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Thursday, February 26, 2009

Bukharin's Dream

12. April 1938: Internal NKVD Prison: A Beautiful Dream

Bukharin slept fitfully in his small prison cell in the Internal Prison of the NKVD, in the bowels of the Lubyanka, a half mile from the Kremlin. His nocturnal writing was interrupted by fitful sleep, often indistinguishable from hallucinations. In his dreams, Bukharin would see Stalin and Nadezhda [Stalin’s wife who committed suicide]. In one, Nadezhda came to him and asked “What are they doing with you? I’ll tell Iosif [Stalin] that he should come for you. The dream was so real that Bukharin wanted to awake and immediately write to Stalin to come to take him from this place. He knew that Nadezhda would never believe that he would do something bad against Stalin. Bukharin’s dream continued. He talked with Stalin more than a hour. His wish was that Stalin could see how devoted he was to him. In another more pastoral dream, he found himself playing with his own and Stalin’s daughter, both Svetlanas, in the wooded dacha compound shared by prominent Bolshevik leaders outside of Moscow. Svetlana’s mother was still alive, and she ran the household with discipline. He dreamed of the animals he raised there and the children’s delight as they played with them. He dreamed how, in the evenings, they would gather outside and sing with even Stalin chiming in with his soft but pleasant voice accompanied by the balalaika.As he waked to the harsh reality of his prison cell, he remembered an exchange in the summer of 1928 in which Stalin said to him: “You know why I treasure you…. You are not capable to intrigue? He remembered his answer. “Yes, but at that very time I ran to Kamenev. Whether you believe it or not, this fact stands out in my mind as the original sin stands out for the Jews. My god, was I a child and a fool.”

Excerpt from The Leper and the Bolshevik's Daughter: Nikolai and Anna Bukharin

Thursday, February 19, 2009

Will the Real Dmitry Medvedev Stand Up?

Few commentators read Dmitry Medvedev’s November 15, 2008 presidential address in its entirety. Medvedev speaks as a hawk on foreign policy, blasting Tbilisi’s “adventurism” which was a “pretext for NATO naval vessels to enter the Black Sea” and to “speed up the imposition of an American missile defense system on Europe.” Most readers did not go beyond this point, concluding Putin and Medvedev are one. The rest of the address, however, takes a quite different tack. It emphasizes the need to defend the Constitution (which gives him an advantage over Putin) and is full of veiled attacks on Putin’s way of governing. Medvedev is allying himself with popular sentiments on foreign policy while cautiously probing popular weaknesses in domestic policy that he may wish to explore in the future.
Let me cite what I regard as the key anti-Putin quote in the address:
“The cult of the state and the illusory wisdom of the administrative apparatus have prevailed in Russia over many centuries. Individuals with their rights and freedoms, personal interests and problems, have been seen as at best a means and at worst an obstacle for strengthening the state’s might. But the bureaucracy still does not trust free citizens and free activity. This logic pushes it into dangerous conclusions and acts. The bureaucracy from time to time casts fear over the business world, pressuring it to keep in line and not to take what they consider wrong action, takes control of this or that media outlet, trying to stop it from saying what they consider the wrong thing, meddles in the electoral process, preventing the election of what they consider the wrong person, and puts pressure on the courts, stopping them from handing down what they consider the wrong verdict. The result is that the state bureaucracy is the biggest employer, most active publisher, best producer, and is its own court, own political party, and ultimately its own people. This is a completely ineffective system and leads only to corruption. ..But an all-powerful bureaucracy is a mortal danger for civil society. This is why our society must continue calm and steady work to build up its democratic institutions and not delay this work.”
Medvedev is Putin’sonly potential challenger. Perhaps Putin has some means of making sure he stays loyal; perhaps not. Medvedev’s anti-Putin remarks are perhaps “cheap talk”. The typical Russian succession is one of like thinkers. Vested interests have much to lose and will fight change tooth and mail. If Medvedev does replace Putin, will he make a difference? The odds are that he would not, despite his brave words.

Stalin's Reach from the Grave: The Moscow Stalin Conference

Russian and foreign scholars dazzled at the marbled luxury of the Olympic Renaissance that welcomed them on December 5 to the International Conference on Stalinism. Organizers included Memorial (whose Petersburg offices were raided during the conference), and the commissioner on human rights. The Yeltsin Foundation provided the funding. The conference’s goal was to “narrow the gap between the scientific viewpoint and everyday understanding of Stalinism,” which “peddles dictatorship and historical justification of violence, millions of victims, and cleansing through social purges.” Clearly Stalin’s soaring public opinion “rating” were a sore point. More than four hundred signed to attend. Some, including disappointed journalists, had to be turned away.

