Socialism Betrayed: Behind the Collapse of the Soviet Union

6. Crisis and Collapse, 1989-91

During 1989 the worst fears of those who had foreseen the potential of the changes wrought at the Nineteenth Party Conference were realized. The working out of those political reforms created a political situation, which the party and its leadership could no longer control. From the end of March 1989, the party leadership was reactive, trying to keep up with changes, which were occurring faster than it could control and propelled by political forces for the most part outside of that leadership and of the party as a whole. Graeme Gill452

The shadow economy has pervaded all economic sectors. Stanislav Menshikov453

In 1991, the masses supported demands for freedom and democracy, opposed the privileges and power so long monopolized by the Communist Party bureaucracy, and hoped for an improvement in their material conditions. The mass rallies for Yeltsin featured banners such as “Down with Gorbachev” and “Down with the CPSU,” but I never saw a banner saying “Long Live Capitalism” or “All Power to the Bourgeoisie.” Roy Medvedev454

In 1989-91, the final three years of perestroika, after having triumphed over his opponents, Gorbachev remade the Soviet Union in five crucial ways. First, he ended the leading role and monopoly position of the CPSU, changing it to a parliamentary party. Secondly, he undermined central planning and public ownership. He pushed the CPSU out of economic management while searching for a transition to a market economy. He began privatizing state-owned enterprises and encouraged the burgeoning second economy. Third, he surrendered to the United States on a range of foreign policy issues and eventually sought an outright alliance with imperialism. Fourth, he allowed the glasnost media to remake Soviet ideology and culture. Fifth, always baffled by the national question, he tried repression against Baltic separatists and then flip-flopped to negotiations in an ultimately fruitless search for a new basis for the union of republics.

Gorbachev was mindful of Khrushchev’s overthrow by the Party in 1964, and he was bent on making his reforms irreversible by a “momentous break”455 with Leninism itself. This took the form of rendering the CPSU powerless, turning it into a kind of advisory, strategic planning department for Soviet society and the parliamentary voice of the Soviet working class. He also wanted a multiparty system and a pluralist media and culture. To make the Soviet economy more flexible and dynamic, he demanded a large role for market forces, private ownership, and private initiative. He desired the continuation of the all-Union federal state. He wished to see less conflict with the West. Only his last wish came true.

Perestroika became “catastroika”456 in 1989. What actually happened was three years of mounting chaos from one end of the USSR to the other, ending in the collapse of Soviet socialism. In 1989 counterrevolution shook Eastern Europe and a year later Germany re-united on NATO’s terms. At the same time Gorbachev’s worst enemy, Boris Yeltsin, whose career seemed dead and buried when Gorbachev publicly booted him out of the leadership in 1987, made a Lazarus-like political comeback. Reborn as a leader of the ”democrats,” he captured control of the all-important Russian Republic. By early 1990, dual power existed in the USSR, with Yeltsin controlling Russia and Gorbachev the Soviet Union.457 In 1989-91, the economy went from bad to worse: production declined, shortages multiplied, store shelves emptied, paychecks sometimes failed to materialize, and popular resentment grew.458 The destruction of East European socialism adversely affected the Soviet economy. The steady withdrawal of the Party from the economy proved disastrous. By the summer of 1991 Western analysts spoke of a Soviet “depression.”459 Soviet citizens blamed perestroika. Unprecedented mine strikes rocked the regime twice, in 1989 and in 1991. The government sank into debt to Western banks. As one after another union republic declared its sovereignty and then seceded, the Soviet Union crumbled as a unitary state.

The media drove all politics rightward. Anatoly Chernyaev called glasnost the motor of perestroika. “Under the increasing pressure of glasnost,” Chernyaev said, “the de-ideologization of perestroika began.”460 Actually, the process was re-ideologization: opening the floodgates to non-socialist and anti-socialist ideas. Gorbachev could not control the genie he had let out of the bottle. By 1989 the media were falling into the grip of the pro-Yeltsin “democrats.” By 1991, a frantic USSR Prime Minister Nikolai Ryzhkov rued that the Soviet media were almost wholly in the “democrat” opposition’s hands.461

In perestroika’s last years, economic forces on the dark side of Soviet society demanded legitimacy and power. The black market and the Russian mob multiplied like vermin. The private enterprise, bogus “co-ops” grew.462 The ambitious and acquisitive backers of Boris Yeltsin lobbied for a drastic shift to radical marketization. If the market replaced the plan and if Yeltsin privatized the Russian economy, high officials, directors of enterprises, and managers could look forward to “unprecedented wealth.”463 The dominant sections of the Party and state leadership could easily see which way the wind was blowing. Corrupt elements of the leadership began embezzling state and Party property and transforming it into their own private property.

In the bewildering last years of perestroika, the Soviet people grew to hate Gorbachev and to treat him with scorn. Frantically racing to quell one crisis here while another broke out there, Gorbachev cut a pitiable figure. A magician who had run out of tricks, he had few friends other than the Western media and governments. In late 1991, even his false friends in the American White House abandoned him.

Gorbachev’s degeneration from a Communist to a social democrat was stark. His illusions about where events were heading were laughable. In May 1990, he gave an interview to Time magazine that took the measure of his “internal political revolution.”464 Answering the questions, “What does it mean to be a Communist today?” and “What will it mean in years to come?” he replied:

To be a Communist as I see it means not to be afraid of what is new, to reject obedience to any dogma, to think independently, to submit one’s thoughts and actions to the test of morality and through political action, to help working people realize their hopes and aspirations and live up to their abilities. I believe that to be a Communist today means first of all to be consistently democratic and to put universal human values above everything else. …As we dismantle the Stalinist system, we are not retreating from socialism but are moving toward it.465

A simple cause underlay the seemingly complex pattern of these tumultuous years. The Gorbachev leadership replaced a policy of struggle with one of compromise and retreat. Gorbachev retreated before the pro–capitalist coalition led by Boris Yeltsin. He retreated before the media that berated his centrism and timidity. He retreated before nationalist separatism. He retreated before U.S. imperialism with its unquenchable thirst for one-sided concessions and for global dominion.

