Publication: Prism Volume: 3 Issue: 15

Russia’s new young leaders aren’t necessarily better than their predecessors, but they are different

By Andrei Fadin

The first six months of 1997 saw the rise to supreme power in Russia of a whole cohort of "young wolves" — thirty- to forty-year-old politicians united less by their age than by their liberal-conservative political orientation, their tough and energetic political style, and their cultural "Westernism." Deputy Premiers Anatoly Chubais, Boris Nemtsov and Oleg Sysuyev are in the forefront. In the second row is a large group of those promoted in the post-Gaidar wave to the rank of minister and deputy minister, heads of government departments, and high officials in the presidential administration. These are people such as Valentin Yumashev, Yakov Urinson, Aleksei Kudrin, Boris Brevnov and Anatoly Yevstafiev. Also prominent are leaders of the major banks and corporations — men such as Mikhail Khodorkovsky, Vladimir Potanin and Vladimir Gusinsky. Even those young politicians and professionals who see themselves in opposition — Grigory Yavlinsky’s people, for example — belong, culturally and generationally, to this group. For all the differences of their practical approaches and positions, they speak the same language (both in a broad, semiotic, sense, and literally, in terms of lexicon). They are on familiar terms with English and with computers; they have traveled the world, and they know the West well enough to have an adequate conception of it and its true intentions and of Russia’s role.

Where did they come from?

The "young wolves" are the children of yesterday’s "Soviet middle class." They reaped the last fruits of "real socialism" in the form of a free education and a childhood free from the struggle to survive. Unburdened by moral complexes or social prejudices, responsible neither to their elders nor to future generations, they received the maximum benefit as a result of the collapse of the old establishment. But while they are not necessarily better than those they replace, they are different.

The traditional Soviet nomenklatura was structured not only along functional lines, but also in terms of feudal-bureaucratic client relationships, personal loyalty and devotion, the exchange of services for protection, and friendships between individuals and between families, including the intermarriage of children within a particular circle. The fact that the members of the elite lived in the same or nearby apartment buildings, went to dachas in the same place in the summer, and were treated by the same doctors, was very significant. Spending leisure time together — hunting, fishing, in the sauna and, especially, drinking — played a significant role in the formation of the "class solidarity" of the elite. One could tell which political clan someone belonged to by observing who it was he drank or steamed himself in the sauna with.

Unlike the old nomenklatura, the "young wolves" base their relations on a much less personal and more rational basis. Here, what is required from a member of the team is first, ideological orientation, and second, precise, professional work. In this group, the traditional rituals of Soviet group loyalty (drinking together, sauna) are not customarily observed, and it is too early to speak of intermarriage between their children. Anatoly Chubais is a typical representative of this new type of post-Soviet apparatchik — goal-oriented, hard-working, secretive.

The team of "young wolves" was formed, for the most part, from members of the Leningrad seminar of market economists in the 1980s. From this circle, Aleksei Kudrin, Alfred Kokh, Petr Mostovoi, Aleksandr Kazakov and others entered the elite. Mikhail Manevich, the deputy governor of St. Petersburg who was assassinated in August 1997, belonged to this circle, while Yegor Gaidar belonged to a similar circle in Moscow. A third center of liberal economic thought in the USSR’s last years was in Novosibirsk.

The pattern of interpersonal relations in the younger generation is linked not only with the Westernization of cultural norms, but also with the changed conditions of adherence to the elite. In the old days, the prosperity of the nomenklatura was defined exclusively by the office held and the commensurate access to the distribution of goods (housing, scarce consumer goods, trips abroad). Nowadays, one belongs to the elite not just by virtue of the office one holds, but also thanks to one’s own personal prosperity.