To the packed crowd, Russia’s top archival historian, Oleg Khelvnyuk, began by listing Stalin’s “mass operations” which killed or imprisoned more than ten million, not counting war victims. Arsenii Roginsky, director of Memorial, followed with an impassioned address on the Stalin paradox – that there were millions of victims but no criminals! Instead of “crime without victims” Stalin somehow produced “victims without criminals,” by creating collective guilt for those who ran Russia after him. My presentation focused on “Was Stalin really Necessary?” stating we must weigh the costs of human life against the benefits cheerfully recited by apologists – rapid industrialization and the victory over Hitler (despite Stalin’s bungling of the first part of the war and his prewar extermination of the entire command structure).

The second day of the conference was devoted to breakout sessions. An agitated journalist, whose apartment had been ransacked that night, wondered whether this was retribution for attendance? Some vocal Stalinists had penetrated the conference (“Under Soviet rule we had everything!”). Eccentrics spun wild theories as anxious moderators to wrested the microphone from their resistant hands.

The conference’s peak was a round table of distinguished writers, film makers, lawyers, and journalists, most old enough to have experienced Stalinism first hand. The moderator, well-known TV commentator Nikolai Svanidze, did his best to control the crowded auditorium. Danil Granin, a war veteran, “frontovik”, recounted the creation of the war-leader Stalin myth as Stalin exiled Zhukov (the equivalent of Truman banishing Eisenhower to Mexico) as the war ended. Sigurd Schmidt, the son of a noted arctic expert, recalled that when the party purges began, people simply stopped talking. Visitors ceased coming to his father’s office. Russian human rights commissioner Vladimir Lukin, lived with his grandmother after his parents, dedicated communists, were imprisoned. Frightened by the racket of a trolley passing by, his grandmother, who had seen her innocent children imprisoned, comforted him that Soviet engineers had designed a quiet trolley but “enemies of the people” had sabotaged it. The greatest fireworks were reserved for the minister of education, Andrei Fursenko, who was repeatedly interrupted by shouts: “And what about the textbook?” The “textbook” was written by a little known historian and had been “approved” for use in Russian schools to teach the next generation about Soviet history and Stalin. The sputtering minister explained that the text had been approved by a meeting of teachers (an old Stalin trick), and even worse texts could have been chosen. As the next speaker was introduced, Fursenko discretely left the hall. The “text” claims that Stalin was forced by circumstances to embark on bold policies that, regrettably, demanded masses of victims. Putin himself is represented as another strong leader who rescues Russia from chaos and humiliation to preserve Russia’s rightful territory.

Did the conference achieve its goal? Scholars have the “facts” on their side, but they are read by a few thousand readers. The pro-Stalinist literature is available on every street corner in bright covers and short texts. These books “prove” that the archives are forgeries and scholars who use them are unpatriotic. Until we learn to communicate with a broader public, Stalin will continue to be a positive historical figure and the Putins and Medvedevs can continue to argue that Russia needs a strong hand.

Monday, February 16, 2009

Moscow Digs in Its Heels On the Katyn Massacre Once Again

On January 29, 2009 the Military Collegium of the Russian Supreme Court upheld the October 14, 2008 verdict of the Moscow regional court to terminate the investigation of the Katyn massacre of Polish officers in April and May of 1940. This October 14 verdict was appealed to the Supreme Court by lawyers representing the relatives of ten Polish POWs executed at Katyn. In its January 29 rejection, the Supreme Court confirmed the lower court’s finding that there had been no proper identification of the victims and rejected the exhumation records for three victims and the documentation of execution for the remaining seven submitted on behalf of their relatives. The second ground for rejection was the fact that the ten year limit of the Russian criminal code in effect on March 5, 1940 when the Politburo ordered the executions, had expired, and the case could not be reopened. Court decisions on cases of this magnitude are dictated by the Kremlin, and Russia’s refusal to recognize the victims of Katyn will continue to rile Polish-Russian relations. For more on the Katyn Massacre, see Exhuming Secrets, Hoover Digest by Paul R. Gregory and Maciej Siekierski. www.hoover.org/publications/digest/22787574.html

Sunday, February 15, 2009

Seven Propositions: Russia, Foreign Policy, and the Financial Crisis

Although contemporary Russia resembles a jigsaw puzzle, there are some constants, which allow us to make some general predictions about what the future holds. These constants can be summarized as six propositions:

Proposition 1: Russia has become a KGB state and will behave as such in its domestic and international dealings unrestrained by the West.

The brief and chaotic flirtation with capitalism and democracy under Yeltsin ended at the turn of the millennium. Yeltsin and his oligarchs chose an unknown figure, Vladimir Putin, probably because of his KGB background, to guarantee Yeltsin’s safe retirement, to not change the results of privatization, and restore order. Putin kept his promise to Yeltsin, but drove uncooperative oligarchs into exile or prison, from whom he wrested control of the media. Putin’s media played up the danger of dark-skinned Central Asians and of the United States and NATO, and questioned the patriotism of opposition groups.
The expropriation of oligarchs through threats, the courts, the tax police, and direct force shifted power from “private” oligarchs to a “KGB state,” run by former KGB officers and their associates. The KGB state now commands industry, commerce, and banking, electronically monitors the population, controls nationalistic youth organizations, conducts covert operations at home and abroad, and operates its own prisons. Former KGB officers have accumulated incredible wealth, tied to their positions, which they lose if their positions vanish. They cannot tolerate any adverse change in the power structure in the high-stakes game of Russian politics.