Gorbachev was incapable of analyzing why his regime was disintegrating. He could not see that liquidating the CPSU was leading straight to the Soviet Union’s collapse. By weakening the CPSU, he relatively strengthened the Yeltsin camp, the separatists, the second economy, corrupt elements in the Party, the Russian mob and Western imperialism. Soviet analyst Jerry Hough, rejecting the Western description of Gorbachev as “a man riding a tiger he could not control,” observed that Gorbachev never seriously tried to restrain the tiger. “Instead he continually urged it on. In the rare case when force was applied it seemed very effective.466

Gorbachev’s analysis of his political predicament lacked realism in some respects, yet he could count votes and read polls. With approval ratings slumping into the single digits, he lacked the courage to push his market policies to their logical conclusion. He never mustered the temerity to impose economic “shock therapy.” Boris Yeltsin did. The very expression merits deconstruction. Economic “shock therapy” derived from a discredited and sadistic therapy of applying electric shock to severely mentally ill patients, causing needless suffering without helping most and providing a cure for few. Economic shock therapy treated people living under socialism as if they were suffering from a mental illness. This “shock therapy” forced the vast majority to suffer a loss of jobs, housing, children’s education, health care, pensions, and security from crime, while providing to a few a chance at wealth.

Gorbachev tried to manage his worsening political position by maneuvering, vacillating, improvising, and dissembling. As mass discontent rose in 1989-91, the Soviet people mocked his wordy speeches about “new turning points” and “decisive tests” and laughed bitterly at his attempt to portray catastrophes as advances. Gorbachev frantically sought to stabilize the USSR, to reassert control, without abandoning policies that were de-stabilizing every aspect of economics and politics. Having jettisoned the Party, Gorbachev tried to evade the consequences. To stabilize the political system, he sought to govern through new state institutions, especially an executive presidency and the Congress of People’s Deputies. The “democrats,” however, swiftly won key positions in the Congress. To stabilize the sinking economy, Gorbachev searched for a transition to a market economy. To stabilize his influence over a CPSU shattered by his policies, he clung to the post of General Secretary of the CPSU and placated his opponents by appointments to his inner circle. The latter tactic was evident in his temporary about-face of late 1990 and early 1991, when arch-revisionists Yakovlev and Shevardnadze left Gorbachev’s side and he elevated Vladimir Kryuchkov and other Communists. To prevent the fragmentation of the Soviet Union, he first tried repression, and then sought to negotiate a Union Treaty.

No attempts at stabilization succeeded, save one. Gorbachev achieved stability, of a kind, in foreign relations by turning Soviet foreign policy upside down. In the final years of perestroika, Gorbachev abandoned socialist and Third World allies, while seeking political support and financial credits from the West. By late 1991 the Soviet Union had evolved into a compliant junior partner of the U.S.

This chapter treats the key events of 1989-91—the overthrow of socialist governments in Eastern Europe, the Party’s destruction, the rise of the “democrat” opposition, the deepening economic crisis, and the USSR’s dismemberment. They were interacting processes. In the final analysis one process drove them all: the leadership’s determination to end the dominant role of the CPSU which, even at this late date, remained a latent obstacle to Gorbachev’s policies.

If Gorbachev himself lacked a realistic view of the consequences of his policies, some in his inner circle were not so naïve. According to William Odom, Gorbachev’s adviser Alexander Yakovlev knew all along where things were heading.

In June 1994 I [Odom] put that same question (‘Did he understand from the beginning that Gorbachev’s reforms might require the collapse of the Soviet Union and the Soviet system?’) to Yakovlev during a dinner chat. He replied that he did realize that they were destroying the old regime, adding with a certain glee ‘and we did it before our opponents woke up in time to prevent it!’467

Similarly, Anatoly Chernyaev, Gorbachev’s top foreign policy aide, described the mindset of the more realistic in the Gorbachev leadership as things fell apart. Without abandoning his revisionist prejudices and vocabulary, Chernyaev stated that at least some began to discern that the “third way” they were following was a mirage. On the eve of a Politburo meeting to discuss the draft Program of the CPSU’s Twenty-eighth Congress, Chernyaev chose these words to characterize the predicament the core leaders thought they faced:

The crux of the matter was that the pendulum of opinion was swinging between two poles. One way was to hold on to Stalin’s model of socialism only without the use of repression (a contradiction in terms). The other was to accept the precepts of a market society (in essence bourgeois democratic) that were already bursting forth. It seemed obvious that once we rejected the coercive model and its imposition on society by use of force and a state ideology, there would be no choice but to follow the second path. No one wanted to admit this. Indeed we hardly realized that this was how matters really stood.468

As the crises multiplied, some observers saw the signs of a U.S.–sponsored destabilization. They remembered the U.S.-campaign against Allende’s Chile in 1970-1973, when Nixon and Kissinger “made the Chilean economy scream.” Destabilization was a familiar imperialist policy for undoing Communist, left, nationalist, and other independent governments in weak Third World countries. The USSR, however, was too strong for external de-stabilization. The U.S. war buildup could strain the USSR, but not crush it.469 After the Soviet collapse, Reagan Administration officials exaggerated their role in the Soviet disintegration.470 The Bush Administration tried to impose a unified Western policy in support of Gorbachev. It believed Gorbachev was a reliable client who would deliver the whole Soviet Union to capitalism on a platter. At first, until it was clear Gorbachev was a spent force, the U.S. and NATO did not favor Yeltsin, who had only Russia to offer. The U.S. also feared the risk posed by ethnic clashes and military disintegration to the vast network of Soviet nuclear weapons and nuclear reactors. In 1991, Bush also wanted Gorbachev’s support for the Persian Gulf War.

Toward the end, as Gorbachev’s position sank into hopelessness, he seemed to have trouble distinguishing between wishes and facts. Some of his aides saw pathological irrationality at work. The lavish praise heaped on him during his foreign trips in 1990 and 1991 deluded him. Chernyaev said Gorbachev’s thinking became “increasingly filled with circular and unrealistic logic” about his real political situation at home. “The narcotic of lionization by foreign leaders and journalists was warping his thinking in an increasingly visible way.”471

Nothing was more irrational than the General Secretary’s pursuit of a new Union Treaty, whose provisions he ostensibly opposed. Gorbachev bridled at each new draft of the Union Treaty that, at Yeltsin’s insistence, gave a smaller and smaller role to the all-Union state. At the end of his tether and confused, he descended into self-deception and political self-destruction.472 Jerry Hough remarked that history knows no other example of a government with full power over taxation stemming from its ownership of all property ruining itself by allowing local governmental units “under its control to take control of tax revenue. …That is what happened from the summer of 1990 to the late summer of 1991.”473

