Failed crusade
America and the tragedy of post-communist Russia
By Stephen F. Cohen, published by WW. Norton, 2000
By F. Kreisel, June 2001
This book was published at the end of last year by a well-known historian, a professor of Russian Studies and history at the New York University. The book constitutes a damnable judgement of the American official policies during the 1990's towards post-Soviet Russia, presented from the point of view of traditional, in the post-War period, liberal illusions in the "civilizing" possibilities of the capitalist market.
Stephen Cohen had written a number of works about Soviet Russian history and the Soviet-American relations. He first gained renown for the biography of Nikolai Bukharin, published in 1973. Cohen emerged out of the same generation of American Sovietologists as Sheila Fitzpatrick, R.G. Suny and Alexander Rabinowitch, which had rebelled against the outright anticommunism popular in the 1950's and started to write about the power, vitality and fruitfulness of the October Revolution. Although he should not be counted among the so-called "revisionists" (by revisionism American historians call those who instead of describing the political events at the "top" highlight the social conditions and the life of the masses), still Cohen in his work always bears in mind the social and economic factors.
S. Cohen occupies a place at the extreme left of the American liberal establishment, among the left wing critics of Clinton and the Democratic Party. An "almost social-democrat", in his numerous works he bases himself on the concept of the "mixed economy", a socially controlled system of private property. One's historical outlook is closely tied to one's stand on current events; historical worldview is a basis for political action. In the case of Cohen he had developed in his historical works the concept of the fruitfulness and vitality of "democratic communism" a la Bukharin, that it was Bukharin's program of national evolutionary reforms which represented the real alternative to Stalin's totalitarian administration by command.
Secondly, this is not the first book in which Cohen plays the role of iconoclast, a destroyer of authorities. In his book "Sovieticus — American perceptions and Soviet realities", published in 1986, Cohen criticized the then popular concepts of "monolithic totalitarianism" and the "Evil Empire".
Iconoclasm
Cohen's last book is aimed squarely at debunking the overblown authorities within the American establishment. Its first section starts with the following quotations:
"The Russian prospect over the coming years and decades is more promising than ever before in its history".
David Remnick, journalist, 1997
"The guarded optimism of the economists seems justified; the "holistic" transformation of Russia will continue".
Richard Ericson, economist, 1998
"Optimism prevails universally among those who are familiar with what is going on in Russia".
US Vice President Al Gore, 1998
"Russia looks terrific to me, compared to the way it looked in the 1970s, 1980s or in 1992".
Robert Kaiser, journalist, 1999
"Russia is a radically different place today than it was ten years ago… And just seven years into this transition, basic arrows on all the big issues are pointing in the right direction".
Michael McFaul, political scientist, 1999
"Only a few years from now… what will be left standing is the towering edifice of Yeltsin's achievement".
Leon Aron, biographer, 2000
At the bottom of the page Cohen pours a bucket of ice water at the readers of these inflamed accolades:
"We want to remind the world that transition can kill".
Head of the Red Cross in former Soviet Georgia, 1996
Then he follows with a few more quotes about the economic and social catastrophe in Russia.
Cohen's book consists of three parts. In the first, Cohen bitterly and astutely demolishes the reputations of Western, especially American, journalists, professors of history and economics and political figures by citing against them their own quotes concerning the developments in Russia over the past few years, and scorning their absurd official optimism. He begins this section with the phrase: "America's Russia-watchers, with only a few exceptions, committed malpractice throughout the 1990's" (p. 5).
Cohen notes that under the Clinton administration the United States took on itself the work of missionaries of American capitalism — "a virtual crusade to transform post-Communist Russia into some facsimile of the American democratic and capitalist system" (ibid.).
Cohen reminds us of the loud slogans and promises, with which the western mass media fed us: democratization and political reform; privatization; a shock therapy leading to stabilization and growth; free market; blooming and growing market; creation of an extensive middle class; constitutional democracy, etc.
"Scholars too suffer from amnesia" (p. 56). Cohen quotes a well-known economist, who wrote one thing in 1998 and a completely opposite idea two years later. He compares the recipes, prescribed for Russia by noted economists and political scientists, with the final results of these operations, and even with the later conclusions of these same "scientists" about these measures.
