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Home , Anatoly Chubais, Barvikha, Prime Minister of Russia

pattern, not of acrmuulating ferment, btit of deepening passivity. A survey in 1961 of 17,000 yotnig people reported tbat only one-quarter of them listed The Soviet collapse and ihe Russian collapse. building a Communist society as a goal of their lives. The rest singled out music, social activities, and the need to avoid blue-collar occupations. Youth league officials, at a gathering in 1968 devoted Stealing the State in part to a discussion of apathy among the rank and file, occupied themselves BY STEPHEN KOTKIN with trying to come to grips with Easy Rider, the American film that had been et's face it," said repudiation of socialism and the dissolu- officially banned. Some stalwarts scolded George Soios, ^\natoly tion of the seetned to come the others for enjoying tbe film, btu. as C-hubais is "tainted." out of tbe bitie. An instittitional loss of Solnick writes, "even the indoctrinators (.hubais is first deputy confidence turned into a self-fulfilling ... seem to have been inadequately in- prime minister of and the former spiral. "Soviet institutions," explains Ste- doctrinated." chief of Rtissia's privatization. Soros has ven L. Solnick. "were victimized by the There was cynicism over a long time been the great champion of Russia's organizational eqtiivalent of a colossal among yotuh and older youth officials, transition, one of the few itidividuals to 'bank run.'" Soviet officials sensed the Solnick argues, and it indicates that match rhetorical support with financial Impending doom, and they "rushed to neither generational conflict tior ideo- support, first with philanthropy, now claim ... assets befote the buteaucratic logical decay can explain the regime's also with investment and with bridge doors shut for good." Of course, "unlike abrupt loss of contr<}l over instittitions loans to the Russian government. Soros [in] a bank run, tbe defecting officials such as the Komsomol in the 1980s. The was speaking about ('hubais at a sympo- were not depositors claiming their right- Kotusotnol deserted into opporttmisin, sitim at Harvard University on invest- ftil assets, but employees of the state btu tintil the "bank rtm" it functioned. ment in Russia; btit to point out, in 1998, that Chubais's reform machinations are The qtiestion, therefore, is why "Gorba- tainted is akin to ascending a soapbox chev's reforms apparently catised mid- and declaiming, with an air of intellec- Stealing the State: level and lower-level Soviet bureaticrats tual courage, tbat most French intellec- Control and Collapse in Soviet Institutions to abandon decades-long patterns of tuals in the 1950s were ... Communists! by Sicvcii L. Solnick subordination and to defy the autboritv' The Neil' York Times, another unvvaver- (Hiirvard University Press, 337 pp., $49.95) of their instittitional bosses." Solnick itig enthusiast for tbe Russian transition, contends that "discretionary behavior" has gone further, admonishing Chubais '/'/;(' Political History of Economic amotig "enterprising" officials was un- in an editorial to step down. This came Reform in Russia,'1985^1994 intentionally let loose. The reforms after the sore losers in Russia's first byMadimir Mau sought to achieve state aims by enabling apparently competitive bidding auction {Centre for Research into Communist greater local initiative. btU a divergence (for a 25 percent stake in Swazinvest, Economies, 132 pp.. £9.95) of interests between state officeholders a state telecomnuinications conglomer- atid top rtilers pushed decentralization ate) used their private media outlets Privatizing Russia much fnrther than intended. to divtilge that Chubais had accepted an by Maxim Boycko. , "advance" for a coauthored book on pri- and Robert Vishny be Komsomol vanished vatization with dim sales prospects. A (MITPress, 165 pp., S12..50) along with its bank de- publisher's miscalctilation, one might Kremlin Capitalism: posits. So did the system conclude—except that the company was Privatizing the Russian Economy of mandatory job assign- subsequently acquired by the hank that mentsT for university gradtiates. But by Joseph R. Blasi. Maya Krt)uniova, won the Svyazinvest auction (with a ten- Solnick's third case, the Soviet draft, der of $1.87 billion). The amount of the mid Douglas Kru.se survived the events of 1991, notwith- book advance was s90,000. (Cornell University Press, 249 pp., $16.95) standing [he known prevalence of drunk- Boris EVtsin: ot rassveta do zakata enness, violent hazing, and noncombat For years, as part of Rtissia's dash to [: From Dawn to Dusk] deaths in the army. Observing that the market, untold billions of dollars' by Aleksandr Kor/hiikov "assets" such as draft boards cotild not be worth of properties have changed hands (Inicrbiik. 