An illusion inspired the whole Gorbachev project—to turn the socialist USSR into a western European social democracy that, in his revisionist view, incorporated the best of socialism and the best of European capitalism.474 He discovered, however, that projects founded on illusion fail. You cannot leap across a canyon in two steps. Some Marxists have said that Gorbachev was consciously pursuing outright capitalist restoration. Admittedly, the dismantling process looked much the same, but such a claim missed the ideological nature of Gorbachev’s project: his non-class view of the world insisted the mirage was not a mirage, that there was a third way between the two systems and the two classes, that his version of “socialism,” capitalism with a social safety net and class partnership policies, was socialism. Typically, this trend of political thought denigrated genuine socialism as “Communism” or “Stalinism.” The fact that Gorbachev’s project ended in capitalist restoration does not prove he was consciously seeking it. The crisis of 1989-91 steadily worsened because Gorbachev never gave up his pursuit of the third way and Party liquidation, the main causes of the crisis. In 1990 Alexander Yakovlev, the earliest, most conscious and most consistent promoter of enfeebling the Party, laid out one last plan for Gorbachev. Calling the Politburo and Central Committee “the main obstacles to perestroika,” Yakovlev urged him to go further and faster in pushing the Party aside. “Convene the Congress of People’s Deputies and establish presidential power.” He advised undoing collectivization, public ownership, and the Union state under the disingenuous slogan: “Give land to the peasants, factories to the workers, and real independence to the republics.” He counseled creation of a multiparty system with the CPSU relinquishing its monopoly of power, slashing the nomenklatura apparatus to the bone, and accepting large loans from the West. He pressed Gorbachev to “launch military reform, get rid of the generals, replace them with lieutenant colonels, start a pullout from Eastern Europe, liquidate the industrial ministries, grant freedom to entrepreneurs, get rid of [Prime Minister] Ryzhkov, and [Yuri] Maslyukov the head of Gosplan.”475 In the end, Gorbachev took most of Yakovlev’s advice.

Two main processes dominated Soviet politics in 1989. One grabbed headlines; the other did not. The first was the swift collapse of the East European socialist states, a series of counterrevolutions that coincided with the bicentennial of the French Revolution. The second process was the implementation of Gorbachev’s “radical political reform.”476 Gorbachev’s revision of Soviet foreign policy triggered the Eastern European collapse, and the Eastern European collapse strengthened revisionism in the Soviet Union. In December 1988, Gorbachev gave a speech to the UN in New York announcing a Soviet policy of non-interference in the internal affairs of socialist states and military withdrawal from Eastern Europe. That shift in policy strengthened the internal opposition in Eastern Europe and emboldened the West. The domino-like fall of state after state in 1989 undermined the prestige and strength of socialism and adversely affected the USSR economy.

The cause of the collapse of the East European socialist states is beyond the scope of this account of the Soviet collapse. Suffice it to say the East European states were weaker than the USSR. First, the Eastern European socialist states were newer and less firmly rooted than Soviet socialism. Second, in much of Eastern Europe, socialist change stemmed less from homegrown revolutionary movements than from the wartime advance of the Red Army. Soviet occupation enabled small Communist Parties decimated by Nazi repression to build postwar antifascist government coalitions that evolved into socialist regimes. Thus, in Eastern Europe, outside circumstances made revolution comparatively easy and peaceful, but also less thoroughgoing. Third, national and religious sentiment worked against many of the regimes. Where such countries as Roman Catholic Poland viewed Russia as the historic oppressor, an extra problem in winning legitimacy burdened socialism. Where Russia was a historic friend and ally, as in Eastern Orthodox Bulgaria and Serbia, socialism walked an easier path. In the German Democratic Republic (GDR) the aspiration for national reunification clashed with the task of building a separate socialist state, but in Yugoslavia, socialism merged with the will for national independence. (This helps explain why in the 1990s NATO had to work so hard to stamp out the unity and socialist character of the remnants of the Yugoslav Federation.) Fourth, some states, bordering the West, notably the GDR, Czechoslovakia, and Hungary, felt the pressure of economic and ideological competition with richer capitalist neighbors that, unlike socialist states, drew wealth from the Third World and aid from the United States. Faced with such pressure, Poland and Hungary became heavily indebted to Western banks. In 1985 Hungary joined the International Monetary Fund (IMF). Fifth, the excessive repressions of the Stalin era created a reservoir of resentment in such countries as Czechoslovakia. The Czechoslovak Party suffered from strong revisionist currents that in 1968 became obvious. Finally, for decades, the West had pursued a policy of “differentiation,” to sow disunity in Eastern European socialism by bestowing rewards on such states as Romania, willing to distance itself from the USSR.

The East European collapse intertwined with the Soviet story.477 It was a humiliation, a warning, and a body blow to Communist political morale everywhere. The East European collapse emboldened separatists and proponents of capitalism in all parts of the USSR.

In 1989 the second major process, Soviet political reform, began in earnest. In June 1988, at the Nineteenth Party Conference, with a bit of last-minute parliamentary chicanery, Gorbachev rammed through “radical political reform.”478 Gorbachev and Yakovlev soon translated the conference resolution into organizational reality.

From June 1988 to March 1989, when the elections for the USSR Congress of People’s Deputies took place, measures to weaken the Party came thick and fast. In July 1988, at the first CC Plenum after Nineteenth Party Conference, Gorbachev’s forces called for the rank-and-file to break the power of the apparatus.479 In September Gorbachev called for cuts in the local apparatus by 900,000.480 Gorbachev sacked non-revisionist and anti-revisionist Politburo leaders. In the September CC Plenum decisions, he removed veteran Andrei Gromyko as a full PB member. Gromyko had slowed down Gorbachev’s reforms. Yegor Ligachev, downgraded to head of agriculture from head of ideology, would now no longer run the CC Secretariat, his base.481 Vadim Medvedev, a trusty ally of Yakovlev and Gorbachev, became a full PB member. Medvedev and Yakovlev took over Ligachev’s responsibilities in ideology and foreign affairs.

Chernyaev described the caprice with which Gorbachev and his advisers cut the CPSU central apparatus. Gorbachev proposed cutting the apparatus in half. Chernyaev proposed two-thirds. They arbitrarily settled on a figure between one-half and two-thirds. Gorbachev then proposed eliminating the economic and governmental departments altogether. ”We’ll keep the socioeconomic one as a theoretical body,” Gorbachev mused, “having stripped it of its management rights and functions.”482 This was impulsive downsizing for its own sake, without a plan, without a thought to consequences. Chernyaev frankly acknowledged the ubiquitous confusion and demoralization that resulted from what the Western media called a “mini coup d’etat.” It wildly accelerated the weakening of central authority and power nationwide that had begun after the Nineteenth Party Conference. Local and regional Party organizations at all levels floundered helplessly, deprived of their previous economic and managerial function.483

In March 1989, the first public test of the new “radical political reform” occurred, the election for the Congress of People’s Deputies. According to Ligachev, the elections brought a self-inflicted debacle on the CPSU.484 Virtually no public discussion of the law on elections occurred. Moreover, the CC directed local and regional Party officials neither to interfere in the elections nor to mobilize their forces for candidates, calling such non-interference and non-mobilization “respect for democracy.” Central Party offices let local branches fend for themselves. Some CPSU candidates soon quarreled publicly among themselves. Though his assignment was international work, Yakovlev played a big role in the elections. The same was true of his ally, Vadim Medvedev. Vitali Vorotnikov, a Politburo member, observed the election rules were one-sidedly skewed against anti-revisionist Communists.485 Because the press had successfully attacked the principle of workplace elections, the March 1989 balloting led to results that over-represented intellectuals and under-represented workers and peasants.486 Forced to compete with one arm tied behind its back, the Party suffered severely.