Proposition 2: Russia is not motivated by conventional economic and political concerns. It will readily sacrifice economic gains to achieve its political goals.

KGB mentality says that the state, which the KGB represents and protects, is surrounded by evil forces that must be defeated. Were this not the case, the KGB state would not be needed. This battle must be conducted without mercy and without regard to conventional rules, and the KGB will win because its opponents are soft and are hampered by rules. The KGB state believes it can get away with the most extreme actions – a poisoning an enemy in a foreign capital, protecting the assassin with parliamentary immunity despite his clear plutonium trail, all evoking only a weak protest from the West. An invasion of Georgian territory planned well in advance becomes a defensive operation when Georgian forces are goaded into resistance . Its courts deny high-level responsibility for the Katyn massacre of Polish officers, despite indisputable archival evidence, and casually ignore Polish outrage. Investigative reporters are gunned down in broad daylight.
According to this KGB mentality, the purpose of business, especially big business, is to advance the interests of the state. Profits are secondary if they matter at all. Energy companies and transit pipelines serve as an arm of foreign policy. It does not matter whether the company is owned by the state. If private shareholders do not follow the dictates of the state, they will lose their investment. This philosophy explains the destruction of Yukos, the most efficient Russian energy company, the arbitrary expropriation of major Western investors by the courts, tax officials, and environmental agencies. Although Putin set a trillion dollar capitalization of Gazprom as a state goal, he willingly accepts its deeply-discounted capitalization in return for its doing his bidding in Ukraine and Europe.

Proposition 3: Putin and his administration will retain power even under extraordinary circumstances, such as extreme financial crisis.

The Russian KGB state is more bureaucratic than the Soviet period. This bureaucracy is divided into a number of interconnected “apparats” of back offices run by unelected officials, little known to the public and press but well known to one another. The KGB’s official apparat is the FSB agency, but beneath the surface is an unofficial network of former KGB officers, united by a common “corporate culture,” who run Russia’s large corporations, newspapers, television stations, courts, prosecutors’ offices, arms industry, and defense. This apparat is interwoven with (and often indistinguishable from) the Presidential Administration, which moved symbolically but not actually to the White House when Putin became Prime Minister. This apparat orders “telephone justice” (tell judges their verdicts), appoints officials, gathers compromising material, and orders character assassinations, poisonings, and contract killings.
Even under a weakened Yeltsin, his presidential apparat had the power to re-elect him, starting from a popularity rating of 5 percent. The Putin/Medvedev apparat dictates to television and media how to cover Chechnya, Georgia, or the financial crisis. When the financial crisis broke, the state media was instructed to avoid terms like “panic” or “collapse.” The United States was to blame anyway. The apparat decides what parties can run in elections; whether they can put up posters; the extent to which they will be harassed. It can even determine what ballots will be counted.
Putin insisted on unfair elections despite his soaring popularity, because he knew there could come a day when he would be less popular. Putin’s apparat’s control of political and economic life means that, no matter how bad the financial crisis, no matter how far the ruble drops, the governing apparat could easily win elections. They can do so more easily and with less manipulation with high popularity, but low popularity is manageable too. The lower the popularity, the more repressive the regime. It just ratchets up the costs of opposition.

Proposition 4: Political change will not come from below but only from the top. Unless the center unexpectedly names a remarkable leader (such as the Gorbachev exception in 1985) who is in charge will make little difference.

Russia-KGB Inc. does not need Putin to win elections. It an elect virtually anyone it wants. Putin, like Stalin before him, is the current leader and has huge incumbent advantages. Any “reform” challenger who wishes to do away with Russia-KGB, Inc. stands no chance. If the challenger did, he or she would likely not survive. Only Quixotic challengers, like Gary Kasparov or the ever-handy Communist Party, are allowed in the game.
Any effective challenge must come from within, and the only potential challenger is Dmitry Medvedev.
For reasons that remain unclear, Putin did not amend the Constitution to continue as President. Instead, he took the post of Prime Minister, and installed a young protégé in the presidency. Putin’s “rating” is four or five percentage points above Medvedev, but Medvedev’s three quarters approval is more than sufficient. Constitutionally, Medevedev is Putin’s clear superior. He can dismiss Putin at any time, even if the Putin-dominated Duma objects. The Russian Constitution gives Medvedev a clear path to Putin’s removal. Like Putin and Yeltsin before him, the removal of a prime minister was routine. With Putin, it would be less routine and perhaps doable, especially if Putin’s popularity plummets and a scapegoat is needed. What we do not know is whether Medvedev, who lacks a KGB background can win over the apparat. Without its support, Medvedev would fail.
The scenario for Putin’s removal would be a sharp fall in the ruble, reminiscent of the summer 1998 collapse and default. The justified distrust by foreign investors means no more currency inflows no matter how high the return; in the meantime, Russian citizen discard rubles. The falling price of oil means lower dollar earnings. Currently, the ruble has fallen some thirty percent, and Putin has declared that it will fall further. If it were to plummet, say, 50 percent, Putin’s rating could no longer defy gravity. KGB Russia could decide to sacrifice him. Medvedev would then appoint a new prime minister. This scenario is possible but unlikely. Putin’s most likely exit would be to declare victory – to retire because his protégé can handle the job alone. A number of influential people are probably rooting for this scenario. Medvedev is not without personal ambition. Oligarchs faced with margin calls would want a change if they are not given bailout funds. Putin, who himself betrayed the oligarchs who put him in charge, surely understands Stalin’s adage: “Loyalty is a malady that affects dogs.”

