Putin

Others were more intent on dismantling the system than on exploiting the transition. One of those was Anatoly Chubais, who was born in 1955 and was thirty-six when the USSR fell. His father was a Soviet army colonel, a World War II vet, and a believer in Marxism who lectured on it to the troops. A lanky redhead, Chubais was drawn to economics, a subject that had been his mother’s major, but she stayed home with the children and never practiced her profession. Chubais, who would quickly become known as “the most hated man in Russia” for the pain he inflicted on the country during the shock-therapy phase, did not himself come swiftly to his new worldview. In the beginning he was an economics Ph.D. student in Leningrad trying to figure out why command-and-control economies were always economies of shortage. He gradually came to the conclusion that only prices set by the open market could provide realistic and reliable information as to what goods and services were needed. But, once convinced, he had something of his father’s Soviet steel in his convictions.

He was a natural for Mayor Sobchak’s team and quickly became one of its top economic advisers, dealing with the attempt to create a Free Economic Zone in Leningrad. That was in 1990. By the end of 1991, Chubais had moved to the center of power, Moscow, and the highest echelons of President Yeltsin’s government. He was appointed chairman of the Committee for the Management of State Property, which was in charge of privatizing state property. Chubais became the “architect of the largest transfer in history of state-owned assets to private hands,” as David Hoffman put it in The Oligarchs, by now a classic text.

No one knew what they were doing, for two very good reasons. First, the people in charge of dismantling the Russian economy were mostly men in their early thirties who, apart from receiving an education, had not done very much at all, certainly nothing on the order of running large enterprises. Second, what they were doing was historically unprecedented. It also contradicted the Marxism on which they had all been reared and that held that Communism was the stage of development that came after capitalism, not vice versa. And so turning Communism into capitalism was as absurdly impossible as trying to turn fish chowder back into fish.

But Chubais and his ilk had strongly held attitudes, goals, and assumptions. The attitude was a visceral hatred and contempt for the system. “I hate the Soviet system. There is little in life I have hated like the Soviet system,” said Chubais. The goal was the absolute destruction of the Soviet economy and thus the Soviet state by putting the USSR’s assets in private hands. The assumption was that the laws of the market would sort things out. The inefficient would die away, the efficient would thrive. Private ownership and personal freedom were two aspects of the same thing. Russia would leap into both democracy and capitalism all at once.

The process would be modeled on the Polish experiment with “shock therapy.” The first step was to free up prices so that they would reflect market realities and not the decisions of bureaucrats in the planning commission. As the Russians quipped bitterly, they got the shock but not the therapy.

Between 1990 and 1994 prices increased by well over 2,000 percent. By the hideous magic of inflation, $100,000 turned into $400. The stores were “pristinely empty,” as Egor Gaidar, the other main leader of economic reform, put it. The farmers weren’t delivering grain. “Why should they? To get some piece of paper that, out of habit, people still called money?”

Huge trucks appeared in downtown Moscow bearing potatoes from the countryside. People bought as much as they could, staggering away bent parallel to the ground by immense burlap bags. In apartments potatoes were everywhere—in cabinets, in closets, under beds.

Everything was for sale. Old women stood in the cold holding up a single knit shawl, like human stores. For people raised on socialist ideals, which considered property to be theft, there was a particular shame in the act of selling, not to mention the fact that these goods were often family heirlooms or simply all people had left in the world. Those with nothing to sell simply knelt on the freezing sidewalks and offered up their own pain and self-abasement. The younger women chose other strategies, equally desperate. Flocks of prostitutes chased every car that slowed in the downtowns of Russian cities. Many were nurses and teachers who could no longer feed their families on their meager salaries, if they were even paid.