Although 87 percent of the delegates to the Congress of People’s Deputies belonged to the Party, and many top officials won in their own right, many other Party leaders lost. Forty-four percent of the Party candidates who stood unopposed failed to gain the 50 percent of the vote required for election.487 The defeated included the mayors of Moscow and Kiev, Party chiefs in Kiev, Minsk, Kishinev, Alma Ata, Frunze, the Latvian prime minister, the president and prime minister of Lithuania, thirty-eight regional and district Party first secretaries, and almost the whole Leningrad Party leadership. In the Baltics, only Party candidates backed by national fronts won. Boris Yeltsin, still a Party member though not Party-backed, won a resounding 89 percent of the vote.488

Princeton historian John Dunlop has called the convening of the newly elected First Congress of People’s Deputies in May-June 1989 the event that “changed everything.”489 In a move without precedent, Gorbachev decided to televise the Congress. For thirteen days and nights, the proceedings transfixed two hundred million Soviet viewers. Obsessive TV viewing reduced economic output at the time by 20 percent.490

In the First Congress of People’s Deputies, the intelligentsia loudly pushed an agenda markedly different from Gorbachev’s. Andrei Sakharov demanded the abolition of the USSR Constitution’s Article Six, the constitutional entrenchment of the CPSU’s leading role. Yeltsin solemnly warned that a Gorbachev “dictatorship” loomed ahead. A Soviet athlete named Vlasov attacked the KGB’s “history of crimes.” A speaker named Karyakin demanded Lenin’s removal from his mausoleum on Red Square. Delegates denounced the one-party system. Some speakers disputed the ideas of Karl Marx and Das Kapital. Congress set up commissions to review the 1939 Nazi-Soviet pact, and a massacre in Tbilisi. Political change accelerated from a “canter to a gallop.”491 After June 1989, more change occurred each month than had occurred from April 1985 to June 1989.

The proceedings of the Congress shook the self-confidence of the CPSU to its foundations. For millions, the Congress undermined the legitimacy of the Party, Soviet history, and the whole social order. It also emboldened socialism’s opponents. It pushed back the boundaries of the politically thinkable. Managed reform was over. Gorbachev became “a surfboarder of events.”492

In July 1989, the Soviet working class passed judgment on Gorbachev’s perestroika and the First Congress of People’s Deputies. In Kuzbas and Vorkuta in Russia, in Donbas in the Ukraine, and in Karaganda in Kazakhstan, a devastating mine strike erupted. Independent workers’ organizations launched the stoppage. From 1986 onward, they had grown up in industrial areas, outside the official trade union structure, just as the “informals” grew up in Moscow.493 The first mass labor unrest since the 1920s,494 the strike caused the Gorbachev leadership to tremble. Yeltsin, sensing populist opportunity, promptly began to work to win over the miners to the “democrat” cause. The iconoclastic atmosphere at the June Congress had helped to goad the miners into action, but, mainly, severe economic hardships drove them to the picket line. The ill-considered cutback in the state orders hit coal mining particularly hard because mines had to buy supplies at market prices, but they could sell coal only at fixed government prices.495 In 1989 miners chiefly demanded higher pay, although they also raised some political demands, for example, the ending of the central ministries’ control, freedom to set coal prices, and the repeal of Article Six of the USSR Constitution. In a few places, miners directly challenged the CP. Moscow felt so threatened by a strike in such a vast and pivotal industry, employing 1 million workers of a total workforce of 160 million, that for ten days three major institutions—the Party high command, the Supreme Soviet, and the Council of Ministers—did little else than try to work out how to grant the miners’ expensive demands.496 Soon, Moscow shipped vast quantities of soap, fresh meat, canned milk, sugar and animal fat to mining areas.

Meanwhile, Yeltsin, on the eve of his election as president of the Russian Federation, gained considerable support among miners. In April 1991 a new strike, more like a general strike than a mine strike, broke out. It was a crippling two-month stoppage affecting many sectors of basic industry in an already weakened Soviet economy. This time the miners’ demands reflected Yeltsin’s program, including demand for the resignation of the Soviet government. In a sign of Yeltsin’s rising authority, the strike ended only after Yeltsin transferred the mines from Soviet jurisdiction to Russian Federation jurisdiction. The new strike made Gorbachev even more accommodating than he had been to the surging strength of the Yeltsin camp.497

In 1989, diversity of opinion expressed in the Congress intensified the pressure on the Party to allow organized factions. The “democrat” argument was that multi-candidate elections within the Party were pointless unless candidates could differ on the issues. Already some Communist deputies to new legislative bodies publicly defied Party views. The Lithuanian CP, for example, differed with Gorbachev on Soviet unity. These developments raced ahead of CPSU internal discussions. The accomplished facts set the terms of debate over the handling of intra-Party differences.498 After the Party decided to permit organized factions, it was but a short step to permitting other political parties. Not far behind that, lurked the far bolder notion of permitting parties that opposed socialism and the Union state. As late as November 1989, Gorbachev rejected the possibility of a multi-party system. As the Central Committee reconsidered Article Six of the Constitution, a half-million strong “democrat” rally in Moscow, addressed by Boris Yeltsin, demanded an end to Article Six. At the CC Plenum in March 1990, Gorbachev reversed himself and did away with Article Six, and opened the way to new, legal parties.499

A crisis of confidence struck the CPSU. In 1989, its 19 million membership stopped rising, and in 1990 the number of members fell by more than 250,000. Passivity and paralysis seized the ranks. Opinion polls revealed a decline of the Party’s prestige, authority, and public support. By 1989 the CPSU was paying the price for its identification in the public eye with Gorbachev’s policies that were sowing hardship and uncertainty in the general population. Neither Gorbachev nor any top leader had any clear plan for dealing with these problems or reversing the Party’s fortunes.500

The CPSU had always had a diversity of ideas and ideological struggle, but following Lenin, it had avoided organized tendencies that would cripple the implementation of policy. Within the context of Leninism, contested elections inside and outside the CPSU were possible.501 There was no problem with a multi-party socialist state, provided that the working class party had the leading role, and the other parties accepted working class state power and socialism, that is, they were not counterrevolutionary. Multiparty systems existed in the GDR, Poland, Vietnam, Czechoslovakia, Bulgaria, and North Korea.502 No socialist state could brook the legalization of anti-Communist parties whose aim was to reverse the results of the revolution.

