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The Berlin Wall was a product of the USSR, and when they decided to let the east bloc countries govern themselves, that was the end of the wall. The USSR most certainly could have maintained that old system as long as they wanted to. The decision was not Gorbachev's alone, because after Stalin died, they had a democratic body within the communist party, the politburo, that had new found power to select new leaders and dictate policy.
Why did they decide to throw in the towel ? Because the 1980's was a total disaster for communism as a whole, especially the Soviet sphere. To begin with, soviet products and fashion was seen as deficient to everything the west could produce. Their elite had to import/smuggle items from the west they desired. The war in Afghanistan was going bad, and other proxy wars not going so well either. They were looking bad all over the world, they shot down a passenger liner from Korea in 1983 that brought them international condemnation. They spent billions on weapons systems that were inferior, a space shuttle that never got off the ground, ugly architecture, bad cuisine ect, instead of developing a consumer economy and increasing agricultural output. People were starving.
The one thing that they were keen on besides espionage, was athletic competition. Showcasing what a wonderful system it was to the rest of the world when the spotlight was on them, via the olympic games. Even that was denied them twice for various reasons, the Moscow games in 1980, and their counter boycott in 1984. Living standards were going down all over the communist world in the 80's. Then some other things, Chernobyl accident in 1986 was another international embarrassment. The constant parade of defectors that bailed out whenever they got a chance was embarrassing. Yakov Smirnoff doing "In Soviet Russia" jokes was embarrassing. Ronald Reagan's speeches were embarrassing to Russia, to be called "an evil empire".
What I don't understand is why the transition to capitalist economy was not more gradual and orderly? Why did they give their oil and natural resources to private individuals and banks, rather than use those resources to help the population, such as what Norway does ? Why all the crime and mafia stuff ? I would not think the soviet population would be conditioned for a greed frenzy where organized crime reaches that kind of level. That problem is more associated with advanced free market economies that are lax on crime and punishment. One would not think the population would become so "decadent" so fast. The first time in history they have a chance to use that gulag thing on REAL criminals and they blow it !
If anything, the opening of the Berlin Wall probably extended East Germany's life a little - had Honecker's shoot to kill orders been followed (before he was replaced in mid-October), the change in East Germany from authoritarian to democratic regime would have been rather violent, and unification probably would have come sooner simply out of necessity.
I agree, it was fortunate for Honecker (and East Germany) that he was removed before those orders were carried out. When you look at what happened in Romania, it could have gone differently. Ceausescu gave shoot to kill orders on protesters and those orders WERE carried out. This set off a violent chain of events that caught him by total surprise, and led to his execution, on Dec. 25, 1989. Honecker was lucky to be on good terms with Moscow, where he hid out until 1991. After the coup, Yeltsen kicked him back to Germany but he was too sick to stand trial so they let him flee to Chile, where he died in 1994. I am curious where Ceausescu would have ended up if he had escaped, it would not be the USSR, they hated him, and for Ceausescu, the feeling was mutual.
In 1991, I was thinking.....With all those natural resources, an educated population noted to be tough, good at strategy, ready to spot a good opportunity and maneuver.......those Russians were gonna kick some butt and get that place running like Singapore. I would have expected them to run a clean shop, attract investment and be rivaling the US within 20 years. And China wasn't going to do much, just polish bamboo or something.....they probably were never going to amount to much.
Now I think Russia must have used the Detroit model, instead of Singapore. But they are on the upswing again, and some good chewing gum laws could go a long ways. They should have used the Norway model to start with, then full on Singapore after 10 years.
What I don't understand is why the transition to capitalist economy was not more gradual and orderly? Why did they give their oil and natural resources to private individuals and banks, rather than use those resources to help the population, such as what Norway does ? Why all the crime and mafia stuff ?
You don't know?
Then here is a good read for starters...
P.S. Oh, and the Berlin Wall went down just because Russians wanted it, in spite of what Western politicians desired. Plain and simple, and it was a separate issue from the fall of the Soviet Union.
