Statecraft

Early next morning I and my party – which included Denis and our daughter Carol, who had shrewdly arranged to cover the trip for the European newspaper – left by plane for the city of Nizhny Novgorod. Under communism it was known as Gorky and was a closed city dedicated to secretive nuclear weapons research. Its very existence had long been concealed as far as possible from prying Western eyes. Indeed, the British crew of the private jet we were using had to take on board a Russian navigator in order to locate the airport, which did not appear on any of the usual maps.

But Nizhny Novgorod, I was aware, once symbolised a very different tradition in Russian history. In 1817 the city hosted its first trade fair, which quickly established itself as the most successful in the whole of Russia. The Russians, who are the world’s most adept inventors of popular proverbs, used to say that Moscow was Russia’s heart, St Petersburg her head and Nizhny Novgorod her pocket. With the end of the Cold War had also come an end to reliance on the defence budget to provide employment. The ‘pocket’ rapidly emptied. So there was every reason for the citizenry to return to their old entrepreneurial ways in order to earn a living.

Successful entrepreneurship is ultimately a matter of flair. But there is also a fund of practical knowledge to be acquired and, of course, the right legal and financial framework has to be provided for productive enterprise to develop. I had heard back in London that the Governor of the province, Boris Nemtsov, was someone who understood all this and that he was committed to a radical programme of what some call Thatcherism but what I had always regarded as commonsense. So I had decided to see for myself, and our Embassy made the arrangements.

Nizhny Novgorod’s saviour was, I found, frighteningly young (in his mid-thirties), extraordinarily energetic, extremely good-looking and gifted with both intelligence and shrewdness (which do not always go together). He was a good talker and spoke fluent English. His background was in physics, on which he had written some sixty research papers. He was extremely self-confident, and with good reason.

Indeed, as we sat in his offices in the Nizhny Novgorod Kremlin building, the more I listened to Mr Nemtsov’s account of his reforms the more impressed I was. He explained to me that he had been using his powers as Governor to promote a real free-enterprise economy. At that time the Russian Duma had still not passed a law to create secure title to private property, but in Nizhny Novgorod he had already decreed a local law on private ownership of land. The soil, as I would later see for myself, was rich and well-cultivated. The prime difficulty was not therefore in growing crops – in fact, Nizhny Novgorod was already more than self-sufficient in grain – but rather in selling the produce. Under communism, decisions about distribution and marketing had, naturally enough, been left to the Party bureaucrats. But once that system collapsed, networks which in the ordinary conditions of capitalism would have evolved over time had to be created all at once from scratch. Mr Nemtsov had made it quite clear to the local farmers and traders that it was they who now had to fend for themselves: the state offered no answers. But he had made a large contribution to solving the problem by auctioning off the entire fleet of government-owned lorries – later that afternoon I visited one of the privatised transport firms and was extremely impressed with all I saw, not least the enthusiasm of the manager and his staff.

It was now time to gain some further information and some exercise, as amid what seemed a large proportion of the population of Nizhny Novgorod, the Governor and I took a walk down Bolshaya Pokrovskaya street. All the stores here were privately owned. Every few yards we stopped to talk to the shopkeepers and see what they had to sell. No greater contrast with the drab uniformity of Moscow could be imagined. One shop remains vivid in my memory. It sold dairy produce, and it had a greater selection of different cheeses than I have ever seen in one place. I ate samples of several and they were very good. I also discovered that they were all Russian, and considerably cheaper than their equivalents in Britain. I enthusiastically expressed my appreciation. Perhaps because as a grocer’s daughter I carry conviction on such matters, a great cheer went up when my words were translated, and someone cried, ‘Thatcher for President!’ But the serious lesson for me – and for my hosts – was, of course, that in this one privately owned shop in this distant Russian city, a combination of excellent local products, talented entrepreneurs and laws favourable to enterprise applied by honest and capable political leadership could generate prosperity and progress. There was no need of a ‘middle way’ or of special adjustment to Russian conditions. In that cheese shop was proof that capitalism worked. The doubters would have been astonished.

THE PERILS OF PREDICTION

But then, Russia has always had a unique capacity to surprise. Every prediction about it should be hedged around with qualifications if whoever makes them would be secure from embarrassment. And before going any further I would like to make my own modest contribution to the current wave of apologising. For I too was wrong – about some things.

I never had any doubt that the communist system was doomed to fail, if the West kept its nerve and remained strong. (On occasion, of course, that seemed a very large ‘if’.) I believed this simply because communism ran against the grain of human nature and was therefore ultimately unsustainable. Because it was committed to suppressing individual differences, it could not mobilise individual talents, which is vital to the process of wealth creation. It thus impoverished not just souls but society. Faced with a free system, which engages rather than coerces people, and so brings out the best in them, communism must ultimately founder.