The next significant moment in the downward arc of the CPSU occurred at its Twenty-eighth Congress in mid-1990. In the lead-up to the Congress, the Party continued to unravel rapidly. The Party began losing the working class. Workers began “voting with their feet” and leaving. According to Graeme Gill, at the CPSU Moscow city conference only 7.2 percent of delegates were workers. “From the industrial oblast of Yaroslavl not one industrial worker was sent as a delegate to the national congress.”503 Angry at worsening conditions, workers wondered, “Why …was economic reform begun with changes that hurt workers?”504 In early 1990, the hemorrhage of Party membership accelerated. The Party grassroots loudly criticized the abandonment of Marxism-Leninism, something overlooked by those who attach great importance to the claim that few Soviet workers defended the system (a matter discussed more fully in Chapter 7 and the Epilogue). Graeme Gill wrote that in the lead-up to the Twenty-eighth Congress, “The reaffirmation of faith in Marxism-Leninism accompanied by the charge that the ideals of the party had been turned upside down was a common line of complaint against the party leadership at this time.”505

In the first half of 1990, organized CPSU factions crystallized. The Democratic Platform dominated by white-collar workers and professionals favored turning the CPSU into a parliamentary social democratic party. The misnamed Marxist Platform favored a market economy. Internal surveys carried out by the Party in May 1990 suggested that a growing segment of the Party base believed that its leaders were corrupt and did not believe that the Soviet government could stop the economic decline. More than half of those polled no longer saw the Party as the country’s leading political force.506

Convening in July 1990, the Twenty-eighth Congress of the CPSU represented the last pitched battle at a Party Congress over Gorbachev’s policies. The Congress, however, did nothing to slow the General Secretary’s revisionist march. The Congress marked another step for a Party rapidly losing both its mission and its working class base. The non-Communist media set the Party agenda. Debate occurred not over “whether the market economy?” but “what sort of market economy?” The Congress rendered the Politburo mostly ineffective. By acknowledging a new freedom of Party organizations in the union republics to review CPSU decisions and to work out their own Party programs, the Congress aided separatism. The Congress downgraded Marxism-Leninism as a source of ideological guidance and turned the Central Committee into a quasi-representative parliament, instead of the authoritative leadership body it had always been. The convention reduced the CC’s powers in relation to the General Secretary. The whole CPSU Congress rather than the CC now elected Gorbachev, making an ouster between elections more difficult, if not impossible. The right to form “platforms,” “seminars,” “clubs” in CPSU was acknowledged, though not “factions.” For opponents of Gorbachev, this was merely a semantic victory. Factions were already forming. The anti-revisionists also won a battle to keep the Party organization in the military and a meaningless verbal commitment to democratic centralism.

At the Twenty-eighth Congress Ligachev failed to get elected as Deputy General Secretary and withdrew from active, public CPSU work. Yeltsin ostentatiously left the CPSU, as did such noted “democrats” as Leningrad mayor Anatoly Sobchak, Moscow mayor Gavril Popov, and ex-Marxist historian Yuri Afanasyev. The Democratic Platform withdrew from the CPSU but not before staking a claim to CPSU assets. On balance, the political complexion of the CPSU shifted farther in an anti-socialist direction after the Twenty-eighth Congress not only because of Gorbachev’s victories, but also because of the exodus of honest Communists. Anti-revisionists were giving up on the CPSU and devoting efforts to winning influence in the new Communist Party of the Russian Federation (CPRF). In 1989, Ligachev helped found the Soviet Peasant Union, and in 1990 the CPRF.507 One reason Ligachev had stayed in the CPSU as long as he did was that he wanted to try one last attempt at reversing the direction of Party politics at the Twenty-eighth Congress. Ligachev played by the rules long after Gorbachev and Yakovlev had stopped. As late as May 1990, Ligachev wrote a letter to Gorbachev in which he declared his loyalty to perestroika, while appealing to Gorbachev to circulate the letter through the Politburo and CC leadership and heed his call to convene a CC Plenum on the crisis in the Party and the country.508 Gorbachev never circulated the letter.

After the Twenty-eighth Congress, from mid-1990 through August 1991, the Party “imploded.”509 The splintering into factions accelerated. Membership losses especially among workers mounted. Dues moneys, publication sales and other sources of Party income plummeted. Party finances worsened to near bankruptcy. Financial losses forced staff reductions that further weakened the organization’s influence. In the new state bodies Communist deputies manifested open disunity. Meanwhile, “democrats” pressed for the elimination of CPSU members from all state and social institutions. After August 1991 and the failure of the “August coup,” (discussed later) and the declaration of martial law by the Soviet government, the Party situation reached the nadir. Anti-CPSU hysteria in Soviet and world media exploded. A drive to outlaw the CPSU and confiscate its assets emerged and proved unstoppable. The CPSU’s fate was sealed.

Paralleling the Party’s dismemberment was the ruin of the military, as well as the Party’s influence in the military. In 1989-91, Gorbachev went after the CPSU’s influence in the Soviet military, which received intensive Marxist-Leninist ideological training compared to other sectors. Gorbachev and his associates viewed breaking the Party’s grip on the military as part of breaking its grip on the whole political system. The first step in “de-partification” was to change Soviet military doctrine, dumping the idea that deterrence depended on U.S.-Soviet weapons parity and that the USSR should aid Warsaw Pact allies and other fraternal socialist states. Soviet unilateral disarmament eroded military morale and conditions. Military disintegration came from three other circumstances: force reductions ordered by Gorbachev, hostile media coverage of military conditions, and resistance to conscription. In 1989 and 1990, officers started to quit in large numbers. In 1989-91 the Soviet armed forces shrank from 5.3 million to just under 4 million men. The demobilized men often returned to homelands with no jobs and no housing awaiting them. Meanwhile, Gorbachev moved ahead with plans to abolish the the Military Political Administration, the organ through which the CPSU organized itself in the armed forces. Though Ligachev and his allies managed to prevent the Twenty-eighth Congress from doing that, the disintegration of Party influence inexorably moved ahead.