Now I think Russia must have used the Detroit model, instead of Singapore. But they are on the upswing again, and some good chewing gum laws could go a long ways. They should have used the Norway model to start with, then full on Singapore after 10 years.
I think Singapore's wealth has more to do with the fact their location is so strategic, than anything else. I don't find their system all that admirable.
P.S. Oh, and the Berlin Wall went down just because Russians wanted it, in spite of what Western politicians desired. Plain and simple, and it was a separate issue from the fall of the Soviet Union.
I interrupt my campaign diaries to bring the people of New York a startling Holy-****-O-Gram from Moscow.
Early last week it was announced that the U.S., in the person of L. Paul Bremer III, had invited one Yegor Gaidar to Baghdad to assist in the development of Iraq’s postwar, "transition" economy.
Gaidar, former Prime Minister under Boris Yeltsin, is not the most despised man in Russia. That title belongs to the man who succeeded him as the chief architect of the Russian privatization effort, Anatoly Chubais. There is no way to talk about the meaning of this decision to invite Gaidar to Iraq without mentioning Chubais, because in inviting Gaidar, what the U.S. almost certainly was trying to say to the world was: At least we didn’t invite Chubais.
This was, in fact, how most Russia-watchers interpreted the news. Harvard’s Marshall Goldman, one of the big heavies in the Russia-watching business, said as much to the Moscow Times in response to the Gaidar announcement: "If they had invited Chubais, that really would have set off a firestorm. That would have really been too much."
Chubais, a William Weld lookalike and towering genius of sleaze, was, with Gaidar, part of a group of beady-eyed intellectuals known in Russia as the "St. Petersburg Mafia." They were revolutionaries whose style of public address was purely Leninist: relentless, zealous, arrogant and heavily reliant on maximalist expressions like "absolutely and completely eliminate", "wipe out", "monster and vile scoundrel." They appealed to academics and intellectuals for the same reasons that Marxism/Leninism once did: Their political vision consisted of using obscure, nerdy theorems to ruthlessly dictate the fate of millions.
The only difference was that their revolution was an ironic variation of Bolshevism. They wanted to smash the state and create a neoliberal laissez-faire paradise. Lenin talked about workers and collectives: The St. Petersburg Mafia talked about markets, prices, goods.
Gaidar and Chubais are both affiliated with Harvard. Their ascension to power in the early 1990s–with the enthusiastic backing of the U.S.–willed into being an expression that now comprises the three most-feared words in the Russian language: Harvard-trained economist. That’s because the economy they created was not capitalism, but a cruel parody of it. Lenin preached communism but created a dictatorship: This crew preached laissez-faire economics but created a corporate oligarchy in which the state replaced the market. Their legacy was the wholesale theft of Russia’s riches from the population, and their delivery into mafia and foreign control.
The theft was a surprisingly quick and brutal process. If Iraq is in for the same treatment, here are some of the things Iraqis have to look forward to.
First, stealing money from people’s pockets. In 1992, Gaidar began implementing a program known as "Shock Therapy" (yet another cruel irony of this business: first Shock and Awe, now Shock Therapy?). Shock Therapy was the brainchild of another Harvard villain, Jeffrey Sachs. In the early phase, this took the form of Gaidar’s move to free the ruble before the end of state-controlled prices. This resulted–as even a child could have predicted it would–in hyperinflation. By the end of 1992, prices in Russia had increased by a factor of 26. Money from 1991 became worthless overnight. Families that had been stuffing mattresses since the siege of Stalingrad saw their life savings disappear in a few weeks.
The benficiaries? The banks that had been licensed by the state to handle currency exchange operations, which naturally became lucrative as Russians fled to foreign currencies. This small group of bankers, hand-picked by the Gaidar government, would become the first bidders on public properties in the next phase, privatization. After all, who else could bid? Nobody else had any money.
There is not enough space here to detail the many obscene nuances of the privatization effort, but roughly speaking it came down to one thing: The crown jewels of the Russian economy were handed over to a small group of thugs and gangsters at fractions of their actual cost. In some cases the Chubais/Gaidar clan actually lent state money to friends to help them buy properties.