But when? We did not know how desperately incompetent, indeed how near total breakdown, the Soviet system was in the 1980s. Perhaps that was for the best. Had some in the West been aware just how limited and over-stretched were the Soviet Union’s resources the temptation would have been to drop our guard. That could have been fatal, for the USSR remained a military superpower long after it had become a political and economic fossil. I would, though, never have predicted that within a decade of my becoming Prime Minister the countries of Central and Eastern Europe would be free, let alone that two years later the Soviet Union would itself have crumbled.

I must also confess to being at least half-wrong about another important aspect of the Soviet Union in my time, namely its durability. I was never attracted by the idea of deliberately trying to hold the Soviet Union together. Such strategies were, in any case, bound to fail because we in the West lacked the knowledge and means to give effect to them. As I have related elsewhere, I was thus alone in opposing an attempt by the then President of the European Commission to have the EEC ‘guarantee’ the integrity of the USSR in the face of independence movements by the Baltic states.*

But like just about everyone else, I underestimated the fundamental fragility of the Soviet Union once the Gorbachev reforms had begun. A non-communist Soviet Union, which was what we at that time wanted to see, even though we did not put it like that, was actually an impossibility. This was because what held the USSR together was the Communist Party.

The Sovietologists, with their subtle analyses of Soviet society, were wrong: the dissidents with their emphasis on the role of a monolithic party ideology were right. Communism was, in fact, like a parasite, occupying merely the shells of state institutions. These institutions were thenceforth effectively dead and could not be revived.

In the period which has elapsed since those dramatic events, other confident predictions have exploded, though not I think any of mine. Some economic liberals were, for example, led astray by too much confidence in the prescriptions of their own ‘dismal science’. It was not actually, as I shall explain, that the prescriptions were wrong. Rather, they took insufficient account of non-economic factors. The liberal economists assumed that with the Communist Party shattered and Western-style ‘reformers’ in the Kremlin it would be quite easy to instal the institutions of a free economy with rapid benefits for the Russian population. There appeared to be encouraging parallels with Poland, another former communist state where precisely such a crash programme of economic reform, masterminded by Leszek Balcerowicz in the early 1990s, had brought positive results within two or three years. But Russia was not Poland.

On the other hand, the gloomiest predictions about Russia have also been largely – though it is premature to say permanently – disproved. Some foresaw a new Russian imperialism set on achieving by force the recreation of a Russian-centred Soviet Union. So far, at least, this has not happened. Tensions remain between Russia and her neighbours. But there have been no large wars, no use of weapons of mass destruction, no return of communism, no turn towards fascism. It is right that among the many criticisms which can be made of Western policy such important if negative achievements should also be acknowledged.

In truth, the story of Russia over the last decade is not one of progression or even regression along a clear path, rather it is a tale of twists and turns, accelerations and occasional derailments, of integration countered by disintegration, of reform and reaction, all alternately or even simultaneously in play. We have to try to understand what has happened and why, because only by doing so can we predict, let alone influence or steer, what happens in the future.

And that is important. Russia cannot and must not be written off. Personally, I feel this with a conviction bordering on passion. The Russian people suffered so much in the twentieth century – and they were so frequently left to their unhappy lot by those Westerners who lied and collaborated with their oppressors – that we must be indignant at the state in which they remain. In the Cold War the West’s greatest allies were always the ordinary Russian people. They now deserve better.

But taking Russia seriously today is also a matter of calculation. When ex-President Yeltsin went to Beijing in December 1999 and reminded us undiplomatically that Russia still had a formidable nuclear arsenal, he was only telling the truth. Whether weak or powerful, an opportunity or a headache, Russia matters.

THE BURDEN OF HISTORY

The best analyses of the Soviet Union were by and large those of historians rather than Sovietologists, because the historians had the benefit of perspective, while the Sovietologists had to glean most of their material from the turgid and mendacious statements of one or other Soviet authority. With Russia’s recent return to an older shape and identity, history is even more important as a basis for our assessments.*

It has been well-said that ‘of all the burdens Russia has had to bear, heaviest and most relentless of all has been the weight of her past’.† Russia might have developed differently. The course of history is not inevitable. But it is unarguably irreversible. One would have to go far back through the centuries to find a glimmer of any indigenous Russian tradition that might have spawned liberalism of the kind that has flourished in the West. From the late Middle Ages the tsars ruled their vast expanding domains in a fashion which explains much about modern Russia.

First, they recognised no property rights except their own, because they treated all their realm as if they owned it, and they regarded all secular lords as their tenants in chief. With no private property – above all, no private land – there could be no law, other than the tsar’s autocratic decrees. With no law, there could be no flourishing middle class, because there was lacking the security required for the accumulation of wealth, for the continuation of commerce and for the development of enterprise. Russian towns remained accordingly few, backward and small.