Proposition 5: Putin’s Russia, like Stalin’s USSR, requires external enemies to justify itself. Therefore, there are few if any meaningful areas of cooperation or common interest with the West.

The KGB state mindset does not allow a scenario of a peaceful world of cooperating nations. It subscribes to Putin’s description of the loss of the Soviet Empire as the greatest catastrophe of the twentieth century. The immutability of this mindset is also captured in Putin’s expression: “Once KGB, always KGB.” Any support that the U.S. or NATO offers the Baltic states, Ukraine, Central Asia, or Eastern Europe will automatically be interpreted as anti-Russian. The encirclement by hostile powers also provides the justification for repression at home. Notice that virtually all “enemies” of KGB Russia are characterized as agents or pawns of foreign powers, instead of domestic enemies of the KGB state and what it stands for. It is therefore naïve for U.S. policy makers to think that they can make friends with Russia. This does not deny that some minor areas of overlapping interests might be found.

Proposition 6: Russia’s anti-Western foreign policy is popular with the Russian people.

If we examine the most recent polls of the Russian people, they show more satisfaction with foreign policy than with domestic policy. Only nine percent say that Russian foreign policy is too tough on the West. Only 12 percent of Russians are positive on NATO (63 percent are negative). These views are reinforced by the state media, of course, but they capture something deeper in the Russian mentality.

Thursday, February 12, 2009

Russian History According to Valdimir Putin

One month before the end of the Great Terror, Joseph Stalin invited regional party propagandists to Moscow to launch his Short Course: A History of the Communist Party of the Soviet Union. The intimidated participants, most of whose predecessors had been executed, listened as Stalin explained that if such a text had been available earlier maybe the two million victims of the Great Terror could have been spared.
This summer, Vladimir Putin’s version of the Short Course appeared in Russian bookstores. The new 500-page textbook, History of Russia, commissioned by Putin’s Presidential Administration depicts history as Putin himself wishes Russians to see it. A new law lets the government dictate which texts are to be used in Russian schools. Presumably, a generation of Russian students will be taught history from the new text.

Putin’s History drives home four lessons:

First, Russia has a heroic and glorious past as a vast world power. The three national accomplishments emphasized are the industrialization and militarization of Russia in the 1930s, the victory over the Nazis in the “Great Patriotic War”, and, now, the renaissance of Russia under Vladimir Putin, a leader “who understood that the sovereignty and integrity of the country must be maintained.” The first two achievements, however, occurred under Stalin. The authors’ problem: How to turn the dark Stalin years into a period of national achievement?
The solution is to present Stalin as a “contradictory” figure: “On the one hand, Stalin can be considered the most successful leader of the Soviet Union. During his rule, USSR territory reached and exceeded the boundaries of the former Russian empire, victory in the greatest of all wars was achieved, and an industrial, economic and cultural revolution took place.” Of Stalin’s victims, the textbook parsimoniously and dispassionately allows: “Under Stalin’s rule there were waves of great repression. The initiator and theoretician of such an ‘intensification of the class struggle’ was Stalin himself. Whole social groups were destroyed.” The authors conclude with a vast understatement: “All of this did not solidify the moral climate of the country.” Hence Stalin’s mistakes must be weighed against his many accomplishments, but notably: “With Stalin’s death, the epoch of rapid advancement to economic and social heights ended.”

Second, those who attempted to reform the system after Stalin – Nikita Khrushchev, Mikhail Gorbachev, and Boris Yeltsin, were failures. Khrushchev was a chaotic “utopist.” Gorbachev denied the USSR’s legitimate right to empire. Yeltsin succumbed to the pressure of hard economic and social conditions. Only those who sought to preserve the status quo, such as Leonid Brezhnev and KGB chief Yuri Andropov, are singled out as “playing a positive role in Russia’s history.”

