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The fall of the Soviet Union

The exact plans of the members of the Moscow Emergency Committee, who had tanks driven up in Moscow in August 1991 (exactly 30 years ago), have not been researched to this day. Their actions were as ill-conceived as the actions of Mikhail Gorbachev, who oscillated between liberalization and centralization. In the opinion of the Russian left-wing politician Nikolai Platoshkin, Gorbachev is to blame for the rapid impoverishment of the population with his order of January 1989 to let the farms decide for themselves what they produce. However, the fact that the Soviet Union was dissolving also had to do with the interests of the Soviet republics-“princes”, according to the left-wing politician, who wrote several historical books. The majority of the population in Russia, Belarus, Ukraine and the Central Asian republics voted in a referendum in March 1991 for the preservation of a reformed Soviet Union. The failed coup of part of the Soviet leadership was followed by the march of the Russian neoliberals, who, under the guidance of the US economist Jeffrey Sachs, underwent shock therapy, which dramatically increased poverty.

When Nikolai Platoshkin went to the city center of Bonn for shopping on August 19, 1991, he saw incredible things. The then 25-year-old attaché of the Soviet Embassy in Bad Godesberg looked spellbound in a shop window:

“At that time, television sets were still displayed for sale in the shop window. On one device, I suddenly saw tanks on Red Square in Moscow. It was a live broadcast. I was of course totally surprised. What did that mean? In the Soviet Union, everything was not only stable, it was super-stable. Everything was free. The biography was foreshadowed. School, college, work. There was work in abundance. It was a bit boring, I would say. About any demonstrations, rallies, coups, wars, Soviet television reported only from the Western world and from developing countries. And suddenly tanks in the city center of Moscow.”

Mixed picture in the vote on a Reformed Union

Perestroika (reconstruction), proclaimed by Mikhail Gorbachev in 1985, initiated an uncontrolled process in the Soviet Union. Regions and republics demanded more independence and soon independence from Moscow. In 1987, the Autonomous Region of Nagorno-Karabakh, inhabited by a majority of Armenians, demanded the separation from the Republic of Azerbaijan and unification with the Republic of Armenia. Azerbaijanis retaliated with pogroms against Armenians in Sumgait in 1988 and Baku in 1990.

Gorbachev gave in to the aspirations for independence of the heads of the Soviet republics. On March 17, the people of the Soviet Union voted to preserve the Soviet Union as a federation of “equal sovereign republics.” Six of the 15 Soviet republics boycotted the vote. The vote was a clear signal for the preservation of the Soviet Union, says Platoshkin, who has written numerous books on historical topics, even though six republics with ten percent of the Soviet population, Azerbaijan, Armenia, Moldova and the three Baltic republics, did not participate in the vote.

“In Ukraine, 80 percent of people voted for the preservation of the Soviet Union, more than in Russia, where 77 percent voted for the Soviet Union. In Central Asia, 93 to 97 percent voted in favor. The smallest number of those who voted for the Soviet Union was in Moscow, because Yeltsin was very popular in Moscow.”

As a next step, Gorbachev planned a treaty that would guarantee the 15 republics more independence. Platoshkin, who founded the “Movement for a New Socialism” in Russia in 2019, recalls:

“90 Percent of the people in the Soviet Union, to which I also belonged, said that we are in favour of the new treaty, as long as the Soviet Union is preserved. But there was the Union bureaucracy, which said that this new Union Treaty actually means the dissolution of the Soviet Union. On paper, the Soviet Union would have continued to exist, but in the treaty there were no more privileges for federal institutions. The Soviet Union would have practically ceased to exist with the new treaty. The Union bureaucracy was right at the time. I was wrong.”

On August 19, 1991, one day before the planned signing of a treaty to give the Soviet republics more independence, the Old Communists, all of whom belonged to the Soviet leadership, launched a counter-strike.

Yeltsin was not arrested

At six o’clock in the morning, radio and television announced the imposition of a state of emergency. An emergency committee headed by Gennady Yanaev, then Vice-President of the Soviet Union and union secretary, Dmitry Yazov, Minister of Defense, and Vladimir Kryuchkov, head of the KGB, took power in Moscow. 4000 Soldiers and 362 tanks entered Moscow.

In the evening, representatives of the Emergency Committee gave a press conference. But the putschists showed insecurity instead of a desire to attack. Valentin Pavlov, Prime Minister of the Soviet Union, could not attend the public appearance because of circulatory problems. The head of the Emergency Committee, Gennady Yanayev, also made no decisive impression. The whole world saw how his hands trembled.

