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By Root 1512 0

including the conservative Hoover Institution, investment bankers like Goldman, Sachs and Company, and radical free-market economists such as Jeffrey Sachs have been pushing shock tactics, in the first two quarters of 1994 industrial production fell a further 25 percent per quarter (faster than during the Great Depression in America), with agricultural production stalled at a thirty-year low.5 Some estimates classify a full one-quarter of the Russian population as impoverished with an additional 40 percent living below the subsistence line.6 While the rich buy cellular phones, Maine lobster, and illegal drugs, the average industrial wage remains somewhere between $40 and $70 a month, just a little more than what it takes to rent a car at a good hotel for an hour.7 Stretch limousines at $150,000 and $30,000 Cartier watches sell out in what are usually all-cash transactions in boutiques that once targeted foreigners but now cater primarily to Russians—about a million of whom (from a population of 150 million) can afford luxury goods. By the end of 1993, nearly forty thousand foreign-make cars had been registered in Moscow.8 At the Exhibition of Economic Achievement fairgrounds that once paid tribute to the wished-for wonders of Soviet industry and science there stands today a massive shopping arcade: a tribute to McWorld, where “Muscovites cart off newly bought Sony and Panasonic Televisions so fast it looks like a looting spree” and where a Russian visitor exclaims: “I am in shock, I am in shock, I think we have become the 51st state of America.”9 Naglost (a term meaning “anything goes” with particularly brazen and insolent undertones) has replaced glasnost as the working cry of the new capitalism, where pyramid schemes pass as investment opportunities, gut-burning moonshine is sold in Chivas Regal bottles, and protection money and security guards have become the ante of playing in any business at all.

Meanwhile, more than 15 million are unemployed (as compared with less than a million in the old Soviet Union) and critics—not all of them conservatives or nationalists or sulking Communists—argue that shock therapy has become shock without therapy. Conservative editor Aleksandr Prokhanov laments, “The economy is dying, social links are breaking apart. At some point soon society will become ungovernable.”10 Viktor Chernomyrdin, Yeltsin’s new prime minister installed after radical reform failed, announced: “The period of market romanticism is over,” but he must still figure out how to deal with $2.5 billion in rescheduled foreign debt, most of it favoring foreign investors who received investment credits.11 The $11 billion in bilateral assistance promised by Western nations in 1993 and 1994 is also aimed at helping Western exporters while the $4.5 billion in real aid promised by international organizations has been forthcoming only in dribs and drabs—as has been the case throughout Eastern Europe, where Western promises have yet to pay off.12

New York Times reporter James Sterngold, reporting on the 1993 economic summit in Japan, wrote that the Russian aid package negotiated there “clearly amounted to less than met the eye … just a reallocation of funds committed” earlier.13 While Russia awaits serious investors in its own economy, McWorld is moving in. The world’s largest McDonald’s is now in business near Red Square—although it caters to the well off, with a Big Mac lunch (which can be ordered in English or Russian) costing a week’s wages. Ben and Jerry’s has come to the provinces, although unlike Pizza Hut, it is prudently holding off on Moscow. Avon is hawking cosmetics to housewives whose vanity is being assiduously stroked by the new media, which feature Western gangster films, soap operas, and game shows; and every electronic and software firm in the world is staking out a position in what is hoped will be a primary consumer growth market in the new century.

The old creaking collectivist and statist monoliths are slowly disappearing, but in their place, alongside struggling new Russian businesses, are American-style