Third, those who “sold out” the Soviet Empire cost Russia dearly in terms of its national security. Gorbachev “robbed the Soviet Union of its security belt” in Eastern Europe leaving these countries to “spheres of foreign influence with NATO units one hour’s drive from St. Petersburg.”

Fourth, both Gorbachev and Yeltsin were surrounded by “pro-American intelligentsia, whose sympathies and love of the USA created the basis for the pro-American foreign policy of our country.” Pro-Western intellectuals, who wish to “promote a positive image” of the West are prepared to enter into conflict with the Russian state (now wisely ruled by Putin) in order “to defend and preserve ties with the West.”
Dictators have an easier time if their citizens agree with their policies. The new history is, therefore, written as a justification of Putin-Medvedev policies. Leaders who question the status quo fail. The domestic enemy is pro-Western liberals, who should not be allowed to hold public demonstrations or given access to state-controlled media. After all, they are to blame for Russia’s greatest tragedy -- the loss of the Russian empire. Russia, a huge country surrounded by potential enemies, is entirely justified in protecting its imperial boundaries (Georgia) and defending its internal integrity (Chechnya).
Putin clearly wants Russians to believe that they are better off with an authoritarian leader, but the historical parallel is the “contradictory” Stalin. With twenty percent of the population having relatives imprisoned under Stalin, a whitewash is not possible. Putin can, however, build off the fact that Russians rate Stalin as a positive figure because of the triumph over Hitler. The subliminal message is that Stalin’s “theory of the intensification of the class struggle,” by which he justified the execution and imprisonment of two million citizens within an eighteen month period, contributed to victory in the Great Patriotic war victory.
Less than fifteen percent of Russians answer that they know “a lot and in detail” about the Great Terror of 1937-1938. The new text will not enlighten the remaining eighty five percent. There is no mention of the archival research showing that the Gulag was an economic and social disaster, that the vast majority of victims were poorly educated workers and peasants, that hundreds of thousands of death sentences were issued without trial, that confessions were extracted by torture, and so on. Such studies make it hard to conclude that Stalinist repression made any kind of positive contribution to Soviet economic or military achievements.
The text’s most notable omission is the NKVD’s (the KGB’s predecessor) role in Stalin’s excesses. Prior to Nikita Khrushchev’s 1956 speech on Stalin’s crimes, the party blamed rogue elements of the NKVD for the Great Terror. The new history places blame squarely on Stalin’s shoulders without delving into the integral role of the NKVD – a convenient approach for authors writing in a “KGB state.”

The new history textbook is only one instance of Putin’s rewriting of history. Putin has defended the notorious Molotov-Ribbentrop Treaty as "ensuring the security of western borders." The Soviet Union did not “occupy” the Baltic states. Putin considers the defense of Russia’s signal achievement – victory in the Great Patriotic War – vital to the resurgence of Russian nationalism and patriotism. He does not want Russians to know the darker side of the Soviet victory: Stalin’s self-serving execution of the Soviet general staff, the summary executions of retreating troops, the mass executions of ordinary citizens in borderlands, and the Gulag sentences for returning Soviet soldiers. Putin is not the first to fear such disclosures. Mikhail Gorbachev was warned by his top advisors that the true facts of the Katyn massacre could convince the Poles (and perhaps the world as well) “that the Soviet Union is no better and may have been worse than Germany and bears no less responsibility for the war”. Putin, like Gorbachev, cannot afford such a conclusion.

Friday, February 6, 2009

Kremlinolgy Redux

Just when we thought we had things figured out, Vladimir Putin did the unexpected. He announced that he would head the party list and as such would surely be named prime minister by his successor, whoever that might be. We had thought that Putin would yield power to a successor, anointed by him but also approved by the KGB state, and retire to a lucrative sinecure, such as the CEO of Gazprom. Putin’s successor was to be chosen by Russia-KGB Inc.. It did not particularly matter whether it was an obscure figure (as Putin was himself in 1999) or a political figure already known on the world stage. Putin’s plan to hold on to power, either as the head of revamped government or as a replacement of a figure-head president who somehow decides to step down in his favor, seems to be clear.

Josef Stalin was the dictator of the USSR from the victory over his last formidable rivals in 1930 until his death in March of 1953. The fact that he executed all but two regional party secretaries, more than half of the central committee, and about half of the Politburo so shook the Soviet leadership that they banded together to execute security chief Lavrenty Beria in December of 1953, the only one with apparent ambitions to assume Stalin’s mantle. Thereafter, the USSR was run by the Politburo with the General Secretary as first among equals. Stalin’s “cult of personality” was avoided. He General Secretary served until his death. His incapacitation was inconvenient but the powerful departments of the Central Committee could run the show on their own.