Auctions were often openly rigged. In the notorious "loans-for-shares" tenders in 1995-96, the bidding banks were often put in charge of holding the auctions, allowing them to exclude other bids. In one famous instance, a bank excluded a rival on the grounds that its application to participate was 24 minutes late for the auction. In a cruel wink to observers of the process, another bank subsequently also excluded a rival for being 24 minutes late.
The privatization schemes enacted by Gaidar and Chubais were created in close consultation with American aid officials.
P.S. Oh, and the Berlin Wall went down just because Russians wanted it, in spite of what Western politicians desired. Plain and simple, and it was a separate issue from the fall of the Soviet Union.
Very interesting reading, sickening the way it worked out, but I think a lot of the damage caused by the "Harvard Boys" can be blamed on Yeltsen and his presidential decrees, the ones that allowed them to operate in secrecy. Does it sound like a bright idea to let a cold war rival into your country and manage your economic affairs ? They needed advisers to help them set up a state oil company, utility and mining companies. The company managers/employees gets a cut, the state gets a cut. Any number of qualified individuals from various western or middle eastern countries could have helped them restructure. Later they could privatize much of that, when they got back on their feet. Some lessons in business ethics from some of the socialist countries may have helped them too, like not breaking the knee caps of your business rivals, extorting money from them, stealing assets ect. They needed business ethics and we gave them a load of Harvard Boy crap. They should have called Norway instead. But some of the business ethics, or just plain ethics, need to come from within, and with religion being absent for so long in Russia, perhaps the people were/are part of the problem too. Would you trust a Russian ? That is what they need to overcome, by caning people like Singapore does, honest dealing, strict laws, Justice and caning for all.
Interesting the way Thatcher and Mitterrand were so paranoid about German reunification, and worked behind the scenes to slow it down, or stop it. Enjoyed reading about that. Kind of ironic that reunification actually cost Germany a fortune, and weakened her economy for quite a few years.
Not so sure Andropov would be the man to do market reforms, but I agree he was a strong anti corruption leader in the politburo, and he wanted Gorbachev to be his successor. So perhaps he would have been up for the job, anti-corruption is what they needed to get them on the right path.
The Berlin Wall falling was inevitable once the Soviet Union elected not to defend its satellite states. What sucked, and what was preventable, was the GDR being absorbed by the FDR. They should have created a federal state with a common defense/foreign policy, and devolved domestic powers, with democratic socialism practiced in the former GDR. The former GDR has never caught up with the former FDR, and I don't think it ever will.
If/when Korea reunites I don't believe this mistake will be repeated.
Very interesting reading, sickening the way it worked out, but I think a lot of the damage caused by the "Harvard Boys" can be blamed on Yeltsen and his presidential decrees, the ones that allowed them to operate in secrecy.
Yeltsin ( or rather a group of Soviet functionaries who were behind him) of course orchestrated all that; Harvard used the situation and implemented their plans with the help of Yeltsin's decrees.
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Does it sound like a bright idea to let a cold war rival into your country and manage your economic affairs ?
Lol you made me chuckle somewhat, because you reminded me of a little fella from " The Emperor's New Clothes" fairy-tale. Basically that's what it really was - the enemy at the gates, the classical Trojan horse, and those in Russian government that opened the gates for it. The problem is - the majority of Russians didn't perceive it this way back then, because they didn't perceive Americans as enemies. So basically even if the general population would have learned that Americans were sitting in Kremlin, only part of it would have sounded an alarm, but many would have taken it as a positive sign, actually.
You need to know a bit more about the history of dissidents in Russia and the way America was regarded in this respect; a power supporting freedom, democracy - with another words things that Russian dissidents were looking forward to. And since a lot of people were hoping that that's what was coming to their country at that point of history, in the 90ies, they regarded Americans as friends, not an enemy.
They needed advisers to help them set up a state oil company, utility and mining companies. The company managers/employees gets a cut, the state gets a cut. Any number of qualified individuals from various western or middle eastern countries could have helped them restructure. Later they could privatize much of that, when they got back on their feet.
