Review, Martin McCauley, Bandits, Gangsters and the Mafia: Russia, the Baltic States and the CIS since 1991 (2001)

(Originally published on Amazon) 

This book is a pretty good summary of political events in the former USSR from 1989 to 2000. However, there are no footnotes; on rare occasions, the author includes a parenthetical reference. The writing style is folksy, and McCauley hews to a personality-oriented version of history. McCauley sees the historical landscape as being dominated by good guys and bad guys—mostly bad guys, or at least, morally weak guys. Qualities McCauley admires include decisiveness, forcefulness, dedication to the nation (i.e., ethnic group—as with Gen. Alexander Lebed—or command structure—as with the August 1991 coup plotters). McCauley observes that shock therapy was a disaster, although he generally admires the instigators for their determination and comparative cleanliness¹; he argues the specific form of shock therapy known as "perestroika" was especially ill-conceived.² He believes that the USSR collapsed because it could not keep up with US Pres. Ronald Reagan's boost in military spending, an error which is important because it reflects the lack of quantitative data in McCauley's analysis.³ For McCauley, it is clear what actors in the period ought to have done, and clearer still that they did not do it.

As a result, the lack of viable alternatives never enters the story. In order to offer his readers a compelling conclusion (that the Soviet military general staff allowed the USSR to disintegrate, leading to eight years under the dead hand of Boris Nikolayevich), he has to pretend that the problem was that Gens. Yazov and Shaposhnikov were fools and traitors, and the one true patriot, Gen. Alexander Lebed, was Russia's Coriolanus—pure but dimwitted.⁴

In the chapter "Bandit Capitalism," he introduces Yegor Gaidar, and points out that Karl Marx had a clearer insight into the workings of capitalism than did Adam Smith (p.266), and prefers Keynes to Milton Friedman and Paul Samuelson (p.267)—some readers will take umbrage at this, but at least he tells you clearly where he's coming from.

Errors crop up every now and then. On p.118, he declares that Georgia supported Russia's incursion into the breakaway state of Chechnya in order to stop the depredations of Chechen-supplied separatists in Abkhazia. In fact, the Abkhazian separatists are wholly loyal to Moscow, and received their supplies from the Russian military, not from Chechens.⁵ Referring to the August 1991 coup, he refers to the officers to refused to use deadly force against Muscovites as traitors (p.198). However, this is not central to the value of the book, which really does an excellent job outlining the various dimensions of Soviet transformation. Since the book is organized thematically, this only crops up in Chapter 6, on the role of the military and security services.

I was not able to verify his analysis of the legal developments in Russia since 1991. He goes into some detail describing the conflicts between the constitutions of the Russian Republics and the center (the Russian Federation itself). These seem to take the form of indulgences extended by the Yeltsin Administration specifically to regions that did not vote for him or his party in elections of 1996. One gets the impression that there's a critical problem with deciding which laws or remits override the other, so that two sides in a dispute are very likely each correct. Economic policy is concocted to take this into account—inflation, for example, was permitted in order to restore the power of the administration over particular enterprises and their revenue streams (p.270).

The account of privatization as a legislative process of self-corruption jibes with what I've read elsewhere—that the dread of having the transition to a market economy interrupted before it was irreversible led Chubais and Co. to support all manner of disastrous compromises, such as making it easier for the incumbent management to retain control after privatization took place. Towards the end, the book becomes very sophisticated and detailed, and I'd say, weathers well.

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NOTES

1. The Yeltsin Era in Russian history was fraught with corruption, but mostly the people at the center—Yegor Gaidar, Maxim Boycko, and Anatoly Chubais—did keep their noses clean. In Nov 1997, Boyko and Chubais—as well as other "shock" reformers Alfred Kokh, Alexander Kazakov, and Pyotr Mostovoi—were implicated in an "inflated advance" scandal involving Vladimir Potanin, owner of Oneximbank. See Jeffries (2013), p.499. All but Chubais were asked to resign at once. By the standards of Russia c.1997, this left them still pretty clean, although it looked at the time like a bribe for facilitating Potanin's sale of shares in of Svyazinvest, the telephone company.