Stalin’s and Putin’s rise to power show striking parallels. Both were obscure and appointed by persons they would later eliminate. After Lenin’s second stroke of December 1922 removed him from active politics, two of Lenin’s likely successors – Lev Kamenev and Grigory Zinoviev – allied themselves with the obscure Stalin to block Leon Trotsky. It was this troika that ruled Russia until their falling out in 1926. Kamenev and Zinoviev soon realized their mistake; Stalin was managing the Politburo on his own. Too late they joined forces with Trotsky only the be expelled from power in a tempestuous Politburo meeting in 1927. It was not until 1937 that Stalin exacted his full revenge. The “mad dogs” Kamenev and Zinoviev were executed in the first Moscow Show Trial.

Similarly, Putin was an obscure figure with strong KGB credentials when he was singled out to replace Boris Yeltsin. He lacked a personal power base and was chosen by a “committee” that included Oligarchs favored by the Yeltsin family and leaders of the resurgent KGB, renamed the FSB. Given the half century Soviet aversion to “cults of personality”, it is unlikely that there was any intent at the time to make him a dominant and supreme leader even on the part of the FSB. After all, during Stalin’s personality cult eighty percent of the NKVD’s regional party leaders were purged – an experience which surely entered the FSB’s collective memory.
There was nothing special about Putin. He was not needed to win the upcoming parliamentary or presidential elections. The ruling elite controlled the media, had compromising material on opposition candidates, and did not hesitate to come down viciously on any real opposition contender. They are not to be deterred by Western public opinion, which they know is a paper tiger. Russia-KGB Inc. could easily elect the proverbial dogcatcher through its iron control of the apparat. Even the weak regime of Boris Yeltsin could reelect him starting from a popularity rating of five percent.

Putin, like Stalin before him, lost no time in eliminating those who put him in power. The patient Stalin had to wait seven years to accumulate dictatorial power. He had to wait another seven before he could physically annihilate his enemies. Putin’s pace was much faster. The Yeltsin family was bought off with guarantees of amnesty and financial security. His attacks on unpopular oligarchs sent them into luxurious but insecure exile. The one oligarch who chose to fight ended up in a Siberian jail, sentenced by “telephone justice” (the verdict dictated by the Kremlin).

Third, the Russian Constitution gives the Russian president the power to fire the government at will. Friendship may be friendship but as Stalin used to say “business is business.” Putin would have to have incredible control over the next president (perhaps in the form of kompromat) to ensure that he is not summarily dismissed. Surely there are influential directors of Russia-KGB Inc. who would like to see him go. How can he be sure that his maneuvers will not backfire?
Fourth, for a Putin, the office of prime minister is much inferior to that of president. The Russian president can follow the time honored tradition of scapegoating his government. If pensions are not paid, he fires the guilty minister. Stalin resisted assuming the prime ministership until the outbreak of World War II for this very reason. The head of the party was not held responsible for failures; members of government were. A prime minister Putin would have to bear the indignities of future economic declines, mine disasters, or foreign policy setbacks.

Fourth, it would seem that the board of directors of Russia-KGB Inc. would not necessarily welcome a Putin cult of personality. They may be waiting their turn. They know the personal dangers of a too powerful leader, who can compromise them or worse. As Stalin’s successors gathered at his death bed in March of 1953, they already decided that MVD head Lavrenty Beria had too much power for comfort. By December, Beria was dead with a bullet in the back of his head.

In short, we have a confusing mess that defies easy interpretation. One overlooked possibility is that the conventional wisdom about the orderly succession of power following a Vatican-like procedure is correct. Putin is simply engaging in a feint to avoid lame duck status. Another interpretation is that the board of directors of Russia-KGB Inc. has, for some unexplained reason, itself decided that it needs a Putin cult of personality. The third explanation is that Putin, driven by his personal power and popularity, has decided to anoint himself, contrary to the true wishes of his board of directors. If this explanation proves to be true, we are in for exciting times.

Wednesday, February 4, 2009

The Liberals Fight Back

Russian and foreign scholars dazzled at the marbled luxury of the Olympic Renaissance that welcomed them on December 5 to the International Conference on Stalinism. Quite a change from the dreary Akademichesky Hotel. Organizers included Memorial (whose Petersburg offices were raided during the conference), the commissioner on human rights, the state archives, and the leading publisher of Soviet history. The Yeltsin Foundation provided the funding. The conference’s goal was to “narrow the gap between the scientific viewpoint and everyday understanding of Stalinism,” which “peddles dictatorship and historical justification of violence, millions of victims, and cleansing through social purges.” Clearly Stalin’s soaring public opinion “rating” were a sore point. More than four hundred signed to attend. Some, including disappointed journalists, had to be turned away.