What explained the faint-heartedness of CPSU leaders who resisted Gorbachev, their underdeveloped political skill, their transparent illusions,510 and the frequency with which they caved in and voted for policies they did not believe in? For a long time Gorbachev’s opponents had the votes to remove him, but did not act. The Politburo even rejected Gorbachev’s resignation.511 Reflecting later on a stormy meeting, Gorbachev loyalist Chernyaev wrote furiously, ”Did you think it [Gorbachev’s resignation offer] was blackmail? A game?” Noting that Gorbachev’s opponents were a big majority in the Politburo and Central Committee, Chernyaev taunted them after the fact: “The ‘collapse’ was only starting then; you could have “restored order”! But no! You had neither the guts nor any alternative concept.”512

The revisionist side was better led than its opponents. Contingency, thus, played a role in the Soviet collapse. After the Nina Andreyeva clash in the Politburo, which ended in a debacle for Ligachev, the correlation of forces turned steadily against Gorbachev’s opponents. The revisionists kept the initiative and chopped away at the Party base of their opponents. Ligachev avoided taking the offensive or vying for the leadership. Ligachev opposed Gorbachev’s excesses, but according to Stephen F. Cohen, accepted some of Gorbachev’s assumptions, for example, a belief in the advantages of partial marketization.513 Until his demotion, Ligachev simply tried to compete with Yakovlev for Gorbachev’s ear. He saw Yakovlev as the gray eminence of revisionism, giving Gorbachev foolhardy advice. Only after it was too late did Ligachev initiate a consistent struggle against Gorbachev, and by then he was outside the CPSU top leadership.

An organized and determined opposition might have ousted Gorbachev, as Khrushchev had been. As late as May 1990, 70 percent of the CC was against Gorbachev.514 Why, then, did Ligachev lose his last battle against revisionism at the Twenty-eighth CPSU Congress? Why did no other major Communist emerge to lead the fight against Gorbachev inside the CPSU? Why had the CPSU leadership caliber declined so markedly since the 1960s? Why was the CPSU not able to overcome Gorbachev in 1987-91, though it had overcome Khrushchev in 1964?

The answer to these questions resided in the same place as the explanation of the collapse itself, in the economy and in politics. Politburo quarrels were not just clashes of ideas, where arguments were won on the merits. Underlying interests and forces determined the power of the opposing sides. Powerful political, ideological and economic forces were pulling the rug out from beneath Ligachev and his supporters. Most importantly, by the late 1980s, in contrast to the 1960s, the USSR’s second economy was far bigger, its corrupting inroads into the social order deeper, and its penetration of top sections of the CPSU more flagrant and pronounced. Ligachev saw clearly that by encouraging the second economy and private enterprise with his economic reforms, Gorbachev was likewise furthering corruption in the Party. Ligachev said: “Suddenly in the space of a year or two came even more horrible and more absolutely corrupt forces that stifled the healthy start made in the Party in April 1985.”515

There is evidence that from the highest Party levels down, Gorbachev encouraged corruption by example and toleration.516 Valery Boldin, Gorbachev’s one-time chief of staff, confessed that, throughout its history the CPSU had known inner struggle—against opportunists, deviations, splinter groups, Mensheviks, Trotskyites, and so on. He concluded however that, with Gorbachev, for the first time, the CPSU had a corruption problem, high and low, citing secretaries of district and regional Party committees, as well as members of the CC implicated in illegal schemes. According to Boldin, the Party has “never” had the same extent of corruption and greed “in high places.” This weakened the Party’s ability to defend itself. In Boldin’s words, “The virus of dishonesty gravely impaired the Party’s immune system and wrecked its stability.” 517

The growth of legal and illegal private enterprise and its entanglement with the Party sapped the efficacy and morale of honest Party functionaries at every level. They saw much of the upper Party and state bureaucracy purloining state assets with impunity. Meanwhile, the independent media run by anti-Communists were reshaping public perceptions, beliefs, and expectations. The Party was disappearing as the power center. Such trends altered the balance of forces in the CPSU. No such conditions existed in 1964.

At the same time a mobilization of the Party base and ordinary workers was extremely problematical because of the unprecedented political confusion accompanying a counterrevolution being led by a CPSU general secretary. Rank and file Communists were not inert, but they were accustomed to acting in response to Party initiative, not to initiating action against a Party leader. Moreover, rank and file workers were increasingly preoccupied with coping with inflation, shortages, and unemployment. By mid-1991 the economy was in a depression. Millions of workers defended their living standards through strikes, but the enfeebling of the CPSU made a fight within the Party difficult. Disorganization, disorientation, and disempowerment of the Party itself limited the possibility of grassroots resistance to the leadership. Notwithstanding these factors, in March 1991 Soviet workers voted by a huge majority to keep the USSR. Preoccupied with daily living, rank and file workers’ protests typically did not go beyond economic struggles, and they were often either ill-led, or not led at all. Nevertheless, the opposition to the revisionists among the CPSU rank and file remained substantial and ended only with Twenty-eighth Congress in July 1990.

Another reason the anti-revisionist forces lost was likewise related to the second economy. In late Soviet society new private wealth acquired in the second economy flowed into the campaign coffers of emerging pro-capitalist politicians. Historian Stephen Handelman observed, “The vory [thieves] knew that Kremlin conservatives [i.e., orthodox Communists] were anxious to cut short the economic liberalization that had already produced such impressive black market profits.” He added, “Gavril Popov who won election as Moscow mayor in the same campaign that took Yeltsin into the Moscow White House has admitted that reformers obtained support from teneviki (shadow businessmen often connnected to the underworld).” The influence of money in politics—with no precedent in Soviet history—strengthened anti-socialist elements and undermined the genuine Communists.518

Gorbachev’s extraordinary media policies gave him, and later outright pro-capitalist forces, a crucial advantage previously enjoyed by authentic Communists. Yakovlev’s appointees in the media set the terms and conditions of a political debate that went far beyond the mild liberalization of the Khrushchev era. After the 1989 birth of the Congress of People’s Deputies, the anti-CPSU intelligentsia and its media allies went on an offensive against the active supporters of socialism. Thus, the favorable political and ideological circumstances around Gorbachev were far different than around Khrushchev twenty-five years before.

Individual and subjective factors played a real, but subordinate role. Leadership qualities did matter. If Ligachev and his supporters had possessed brilliant leadership qualities, and if the revisionists had not, matters might have turned out differently, regardless of objective conditions. In the battle Gorbachev, however, always held the favorable high ground, even when outnumbered. His main opponent—Ligachev—may not have been “the pathetic, principled Ligachev”519 of one account, but Ligachev was definitely schooled in the Communist principles of democratic centralism, modesty, and loyalty, and those principles constrained his ability to mount an effective opposition. Even though Ligachev had wide respect and indisputable leadership qualities, for a long time he confined himself to attempts to moderate Gorbachev’s policies and to counter pressure from the right with his arguments. With the same collective determination, organization, and planning that Khrushchev had used to arrest Beria, and that Brezhnev had used to oust Khrushchev, Ligachev probably could have turned the Nina Andreyeva affair to his advantage and could have unseated Gorbachev. Ligachev’s failure to act except in his own defense, however, immobilized his allies, none of whom had Ligachev’s prestige. Given this opening, Gorbachev and Yakovlev subjected Ligachev to withering criticism and sent Ligachev’s allies in the leadership and the media scurrying for cover.

