Kapitalizm: Russia's Struggle to Free Its Economyby Rose Brady
Rose Brady, Moscow bureau chief for Business Week magazine, here provides a compelling first-hand account of Russia's transition from a socialist state to a market economy. Taking us into the factories, stores, banks, markets, homes, schools, and corridors of power in Russia, she explains how the country's own brand of capitalism has evolved.
New York Times Book Review
- Yale University Press
- Publication date:
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- New Edition
- Product dimensions:
- 5.45(w) x 8.21(h) x 0.88(d)
Read an Excerpt
Babushki. Grandmothers. A conga line of babushki stood shoulder to shoulder outside the railway station. Their feet stamped in the slush and mud. Their blank eyes gazed into the distance. Their rough hands held out bottles of vodka, loaves of bread, Ukrainian sausages, Chinese-made handkerchiefs, T-shirts, used boots, old cameras ... all for sale.
Hundreds of grandmothers stood at a makeshift market at the Kiev Railway Station on the south side of Moscow. Or a few miles away at Belorusski Vokzal. Near metro stations on the outskirts of town. At Luzhniki Stadium. And at train stations and stadiums in St. Petersburg, Yekaterinburg, Vladivostok, Nizhny Novgorod, Perm, and all across Russia.
Hundreds and thousands of Russian traders were doing what just a few years ago had been against the law exercising their freedom to buy and sell goods or to sell their old belongings, for a profit. Dengi. Money. They needed money to supplement miserly pensions or salaries. Not to buy sausage or bread, which they could still afford, but to replace eyeglasses that had been lost or to buy medicine or to pay the huge telephone bill (which used to be so low) or to buy a birthday present for a friend ... In other words, to survive Russia's transition to capitalism more or less as human beings.
Antonina Grigorievna had worked for decades at a lightbulb plant. Nadezhda Petrovna had guarded a factory during the siege of Leningrad. Vera Nikiferovna, orphaned at birth, had raised four children on her own after her husband died of a heart attack.
"Milaya, moya ... my darling ... what would you like?" Dressed in a big brown wool coat, with a brown wool hat, Vera Nikiferovna was selling lemons, milk, and cottage cheese.
"We are pensioners. We don't have enough money. We have to work a little bit what can you do? We buy these goods in the store and sell them for a little bit more whatever we can get. I come here at about five in the afternoon and leave at nine. During the day I buy, and at night I trade that's my work."
Vera's husband had died twenty-two years ago. "I have two daughters and two sons, and I raised them all myself. It was easier then. Everything was much cheaper. I had seven thousand rubles in the bank. At that time I could buy both a dacha and a car with that money. Now you can't buy anything. We planned and planned and then everything was lost. We were lied to."
They enjoyed life more before, these babushki. Life was hard but more predictable. "We were just beginning to live when it was Brezhnev's time. With him, it was good, very good. We were paid very little, but we ate well," said a woman combing through the garbage bins near my office. She wouldn't give her name. "Before we could buy meat, clothes, boots. Now I can't buy boots. It's impossible. You have to save, save, save. That means don't eat anything, don't drink anything. What to do?"
She didn't search the garbage bins for food, though. "I look for children's toys, pretty containers, empty wine bottles, sometimes pens. I want to buy something for my grandchildren, maybe some fruit, maybe some bananas.... I come here it's far away from my own neighborhood so no one there will see me. Mne stydno, after all. I'm ashamed. Maybe someone will tell my children,...`Your mother is picking in the garbage.' Even sometimes my grandson asks, `Babka, where did you get this?' And I say, `I bought it.'"
"I worked in a sewing factory for forty-one years," she recalled. "I started when I was fourteen years old. I got married young, lived with my husband, gave birth to children, raised them, and that's it. I don't have beautiful furniture. I don't have a beautiful apartment. I don't have a dacha or a car. I didn't earn anything in life. Now my children tell me I raised them the wrong way. All that honesty and fairness, no one needs it now. If you are honest you are a fool.
"They say we are going to live better but I don't know."
Viktor knew. "I live better, much better," he said. He had come to my apartment at the invitation of a friend. A young man in his thirties, tense, he leaned forward in his chair and smoked Camels fiercely. He was big across the chest and in the arms. He spoke in a matter-of-fact voice without emotion. "We live as we like. I am not dependent on anyone. Everything is perfect. But for every job, I always am prepared for the worst that I won't come back. That's it. It's pressure, constant tension."
A robbery conviction had landed Viktor in prison at the age of fourteen. After his release, he had wandered for a while, looking for a job. When Gorbachev's perestroika allowed new private businesses to open, Viktor had joined a Moscow gang.