To the packed crowd, Russia’s top archival historian, Oleg Khelvnyuk, began by listing Stalin’s “mass operations” against peasants, “marginals”, the party, the military, and in border regions, not counting the six million or more famine victims. There were no gasps at the victim totals, more than ten million. The numbers were familiar and indisputably drawn from NKVD/MVD’s sources. Arsenii Roginsky, director of Memorial, followed with an impassioned address on the Stalin paradox – that there were millions of victims but no criminals! Instead of “crime without victims” Stalin somehow produced “victims without criminals,” by creating collective guilt for those who ran Russia after him. My presentation focused on “Was Stalin really Necessary?” stating we must weigh the costs of human life against the benefits cheerfully recited by apologists – rapid industrialization and the victory over Hitler (despite Stalin’s bungling of the first part of the war and his prewar extermination of the entire command structure). The costs, I suggested, were the immense and unnecessary loss of human life, the destruction of agriculture, and the introduction of a dysfunctional economy.

The second day of the conference was devoted to breakout sessions. An agitated journalist, whose apartment had been ransacked that night, wondered whether this was retribution for attendance? Some vocal Stalinists had penetrated the conference (“Under Soviet rule we had everything!”). Eccentrics spun wild theories as anxious moderators to wrested the microphone from their resistant hands.

The concluding summaries on the third day would have left an ordinary Russian observer without an answer: Was Stalin a positive or negative figure? The details and information were overwhelming but not packaged for a simple answer. The conference’s peak was a round table of distinguished writers, film makers, lawyers, and journalists, most old enough to have experienced Stalinism first hand. The moderator, Nikolai Svanidze, did his best to control the crowded auditorium. Danil Granin, a war veteran, “frontovik”, recounted the creation of the war-leader Stalin myth as Stalin exiled Zhukov (the equivalent of Truman banishing Eisenhower to Mexico) as the war ended. It was Stalin’s “military genius” that won the war. Sigurd Schmidt, the son of a noted arctic expert, recalled that when the party purges began, people simply stopped talking. Visitors ceased coming to his father’s office. Russian human rights commissioner Vladimir Lukin, lived with his grandmother after his parents, dedicated communists, were imprisoned. Frightened by the racket of a trolley passing by, his grandmother, who had seen her innocent children imprisoned, comforted him that Soviet engineers had designed a quiet trolley but “enemies of the people” had sabotaged it. Film director, Peter Todorovsky, recounted how an elderly building superintendent demanded proof that no state secrets were being violating. Local municipal officials puzzled: Why would any one ask for papers for a quite ordinary building? Only a survivor of Stalin’s Russia.

The greatest fireworks were reserved for the minister of education, Andrei Fursenko, who was repeatedly interrupted by shouts: “And what about the textbook?” As the moderator restored order, participants were instructed to pass their written questions to the front. The “textbook” was written by a little known historian and had been “approved” for use in Russian schools to teach the next generation about Soviet history and Stalin. The sputtering minister explained that the text had been approved by a meeting of teachers (an old Stalin trick), and even worse texts could have been chosen. As the next speaker was introduced, Fursenko discretely left the hall. The “text” claims that Stalin was forced by circumstances to embark on bold policies that, regrettably, demanded masses of victims. Putin himself is represented as another strong leader who rescues Russia from chaos and humiliation to preserve Russia’s rightful territory.
Did the conference achieve its goal? Scholars have the “facts” on their side, but they are read by a few thousand readers. The pro-Stalinist literature is available on every street corner in bright covers and short texts. These books “prove” that the archives are forgeries and scholars who use them are unpatriotic. Until we learn to communicate with a broader public, Stalin will continue to be a positive historical figure and the Putins and Medvedevs can continue to argue that Russia needs a strong hand.

To place this in context, imagine that the following document, signed by some modern dictator, has been discovered and published. Loosely translated, it reads: “Enemies of the state have been accumulating in the regions. We order each regional party and secret police leader to send us lists of such enemies, dividing them into two groups – one to be shot, the other sentenced to prison without any court trial.” This document is the notorious Order Number 00447 of July 1937. In his remarks, Fursensko advised scholars not to engage in polemics but to gather the facts, prompting a retort from the audience: “Do we need to gather the ‘facts’ about Hitler?” This document starkly relates the “facts” about Stalin and should end any discussion. Yes, we do need facts, but we need not refrain from making clear judgments about Stalin.

Putin Is In Deep Trouble

Just as Putin imperiously dismissed his own prime ministers who “failed the country,” he may soon find himself without a job. If so, his undoing will be of his own making. The anticipated passage of the constitutional amendment to raise the presidential term shows that Putin easily could have continued as president. Instead he installed a young protégé in the presidency and decided to run the country as prime minister. Putin is still the most powerful figure in Russia, but his mandate rests on his popularity. Currently Putin’s “rating” is four or five percentage points above Medvedev, but Medvedev’s three quarters approval is more than sufficient. Constitutionally, Medevedev is Putin’s clear superior. He can dismiss Putin at any time, even if the Putin-dominated Duma objects.

Putin has staked his popularity on restoring Russia’s international prestige and guaranteeing a strong economy. He has publicly promised to protect citizens from the chaos of the Yeltsin years. His invasion of Georgia left Russia in international isolation, although his rating for international affairs rose. Putin appears safe on this count, even though his only international supporters are rogue states. On the other hand, Putin could easily fall victim of the international financial crisis and his almost panicked actions tell us he understands this point well.