In the opinion of Nikolai Platoshkin, Gorbachev was privy to the coup. “Members of the Emergency Committee had visited Gorbachev in Crimea a day before the call of the committee. They said that we are trying to introduce a state of emergency, and that we will probably control the state.“Gorbachev explained during the conversation: do what you want. But in case of failure, do not count on me.

“Many citizens of the Soviet Union thought at the time that this committee had carried out an anti-constitutional coup against Gorbachev. Therefore, at that time in Moscow, many took to the streets to defend Yeltsin. Yeltsin positioned himself not as an opponent of Gorbachev, but as a defender of Gorbachev, who was under house arrest in Crimea. The chairman of the KGB said at the time that we must storm the White House in Moscow, where Yeltsin was holed up, because Yeltsin opposed the Emergency Committee. But the majority of the committee said that if we storm the White House, there will be casualties. We don’t want that. We want to preserve the Soviet Union, but without bloodshed. That was the reason the committee failed. The people were not willing to use weapons against their own people.”

KGB chief Kryuchkov had been prepared for a state of emergency since December 1990. The President of the Soviet Union, Mikhail Gorbachev, who was staying at his dacha in Foros (Crimea), had been placed under house arrest, but not his opponent Boris Yeltsin. This was only observed by the special operations group Alpha, but not restricted in its freedom of movement.

Already on the first day of the coup, Yeltsin arrived at nine o’clock in the morning in front of the White House, where he organized resistance to the putschists. At twelve o’clock at noon, standing on a tank of the Taman division, he gave his famous speech, in which he spoke of the attempt at a coup d’état and called for resistance.

The measures of the putschists seem dilettante in retrospect. The members of the state trade unions were not mobilized in support of the putschists. Parts of the troops and KGB special forces refused to follow their commanders.

Putschists as helpless as Gorbachev

On the morning of August 21, Defense Minister Yazov ordered the withdrawal of troops from Moscow. There were three deaths. They were young men who had fallen under armored personnel carriers in front of the White House. There was no order to shoot during the coup. The tanks did not fire a single shot. And in hindsight, it can be noted that the Old Communists were not bloodthirsty. In August 1991, three people were killed when Boris Yeltsin ordered the shelling of the White House in October 1993, several hundred.

The files on the events of the August coup are not yet publicly available. Much is still in the dark. The main question is whether the events in August 1991 can be described as an attempted coup. Which goal the” Emergency Committee " actually pursued is not definitively clarified to this day. The fact is that the August coup gave a powerful boost to the market radical reformers around Yegor Gajdar and Anatoly Chubais. Between August 24 and August 16, 2018 On December 31, 1991, all the republics of the Soviet Union proclaimed their independence or confirmed earlier declarations of independence. On December 31, 1991, the Soviet Union formally ceased to exist.

Gorbachev without a plan

It seemed that, despite many general words, Mikhail Gorbachev had no analysis, no plan and no forecast of how political and economic reforms in the Soviet Union will affect. The reform process had slipped out of his hands in the second half of the 1980s. He acted as a driver and not as someone who can still stop a train whose brakes suddenly stop working.

The August “coup” of the Old Communists acted as a fire accelerator. Platoshkin:

“Of course, the princes of the republics then took the coup as an occasion to make themselves independent of Moscow. You’ve wanted this before. The coup then gave them the occasion.”

The Old Communists were demoralized by the defeat in the “coup”. Yeltsin banned the Communist Party. Now the market radicals Yegor Gajdar and Anatoly Chubais also had free space to carry out the full program of economic liberalization.

Impoverishment of the population began in 1989

In the opinion of Platoshkin, Gorbachev was to blame for the breakup of the Soviet Union. Because the Secretary General allowed the state enterprises, which were monopolists, with a law that they can now decide for themselves what they produce and that they can withhold the profit. This law, which entered into force in January 1989, led to total chaos in the food supply. Platoshkin:

“There used to be a fixed amount of bread that had to be produced in one day. The management now said, why should we now produce bread for 20 kopecks? (salaries at that time were on average 250 rubles, UH).

Suddenly, bread and soap disappeared from the shelves in stores. Household soap cost ten kopecks in the Soviet Union. But the factories produced only the best quality soap for two rubles. Because this soap brought the factory the greatest profit. It was then that the miners began to strike, because they could no longer find soap in the shops.