479 pp.) easily expropriated, he overlooks the under (^Ihubais's direction, with Western garage sales of Kalashnikovs, commtmi- cheerleading, consultants, and cash. But cations equipment, and tanks. He also neglects lo mention that the Komsomol all of a sudden we are shocked, shucked appropriating state assets." And they hy "robber-baron capitalism," and some- was linked to the Commtinist Partv' and grabbed everything that was "ftmgible." so went down with it. and that tbe system one must be beld accotmtable. The up- (From the wreckage Solnick himself roar over Chubais s petty greed reflects a of job assignments formed part of tbe plucked a valuable book.) planned economy and could not stirvive certain disappointment over the eotuse It looked like the end of history, but of events in Russia. But that disappoint- the latter's demise; but the army was a it was a bank rtin. Solnick's study of the state institution, not a party institution. It ment derives from an insufficient grasp "stealing" of the state proceeds through of what has transpired. could exist, whatever the nature of eco- three case studies: the Communist youth nomic organization, provided it received Amid lamentations over "reforms" league (Komsomol); the system of man- allocations from the state budget and stymied by Communist troglodytes, the datory job assignments for university drew on a sense of statehood. graduates; aud universal military con- STEPHEN KOTKIN is director of Russian scription. Examining archival materials, The state survived the party and Studies at Princeton Universitv. he f^ound that Soviet youth displayed a socialism. Indeed, the Communist Party

26 THE NEW REPUBLIC APRIL I 3, I 998 had nt-vt'i di.splated Ilie siaie. Alter the Ministers, to be followed by in.structiotis the party and you got a voluntary tmion revolution in 1917, tsarist officers and from the (Genual (^^ommittee depart- of states, any one of which could choose bureaucrats were incorporated into the ments in charge of ideology and educa- to withdraw. new order for their much-needed ex- tion and the Ministry of Edtication. and Gorbachev had trouble grasping his pertise. But they were not trusted, and so on, right down to the eity and district country's structure. He also feared party so tlie revolutionarv autlioritics paired part) committees and the local branches conservatives, (ilasnost was introdticed the experts with polilital commissars. of tlie state edtication btireaticracy. to force "reform" on the recalcitrant, but Thf ncxr generation of officers and Why not, then, remove the party as it had the opposite effect, ft heightened bureaiicraLs were graduates of Soviet redundant, anti get on only with the conservative opposition, hi late 19H8, schools, but the party-state parallelism state? That is what CJorbachev half- to avoid a repeat of Octoher 1964, when was already inslittitionalized. Thus, the wittingly set out to do. But he had an im- a conspiracy of the apparat ousted Soviet Union acquired two separate pleasant surprise. The problem that Gor- Klirushchev by accepting his "request" bureaucracies, one of the party and one bachev enctJtmtered—the bank run— to resign, (iorhachev abolished the oC the state, mirroring eatli other in took place becatise the party under- Union-wide supervisory tun( tions of the function and in office fiom tlie lowest girded tlie I'nion. (k)ntrai y to common party. By sabotaging the appaiat, and in levels to the liii^hest. understanding, the Soviet state really such a masterly way that the con- By itself the Soviet state was ininienst', was a union comprising Ifi republics. servatives scarcely noticed, the wily geti- encompassing ihe whole system of Sovi- Each republic had fixed borders, a quasi- eral secretary secured his own posi- ets, or legislatures, and the executive, or parliament, a government, an academy tion—but he also inadvertently placed the various ministries, the planning of science, and a national langtiage, all the republics beyond 's control. agencies, the KCiB, the aiiny. To conduct estah!ishe(f mostly as a result of (lelil> The Supreme Soviets of the sovereign business, the staff of each state institu- eiate policies undertaken hy the Sov- repuhlics, freed from party domination, tion usually held two meetings, once as iet regime. I'he constitution gave the hegan to pass laws stipeiseding tho.se of pai t\ niembi IS and f)nce as state iunc- reptiblits the right to secede. But self- tlie I'SSR. Hectoring and the inconclusive tionaiies. Since almost all state officials rtile was hioekecl, hec ause ihe party was use of force could not alter the new were party members, ihe two meetings not fedetal. The ("ommunist Party of, political balance. trequently seemed identical. At the same say, Georgia did not have even the nomi- How could the Soviet Union have time, the garganttian party hiireauctacy nal autonomy of a republic: it was sub- "survived decades of inescapably real held its own meetings alongside those ordinated to Moscow like the party com- challenges like war, famine, and crash of the stale bodies. Thus, a decision on mittee from any Russian province. As intkistriali/ation," yet perish as a result S(IK)O1 textbooks meant a resolution long as the centralized party apparatus of "the altogether less ominous chal- from botli the parly s Ontral Cotmnit- held sway, the federal institutions of the lenge of internal lefotin"? Solnick has lee aiKf the government's Council of state could be overridden. Bnt remove an answer. This hajjpened because ihe The Asian Crisis, Currency Devaiuations, Financiai iVieitdov\fns....

