Tuesday, April 28, 2015

Moscow Failed to Learn from Perestroika and Keeps Repeating Its Mistakes, Inozemtsev Says

Paul Goble


            Staunton, April 28 – Perestroika, begun 30 years ago, “became an irreversible process,” one that “destroyed both the communist system and the Soviet empire, Vladislav Inozemtsev says. But as is now clear, “it did not put an end to its age-old authoritarian traditions of Russia itself and did not transform it economically, socially or politically into a ‘normal country.’”


            It ended, the Moscow economist continues, “not because it achieved all its goals but because the history of the Soviet Union ended.” As a result, “the processes unleased in those years continue now,” and those who want to guide Russia need to focus on the lessons of perestroika (daily.rbc.ru/opinions/society/27/04/2015/553a32e39a794758ad212202).


            That is all the more so if Russia begins as it is likely to sometime in the future to launch “’Perestroika 2.0.’” Otherwise, without a full appreciation of those lessons, it is likely that Russia will repeat them with potentially even more fateful consequences in the course of the latest historical cycle.”


            In a commentary on RBK.ru yesterday, Inosemtsev discusses what he sees as the five chief lessons or even what one might call cautionary tales that Perestroika 1.0 offers:


            The first of these involves the process of economic reform as a whole. Mikhail Gorbachev sought to achieve two things at once, radical reform and acceleration, but his pursuit of these two simultaneously became “the most important reason why neither of these goals was achieved,” Inozemtsev says.


            If an economy needs to be restructured, Inozemtsev argues, promoting acceleration will only lead to “the production of unneeded goods” and “the deepening of disproportions. If, on the other hand, ‘perestroika’ is needed, then it should be carried out under conditions of lower tempos,” thus allowing new centers of growth to emerge.


            Now as in perestroika times, the authorities are trying to do both at the same time, something that means Russia is now far more dependent on the export of oil and gas than was the USSR and that private enterprise, the chief driver of real economic reform and development, “is ever more actively viewed as an enemy.”


The second of these lessons that Moscow has not yet learned is economic but also political: the question of how to deal with property. What happened during perestroika was “not only unjust but economically ineffective,” reinforcing the bad from the past rather than opening the way for the good in the future.


China has shown how a country ought to proceed but the USSR and now Russia have “gone along another path,” one that has hurt them both.  Instead of promoting new companies by creating legal arrangements allowing them to emerge and compete, Moscow has focused ont eh redistribution of the existing infrastructure.


“Of the 100 largest companies in present-day China, only five,” Inozemtsev says, are based on those created before 1980.  In Russia, 70 of the largest firms are those which were created then. As a result, in Russia, “structures most of all interested in preserving the status quo occupy the dominant positions;” in China, the innovators do.


The third lesson of perestroika that has not been learned is about “the ‘democratization’ of society.” Democratization, of course, did not lead to democracy. Instead and “to the contrary, in the 1990s, we saw the manipulation of public opinion by the oligarchs, and in the 2000s and especially in 2010, the same thing by the authoritarian political hierarchy.”


Democratization and economic reform are extraordinarily difficult to implement in the short term as they tend to create a situation in which they conflict.  In the USSR, democratization was carried out where there was no “responsible civil society. Today its absence is even more visible.”


Thus, “the third lesson of perestroika consists in the idea that appealing to society when there are economic problems or even a crisis can lead to results diametrically opposed.” In Russia today, “the liberal order which neither perestroika nor the new Russia gave birth to” is a matter of “the imitation of democracy” and “democratic chaos.”


Instead of developing the Soviet Union as the unitary state it was and devolving powers to the regions to the point of satisfying republic elites, “the Soviet authorities decided to ‘restructure’ the USSR,” a decision that “became the beginning of its end.” That lesson is “especially important for Russia today,” Inozemtsev says, given that it is more centralized than was the USSR and how many centrifugal forces are emerging.


“On the one hand,” he writes, the annexation of Crimea “is analogous to the Baltics” in Soviet times. “And on the other, Chechnya has raised its head, ready to begin the process of such ‘a federalization’ about which no one even thought about in the late Soviet Union.”  Russia needs “a new regional policy,” and it must be based on economic and social levers rather than force alone.


The fifth lesson involves foreign policy.  Under Gorbachev, Moscow achieved a serious rapprochement with the West, but current events which point to the unleashing of a second cold war “indicate that even here something didn’t go as planned.”


            The reason, Inozemtsev says, is that “having begun a dialogue with the West, the USSR did not start from a recognition of its defeat in the global contest. When people say that the cold war was not lost, this is in many ways just.” But the problem was that “Soviet leaders were not concerned about a clear legal strengthening of the results of rapprochement.”


            The West should have embraced Russia to prevent it from falling into the trap of its own phobias as it has done, the Moscow economist says, but Russia in its turn “should ‘sell’ its turning away from aggression for a much higher integration price than was done at the turn of the 1990s.”

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