy, would restore capitalism in the Soviet Union.
This process of degeneration went on much longer than Trotsky expected. It is still going on today, after nearly seventy years of buraucratic power; only it has reached a new stage. The developments of the past few years, the open emergence of the "bourgeois party" in the ruling spheres of the state, the turn to capitalism, were prepared by several decades of slow and almost imperceptible change within the bureaucracy. In that sense, although it is a new stage in the process, we are still faced today with the same process that Trotsky and his comrades of the Left Opposition fought against in the USSR in the 1920s.
Of course, seventy years of plundering have not left Russian society unharmed. What was created by the October 1917 revolution has changed beyond recognition. But there is still one fundamental gain that is left from the days of the Bolsheviks. It is the absence in Russia of a privileged class based on private property, of a capitalist class. This was the main factor which made possible the enormous economic development of the Soviet Union from the 1930s onwards despite the systematic plundering of the bureaucracy, thereby proving the enormous superiority of a planned economy based on the collective ownership of the means of production. The absence of such a capitalist class could still today be a decisive asset in the hands of a new proletarian revolution.
For revolutionary militants in Russia, this means that anything that contributes, in whatever way, to the development of the embryonic bourgeoisie, has to be opposed. The forces of the Russian working class are still intact despite the drastic reduction of its standard of living. It would represent an enormous force if it were to choose, once again, the road of the revolution. And if it did, its enormous social weight, its cultural level, the considerable material means at its disposal thanks to the elements of the planned economy that the bureaucracy has not yet managed to destroy, would be a lever powerful enough to rid Russia not only of the threat of capitalism but also of the bureaucratic plague. This time the forces of the Russian working class would no longer be that of the weak Russian proletariat of 1917; they would allow the new workers' state to avoid being forced into the deadly isolation which enabled the bureaucracy to hijack the proletarian state in the 1920s. Once again the Russian working class would put on the agenda the call for a world proletarian revolution, but this time with an unprecedented might. Such is, in our view, the only possible revolutionary programme for the proletariat in Russia today.
Will the Russian working class find this revolutionary determination within its ranks? Will a new revolutionary party emerge fast enough to be able to carry out such a programme, rather than having to fight from a weaker position, in a society already reconquered by capitalism? Will such a party emerge before the threat of dictatorship, which is looming at present, becomes a reality; before the regional powderkegs, which are building up today, are allowed to explode into as many Yugoslavia-type wars? These are questions that we cannot answer. Our hope is that the Russian working class will answer them itself.