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APRIL 13, 199B THE NEW REPUBLIC 27 party was redundant to the state, but and there were few strikes. So home Whereas Gaidar had legiiimalcd man- without the partv the federal state no free? Hardly As Mail emphasizes, consis- agerial larceny, Ghubais sotight to ttirn it longer operated like a centralized state. tent anti-infiationary policies proved to the country's advantage. Dumbfounded, the Soviet elite divided impossible in Russia, owing to the social between those who clung to the unsal- legacy of Stalin's industrialization. Gai- hubais's approach was tac- vageable Union and futilely demanded dar vanquished the planning bureati- tically brilliant. He dele- martial law. and those, such as Yeltsin, cracy, but agents of the more itmdanien- gated responsibilit)' for the who I ushed to join "nationalists" repre- tal sector of the planned economy, the privatization of lessei-scale scntinj:; the republics, thereby saving or industrial enterprises, vanquished him— businesseCs to regit>nal and munici- even elevating themselves. The putsch after he had litjerated them from the pal governments, to make them self- in August 1991 (it was conducted by the planners. interested beneficiaiies, and he himself government of the Soviet Union, so as to concentrated on large firms. Ai med with preserve itself) undermined the Union's aidar was replaced by a program of "mass privatization." he la.st operating institution: the Soviet Viktor Ghernomyrdin. the endeavored to beat back anti-private presidency (llmt is, Gorbachev). Rtissian natural-gas tsar of the property forces in the parliament; to win Republic bodies—some recently formed Soviet era. Stoking dooms- over existing stakeholders (the sticky-fin- on paper (the army, the KGB), others of day prophecieG s in the West, Gherno- gered managers, some of whom opposed long standing (the Finance Ministry)— myrdin pnblicly castigated his predeces- privatization for fear that they would lose their ownership rights): took over the remains of their disinte- sor and bemoaned the steep decline of and to ci eatt' more stakeholders among grating Union counterparts. Solnick is Russian industry. In practice, however. the new prime minister began to follow a the citizenry. Vouchers were distributecl unconcerned with this larger frame, but to everyone bcUveen October 199*2 and he pinpoints the dynamic: "precisely more vigorous anti-inflationary course tlian Gaidar, using patriotic rhetoric to February 1995. In preparation for sale, those agents who successfully defected all firms were compelled to incorpo- from weakening Soviet structures" have deflate the opposition. For all his analyti- cal acnnien, Mau does not explain this rate—bui as open joint-stock companies, become "the leading political and eco to preempt tlie insider-le

28 THE NEW REPUBLIC APRIL 13,1998 received more than s40 million in non- Small wonder that Ytni Ln/hkov. the would lie sold at auction. Incredibly, competitive grants over several years. sa%'\y mayor of Moscow, ptilled out all Chubais allowed the banks Uiemselves to AddiiioTial hiiiKlreds o(" inillions coor- the stops to exempt Moscow properties set up and to run the auctions. 'The dinated by iinn were provided by pri- from the vottcher schetne. Like Cieneral banks that organized the atictions re- vate foundations in America, the World Kuttizov against Napoleon, Clhubais sur- peatedly disqtialified their competitors Bank, the European Reconstrtiction and rendered Moscow to win the war. Assets and won the bids," Blasi. Krottmova, and Development Bank, and others. In con- in the country's capital were offered for Krurse write, adding in miderstatement nection with the voucher proi^ram cash sale, generating sizable revenues that "mcst bids were fairly low." In many alone, some .