Russia's ruin, and our own

After the Soviet Union collapsed, ‘male life expectancy at birth in Russia fell by six years between 1991 and 1994.’ Did the West rejoice at the end of the Evil Empire and hurry to assist its people?

No, because Russia is far too useful as a bogeyman. When US macroeconomist Jeffrey Sachs, brought in to advise Yeltsin’s government, asked for financial help of the kind that he had previously negotiated for Bolivia and Poland, this is the reply he received from the Deputy Secretary of State for President George H W Bush (Episcopalian):

‘Jeffrey, you must understand. Assume for the sake of argument that I agree with you. It doesn’t matter. Do you know what this year is? It’s an election year. There will be no large-scale financial support.’

That Deputy was Lawrence Eagleburger, a critic of what he called the ‘Christian hard right.’ Later, in 2016, Presidential candidate Hillary Clinton (Methodist) had to deal with the fact that Russia was no longer Communist, and so in her speech to Reno voters she characterised Putin as ‘the grand godfather of this global brand of extreme nationalism.’ We assume she expected her audience not to see herself as an international socialist and globalist; an awkward triangulation, perhaps an impossible bind - a ‘tristrangulation.’ Still, when the Golden Oaf won he was chronically undermined by the Russian-influence hoax, so Vlad continued to be of use to the Bomb Party. More recently, Senator Lindsey Graham (Baptist) noted Russians were dying in the Ukraine conflict and said support for Kiev was ‘the best money we've ever spent.’

So much for the Christians who wear their faith like a football shirt and look for opposition fans to hooliganise. Perhaps they should institute a new holy day devoted to their racism and bigotry - call it Othering Sunday? Look online and you will see Russians sourly referring to themselves as ‘steppen*gg*rs;’ look in vain for Western PC-ninnies taking the knee to Slavs.

Yet Russia deserves our compassion. The common people suffered disaster, exacerbated by the suddenness of changes following the fall of the USSR, as illustrated in Adam Curtis’ BBC docuseries ‘Traumazone’ (Ep.4). The political gyrations were accompanied by an abrupt transition from centralised planning to a free-market economy. Under Yeltsin’s economist Yegor Gaidar price controls were abolished and the cost of living shot up twenty-five-fold; the people were issued share vouchers to buy into formerly State-owned industries, but had to sell the shares just to survive; hence the rise of the oligarchs followed by the arrival of Western freebooters and luxury goods providers.

The victory for extreme neoliberal economics saw inequality explode, as measured by the Gini Index, which runs from 0 (absolute equality) to 100 (all wealth in one pair of hands.) In the already collapsing, gangster-ridden USSR of 1990 its Gini coefficient was an estimated 28.1 (see p. 3 here) but still low compared with 34.9 in the UK and 38.3 in the US. Yet by 2007 Russia was at 42.3, even higher than the UK (38.6) and US (40.8).

Curtis mentions in passing the involvement of (unnamed) American advisers and one might wrongly have suspected that Jeffrey Sachs had intended these effects. Not at all, and ten years after the event he wrote a monograph to explain and exculpate himself. As a macroeconomist it was not for him to say what form a free economy should take.

One wonders at the speed and scale of the reforms - was it a burning of bridges to ensure that communist economics could not return? Or was there already a manoeuvring for money-power behind the scenes? In any case, Gaidar allowed the sale of Russia’s energy industries, which Sachs had said should remain in State hands to provide public revenue streams.

And as with Bolivia and Poland, Sachs was concerned to set up a package of support for the poorer sort, to mitigate the impact of the structural redesign. For those two counries he had managed to secure write-downs of debt, even from the merciless IMF; but not in Russia’s case, where there was also no foreign money forthcoming to support the most vulnerable.

When the IMF did finally put in funds, they were used to pay interest on the now gigantic debt and the system had become so corrupt that the remaining available cash found its way into private hands. In 1998 Russia defaulted, crushing not only the ruble but the over-leveraged LTCM hedge fund whose smart quants had not allowed for that possibility.

Curtis’ series ends with the arrival of Putin, whom the ‘Seven Bankers’ thought they could control. Vlad, our Western commentariat are agreed, is a bad man - even the usually sideways-on Private Eye features jingoistic cartoons of him as a bloodthirsty villain; perhaps forgetting that the oligarchs would have fed a nice but awkward man to the pigs in five minutes. It’s a story familar to the old Communist system - appear a bit dim and malleable to avoid being liquidated as a potential threat, until the moment to strike. Or maybe there’s an older parallel, with the boyars who killed Ivan’s beloved wife and turned him into their scourge. Today Russia’s Gini score is estimated at 36, about the same as the UK and lower than the US’ 41.5; and as Curtis reports, the former’s experience of ‘democracy’ has led Russians to view it as skeptically as Communism.

Over here, the constant cry is ‘Moscovia delenda est’, even as we ourselves - now also becoming dubious of our democratic institutions - approach a financial climacteric from which no-one may be able to rescue us. Even the doughty Peter Hitchens has turned Cassandra on Twitter, telling all who can to flee Britain before it falls.

A few years ago there was a TV programme featuring a clip of a woman who had been with Hitler at Berchtesgaden before we entered the war. They were on the balcony watching an ominous bank of roiling cloud, black yellow and red. ‘Das bedeutet Blut, und mehr Blut’ (that portends blood, and more blood) she said. Hitler trembled, then replied ‘So sei es’ (so be it).

Shall we heed the angel’s warning?