Cohen points out that a few years ago the West agreed that the Soviet infrastructure must be destroyed. He reminds us of the theories, according to which the forces of free market would transfer resources from the ineffective and unproductive enterprises to the productive ones, and will create new progressively structured economy and society. He writes that the results of this destruction must be characterized as "collapse, disintegration, tragedy" (p. 40). "If capital investment is the lifeblood of an economy, Russia's was dying throughout the 1990's. In 2000, investment was 20 percent what it had been a decade earlier" (p. 41).
Only a few years ago the West characterized the notorious cases of corruption and pilfering of state property as the necessary mechanisms of privatization of state owned industry. Cohen points out that corrupt officials of Yeltsin's and Chubais' rank enjoyed the continued cover by the American government and mass media (p. 154).
He is especially scornful, and rightly so, towards his colleagues within the prestigious academic fraternity. On the same page Cohen reminds us that Harvard University's Institute of International Development, led by the "father of shock therapy" Jeffrey Sacks, was an important intermediary in channeling western donations and credits into the hands of the biggest scoundrels in Russia and in the other republics of the former Soviet Union. In the interests of our readers we shall complete this instructive story. In 1999 HIID became immersed in a scandal when it was discovered that two researchers on its staff were involved through their wives in a series of financial speculations in Russia. These two "scientists" were fired, and in January of 2000 Harvard University had decided to shut down HIID so as to save its own reputation. To Cohen's credit he had warned in 1993 that professor Sacks' shock therapy prescriptions would turn out badly (P. 109).
The catastrophe unfolds
The second part of the book consists of articles and interviews, which Cohen had published over the past eight years, from 1992 till 2000. From the early days of the Gorbachev regime Cohen gave it his support and applauded the gradual reforms of "Perestroika" and "Glasnost".
He writes that a "mixed economy" is natural for Russia: "Before and after 1917, except for the aberrant Stalinist command system of 1929—1986, the country has always had what Russians call a "mixed economy" — one featuring both state and private sectors in a market setting over which the government has substantial influence but not control" (p. 48).
Cohen repeatedly states that it was Gorbachev who began to return Russia to a mixed and combined economy, to democracy and popular reforms. "What most Russians want is similar to European social democracy but contrary to the program (or "conditions") of the American crusade. Any other kind of economy will have to be imposed on them, as was tried in the 1990's, to the detriment of democracy" (pp. 48 — 49).
On page 91 Cohen writes that historically, "The West began with markets and moved toward state regulation and welfare". He leaves out of account the combined interrelationship between world capitalism and the development of Russia: the critical dead end of world capitalism brought about the October Revolution, which, in its turn, encouraged the proletariat of Europe and America to struggle and win considerable economic and social concessions; the later betrayals and crimes of Stalinism undermined the idea of socialism among both the Soviet and world proletariat, and this led to the collapse of the first workers' state and to the roll back of the past programs of social welfare in the West.
Cohen's thinking divides countries into separate cells, imbues them with independence from the whole (which, by the way, resembles the way Stalinists think). That is why Cohen opposed the collapse of the Soviet Union and the introduction of shock therapy. He insisted that reform measures were sufficient to counteract the forces of the world market. He correctly states that under Gorbachev there was more actual democracy and press freedom, that most citizens of the Soviet Union did not vote for its dissolution but were drawn into this catastrophe against their will.
In an interview given in 1992 Cohen expresses signs of deep nostalgia for the collapsing USSR, he attempts to deny or underestimate the ongoing process of dissolution and "hangs onto the past" (pp. 74 — 78, for example). Cohen cites the survey results, which indicate that the majority of Russian citizens regret the dissolution of USSR and think that they lived better under Brezhnev (p. 48).
The author proposed preserving a voluntary Union and conducting moderate capitalist reforms, propped up by a new "Marshall Plan". This suggestion is quite vague and contradictory and the second half of the book suffers from a lack of clarity and interjections. Its strong points consist in Cohen's observations about the character of the unfolding events. Unlike the official liars from both sides, the representatives of the Clinton-Yeltsin consensus, Cohen characterizes the transformations in Russia over the past decade as a catastrophe.
In his articles covering eight years he quite correctly describes the consequences of "shock therapy", privatization and "democratization".
In the article "Parliament Is Burning!" (1993) Cohen condemns Yeltsin for bombarding the White House and dispersing the Parliament and brands the American establishment as accomplices in this crime against democracy.