Secondly, the tsars admitted no institutional or even theoretical checks upon their power. They did not need to seek the consent of their subjects in order to raise revenues. Late-nineteenth- and early-twentieth-century Russian representative institutions thus had little resonance with most of the populace and were treated with scant respect by the tsar.

Thirdly, the tsars established an odd symbiotic relationship with the Russian Orthodox Church. On the one hand, the tsar exercised total control over it: the traditions of Orthodoxy – inherited from practice in Byzantium – were highly conducive to this, recognising no clear division between the ecclesiastical and political spheres. On the other hand, Russian Orthodoxy, claiming Moscow as ‘the third Rome’, deeply infused the whole Russian state with attitudes which were viscerally anti-Western.

These three elements combined uniquely with a fourth – the way in which Russia’s development as a state more or less coincided with its acquisition of an empire. Both were intricately connected for, to quote one leading authority, ‘since the seventeenth century, when Russia was already the world’s largest state, the immensity of their domain has served Russians as psychological compensation for their relative backwardness and poverty’.*

Westerners who visited tsarist Russia immediately knew that they had to deal with something utterly alien and un-European. More open-minded than those intellectuals who a century later made their pseudo-pilgrimages to the Soviet Union was the Marquis de Custine, who wrote his recollection of a visit to Russia in 1838. He went there as a sympathetic admirer of Russia; he returned an outraged critic:

The political state of Russia may be defined in one sentence: it is a country in which the government says what it pleases, because it alone has the right to speak. In Russia fear replaces, that is paralyses, thought … Nor in this country is historical truth any better respected than the sanctity of oaths … even the dead are exposed to the fantasies of him who rules the living.†

If this reads like a description of the Soviet communist dictatorship, that is more than coincidence; for it was grafted onto a Russian police-state tradition that was already well-established.

Custine’s picture of backwardness and repression is not, though, the whole story. The depredations which communism later made upon Russia – and even from its political coffin still makes – went far beyond anything devised by the tsars. Furthermore, economically at least, things had begun to change well before the Bolshevik Revolution. Russia’s belated but dynamic industrial revolution took off with a vengeance from the last decade of the nineteenth century. Indeed, as Norman Stone points out:

By [the eve of the First World War], Russia had become the fourth industrial power in the world, having overtaken France in indices of heavy industry – coal, iron, steel. Her population grew from just over sixty millions in the middle of the nineteenth century to a hundred millions in 1900 and almost 140 million by 1914; and that was counting only the European part, i.e. west of the Urals. Towns, which contained only ten million people in 1880, contained thirty million by 1914.*

Russia lacked the social and political institutions to cope with the strains of such rapid economic change. Moreover, the empire was about to enter a terrible war which exposed its weaknesses, and which led first to anarchy, then revolution, and finally to the imposition by the Bolsheviks of the most total dictatorship that the world has known.

THE LEGACY OF COMMUNISM

The system was as much the work of Lenin as of Marx. The wordy, flawed analyses of the German were applied with ruthless violence by the Russian, who already lived and breathed the repressive atmosphere of the tsars.

The Soviets took the traditional tsarist hostility towards alternative sources of authority, towards freedom of thought, towards private property and towards a rule of law much further. While the tsar had demanded that he be treated as God’s representative, the Party actually usurped the place of God Himself. Communism’s war against religion – even one so politically amenable as Russian Orthodoxy – was pursued with the same aim as that against the richer peasants and against all the habits and ties of private life: the state must seize, possess, and ultimately absorb all.

For seventy years this system was imposed on the Russian people. Of course, like all that is human, it had its less bad moments. In time, the frenzied campaign against religion abated, to be replaced under Stalin by an uneasy modus vivendi between Church and state, because the latter found the former’s influence useful. Similarly, after Stalin’s purges a certain stability descended on the Soviet system, which became more bureaucratic, stratified and corrupt – this was the period of the emergence of what Milovan Djilas called the ‘new class’.* The monster of communism mellowed a little as sclerosis set in. Under Khrushchev, the errors of Stalin were admitted. Under Gorbachev, the conduct of Lenin was eventually debatable. In the last few years of the Soviet Union the pressure for free speech and free elections grew and – to his credit – Mr Gorbachev responded.

There was also talk of economic reform. But it never came to anything. This was essentially because, for communists – from Lenin to Gorbachev – ‘reform’ simply meant making the Marxist-Leninist system more efficient, not adopting a different system. Perhaps the last moment at which such an approach could have yielded positive results was under the intelligent Yuri Andropov (1983–84), who at least understood the economic abyss before which the Soviet Union tottered. But he was too sick – and his successor Konstantin Chernenko (1984–85) was both too sick and too dull – to make any impact. By the time that Mikhail Gorbachev took over in 1985 any attempt to reform the system was bound to fail and likely to result sooner or later in its dissolution.