In 1989-91, the anti-Communist opposition rose as steeply as the CPSU declined. Many reform-minded CPSU leaders benignly entertained the idea of a multiparty system. The anti-Communists, however, still masked their pro-capitalist ambitions.520 As they contemplated new political arrangements, Communist leaders attached astonishingly little importance to the question of state power, whether or not a new movement or party accepted the class character of the state and the Communist Party’s leading role.

The “democrat” opposition that arose after 1985 had forerunners in the Khrushchev “Thaw” years, 1953 to 1964. Khrushchev had tolerated liberal intellectuals. After 1964, when Brezhnev became less tolerant, part of the intelligentsia created a dissident movement. The dissidents were the heirs of the Bukharin-Khrushchev tradition. The dissidents influenced Gorbachev. They also supplied key elements of the “democrat” program. As early as May 1970, foreshadowing the slogans and program of perestroika, an extraordinary open letter to Brezhnev and other Soviet leaders was signed by three prominent dissidents, physicists Andrei Sakharov and Valery Turchin, and writer Roy Medvedev. The letter put forward theses about the current state of the Soviet Union and advanced fifteen demands. The authors claimed to speak for the intelligentsia and “advanced section of the working class.” The USSR’s problems, it said, stemmed not from socialism, but from “the anti-democratic traditions and norms of public life established in the Stalin era.” The main demand of the authors was “democratization,” a word repeated many times. The letter also introduced the word “stagnation,” a chief concept of the perestroika era. The authors also demanded the restoration of the rights of nationalities deported by Stalin, progress toward a more independent judiciary, public opinion research, wider dissemination of social science research, multi-candidate elections, industrial autonomy, more funds for primary and secondary education, amnesty for political prisoners, improvements in cadre and management training, and abolition of information on nationality in an individual’s documents. The program wished to perfect socialism, but there was no criticism of the capitalist West.521

The self-styled “democrat” opposition went through many stages before it emerged in 1988-89 as legal, anti-socialist parties bidding for elective office and even state power.522 First, in 1987 the so-called “informals” (informal organizations) emerged, some as humble as discussion clubs, neighborhood groups, and study circles. Gorbachev blessed the informals and invoked the ideas of Italian Communist theoretician Antonio Gramsci about the importance of “civil society,” a favorite ideological construct of social democrats. Gorbachev and Yakovlev wished to foster non-Party social movements to support their policies and to bypass the “conservative bureaucracy” of the CPSU. The informals grew quickly, and they quickly changed in character. In non-Russian republics they became “national fronts” promoting separatism and in Russia “popular fronts” advocating the “democrat” line. Until mid-1988, a “democrat” meant a Gorbachev supporter against Ligachev. After mid-1988, a section of the intelligentsia criticized Gorbachev as not fully a “democrat.” In May 1988 in Moscow, a dissident from the 1960s and 1970s formed the Democratic Union, the first anti-CPSU political party.

In May-June 1989, the Congress of People’s Deputies gave a huge boost to the “democrats.”523 Soviet TV displayed Moscow intellectuals arguing for “democracy” in opposition to Gorbachev. In July 1989, some deputies formed the Interregional Group, (led by Andrei Sakharov and by Boris Yeltsin, still a CPSU member). This “democrat” parliamentary faction held 380 of the 2250 members of the Congress of People’s Deputies. It called for a “transition from totalitarianism to democracy,” and for “radical decentralization of state property,” and “economic independence of republics and regions.” This meant that an anti-Communist parliamentary opposition led by major popular figures was openly at work in Gorbachev’s new state institutions.

In January 1990, Democratic Platform formed in the CPSU with delegates representing 55,000 Communists. It favored transforming the CPSU into a social democratic party at the upcoming Twenty-eighth Party Congress. Also in January 1990, Democratic Russia, a more ambitious project, formed. It favored “the ideas of Andrei Sakharov,” who had died in December 1989. The “democrat” camp promptly canonized Sakharov as the patron saint of the “democrat” cause. Democratic Russia evolved out of the Interregional Group and had a Russian nationalist complexion. It called upon the Congress to enact a new RSFSR constitution, revoke Article Six of the Soviet Constitution, return churches to believers, place the KGB under parliamentary control, proclaim the Russian republic’s sovereignty, and create a regulated market economy. Democratic Russia’s demands went much further than any existing group toward open advocacy of capitalist restoration and USSR breakup. Democratic Russia would become the main base of Boris Yeltsin.

In March 1990 in the Russian Federation elections, the “democrats” won political control of Moscow and Leningrad by a large majority, a stunning result. By May 1990 the “democrats” claimed 25 percent of Russian Federation Congress. As in 1917, dual power existed in Russia, this time the “democrats” and the CPSU.

The “democrat” opposition found its Russian leader in Boris Yeltsin. Yeltsin’s Party career had taken off in 1985 when he was brought to Moscow, ironically, on Ligachev’s recommendation. An engineer by training, Yeltsin had been a construction manager in the Urals. He was ambitious, pragmatic, and alcoholic. At the Twenty-seventh CPSU Congress in 1986, Gorbachev brought him onto the Politburo as a candidate member.524 Though a CPSU official, Yeltsin developed into a popular and erratic critic of the CPSU. At the Twenty-seventh Congress, Yeltsin battled with Ligachev over Party privileges. In 1987, Yeltsin’s criticism of Gorbachev led to his ouster from the Politburo and dismissal as Moscow Party first secretary. Returning to his native Sverdlovsk, Yeltsin wandered in the political wilderness from late 1987 to early 1989. Gorbachev’s creation of new state institutions made a comeback possible. In March 1989, Sverdlovsk elected Yeltsin to the USSR Congress of People’s Deputies. In March 1990, Russians elected Yeltsin to the RSFSR Congress of People’s Deputies, and in May 1990 the Russian Supreme Soviet elected Yeltsin chair. In July 1990, Yeltsin left the CPSU at the Twenty-eighth Congress. In June 1991, he was elected president of the RSFSR, a new position created in April 1991 by a deal with Gorbachev in which Yeltsin pledged to support Gorbachev’s Union Treaty.525 With 57 percent of the vote, Yeltsin defeated five rivals and thereafter held a proven electoral mandate that Gorbachev lacked, an important advantage in the battle for supremacy. Sometime in 1989, Yeltsin’s new trajectory had become clear. He planned to “play the Russia card” to achieve supreme power and capitalist restoration.