In the article "America's Failed Crusade" (1994) he writes: "The Russian economy is in free fall, ravaged by an extraordinary multiple collapse of production, capital investment, consumption, legal transaction, and the ruble" (p. 128).
The article "Who Is to Blame?" (1995) describes the devastating consequences of shock therapy: "have plunged at least half the country into poverty or to the brink of it while unleashing a bacchanalia of official corruption and enriching perhaps 5 to 8 percent of "New Russians" (p. 135). He accuses Yeltsin of unleashing the war in Chechnya "which had killed tens of thousands of civilians and left its capital city of Grozny, once a thriving metropolis of some 400,000 people, in ruins" (p. 136).
In December of 1996 Cohen published an essay entitled "Transition or Tragedy?", which resonated widely in America. The essay summarized the results of the five years of shock therapy and Yeltsin's rule and described the tragic tendencies of collapse. This publication provoked a sharp reaction by the whole official establishment: the US presidential election had just ended and the Democratic candidates Clinton and Gore were closely tied to the corrupt bandits Yeltsin and Chernomyrdin in the Kremlin.
In his article "The Other Russia" (1997) Cohen unmasks the official (Russian and American) propaganda about the supposed economic recovery and writes that "few Russians think Moscow's economy rests on anything more substantial than massive high-level corruption" (p. 149). He evaluates capital flight at about two billion dollars per month and points out that production had fallen to about half its 1990 volume (p. 150). He bitterly quotes people living in the provinces, who speak "of a "dying nation" — idle factories, decaying farms, polluted rivers, malnourished children, and collapsing professions, education and health care" (ibid.).
Finally, in the essay "Why Call It Reform?" (September 1998) Cohen writes: "So great is Russia's economic and thus social catastrophe that we must now speak of another unprecedented development: the literal demodernization of a twentieth-century country. When the infrastructure of production, technology, science, transportation, heating, and sewage disposal disintegrate; when tens of millions of people do not receive earned salaries, some 75 percent of society lives below or barely above the subsistence level, and millions of them are actually starving; when male life expectancy has plunged as low as fifty eight years, malnutrition has become the norm among schoolchildren, once-eradicated diseases are again becoming epidemics, and basic welfare provisions are disappearing; when even highly educated professionals must grow their own food in order to survive and well over half the nation's economic transactions are barter — all this, and more, is indisputable evidence of a tragic "transition" backward to a premodern era" (p. 159).
Cohen's suggestions
The third and last part of the book is entitled "Toward a New Russia Policy" and consists of Cohen's ideas, addressed to the American society and government and aiming to change its attitude to Russia and to stop giving it advice, as if Americans knew better how Russia should develop. Concretely, he suggests the adoption of something akin to a Marshall Plan of about five hundred billion dollars spread over ten years (pp. 220, 223). If this does not occur, Russia might choose the "Chinese" version of development, enter into a strategic alliance with China, Iraq and other enemies of the West, etc. Cohen threatens Americans with the specter of the Russian military industry becoming an arsenal for all of America's foes (pp. 213 — 214).
We should note that Cohen proposed a "Marshall Plan" back in 1992, while noting bitterly that it was unlikely to happen (p. 91). We think that this idea is even less realistic today.
Cohen and other supporters of similar plans leave out of account the fact that the Marshall Plan was rooted in economic hegemony of the United States in the immediate post-War period and corresponded to the goal of expanding the consumer markets in a devastated Europe so as to prevent a market glut in America itself. The Plan succeeded under conditions of a general expansion of world markets and a growth in the world economy.
We are living on a completely different curve of world capitalist development. The market volumes for major industrial goods are not expanding; we observe only a transfer of production volumes from countries with expensive labor power and relatively highly developed systems of social welfare (the US, Western Europe, Japan) into countries, where the workers are much cheaper (China, the Philippines, to a lesser extent into Eastern Europe, etc.).
The Soviet industry, its place within the world market
Ten years ago the Soviet Union produced about ten million televisions per year; about a million and a half automobiles, buses and trucks; there existed huge aerospace, shipbuilding, computer, pharmaceutical, telephone and photographic industries; city blocks and whole towns were being constructed; agricultural machinery was produced on a huge scale; millions of industrial goods for the home: refrigerators, washers, etc.; an enormous number of other consumer goods.