I came to Moscow for vacation in June 1990. In a large furniture store I wanted to buy a bookshelf. But there was nothing. There was no deficit, but there was nothing at all. In the grocery stores there were three liters of birch sap. Nothing else.

When you came to a grocery store, you didn’t ask if there was cheese or bread, but if there was something to eat. Gorbachev had accomplished this in a year.

In 1988, life had actually been normal. But in the summer of 1991, people fought for survival. They were depoliticized. While I was growing up in the Soviet Union, there was not a single change in food prices. But in 1991, prices increased ten and twenty times, but not salaries.

For the first time since the Second World War, food cards were even introduced in Moscow in 1991. Because suddenly there was no more sugar. Everything was rationed. You can imagine what the mood was among the population.”

Shock therapy in quick steps

The market economy in Russia began like a bad New Year’s Joke. On 2 January 1992, a release of consumer prices prepared by Deputy Prime Minister and Finance Minister Yegor Gajdar came into force. Only for a small part of the goods (bread and milk) and services (public transport), the state price fixation remained. This was the first step of a shock therapy with which Gajdar wanted to transfer Russia from a planned to a market economy within a short time. The Deputy Prime Minister relied on the surprise effect for a largely unprepared and ignorant population. The price release was followed by the abolition of the state monopoly on foreign trade and the privatization of state enterprises.

The shops were now filled with goods again, but the citizens had no money to buy these goods. The ruble had become worthless due to hyperinflation. The inflation rate climbed to an unimaginable 2600 percent in 1992. Thus, the savings of the Soviet era were devalued.

One reason for the incredible inflation was that in 1991 the government had tried to boost production in industry and agriculture through loans. The money supply therefore increased drastically. Gajdar placed the blame for the economic problems in implementing his shock therapy – which included not only the release of prices, but also the release of wages and the legalization of trade – on the Communists and the supporters of a state – regulated transition to a market economy, who still had a majority in the Supreme Soviet – the parliament.

Young academics take the helm

The person in charge of shock therapy, Yegor Gajdar, came from a family of the communist elite. In 1987, Gajdar became head of the Department of economic Policy at the Communist party organ, and in 1990, head of the economic department at the party newspaper Pravda. Boris Yeltsin, who had been elected the first president of the Russian-Soviet Republic (RSFSR) on 12 June 1991, appointed Gajdar Deputy Prime Minister and Minister of Finance in November 1991.

In November 1991, Gajdar was elected to the government of Anatoly Chubay. The young academician, who had previously advised the mayor of St. Petersburg on economic issues, became chairman of the Committee for the Management of state Property. From this key post, Chubays led the first wave of privatization of state enterprises.

Gajdar and Chubajs were not the only young academics Yeltsin brought into the government. Most of the new cabinet members came from an informal Moscow-Leningrad circle of economic reformers, which had been formed by a meeting of Gajdar and Chubajs in Moscow in 1982 and held regular scientific conferences.

Jung-Reformer already 1987 for dissolution of the Soviet Union

At their conferences, the young academics first discussed the experience of economic reforms in Yugoslavia and Hungary. Then, over the years, their concepts became more concrete: already in 1987, the Leningrad “Perestroika Club” discussed the dissolution of the Soviet Union and the privatization of state property with the help of vouchers (people’s shares in state property, see below). Even then, the young reformers came to the conclusion that economic reforms could only be carried out in individual republics, but not in the Soviet Union as a whole.

The fact that the young reformers, who joined forces in informal clubs in 1982, took power ten years later in a state that had been firmly established until then, seems surprising at first glance. But in the Soviet Union at the beginning of the 1980s there was no mood of optimism and revolutionary vigor, writes historian Platoshkin.

“Boys in pink panties”

The fact that in 1991 the government was suddenly full of young academics with no management experience – Gajdar and Chubajs were then both only in their mid – thirties-was used by the communist opposition for its agitation. She called the economic reformers in the government " guys in pink panties.”

The designation requires an explanation. According to Soviet tradition, in the government sat full-bodied men with grim faces, that is, real muzhiki, as the “hard men” are called in Russian. The young economic reformers were lean intellectuals. How should these “semi-strong” manage to steer a giant state like Russia, the opposition stank. But that’s not all: at the demonstrations of the Stalinist organization “Working Russia” in 1993, alongside posters calling for the restoration of the Soviet Union, slogans against the shidy (swear word for Jews) in the government were seen. In addition, rumors circulated in the media that gays were in the Yeltsin government.