And this, of course, is what happened. Mr Gorbachev’s programmes of glasnost (openness) and perestroika (restructuring) were intended to be complementary, but that is not how they worked out. Openness about the failures of the system and of the people, past and present, who were responsible, was immensely liberating for the Soviet citizenry who had for so long been denied the chance to debate the truth. But restructuring the ramshackle institutions of the state, let alone replacing the mediocrities who battened on them, was really out of the question. In any case, the basis of the Soviet Union was still the Communist Party (which also controlled the military-industrial complex and the security apparatus), and the Party would not meekly yield up the one thing it valued above all – power.

This fact also explains the personal tragedy of Mikhail Gorbachev, who was feted by the West – and justly so – but who was rejected and reviled by his own fellow-countrymen. For all his talk of the need for ‘new thinking’, in the end he just could not practise it. Faced in 1991 with a choice between continuing along the path of fundamental change on the one hand and a return to repressive communism on the other, he dithered. I do not believe, though this has sometimes been said, that he secretly supported those hard-line communists who temporarily seized power in July 1991. But he had himself appointed them to their positions. And even when he returned to Moscow he proclaimed himself a communist. So for all my admiration for his achievements, my sympathy for his predicament, indeed my liking for him as a man, I am sure that his replacement by Boris Yeltsin was right for Russia.

The deep hostility between these two men who between them have done more for their country’s freedom than any other Russians was doubtless partly to be explained simply by political rivalry. But it also, I am convinced, represented something deeper. Mr Yeltsin knew in his heart that the system in which he had risen and then fallen, only to rise again, was fundamentally wrong – and not just because it failed to give people a reasonable standard of living, but also because it was based upon a structure of lies and wickedness. This, I think, is why Mr Yeltsin looked so large as he stood on that tank in central Moscow when he led the heroic battle for Russian democracy. And it is why Mr Gorbachev looked so diminished as he returned three days later from his Black Sea coast retreat in the Crimea. Cameras often lie, but this time they told the truth: not just a tale of two Russians, but also a tale of two Russias.

The collapse of the August 1991 coup provided the opportunity for a triumphant Boris Yeltsin to order the banning of the Communist Party and to oversee the orderly dissolution of the Soviet Union. In recent years it has become the fashion to scorn Mr Yeltsin’s weaknesses, which were doubtless real enough. But they were more than matched by astonishing courage and large reserves of political wiliness. And had bravery and cunning not also been accompanied by a typically Russian ruthless streak he could never have scored victory after victory against the communists who wanted to drag Russia back to its Soviet past.

Boris Yeltsin’s shoulders were broad. But history’s burden was still too heavy for them. The habits, instincts and attitudes developed by Soviet communism made the transformation of Russia into a ‘normal’ country immensely difficult. This has been glaringly apparent in the growth of lawlessness.

Long before the end of the Soviet era, Russians had come to regard the state itself as their enemy. For those who chose to proclaim their individuality it was an oppressor. But for many more the state was essentially a thief.

There was, of course, no law in a Western sense in communist society. Indeed, though there were rules and regulations at every turn there was no concept of equity, according to which a single set of obligations based on what each was due as a human being was applied to all equally. As the writer and dissident Alexandr Zinoviev strikingly put it: ‘In Communist society a system of values prevails which is founded on the principle that there should be no general principles of evaluation.’*

In fact, the only dominant principle was that of predatory egotism. Such habits die hard, or not at all. It is important to stress that although the scale and violence of Russian crime have snowballed since the end of the USSR, its psychological and systemic roots were planted under communism. In the last years of Leonid Brezhnev’s presidency corruption in high places became notorious. But from the mid-1980s, crime became fully institutionalised, not least through the activities of the KGB which, according to a senior CIA source,

sold cheaply acquired Soviet commodities abroad at world prices, putting the proceeds into disguised foreign accounts and front companies … [Its] lines of business came to include money laundering, arms and drug trafficking and other plainly criminal activities.*

There was, understandably, little confidence that this disordered state of affairs would change under the new dispensation: most Russians had grown so accustomed to it that criminality appeared the ordinary way in which things were done. How could it be otherwise when so many of the same people who had held high positions under communism re-emerged under capitalism as the new masters?

Russia has accordingly become a notoriously criminal society. It is thought that between three thousand and four thousand criminal gangs operate there. The Russian Ministry of Internal Affairs says that organised crime controls 40 per cent of the turnover of goods and services; some estimates are higher. Half of Russia’s banks are thought to be controlled by criminal syndicates. Not surprisingly, the European Bank for Reconstruction and Development (EBRD) considers Russia the most corrupt major economy in the world. Public opinion polls have suggested that Russians despair of honest effort as the means to advance. Instead, 88 per cent listed ‘connections’ and 76 per cent dishonesty as the best ways to get ahead.†