When the financial crisis broke, Putin’s first declared that Russia would not be affected. Its economy was too strong. The state media was instructed to avoid terms like “panic” or “collapse.” The United States was to blame anyway. If Russia’s stock markets were falling, so were they falling elsewhere. Putin did not say, however, that the downturn of the Russian stock market proceeded both Georgia and the drop in oil prices. International investors were simply fed up with Putin’s arbitrary manipulation of tax, legal, and environmental regulations, visa technicalities, and threatened investigations that served to destroy their investments. Even the most rock solid companies, such as Gazprom, were shown as houses of cards that serve the state not shareholders. Russians knew this and invested in apartments, furniture, and cars. Sophisticated foreign investors did not know what Russians knew.

After the international financial crisis broke, Putin was pushed to a begrudging admission that the financial crisis would also affect Russia, but he would keep it under control. Putin blamed falling oil prices, but Russia and Indonesia are similarly dependent on oil, and the Jakarta index fell fifty percent; the Russian RTS index almost 80 percent. There is a reason why Russia’s stock markets were hit harder than any other major country.

Putin’s major pillar of popularity – the strong economy -- has been damaged. With falling energy taxes, Russia’s once-proud military cannot be rebuilt. The goal of making Gazprom the world’s largest company is now a mockery; it has fallen from third to thirty seventh place – a huge “Putin discount”. Russia’s vaunted “stabilization fund” is not being used as intended to rebuild fraying infrastructure but it is being drained at alarming rates to prop up favored oligarchs and a shaky ruble. The declining ruble means that ordinary citizens cannot vacation in Greece or Turkey like last year.

Putin’s rating as prime minister continues to defy gravity at 80 percent. Russians are still giving him the benefit of the doubt. Medvedev’s rating has increased slightly (from 72 to 74 percent). But in the last two months, the percent of Russians expecting to “live better in the future” has fallen from 30-32 percent to 25 percent. As things get worse, this figure will plummet. Russia’s growth in the final quarter is expected to be flat and may be negative in 2009.
Putin’s disaster scenario is a sharp fall in the ruble, reminiscent of the summer 1998 collapse and default under Yeltsin. Putin has promised this will not happen, but his options are limited. The justified distrust of foreign investors means no more currency inflows; Russian citizen discard rubles as they fear further devaluations. The falling price of oil means lower dollar earnings. Barring some fortuitous event, the ruble must fall not by a point or two but by a significant amount. When this happens, Putin’s rating can no longer defy gravity, and he will have lost his claim to legitimacy.

The irony is that a sharp ruble devaluation is the medicine that is required to restore economic growth, as it did after the Yeltsin devaluation, but it could mean the political end of Putin.
Putin’s most likely exit would be to declare victory – to retire because his protégé can handle the job alone. A number of influential people are probably rooting for this scenario. Medvedev is not without personal ambition, and his (overlooked) presidential remark “an all-powerful bureaucracy is a mortal danger for civil society” cannot but be regarded as an attack on Putin’s governing methods. Oligarchs faced with margin calls would want a change if they are not given limited bailout funds. Putin, who himself betrayed the oligarchs who put him in charge, surely understands Stalin’s adage of Russian politics: “Loyalty is a malady that affects dogs.”

All You Need to Know About the Stimulus in Two Hundred and Fifty Wod

All You Need to Know About the Stimulus in Two Hundred and Fifty Words
1. We will always have business cycles, which end with our without government intervention. In some cases, government discretionary policies speed recovery, but doing nothing is better than the wrong policy. Entitlement programs serve as automatic stabilizers not requiring government action.
2. The average postwar downturn is ten months. The two most severe lasted 16 months, each caused by different factors. In both cases, alarmists warned another great depression was imminent. If history is a guide, recovery will begin in less than a year from now.
3. The Great Depression was caused by money-supply collapse, the interventions of the National Recovery Act, and the Smoot Hawley Tariff. Throughout the current recession, monetary aggregates have continued to expand. Protectionism and government intervention represent the greatest threats to recovery.
4. Major postwar expansions have followed long-term tax cuts (Johnson 106 months, Reagan 58 months, Bush 120 months) not government spending increases.
5. Discretionary spending cannot be put in place on a timely basis. The CBO estimates that only $191 billion of the proposed stimulus can be spent in 2009.
6. Keynesian fiscal policy is based on the assumption of a large multiplier. Most estimates place the multiplier at one or less, meaning the 2009 stimulus would raise GDP one percent or less. The multiplier is small because government spending crowds out private spending and people understand that deficits must be paid for with higher future taxes.
Paul Gregory, Professor of Economics, University of Houston, Research Fellow, Hoover Institution

Author of Essentials of Economics (Addison Wesley)