The “young reformers” made it to the Putin era

The fact that many former intelligence officers were given posts in the presidential administration and state enterprises under Putin from 2000 onwards led the West to believe that Russia was being run by an intelligence clique. But in fact, it was an alliance of market radical reformers and intelligence officers who guided Russia’s fortunes from 2000.

Anatoly Chubays headed the State Electricity Company EES Rossii from 1998 to 2008 and the state technology Company Rosnano from 2013 to 2020.

Aleksei Kudrin, a member of Chubay’s Leningrad “Perestroika Club”, became Minister of Finance under Putin in 2000. Since 2018, he has been the head of the Russian Court of Auditors. Pyotr Aven-a member of the Moscow “Perestroika Club” – became Minister of Foreign Economic Relations in November 1991. Since 1994, Awen has been president of Alfa-Bank. According to Forbes magazine, in 2020 he had a fortune of $ 4.6 billion.

Andrei Illarionov was a member of the Leningrad club “Sintes"during perestroika. In 2000, Illarionov became an economic adviser to Putin. he was released in 2005. Illarionov now lives in the United States, from where he supports the right-wing liberal Russian opposition.

US Chief Adviser Jeffrey Sachs stands by Russian reformer

At the beginning of the 1990s, the young Russian reformers were assisted by an extremely agile economic consultant from the USA, Jeffrey Sachs, who was 38 at the time. Sachs had already implemented shock therapy in Bolivia. The shock therapy carried out in Russia under the guidance of Sachs under Yegor Gajdars led to massive social cuts and economic chaos, in which mafia groups, top officials and robber baron capitalists were able to enrich themselves unhindered. From 1989 to 1997, industrial production fell by 42 percent. In 1995, real incomes were 45 percent lower than in 1991. In Moscow in the 1990s, it was part of everyday life for young and older women to sell old clothes, cooking pots and cheap goods in long rows at the metro stations.

Tank attack against the left-wing nationalists

Under Gajdar, the conflict between the Kremlin and the government on the one hand and the left-national opposition in the Supreme Soviet (the then parliament) and the Congress of People’s Deputies on the other developed into a power struggle, which eventually led to the use of tanks and bloodshed in October 1993. It was the second serious state crisis that Russia went through in the early 1990s.

The 1993 power struggle began in September with a constitutional crisis. President Yeltsin and the Supreme Soviet mutually annulled their decisions. On October 4, 1993, the height of the state crisis was the shelling of the White House, the seat of parliament, by tanks.

Nikolai Platoshkin worked in the Russian Ministry of Foreign Affairs in October 1993, in a high-rise building in the style of a confectioner from the Stalin era, just a kilometer from the White House. He reports:

“Yeltsin fired at the new Russian parliament, not at the Soviet One, which was based in the same White House that Yeltsin occupied in 1991. In the center of Moscow there were hundreds of dead. The bullets flew all the way to the State Department. At that time, I approached the head of the Ministry of Foreign Affairs and suggested sending the female employees home. Because you could be hit by a random bullet. This was democracy in 1993, when Yeltsin had the parliament shot down with tanks and snipers.”

Western media advocated “inevitable radical cure”

The Western media justified Yeltsin’s actions as an"inevitable radical cure.” Those who criticized the shooting of the White House in Germany at that time often faced the accusation of mourning the Soviet system. Western media coverage at the time was completely drowned out by the fact that the President of the Supreme Soviet, Ruslan Khasbulatov, and the Vice President of Russia, Aleksander Ruzkoy, had stood firmly by Boris Yeltsin’s side in the coup of the Old Communists in August 1991. They did not belong to the Old Communists, advocated a controlled transition to a market economy and opposed shock therapy.

Nikolay Svanidze, a well-known journalist who works for the state television channel Rossiya and often speaks on German television, still defends the shelling of the parliament as a necessary measure that has opened the way for the democratic development of Russia. The opposition of the parliament in October 1993 was" the last, convulsive attempt of the most reactionary part of the parliamentary nomenklatura (was) to get to the hotly desired feeding trough again", according to the well-known Russian TV presenter, whose grandfather Nikolai Samsonovich was a high party functionary after the revolution.

Yeltsin had no choice, according to journalist Svanidze. He was forced to"break the closed circle of lying legitimacy (meaning parliament, UH)". Otherwise, he would have " destroyed the country by his decisiveness."