2. The transition of the Soviet economy to capitalism involved many phases and is still incomplete. Following Soós (2011), one can speak of a phase of "primary privatization" (in which the state relinquished its direct ownership of the the means of production) and "secondary privatization" (in which the new owners—in Russia's case, the general population of voucher recipients—converted their diffuse holdings into new capitalist structures of production, including corporations and cooperatives). In the USSR, there was effort to skip over privatization (1986-1991) by giving the existing managers of the state-owned enterprises (SOEs) control over methods and amounts of output. This was the essence of perestroika, and it led to the problem that the existing management c.1986 could not be displaced, but could not raise prices (or dismiss workers) to reflect economic realities.
   
   Instead, since the "red directors" could not manage under actual market conditions, they became a surrogate political class of opposition to additional reforms. As a result of subsequent primary privatization schemes, the red directors usually (but not always) preserved direct control over enterprises.


3. The Soviet military budget peaked in 1982 and declined afterward; this, despite a large (2% GDP) commitment to the war in Afghanistan. See, for example, Richard Ned Lebow and Janice Gross Stein, "Reagan and the Russians"; The Atlantic Monthly; Volume 273, No. 2; pages 35-37. (Feb 1994). Estimates of Soviet military expenditures are difficult to validate, and it seems likely that even the Soviets had only a vague idea of what they were spending. However, one compelling point is that the USSR relied overwhelmingly on exports of hydrocarbons for hard currency—and this source evaporated suddenly in the early 1980s.


4. Lt. Gen. Alexander Lebed's main historical role was that he was one of the front-runners in the 1996 presidential elections (3rd place, behind Gennady Zyuganov) and subsequently was appointed to the incumbent administration and endorsed Yeltsin in the runoff. This decision doesn't say much for his purity.
   
   Lebed was commander of the 14th Army in Moldova, which he elected to use on behalf of Russian separatist rebels in the Transnistrian Republic. McCauley's account on this is misleading: he says that Lebed shelled advancing Moldavian Army units, when in fact he attacked the regular Moldovan Army after they had taken the Moldovan city of Bendery, killing 112. In other words, Lebed simply carried out a punitive massacre of regular Moldovan soldiers on their own territory.


5. Moscow's sub rosa support for Abkhazian separatists is common knowledge, but see, for example, Alexandros Petersen, "The 1992-1993 Georgia-Abkhazia War: A Forgotten Conflict," Caucasian Review of International Affairs, 2, (Autumn 2008), p.198.
   
   To be fair, McCauley gets around to acknowledging this (p.350), but his account whitewashes the affair. He generally paints foreign policy as having been "subservient" to the West (1989-Jan 1996), then correcting course after Andrei Kozyrv stepped down. This is not a strength of the book, but it may accurately reflect Russian attitudes.

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SOURCES 🙵 ADDITIONAL READING

Robert V. Barylski, The Soldier in Russian Politics 1988-1996, Transaction Publishers (1998); in my view, easily the best book on the post-Soviet transition.

Serguey Braguinsky, "The Rise and Fall of Post-Communist Oligarchs: Legitimate and Illegitimate Children of Praetorian Communism," MONOGRAPH (2007)

Ian Jeffries, The New Russia, Routledge (2013)

Elena Medova & Larissa Tischenko, "Lawless Privatization?" Cambridge Endowment for Research in Finance (2006)

Alexandros Petersen, "The 1992-93 Georgia-Abkhazia War: A Forgotten Conflict," Caucasian Review of International Affairs Vol. 2 (4)-(Autumn 2008)

Károly Attila Soós, Politics and Policies in Post-Communist Transition, CEU Press (2011). Soós account is very dry and specializes in a direct comparison of policies adopted by different successor states of the Warsaw Pact. However, it is scrupulously accurate and explains the dilemmas faced by the policymakers involved with privatization.