$7.7.5 million was spent on that have been used not onlv to line the cases, in iact, the outcomes were riggerl: ten "consultants" hired throtigh llllt). pockets of officials, but also to rebtiild the presei\iiig the appear'ance of competi- They worked intimately wilh Cluibais. city s inriastructure and to pay for ser- tion, the bankers negotiated a division of who bypassed the troublesome Russian vices. Much of the rest of Russian indus- the spoils. The upshot was the creation legislature and obtained the aiithorit\' to try, however, was given away for small of a small group of billionaires, who act from autocratic presidential decrees. l)cci\ to make privatization "irreversible." repaid the favor by helping proctire He set tip privaie agencies, staffed by Boris Yeltsin's reelection in 1996. (The select goveiimient oftkiais, to handle t all might have been benefi- IMF also kit ked in stibstairtially.) the ftmds. Efficacy took precedence over cial had the Russian economy arc()untabilit\\ taken off. But the survey by ately, the billionaires have Hint used part of its LSAID funding lo Blasi. Kroumova. and Krtise been scooping up control- also uncovereI d little evidence of restrtic- ling stakes in a variety of "stipport" the writing of an informative and self-congrattilatory book by Shicifer turing. They note that outsider influ- enterprises and firing man- ence over firms remains negligible, and agers; Lbut restrtrcttiring remains einsive. atid two other members of the team, Maxim Boycko and Robert Vishny In tliat substantial passive state ownership The problem is not some innate incapac- that book, they laud privatization as a persists in most inms. "Privatization," ity on the part of Soviet-era managers to "rare success story of Russian economic they conclttde, "was a seed that fell on work in market conditions. (After all, to reform," adding that by 1994 it "was hard, dry gronnd"—except in Moscow, fulfill the plan most of them had to be largely done." But they themselves ac- which they do not examine. (Nor do wheeler-dealers on the vast black mar- knowledge that the success ot privatiza- they investigate the experience of the ket.) The problem is that many, and per- tion "tiltimately" will be determined hy provincial governments, most of which haps most, of the enterprises purchased have used privatization to consolidate "the speed and scope of restriictitring," with votichers—even the ones subse- political control, with economically var- quently taken over by outsiders—face and that "the restructtiring of industry" ied results.) well-deserved extinction. It is one thing has barely "begim." Even with .such an to procure state licenses to export oil admission, their first-piiiiciples dc(en.se Neither book on privatization treats and gas for dizzying profits, or to ex- of Russia's privatization would be easier ihe impact on the industrial lobby. Still, propriate the profitable sirbdivisions of to take had t.sAlD not suspended the it is not hard to snrmisc what happened. factories; it is quite another to restrtrc- Harvard grant in 1997 alter allegations Newly propertied managers split into ture a rust belt encompassing literally that, in violation of university regula- two (amps. There were those in profit- an entire country, hi the 1920s, belbre tions, Shleifer's wife and another consul- making ventures, who wanted a relative- Stalin's industrialization, heaw industry tant's girlfriend made profits in Russian ly siable macioecononiic environment, accotmted for about '20 percent of the Investments using privileged inlbrma- and there were the r'est, who sotight con- Soviet economy. By tbe late l9H()s, the tiou controlled by iiiii). tinued btidget stibsidies to prop thenr proportion had switched. The economy tip. Paying lip service to the latter, ('her- was almost 80 percent hea\y indu.stry. more scruptiloits assess- riomyrdin backed the former, who in- ment of Russian privatiza- cltided a handful of manufacturers but Not all enlerprises inherited by Russia tion conies from a hook over^whclmingly comprised firms selling (rom the Soviet Union were antedilu- based on another Htii> resources at world ptices (such as Gaz- vian. The best were in defense, but the sponsoreAd pi<)ject. BetAveen 1992 and prom, the prime minister's former baili- necessarv downsizing of the military- 1996. Joseph R. lilasi, Maya Kjouniova, wick). The men rirnningsirc h (ornpanics indtistiial complex brought many woild- and Douglas KJ use visited hundreds of whisked their considerable windfalls into class manufacttirers to tbeir knees. coin|)iinies in almost all legions of the oftshor-e accounts, thotigh some of the Other- top-notch branches, stich as bio- Russian Kedeiation. On average, they cleverer ones botrght up media proper- technology, suffered from the lack of write, managers and general directors ties and created commercial banks. industrial triage in (iaidar's btoad-fiont admitted paying about 40 times less The state treastrry has seen little of attack on the founder ing planned econ- than their companies were worth. And this money. On the contrary, the combi- omy Notwithstanding the abolition of even higher mtiltiples have been docu- nation of premeditated shock therapy planning and industrial decline, Russia's mented. The automobile manitfacttirer (inducing a free-fall in industry) with economy is still dominated in employ- VAZ, for example, was purchased at selective budget concessions opened a ment terms by P"or-disl plants typical of voucher attction foi .It4.5 million, whereas monstrous deficit. Heirce the infaniotrs the interwar period (even if they were in 1991 Fiat had offered S'2 billion (and "loans for shares" second stage

