Alan Woods
Apathy, indifference, thieving… have become mass phenomena, with at the same time aggressive envy towards high earners. There have appeared signs of a sort of physical degeneration of a sizeable part of our population, through drunkenness and idleness. Finally, there is a lack of belief in the officially announced objectives and purposes, in the very possibility of a more rational economic and social organisation of life. Clearly all this cannot be swiftly overcome – years, maybe generations, will be needed.
– Nikolai Shmelev, Novy mir, No. 6, 1987
Gorbachev’s reforms solved nothing but prepared the way for an even deeper crisis. In the same way, tsarism for generations swung from repression to concession and back again. However, the options before the bureaucracy were now extremely limited. The old system was collapsing, but nothing was being put in its place. Such a situation could not last. The economy was sinking deeper into crisis. Gosplan, the central state planning agency, was warning that, due to the collapse of central planning, production could slump between thirty to seventy per cent. The impasse of the bureaucratic system had created widespread disillusionment in the working class.
By the late 1980s, powerful illusions in the market arose among certain layers, especially of the bureaucracy and the intelligentsia (especially the economists). Gorbachev, however, still had not made up his mind to go over to capitalism. It was the government of the Russian Federation under Yeltsin that acted as the cutting edge of the pro-bourgeois wing of the bureaucracy. This wing came forward with a programme of complete capitalist restoration. Stanislav Shatalin and Grigory Yavlinsky drafted the so-called 500-day programme for the transition to a market economy, which proposed large-scale privatisation within 100 days, plus price liberalisation and the slashing of subsidies.
The council of ministers ordered a draft to be prepared by 1 May to achieve a more rapid move to a market economy. However, by late April the Presidential and Federation Councils had returned the draft ‘for further elaboration’. It was clear that Gorbachev and his ministers had backed away from shock therapy for the economy for fear of provoking strikes and unrest. These fears were justified, as events would later show.
On 6 March the Supreme Soviet adopted Article 34 on property ownership. Abalkin said it would create the necessary conditions for Russia’s transition to a “planned market economy”. The new law allowed citizens the right to own and inherit property, mineral resources, equipment, money, shares and water. Here we have the essence of the problem. It is a striking confirmation of what Trotsky wrote in the Revolution Betrayed, where he pointed out that the bureaucracy would not be satisfied with their bloated incomes and privileges, since these depended on their positions as functionaries in the Soviet state. Their comfortable apartments, their cars and dachas remained state property that could not be inherited by their sons and daughters.
When the text of the new law says that “citizens” will have the right to “own and inherit property”, it does not refer to the coal miners of the Kuzbass but to the privileged caste of officials who were itching to get their hands on the property of the Soviet state. It was this that was the main motive force driving in the direction of capitalism. The bureaucracy was, however, compelled to tread warily for fear of provoking an explosion.
The drive towards capitalism gained impetus throughout 1989 and in the first half of 1990. But it did not come as a result of pressure from the population. As a matter of fact, the majority of Russian workers were suspicious of the idea of a market economy and were opposed to it. This was tacitly admitted by the official news agency TASS, when it pointed out that the term “private property” had been avoided because the phrase “has great emotive force” in the USSR, where people associated it with exploitation. More than forty per cent of respondents to an opinion poll held at this time said that they would prefer a return to more centralised economic management and only twenty-five per cent wanted a market-orientated system.
Within the Supreme Soviet there was a stormy session on the second reading of the bill. But on 1 July, the law came into effect with 350 in favour, 3 against, and 11 abstentions. But this was still in the realm of calculated ambiguity. On the next day, the central government published a statement that land was the property of the people living on it and that every citizen had a right to a plot. However, much to the surprise of the pro-capitalist ‘reformers’, the rural population showed no interest whatsoever in becoming transformed into private owners of small plots of land.
Reform of pricing was another central plank of the transition, but fearing a popular explosion, the government wanted a “stage by stage introduction of market methods…” In anticipation of these reforms, it was proposed to treble bread prices on 1 July 1990, and compensate for this with pension and wage rises. The attempted compromise satisfied nobody. On 14 June, the Supreme Soviet rejected the proposal to treble bread prices. Panic buying forced Gorbachev to appeal for calm on television.
The workers’ patience was exhausted. In July 1989, a wave of industrial unrest gripped the USSR, centred on the coalfields of the Donbass and Kuzbass. On 11 July, tens of thousands of miners went on strike. 12,000 stopped work at Mezhdurechensk and took control of the town. They demanded better living conditions, higher wages, increased holidays and better working conditions.
In the Kuzbass more than 100,000 miners were involved. The strike committees demanded the immediate abolition of privileges for officials, direct negotiations with central government and a new constitution. As the Kuzbass went back, the Donbass came out with similar demands. The movement affected pits at Vorkuta in the far north, Rostov-on-Don in the south-west, and Dnepropetrovsk and Chervonograd in the Ukraine.
The estimated number on strike rose to 300,000. Gorbachev said the strikes were “the worst ordeal to befall our country in all the four years of perestroika”, but added that they showed the need to eliminate “all sorts of bureaucratic obstacles along the road to reform”. The government was forced to step in to prevent the strikes spreading. The strikers agreed to return after concessions were made.