New insights on the Soviet Union's collapse

A former Russian official blames the threat of famine, not Gorbachev's reform policies.

from the July 23, 2007 edition

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The result was that Moscow could not suppress revolt in its empire – as it had done in earlier years in East Germany, Hungary, and Czechoslovakia – without losing Western loans.

Gaidar argues that if the Soviet military had crushed Solidarity Party demonstrations in Warsaw, "the Soviet Union would not have received the desperately needed $100 billion from the West." Similarly, when the Soviets tried to use force to reestablish control in the Baltic states in January 1991, the reaction from the West, including the United States, was: "You can choose any solution, but please forget about the $100 billion credit." The Soviets backed down.

Oversimplifying history, Gorbachev was perceived as weak for allowing the dissolution of the Russian empire, overthrown in a military coup, and eventually replaced by Boris Yeltsin.

Gaidar's thesis isn't accepted in its entirety by other experts. Leon Aron, a fellow at the AEI and a friend of Gaidar, says glasnost – Gorbachev's effort to bring openness and transparency into the activities of Soviet institutions, with greater freedom of information – opened the USSR to new political, ideological, and spiritual ideas. "The economic side made collapse faster," he says.

Goldman figures that Gorbachev's dismantling of the Soviet military-industrial complex was the main cause of the collapse. The aluminum industry, for example, supplied raw material for military aircraft, the steel industry for the 60,000 tanks facing the West. Afterwards, "there was no longer anything there," he says. At its peak, the military absorbed 30 percent of total Soviet output. Today, Russia spends about 5 percent on its military.

Of course, not all is shiny in Russia today. The nation is not yet investing enough, says Stephen Cohen, a Russia expert at Princeton University in New Jersey. Too much investment money held by the elite is fleeing abroad.

The World Bank says only 14 percent of Russians were living below the poverty level last year, compared with 30 percent in 1999. But Mr. Cohen says "an awful lot of people" are hit by a crumbling infrastructure, the privatization of government property after the Soviet Union's collapse, and poor pensions, healthcare, and education. Per capita income is a mere $10,600 a year, Movit reckons (versus $22,000 in the US).

But Russia today has a budget surplus, a $112 billion "Stabilization Fund" to counter a big drop in oil and gas prices, and some $400 billion in its international reserves.

Unlike Rodney Dangerfield, Russia gets some respect nowadays.

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