Magazine article Insight on the News

Trappings of Socialism Clamp Russia

Magazine article Insight on the News

Trappings of Socialism Clamp Russia

Article excerpt

In the early days of the Cold War, Ignazio Silone, the Italian novelist, predicted that the next war would be between the communists and ex-communists. Silone, who was himself an ex-communist, couldn't have foreseen that the opening battle of that war would happen not in the West but in Russia itself. Boris Yeltsin, not only an ex-communist but an anticommunist as well: is confronted there by communists masquerading as noncommunists who have made economic reform impossible. Russian socialism, an insatiable vulture, is still the dominant politico-economic force.

One of the best definitions of socialism, propounded by the economist Joseph Schumpeter, runs as follows: "the organization of society in which the means of production are controlled and the decisions on how and what to produce and on whom is to get what are made by public authority instead of by privately owned and privately managed firms."

By that definition, Yeltsin's Russia is about as far away from a nonsocialist economy as it was on Aug. 21, 1991, when the Soviet Union began to unravel. In fact, Yeltsin in December condemned the 1,041-member Congress of People's Deputies for "reestablishing the old communist system rejected by the people."

At the rate events are moving in the Russian Federation, the market economy may not come to pass for a long, long time, if ever. No matter what you hear or read about the new prime minister, Viktor S. Chernomyrdin, the big communist industrial tycoons who ran the Soviet economy - right into the ground, of course - are still running that economy, whatever is left of it. (Chernomyrdin, as energy minister, exempted the outrageously inefficient oil industry from privatization.)

The consequences for the Russian people are hyperinflation running at an annual cumulative rate of 2,000 percent and a production decline of 30 percent or more. The still state-owned Russian economy faces ruin, sacrificed to a struggle for power between Yeltsin and the uncompromising Communist Party industrial leadership, represented by Chernomyrdin, whose appointment has been endorsed by the repudiated Mikhail Gorbachev.

Foreign trade statistics are frightening. In the first 11 months of 1992, the volume of Russian foreign trade dropped 22 percent compared with the same period in 1991, while the trade balance fell from $7.1 billion to $1.7 billion, according to the Russian Committee of Statistics. …

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