Soviet industry had developed under conditions of Stalinist autarchy (self-sufficiency and separation from the world market), it suffered from the ills of bureaucratism and mismanagement, was wasteful of energy and low returns, and in many ways lagged behind similar enterprises on the world market. Consumer goods were by and large of worse quality and more expensive than in the West. The more Soviet economy grew and gained in complexity, the more harmful became the old methods of centralized bureaucratic planning, the separation from the world market harmed all branches of science and industry, the tempos of growth slowed down, stagnation ceased the whole economic mechanism.
The ruling Soviet bureaucracy under both Brezhnev and Gorbachev had to answer the questions: How to preserve its rule under conditions of growing hostility of the masses toward the privileged elite? How to overcome the lag of Soviet industry in the most important technologies (computers, telecommunications, biotechnology)? How to integrate Soviet economy into the world division of labor? Where to find markets for Soviet factories and finances to renovate these factories? How to productively employ tens of millions of workers?
Cohen does not answer these vital questions. He refers to the massive capital flight from Russia, but does not explain its causes. For him, there are no objective laws of capitalism, the most important of which consists in the fact that profit and capital growth are the end all and be all for the bourgeoisie. If the Russian thieving capitalists and their colleagues, the buyers of stolen goods in the West, don't reinvest in Russia but, just the opposite, yearly withdraw tens of billions of dollars from it, the reason for this state of affairs is not the natural inclination to corruption of a Berezovsky or a Potanin, but in the fact that the building or the reconstruction of large factories in Russia is for the most part unprofitable. The world has no need for new automobile plants, a new Boeing or a new Phillips. The world markets are already awash in unsalable goods; huge industrial corporations in the West face threats of bankruptcy.
Let us examine the problem of integrating Russian economy from another point of view: from the point of view of finding the necessary resources. New technology is expensive. To effectively employ a worker at a modern factory takes a few tens of thousands of dollars, often even more. The most advanced industries (manufacture of computer discs and integrated circuits) require a capital investment of over two million dollars for every employee of the plant, from an engineer down to a janitor.
There are, of course, branches of industry where tools are cheap and hand labor is used: carpet weaving, fruit picking, etc. But such niches in the world economy are glutted with the proletarians of India, Bangladesh and Colombia. Russia grows neither bananas nor cotton. Hence, the world capitalist economy has prepared for Russia just one single role: that of extracting oil, gas and other natural resources. The world market requires the oilmen of Tiumen, not the carmakers of Togliatti or the scientists of Akademgorodok. Under capitalism, the whole civilization, which grew on the foundations of the October revolution, is doomed to extinction.
Is there another choice?
Integration of the world economy is the overwhelming factor of our life. Russia cannot separate itself from the world economy and "choose" an independent path of development. The technical progress in telecommunications and transport, globalization of production and integration of all the productive forces of mankind lead to a general economy of labor time, and in and of themselves are profoundly progressive. But under the capitalist social system integration of the world labor force leads to a destruction of productive forces in whole regions: the deindustrialization of America and Russia, degradation and lumpenization of the working class masses, collapse in Africa, etc.
Humanity must and can solve the problems of development facing each nationality, the preservation of the environment, rational use of natural resources, but only together, united in a common planetary community. Globalization in a truly progressive sense is possible only under conditions where the working class and the toiling masses of the planet will govern and direct this process, when over and above the laws of the market there shall stand the conscious will of the toiling population of the Earth.
Cohen's mistake is rooted in his historical view that Bukharin and his program of gradual national-Ôsocialist" reforms constituted the real alternative to Stalin. Both Bukharin and Stalin shared the idea of Russia abstracting herself from the world economy and building "socialism in a single country". The actual alternative to this barrack "socialism" was expressed in the program of world socialist revolution, defended by Leon Trotsky and his friends.
On the other hand, S. Cohen's mistake is rooted in his belief in the viability of the old Keynesian liberal model of state regulation, which predominated in the post-War period. This method has been completely exhausted over the past quarter century, as production has gone global and the traditional forms of maintaining social reforms have decayed. The welfare state cannot be revived. That is why Cohen's discontent — as justified and biting as his criticism may be — does not provide an answer to the contemporary crisis and cannot point to any measures, which might resist the destructive processes gathering way in Russia.