Revolution from Above: The Demise of the Soviet System

321 Pages·1997·49.856 MB·English

by  David M. Kotz

Revolution from above
It is widely believed that the demise of the Soviet system was caused by
the collapse of the economy accompanied by public demand that so
cialism should be abandoned. Revolution from above: the demise of the
Soviet system gives a new interpretation. It argues that the ruling
party-state elite of the USSR itself moved to dismantle the Soviet system
in pursuit of increased wealth and power.
Examining the evolution of the Soviet economic and political system
from 1917 to the present, the book discusses:
• the beginnings of economic stagnation in 1975;
• Gorbachev's efforts to reform the Soviet system and how these led to
the growth of a coalition favoring capitalism;
• the complex political battle through which the coalition favoring
capitalism took power;
• the flaws in economic policies since 1992 intended to rapidly build
capitalism;
• the trend towards authoritarian government in Russia;
• the surprising resurgence of the Communist Party.
Research includes interviews with over fifty former Soviet government
and Communist Party leaders, policy advisors, new private business
men, trade union leaders, and intellectuals. Original and accessible, this
book will give invaluable new insights to students of the economy,
politics or history of the former Soviet Union and contemporary Russia.
David M. Kotz is Professor of Economics at the University of Massa
chusetts. He is the author of many articles on the economy of the former
Soviet Union and Russia and on economic growth. Fred Weir is a jour
nalist who has lived in Russia since 1986. He is correspondent for the
Hindustan Times and a contributor to the Canadian Press.
EconomicslRussian-East European studies

Revolution from above
The demise of the Soviet system
David M. Katz with Fred Weir
London and New York
First published 1997
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon, OX14 4RN
Simultaneously published in the USA and Canada
by Routledge
270 Madison Ave, New York NY 10016
Transferred to Digital Printing 2005
©1997 David M. Kotz with Fred Weir
Typeset in Palatino by Pure Tech India Ltd, Pondicherry
All rights reserved. No part of this book may be reprinted
or reproduced or utilized in any form or by any electronic,
mechanical, or other means, now known or hereafter invented,
including photocopying and recording, or in any information
storage or retrieval system, without permission in writing
from the publishers.
British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging in Publication Data
Kotz, David M. (David Michael),
Revolution from above: the demise of the Soviet system / David M. Kotz
with Fred Weir.
p. em.
Includes bibliographical references (p. ) and index.
1. Soviet Union-Economic conditions-1985-1991. 2. Soviet Union
-Politics and government-1985-1991. 3. Former Soviet republics
-Economic conditions. I. Weir, Fred. n. Title.
HC336.26.K668 1997
338.947---dc20
96--7570
CIP
ISBN 0-415-14316--0 (hbk)
ISBN 0-415-14317-9 (pbk)
Contents
List of figures vii
List of tables viii
Preface ix
Acknowledgements xii
A note on transliteration of Russian names xiii
1 Introduction 1
Part I The Soviet system
2 Socialism and the Soviet system 13
3 Growth, stagnation, and the origins of perestroika 34
Part II Perestroika and the demise of the Soviet system
4 Glasnost and the intelligentsia 63
5 Economic reform 73
6 Democratization 96
7 The party-state elite and the pro-capitalist coalition 109
8 The struggle for power 131
Part III Aftermath of the Soviet demise
9 Shock therapy 161
10 The results of shock therapy 173
11 Russia's political evolution 200
12 Lessons for the future of socialism 224
vi Contents
Appendix 236
Notes 239
Bibliography 283
Index 292
Figures
3.1 Soviet and American economic growth, 1928-75 37
3.2 Slowdown in total output growth 43
3.3 Slowdown in industrial production growth 44
3.4 Slowdown in labor productivity growth 46
3.5 Planned and actual economic growth 50
5.1 Growth rates of output and consumption for the Soviet
economy during 1980-91 76
5.2 Growth of household income and consumption 81
5.3 The Soviet budget deficit as a percentage of GDP 82
7.1 Ideological position of a sample of the Moscow elite,
June 1991 115
7.2 Origins of the top one hundred Russian businessmen,
1992-93 118
8.1 Public opinion survey in European Russia on desired
form of society, May 1991 138
9.1 Russian government expenditure, revenue, and budget deficit 170
9.2 Growth in the money supply and consumer prices 171
10.1 Percentage change in macroeconomic indicators for Russia 174
10.2 Percentage change in real gross industrial output by sector,
1991-95 175
10.3 Percentage change in output volumes for selected products,
1991-95 178
10.4 Average rate of consumer price increase per month during
1991-95 179
10.5 Real pay and pensions 179
10.6 Distribution of money income of households in Russia and
the USA 182
10.7 Relative wages for selected sectors 183
11.1 Duma election results, December 1993 and December 1995 209
Tables
5.1 Growth rates for Soviet economy during 1980-91
(per cent per year) 75
8.1 Republics of the USSR, 1991 142
10.1 Percentage change in real gross industrial output by sector 176
10.2 Output volumes for selected products 177
10.3 Vital statistics of Russia 185
11.1 Results of the referendum of 25 April 1993 213
Preface
One of the authors of this work, David Kotz, is an economics professor
at the University of Massachusetts at Amherst, and the other, Fred Weir,
is a journalist based in Moscow. In the late 1980s, from our separate
vantage points, we both observed with interest the economic and polit
ical reforms taking place in the Soviet Union. At that time it appeared
that Mikhail Gorbachev's policy of perestroika might be giving birth to
the world's first democratic socialist system. Perhaps, buried beneath
the Soviet Union's repressive state and rigidly centralized economy,
some genuine socialist remnants might have survived from the ideas
that had originally inspired the Russian Revolution. It seemed possible
that Gorbachev's reforms would succeed in liberating what was good in
the Soviet past while expunging the unsavory aspects of the Soviet
system.
Events in the former Soviet Union did not follow such a course.
Gorbachev's attempt to reform the Soviet system instead led to its dis
integration. By the end of 1991, some six years after Gorbachev's rise to
power, the Soviet state was dissolved, replaced by fifteen newly sover
eign nation-states, and an effort to build capitalism superseded Gorba
chev's project of reforming and democratizing Soviet socialism. This
was a remarkable tum of events, which almost no one had predicted.
The authors of this book first met in Moscow in the summer of 1991.
We discussed the Soviet demise unfolding around us. The Western
media were filled with stories of a popular assault from below toppling
the Soviet system, as its inevitable economic collapse suddenly left the
Soviet elite unable any longer to protect and save the system. However,
this did not accord with what we saw. We looked at the process of the
Soviet demise from the perspective of our particular intellectual training
and experience, and we found the received explanations to be implaus
ible and inconsistent with the evidence.
David Kotz is an economist who specializes in the process of institu
tional change in economic history, in the former Soviet Union and else
where. This specialty requires knowledge of the factors that promote