30 THE NEW REPUBLIC APRILI3, 1998 cow lost their sinccuri's as vaiioiis slaie and tiiingled their plasma. agencies were abolished. Bui many of Trying to minitni/e l)ad news, orvvhai these reappeared undfr new names, a disheartened Yeltsin would denounce and countless new offices were created. as "again more shit," Korzhakov took Buildings that used to house party ii upon himself to regulate the traffic apparatchiks now hold state functionar- JTi and out of the president's office. Yet ies. Ilie ])()st-l99l fias Yeltsin became depressed anyway and, in nioir oI'lK-fholders tlian the Soviet Korzhakov's euphemism, periodically Union had, to serve not much more souglit t(j "resolve matters once anhea\'\' and sell-absorbed. sphere of aulhority. Kor/liakov improba- bly sloughs oil' responsibility for the he story ol the Russian Chechen war, but he admits that well state's consolidation ac- before Yeltsin's violent showdown with quires a new light in Boris parliament in October 199.S he "told the EVtsin: nt mssx'p.ta do zakata, president it's time to bang a fist on the or BorisT Yeltsin: From Dawn to Dusk, a table. Enough already tolerating this memoir by Aleksandr Korzhakov re- whorehouse environment, this power- (eTitK' published in Russia (and not yet lessness. There should be a single mati Letters of tTanslaled into Kugiish). A career KGB of the house." of'iicer, and tlie beefy son of two tex- Heinrich and tile workers from a rougli-and-iumhle tist ptiof to the onset of Thomas Mann, Moscow nei^liborhood, Kor/hakox- was the armed melee. Korzhakov assigned lound-tho-cUtck guard duty of writes, Yehsin retired at 11 1900-1949 Boris Yeltsin in late 19H5, when tfie party p.m., having instructed his Edited, with an Introduction, by Ijoss of the Urals was transferred to bodyguarJ d to sit at tlie coimtry's com- Hans Wysling Moscow and made a caiididale-member mtinications command post. "I sat in the Translated by Don Reneau, ol' tlie Politljuro. Even afier Yeltsin was president's chair almost the whole night Foreword by Anthony Heilbut bouiuect [roin the leadership and de- from the 'Md to the Ith of ()cu»ber." he "Beautifully edited and translated. moted lo head a consiiuclion trust in boasts. "I heard I'cpoits. issued orders, ...The letters of the brothers Mann 19H7, they remained in close contact. gathereti information.'" When he discov- constitute a crucial document of Korzhakov professes that he had no ered that Defense Minister Pavel (Irach- 20tb-century German culture and inkling thai Yeltsin would later rise to ev had not moved in troops as he was politics, and they are by any stan- stipreme power, that his continued asso- ordered, Koizhakov supposedly woke ciation with a disgraced official cotild dard fine reading."—Kirkus Reviews and dragged the president to the tempo- "A welcome addition to the Mann instead have flama^cd his career in the rizing ministry. Several hours later, after Kremlin. Soon enouj^li, however, Yeltsin Yeltsin was again awakened to shore up canon..,.A fascinating and useful was eleried to higli oi'lk e. Ajfain he i ated the motale of the elite Alpha troops. collection."—Library journal a bodvjfuaid. He and tlie bodyguard Kor- Keen "in eesiasv over getting German Refugee Artists and fiee housing.") fie divulges tlie presi- After relying oti Koivliakov to disperse Intellectuals in America from the dent's passion lor playing spoons, nsnally the madcap parliament. Yeltsin s entour- 1930s CO the Present on the head of a kneeling aide. (When age forced through a constitution whose BY ANTHONY HEILBUT ihe wooden souvenir type could not balance of powers is neatly summed up Available again, with a new Pref- be lound, Yeltsin used metal ones.) We in the provision that treats of votes of learn ihal the president, when forbidden ace—"Heilbut has exercised no-confidence in the government: after impressive scholarship, and even a U) cirink by duelors, would secretly slip one such vole, nothing happens; after a money to an aide to go out and hu\- him sec<.)nd such vote, nothing happens; after touch of poetry, to get to the a liotile. (The evei-vigilanl Kor/hakov a third su< h vote, ihe presiflent may dis- beart of this diaspora."