Why did Yeltsin succeed at becoming the leader of the counterrevolution? In the July 1989 miners’ strike, Yeltsin forged an alliance with the most powerful and angry contingent of the working class. In 1989-90, he won support among intellectuals angry at Gorbachev’s caution. He seized the banner of “radical” (overtly pro-capitalist) perestroika. He grew popular among non-Russian republican separatists whom he accommodated. He cultivated religious believers. He championed Russian sovereignty and the symbols of Russian nationalism. Above all, he favored a market economy far more decisively than Gorbachev and thereby won over the pro-capitalist elements in the proliferating second economy. Also important was the blossoming support Yeltsin won from Western business, Radio Liberty and other Western radio voices.

Yeltsin’s willingness to sacrifice the USSR as a federal state if necessary to bring Russia to “radical reform”—capitalist restoration—made him the leader favored by counterrevolutionary partisans at home and abroad. So long as Gorbachev controlled the all-Union institutions, his continual vacillations impeded full capitalist restoration. From August 1991 to December 1991, events developed in unforeseen and dramatic ways, and Yeltsin got his chance to seize power and dismember the USSR. Then, in January 1992, he started the economic shock therapy from which Gorbachev always shrank. A year and a half later, in October 1993, meeting legislative resistance to his policies, this leader of the “democrats” would order the artillery bombardment of the Russian parliament, killing and arresting hundred of legislators and citizens.526

Deepening economic confusion and crisis stemmed only partly from the madcap debates and wild zigzags that occurred under Gorbachev’s plans for transition to a market economy. The overthrow of socialism in Eastern Europe also damaged the Soviet economy. Separatism disrupted economic links among Soviet republics and harmed production. Gorbachev’s promotion of the second economy and his attack on the centrally planned state-owned sector also sharpened the crisis. Boris Kargarlitsky noted the enormous irony of a powerful campaign in support of privatization unleashed in 1990 by television, newspapers and magazines in most cases still controlled by the Communist Party. “Anyone who doubted the new wonder-working recipe was not allowed to be heard.”527 The Soviet media monopoly was now capitalist.

Columbia University Sovietologist, Marshall Goldman, concluded that the Soviet economic decline actually began before 1989: “By mid-1987 the damage had already been done. After two years or so of poor results, he [Gorbachev] had lost much of his credibility, at least on economic matters.” Thereafter, the crisis grew more acute. By mid-1988 the deterioration began to feed on itself, and “important economic institutions were starting to disintegrate.”528

A Soviet decision that pushed the ex-socialist states to re-direct trade into Western markets magnified the impact of the Eastern European political collapse. For decades the USSR had provided oil, gas, and raw materials on easy terms to Eastern Europe in return for manufactured goods. According to Jerry Hough, the Soviet Union’s abrupt decision to end the subsidy amounted to shock therapy for Eastern European states. Eastern Europe had to move toward Western markets as quickly as possible. By 1990 and 1991 the loss of Eastern European trade, however, was worsening Soviet economic and social problems. The sudden loss of Eastern European medicine imports, for example, was a major factor in the rapid decline in the Soviet health system.529

After what Ligachev dubbed the “fateful error,”530 the drastic and hasty reduction in the state orders in 1987, shortages—meaning lines, rationing, empty shelves531 and the resort to black markets—dominated the economic bad news in 1988 and 1989. Production for most consumer goods did not drop in 1988 and 1989, “but the increase in wages and the failure to control the food subsidies meant the population had progressively larger amounts of money at its disposal.”532 With too much money chasing too few goods, inflation began. In 1988 declining food production led to food shortages and price increases.533 With the weakening of central economic authority, confidence in the stability of supply diminished. Private hoarding by consumers and, more important, public hoarding by republics and cities, spread dramatically, first with respect to food, then other consumer goods.534 Empty food shelves, the most glaring and most resented shortage, drew sharp public anger and had widespread political, psychological, and economic results. A psychology of shortage and hoarding spread throughout the economy. Thus, even before production declined, lack of confidence in economic stability was creating shortages. Moreover, as the erosion of confidence spread and light industry could not get allotted inputs from its suppliers,535 the output of consumer goods fell further, and shortages intensified. It was vicious circle.

More than any other factor, Party withdrawal from running the economy caused the worsening hardships from 1989 on. In 1990, production went down. “Economic production was down 2 percent in the first eight months of 1990 and inflation was rising rapidly.”536 Then the bottom really fell out. In early 1991 in Der Stern, the German mass circulation news magazine, Gorbachev appealed to the Germans for help: 500,000 tons of meat; 500,000 tons of vegetable oil; 100,000 tons of noodles. By then inflation had reached an annual rate of about 80 percent.537 In mid-1991, analysts spoke of a Soviet “depression.”538 In July 1991, Gorbachev shocked the world by asking for Soviet membership in the International Monetary Fund. One superpower was going down on bended knee before the other.

In 1990-91 an immense rightward shift occurred in the economic policy debate. The Soviet leadership’s focus on the economy had waned in 1988 and the first half of 1989. In that interval Gorbachev turned his attention to political reform. Economic debate became the center of politics again in late 1989. This time the whole character of the debate changed. The contrast between two books by Abel Aganbegyan, who was Gorbachev’s chief economic braintruster in the early days of perestroika, The Economic Challenge of Perestroika (1988) and Inside Perestroika (1989),539 reflected the change. Unlike the first, the second book favored an unregulated market.

Many factors caused the rightward shift of economic debate in USSR, but two stood out: the death-throes of the CPSU and the growth of the second economy. In the table below, two U.S. economists, Michael Alexeev and William Pyle, have estimated of the share of the second economy in the GDP of most Soviet republics midway through the Gorbachev era, and compared it to its size about three years into Yeltsin’s rule. The comparison yields a rough indicator of the rate of growth of the second economy in 1989-91 and beyond. By the 1990s the conventional terminology becomes problematic. Scholars originally chose the label “second” economy to suggest the Soviet private economy’s subordination to the centrally planned, state-owned ”first” economy. By 1995, however, in at least three republics, the second economy, already swollen in the Gorbachev era, had become the “first economy,” i.e., the dominant economic reality. In the biggest republic, Russia, the second economy output was close to half the Gross Domestic Product (GDP). In the Ukraine and the Caucasus, the second economy had truly become the first.540