There was more to the story than meets the eye. First of all Soviet/Russian government wanted loans ( their economy really faltered by the mid of the 80ies,) and from what I remember these loan negotiations originated with Gorbachev ( I guess you've already figured it out from that article on Thatcher, that the dynamics of relations and the goals of those politicians of older generation were originally quite different. Thatcher, Kohl, Mitterand, Bush senior - they didn't want the dissipation of the Soviet Union ( or Soviet system for this matter) - they just wanted a quiet enjoyable retirement lol, knowing that someone who sits in Kremlin ( namely Gorbachev) was quite reachable and agreeable and if money ( loans) were the way to grease it, they were quite receptive to this idea. (That's why Bush senior didn't even give the support to Baltic countries when they were trying initially to secede from the Soviet Union.)
The situation got out of hands however in Russia itself, where the population was rejecting the Soviet ideology, even in its modified form that Western politicians were favoring. That's why the Russians voted Gorbachev out, replacing him with Yeltsin (who was far more radical in this respect) yet the loan negotiations remained in the picture. And Americans were the key to those loans, since IMF was an extension of their policies.
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Some lessons in business ethics from some of the socialist countries may have helped them too, like not breaking the knee caps of your business rivals, extorting money from them, stealing assets ect. They needed business ethics and we gave them a load of Harvard Boy crap. They should have called Norway instead. But some of the business ethics, or just plain ethics, need to come from within, and with religion being absent for so long in Russia, perhaps the people were/are part of the problem too. Would you trust a Russian ? That is what they need to overcome, by caning people like Singapore does, honest dealing, strict laws, Justice and caning for all.
I've already explained why Norway was out of question under the circumstances lol, and of course there were people in Russian government who knew perfectly well how to manage the changes - in terms of both laws and economy, but Clinton administration knew all too well what goals it wanted to achieve, what changes to implement in order to turn Russia into a third world country with a ruling class obedient to American interests. So I don't believe there was place for mistakes and misunderstandings in this case, just a big miscalculation in the long run.
These are curious pics from those times - the end of eighties to be exact; they depict the mass protest in St. Petersburg against Gorbachev's government. The protesters were trying to wave the old ( pre-Soviet) Russian flag and they were carrying the banners "Free elections for president and parliament" and that kind of things. 180 people were arrested that day.
( What many of them ( those who were familiar with situation) now think, is that Putin ( being a part of the KGB at that time) was overseeing the arrests.
Not so sure Andropov would be the man to do market reforms, but I agree he was a strong anti corruption leader in the politburo, and he wanted Gorbachev to be his successor. So perhaps he would have been up for the job, anti-corruption is what they needed to get them on the right path.
When I think "Andropov" I don't think about "reforms" lol, I rather think about eternity of the Soviet system, the KGB and all.
When he came to power, the first thing he did was to tighten the screws on population and to reinforce the propaganda machine.
That's why I am not the one to cry about his *untimely* death lol.
I think Boris Yeltsen was a stew bomb, and on the take as well. He had no right to bi-pass the public in major decisions, for once he was elected, the new Russian Federation was a democracy. The people should have been informed every step of the way. I think Gorbachev was smarter and could have done a much better job than Yeltsen.
As for the IMF loans, would they not get loans anyway, provided they had free elections and a dramatic draw down of the military and nukes ? I know Ceausescu got IMF loans back in the 70's, was it going to be that hard to get loans ? Kind of having a hard time realizing why they needed loans that badly. The Russian economy was producing an abundance of military product in the 80's, had they changed tactics, and slashed military & space budget to near zero, and dumped all the oil they could produce on the open market, would they not be able to generate revenue and grow ? What about a vodka tax, I know Gorbachev tried that, maybe that's why nobody liked him....lol.
Just finding it hard to believe, they built a bomb and sent a guy into space, they remained the senior partner to China thru the whole cold war. I find it difficult to believe that they did not get all the information they needed from outside sourses to structure corporations, improve infrastructure, create a fair judicial system........it's not like they didn't have any outside examples to copy, and people gathering information on how to do it.
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