Anatoly Chubay, who initiated the privatization of state-owned enterprises in 1992, stated in a Spiegel interview in 2007 that there was no alternative to radical economic restructuring. If there had been no reforms, a civil war would have broken out. “As so often in Russian history, hundreds of thousands would have lost their lives. That describes the true value of our reforms and not that oligarchs now own billions.”

The Great Raid

In the 1990s, a new class took power in Russia. They were mainly members of the Communist youth association Komsomol. The new actors in politics and business were educated, knew foreign languages and had good connections, because they mostly came from families of the old Communist elite.

During the perestroika period, the Young Komsomol members had already gained their first experience as entrepreneurs in the newly founded cooperatives. Together with the corruption-riddled bureaucracy, the young Communists now took the helm.

No one followed the law anymore. When the first law on the privatization of state property came into force in 1992, 2000 enterprises had already been privatized without a legal basis. Unscrupulous profiteers, adventurers and bandits came to the fore, who had secured influence on the decision-makers in the state administrations by means of penetration, bribery and often also violence.

Anatoly Chubays-Minister of State Property in 1991, Deputy Prime Minister from 1992 to 1996 – led the first privatisation of state-owned enterprises in 1992 via so-called vouchers. Since state ownership of the means of production was the property of the people in the eyes of the population, the economic reformers had to carry out privatization necessarily with the involvement of citizens. Thus, each citizen of Russia received a voucher (certificate of share in the state property) with a nominal value of 10,000 rubles, which at that time was equal to 17 US dollars. Anatoly Chubay promised that in a short time the value of one voucher will increase to 200,000 rubles, and then for one voucher you can buy two sedans of the Volga brand. But this was nothing more than fraud.

The vouchers were bought from the citizens via merchants who stood at street intersections and metro entrances in the cities and windy financial companies in backyards. From the proceeds of his voucher, the former owner could buy himself no more than two bottles of vodka. Sometimes you only got a few kopecks. A total of 150 million vouchers were issued. In 2006, there were only 40 million shares. The Russian citizens felt betrayed by the whole action.

a second wave of privatisation began in 1994. The state was heavily in debt. The new entrepreneurs were able to become owners of other state-owned enterprises in exchange for loans they gave to the state, usually at a very reasonable price. Despite ideological differences, tactical alliances often occurred between old Soviet directors and nouveau riche adventurers. The nouveau riche were in a kind of frenzy. There was no public control. Everything seemed possible. Only rarely did the judicial and security bodies care when weapons were used in disputes over the division of state property and competitors were eliminated by contract killers.

“New Russians” – unscrupulous capitalists

From 1992 to 2000, the “Noviye Russkiye” (the new Russians), as they were called, plundered the entire wealth of the country. The state became impoverished because no one gave a thought to collecting taxes, let alone paying them. The accountants of the companies handed over the bulk of the salary in the envelope to their employees in order to save taxes, a practice that is common to this day.

For the export of raw materials, the new entrepreneurs established offshore companies in the Channel Islands and Cyprus. Oil, metals and wood were and are sold at low prices to offshore companies in order to save export taxes and are then resold by them to end customers at a higher world market price.

Because factories, institutes, and schools stopped paying salaries in the 1990s, or because salaries did not adjust to rapid inflation, workers, scientists, and teachers were forced to look for another job or to pursue several activities at the same time. Former workers and employees, but also teachers and engineers became Chelnoki (Russian “little boats”) by means of learning by doing, i.e. flying traders who brought cheap goods from Poland, Dubai and China to Russia with the huge, checkered bags and later containers and sold them there on open-air markets.

Social insecurity radically changed people’s lives. The birth rate decreased, alcohol consumption increased. Statistics speak for themselves: the population in Russia from 1989 to 2009 decreased from 147 to 141 million people. The slump was not only due to the rampant consumption of alcohol and drugs, as well as suddenly paid health care. More importantly, in the chaotic 1990s, the willingness to give birth to a child had fallen sharply.

Two million street children were counted in the 1990s. Tens of thousands of women fell into the hands of unscrupulous pimping gangs and ended up in the brothels of Europe. These gangs could not be prosecuted by law in Russia, because against trafficking in human beings there was no article in the Criminal Code.

The fact that Vladimir Putin has been sitting pretty firmly in the saddle since 2000 has mainly to do with the experience of the Russians in the 1990s. Democracy then became a curse word, because democracy meant practically impoverishment.

In the 1990s, the Russians lost almost everything, a large country, their savings, their careers, a tolerably functioning economy and stability. So one should not scold the Russians too much for their conservatism.