"What can I say? People with higher educations are being cut back from work every day. There's nothing to do, nowhere to go. You have to live somehow, so we steal, we kill. There was one businessman in recent days, the director of a firm. He didn't want to pay us. So we took him, tied him up, brought him into the forest, and beat sense into him. After that, everything was fine. As soon as he gave us our money, we arranged for him to be kicked out of his company and we put our own man in. We invested our money into it."
"There's a street here in Moscow Tverskaya Ulitsa. Just look at it," Viktor urged. "All those buildings, all that land. All those new stores. It's almost all owned by people who at some time were involved in the raket. My life today is such that I can get for myself anything I want. But one perfect day maybe it won't be like that anymore."
"I go to church every week. I light a candle. I give the bums there money for something to eat. Everything is fine."
At a Moscow school, I met Julia. She was an attractive young woman, dressed in a short black skirt, high heels, a vest. She was in her last year, planning to enter the Institute of Foreign Languages. Her best friend had just been killed. "He was a bodyguard for a businessman, and he was shot. He was the only person who had the kind of life I respect. He worked, he brought money home to his family. He lived for something and for someone. I haven't met many people like that."
Julia spoke with a great deal of irony for one so young. "This is the kind of country that makes you tired," she explained. "It's that kind of life, impossible to predict. You go along and suddenly bonk a new reform. Yesterday you had ten thousand rubles, and today it's only worth a ruble. And in our country now if you don't have money you will not succeed. Whether you area genius or a fool, you need money. All around, you have to give bribes."
But she did not want to go back to the way it was before. "I think Russia should be a capitalistic country. We shouldn't have the situation when a stupid, cruel, immoral person should have as much as an intelligent person. It's not moral. If people behave differently, work differently, why should they be paid the same?"
On the assembly line of the huge tractor plant in the ancient city of Vladimir, Alexander Martisyanov missed the old socialist egalitarianism. A spark plug of a man, short and tough, Martisyanov was hoisting a half-built engine onto a hook. He had worked at the factory for forty-four years. "Look at these hands," he declared, holding them up. The right hand was covered by a thick, grease-stained blue mitten. The left hand was bare except for the grease working its way into his pores. "Before, they gave us two. Now I only get one. I switch it from hand to hand. One hand gets dirty, the other gets a rest. Our conditions have worsened in every way. We produce one-half of what we used to. Our wages are never paid on time. Socially, we are poorly defended. The minimum amount you can live on is seventy thousand. We get paid forty thousand or fifty thousand a month."
"Look at the assembly line," he gestured. "It's shut down. Today isn't a holiday. It's a normal working day. But we didn't get the right parts so we cannot work."
"Whose fault is this?" he asked rhetorically. "It doesn't depend on us, the working class. The bosses dictate everything. They say there are no parts, but there always used to be parts. The parts came from all over the union from everywhere. Now we are all disintegrated. Everything is ruined."
Poverty, crime, industrial collapse. These were images of Russia's lurch toward capitalism. Yet there were also images and voices of abundance, optimism, hope. In his newly remodeled office in a prerevolutionary mansion in downtown Moscow, Sergei Solodov leaned back in his plush leather chair. As vice chairman of Rossisky Kredit, one of Russia's largest commercial banks, he felt the burden of his responsibilities. "I spend about twelve or thirteen hours a day at work. Saturday I usually work either meeting with the collective or on business trips. I have almost no personal life. Once a month I rest, and the rest of the time I work. I am the kind of person who decides to live and die at work."
Solodov was in his early twenties. Not long before, he had received his diploma from the economics faculty of the automotive construction institute. An average student, he had spent one week on the assembly line, the next week in the classroom. Then his life changed. His sister started working for Rossisky Kredit, and he soon applied for a job there. He worked part-time while finishing his diploma, then full-time. In two years, he rose from analyst to vice chairman. "Now is the time for young entrepreneurs," said Solodov. "We are playing. We are playing football. And the more we play, the better. As we go up, the country will go up." He wanted to help his bank grow throughout Russia and the world, and he was not modest in his objectives. "Empire. To create an empire. That is our goal, to become a transnational corporation. Our goal is to develop while there is the possibility in Russia."
"I very much like the climate that we now have in Russia," Solodov said. "Whether we say it is good or bad, at least it gives you the freedom to work. If a person has energy, initiative, and a strong mind, that person is able to work."
Solodov predicted, "In Russia today, there are those who are satisfied with their lives and those that are not satisfied. The new formation will be those that are not satisfied. It will be those that will take the initiative to push forward for the nearest fifteen to twenty years at a minimum. Everything depends on the intellectual potential of the young people. I am by nature an optimist, and I believe that in Russia everything will be fine."
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