—Time iniercedefl, substituung watei" foi vodka, miss parliament and call for new elec- $19.95 paperback bui adding just a pinefi ol tlie hard stuff tions. Stteh arrangements, generou.sly to fool the boss.) Numerous family described as a "presidential state," have Ai bookstorc5 or order I 800 822 6657 photographs, with imagined captions been attributed to the authoritarian coniaining Yeltsin's 'Vollotiuial" lirand political culttire of Rtissia, or to Yeltsin's University of ol Russian, add weight lo tlie revelaiion pcrsonaliiv. fiiit Kor/bako\'s memoir California Press tliat Kor/hakov and Yeltsin were "blood liighlights how, in battling against the w^^. ucpress.edu brothers," having iwiee cut themselves "threat" of a (Communist revanche and

APRIL 13,1998 THE NEW REPUFJI.K 31 decides what's good coached by Boris Berezovsky, a tvcoon and what's bad," he with close contacts to the government, Notes from the Provinces records himself as hav- she accused Korzhakov of sabotaging the ing said. "The prime president's campaign. In the middle of Something about that music minister is not the last the night, NT\', a private station owned from the corner bar &: grill— person in our state, in by , another financier, tfie blue notes drifiing out like smoke .. fact, he's probably the interrupted its insomniac programming number two person. to report an attempted coup. Each time she walks by, or he does, You should also have That morning Yeltsin met with Kor- he licks his lips appreciatively— some weight." zhakov and Barsukov, and reportedly for- but he docs it so no one will notice. More details of the gave them; biu later, under pressure discussions are not from his daughter and Chubais, he de- Sunset, down on the town square, provided, but Kor- manded their resignations, The presi- as they lower the flag, raise their rifles. zhakov writes that dent went on television, explaining that Fire at the ernptv' heavens. Chubais, backed by the two security men had "taken a lot on Children running in circles, billionaires who were themselves and not given much." The re- old men in a chister nervous about politi- marks alarmed Korzhakov's mother, who discussing their tight black shoes. cal instability, advised thought that Yeltsin was referring to that, with a lot of bribes rather than power, and scolded Through an open window money and the manip- her son for not sharing some of what he two lovers locked together ulation of state tele- took wilh the president. Dismissed, Kor- upright, or maybe not. vision and private tele- zhakov nonetheless rettirned for work in Smell of somebody's cooking vision, reelection was his Kremlin office—and was admitted. arriving on a wind possihlc. As Yeltsin was When he was informed of this, Yeltsin by way of |upiter Street. shown on TV holding was enraged; and an aide hurried to tell a shovel and telling Korzhakov it was for real, he had to go. What was it you stepped out to look for? impoverished viewers Two days later the president suffered Cool air, a piece of string, that he and his family another heart attack. The runoff was a a few fresh herbs from your garden? planted and harvested week away. On the day of balloting, the their own potatoes, former bodyguard told a wall of TV cam- DAVID YOUNG which they "lived on all eras that he voted for Yeltsin. Korzhakov winter," the tables at admits believing that a reflected presi- campaign strategy se.s- dent would stmimon him back. Btit Yelt- sions groaned under sin already had his strong-arm constitu- for the cause of "reform," anything couid the weight of delicacies reminiscent of tion, and for the time being he needed be justified. Russia had no organized the Romanovs. Within the Yeltsin camp, neither cancellation of an election nor political center to speak in the name of however, the uncertainty of a real vote military operations against parliament. the rule of law. There were only danger- increased tensions, while the campaign Escaping, now and again, from the ho,s- ous Communists and anti-Communists. rearranged the internal correlation of pital to the Kiemlin, Yeltsin has made (Here Gorbachev's pre-1991 refusal to forces. At the end of one meeting at noises ihat he wanted to free himself split the ranks and form a social demo- headquarters, Korzhakov asked Chubais from the money men as well. Constitu- cratic party looms large.) A strong execu- to keep his ugly mug out of public view, tionally, he has the power to dismiss his tive also seemed necessary owing to the since it was turning off too many voters. govcrnmeni—as he did, theatrically, last chimera of a directed transition to ihe Usually ruddy, C'htibais turned so pale, week. But Yeltsin's illusory show of lead- market, while ihe redistribution of prop- according to Korzhakov, "that he began ership (possibly abetted by his daughter erty provided more than enough incen- to look like a normal white person." Tatyana) cannot curb the parasitic power tive to hold power, whatever the political Korzhakov, who held responsibility for of the financiers and energy interests, or price. guarding campaign finances, provoked a eliminate any new government's depen- The unchecked presidency happens showdown. He writes, in Soviet jargon, dence on them. And intrigue, too, has to be occupied by an invalid president. that "information came forward" that its price. After Yeltsin suffered anoiher heart tens of millions of dollars were being attack around New Year's Eve, 1995-96, stolen from the campaign. More prc* n stealing the state, only a few Korzhakov and other handlers holed cisely, on the night of June 18, Kor- former Soviet officials ripped tht president up at the government zhakov's men surreptitiously entered the out the phones, carpets, and complex in Barvikha. "Occasion- room holding campaign finances (it was wood paneling before fleeing. ally," Korzhakov writes, "Boris Nikolae- Most oIf them remained at their desks, also an office of the deputy finance min- vich would ask in a sad voice, 'How're ister), opened the safe, and allegedly using their positions—connections, things down at work? What's new?'" This found s500,000 in neatly wrapped bank- licensing power, affixing of seals—for pri- is Brezhnev, with elections. One day notes, along with receipts for deposits vate gain. It seems remarkable, in retro- Yeltsin lifted his head with difficulty in offshore accounts. The next day, two spect, that before the great bank run state from the pillow and in a barely audible campaign workers showed up and re- assets were not spontaneously appropri- voice declared, "fve decided to run." trieved the money. They were detained. ated by the officials at all levels, for these The president's popularity hovered near Korzhakov's close associate Mikhail Bar- were the people who exercised day-to-day zero, and Kor/hakov concedes that the sukov, chief of the FSB {a successor control over their disposition. Of course, inner circle had its doubts. Trying to win embezzlement and bribe-taking were to the KtJB), sent a team to condtict an over Chernomyrdin, the prime minister, commonplace under Communism. But interrogation. A call came in from the to an election nullification scheme, Kor- compared with what has happened since? zhukov resorted to flattery. "It's not right president's younger daughter, Tatyana Wlial an irony that Mikhail Gorbachev, that only the chief of personal security Dyachenko, who demanded the release who had risen to power as the leader of an of the two detained men. Supposedly

32 THE NEW REPUBLIC APRIL I3,1998 .inlicoi ruptioii tfain assfinhlfd by Yuri of the gigantic rust-belt economy, and it FRFF. C\T\I,(M; —1 Andro|X)v, instigntf d a reform ihat great- remains as daunting as ever. ; v Classic Music Furniture ly accelerated the insider theft of state Privatization, along with macroeco- ' v;* 11 y{)u loie music, ow new i:L]Iylog of fine harowoiid music furniture will delighl you. property by officials. And what a coup nomic stabilization, has not brought Music siands, ^heel music cabmels. players" that Boris Yeltsin, assisted by Russian and about the miraculous transcendence of seiiiin;!, insfrumenl slunds. :md mote. 'Alden For FRKE catalog foreign champions, claimed the credit, the rust belt. Nor have the reforms in- call 1-800-324-5200 (ailing the iheft a transition to the mar- stitutionalized contract and property 21'iChrysk-rDt, Menli) Park. CA 9402,1 ket. In away, it was. law, regularized tax collection, or re- Just as no So\iet leader could have eas- duced official venality as welt as other ily forestalled tlie di.ssolution of the su tic- crime. Few people seem to have studied turally vulnerable Union, so no Russian the causes of the developed world's Publish Your Book leader could have prevented the total shift from "primitive accumulation" to 73-year tradition of quality. Subsidy book appropriation of bank accounts and a permanent legal framework benefit- publisher offers publisbing services tor property that the state owned on paper ing all property holders. Russia may books of all types. For Author's Guldf write btu did not control. For that reason, this yet provide some clues. Hope lies in or call Dorrance — NR, 643 Smirhfieid, was nex'n an engineered move to the the thousands of new small btisinesses Pitrsburgb, PA 15222 or 1-800-695-9599, niaiket. Tlie Rtissian transition formed that have arisen, and in the immense a continuation oi' the Soviet collapse, sums of domestic capital known to be which in ttu n was driven by the dissolu- kept abroad. Russian banks and hold- SEIZED CARS FROM $175. lion of structural controls over stale ing companies have been buying up Porsches, C'adillacs, Chevys, agents and managers. Exempting him- properties and businesses beyond their BMW's, Corvettes. Also Jeeps, 4WD's. self, Gorbachev established mnlticandi- borders, in the "near abroad" of former Your Area. Call Toll Free, date elections and dealt an tinintcndcd Soviet territories, and throttghotit the 1-800-218-9000, Ext. A-4377 body blow to planning. Yeltsin, with the former satellites of Eastern Europe, and for current listings. people's support, pushed a "radicaliza- in Western Europe and Asia. Should the tion." Cielling rid of the remaining mech- money begin to come home and be anisms of the socialist economy proved invested, the results could be extraordi- to be child's play. Legalizing and thereby nary, And some foreign investors are GOVERNMENT FORECLOSED gaining some influence over the sponta- bullish. Prior to his loose talk about HOMES FROM ncotis appropriation of state property robber-baron capitalism and the taint- pennies on $1. I Jclinqut-nt Tax, took greater skill. (Something other than ing of , George Soros Rfpo'i, REOs. Your Area. reformist lalent was involved in who got formed part of the winning bid for the Call Toll Free: 1-800-218-9(100 the choicest assets and how.) But the contested qtiarter stake in Russia's Svyaz- Ext. H-4377 for current listings main task all along was the rejilacement invest. G(} figure. •

FREE CASH GRANTS! College. Scholarships. Business. The Old and the New Medical bills. Never Repay. Toll Free: 1-800-218-9000 Ext. G-4377 BY ROBERT ALTER NEW AUTHORS PUBUSH YOUR WORK The Castle All subjects conskli'ivd: Fiction. Biography, Poetry, Religion, Childrens; by Franz Kafka AUTHORS WORLDWIDE INVITED. translated by Mark Harman Write or soid your mauut^cript to: MINERVA PRESS ISchocken, 328 pp., S2S) 2 OLD BRUMnON KDAU'LIINUON SW7 3DQ, ENGLAND y \ci\iliiiig about Kafka is World War II. Once the cult figure ol a complicated and elusive: small literary elite, Kafka came to be pro- his life, his intentions moted into a major modernist—indeed, # about the publication of into a kind of touchstone of modernist lii.s work, tlitf texts of his novels and sto- fiction. ries, the course of the posthumous pul> The first problem with the Muirs' ver- lication of his writiiifrs, the challenge sion was scarcely their fault: it was based ot representing him in translation. The on the German text assembled from Castle, his lasl and famously incomplete Kalka's manuscripts by his friend and lit- novel, first appeared in English in 1930, erary executor Max Brod. In the course lor ^ tiff [,[i.jli)guf, write or i.A\: (bur yt'ars after its publication in only of time, it has become clear that Brod's Dt[n. N1-; • P.O Bo\ %9 • Ashland, Oregon 97S20 1,500 copies in German. This early En}^- way with Kiifka's texts was often cavalier. lish version, by the Scottish critic and (Walter Benjamin wryly characterized 1-800-729-2665 poet Edwin Muir and his wife Willa, was Kafka's relationship with Brcjd as "a hrrp:/Avww.bl,itk\lijneaudio.tum the version through which countless friendship which is not among the small- thousands of British and American read- est mysteries of Kafka's life.") Brod pre- ers experienced The CastU, as Kafka simied to excise certain passages not to swelled in reputation in the years after his taste; and he made some attempts to BLACK5T0NE AUDIODOOK5

APRIL 13,1998 THE NEW REPUBLIC 33