The salaries of public officials in Russia, even at the highest level, are miserably low. At the same time, electoral cycles and the probability of losing one’s job in the event of a change in the political leadership, force top officials to look out for their future and that of their families — they have to lay the financial groundwork for their prosperity. Clearly, this prosperity comes not from their government salaries but from their covert participation in business or from the "services" they provide to big corporations. This is a very private matter and, for politicians, a very dangerous one. Everyone remembers the scandal that arose over the publication in Novaya gazeta of the information that Chubais had earned half a million dollars in six months. The extent and sources of one’s income must be hidden even from one’s closest associates on the "team." Even such everyday matters as friendship between families or the education of one’s children cannot lead to the formation of new social networks. The question of where young officials get the money to send their children to study abroad (in England, for the most part) inevitably raises the question of income. The same is true of housing, automobiles or virtually anything else.

Ideological influences

Many of today’s liberal reformers began their political careers in 1991-92 or had connections with the stars who were promoted at that time. Their ideology proceeded primarily from their experience within Russia, and Western ideas played only a supporting role. Most of them confronted at first-hand the progressive inability of the Soviet state to manage the economy. Western theories were and still are only superficially known in Russia but, on the whole, they confirmed the young economists’ own analytical conclusions. The ideas of Milton Friedman and Friedrich von Hayek clearly had a strong influence on the ideology of the "young wolves," but ideas about political democracy and human rights dominated their consciousness to a far lesser extent.

A popular topic of discussion in this circle was the analysis of the failure of populist and inflationary models of getting out of the crisis in the countries of Latin America and, by contrast, the striking success of the "Chilean model." But the young Russians’ world views did not include the whole East Asian experience of accelerated development, with its powerful statist component.

Back in the 1980s, and especially in the early 1990s, the young economists began to pay rapt attention to market reforms in the countries of Eastern Europe. They looked especially closely at Hungary and Poland. Poland’s finance minister Leszek Balcerowicz, who successfully implemented "shock therapy" in that country, was the indisputed hero of the age. Afterwards, in the circle of young liberal Moscow economists, the slogan "Let’s do what they did in Poland" emerged. Other "heroes of the age" were the premier of the Czech Republic, Vaclav Klaus, and the Hungarian economist Janos Kornai, whose book The Economics of Scarcity was an economic bestseller in the mid-1980s. Both Gaidar and Chubais made a professional study of the Hungarian reforms.

Contacts with Western colleagues, which opened up in the 1980s, and joint research projects within the framework of the International Institute of Applied System Analysis in Vienna (where Gaidar, Petr Aven, and many other future liberal reformers worked) only confirmed the correctness of their conclusions. It was in Vienna that they first met Western economists such as Anders Aslund and Jeffrey Sachs. As soon as it became possible, these people were invited to Moscow as advisers. But these contacts changed little in the minds of the Russian liberal economists. The basic ideas of voucher privatization, for example, had been formulated and discussed in liberal circles back in 1986-87.

The influence of Western advisers in Moscow was limited — very frequently, they were asked purely technical questions; often, their advice wasn’t heeded. On the whole, the views of the "young wolves" could not be linked with any particular school of Western economic thought. Rather, they were oriented toward the American economic mainstream, a sort of generalized Harvard, an economic neo-classicism in the spirit of Samuelson. What has been important has been not concrete economic theories adopted in the West by political liberals but the fact that, in the words of one Moscow financier, their "group of reviewers" has been located in the West. The opinions of the Western economic community, Harvard professors or IMF economists are much more important to the "young wolves" than those of any community in Russia.

What propelled the new generation to power?

Since Yeltsin had no reform program of his own — not even a general plan — the colossal formal power which he had concentrated in his own hands proved useless. By 1996, Russia was facing a growing structural crisis and "social dynamite" was accumulating down below. In these circumstances, Prime Minister Viktor Chernomyrdin’s policy of doing nothing and going round in circles became fatally dangerous for the regime.

The "young wolves" were propelled to power by the Russian financial oligarchy, who virtually ran Yeltsin’s reelection in the summer of 1996. The financiers’ trusted person in Yeltsin’s entourage was Anatoly Chubais, and he became the main dispenser of the financial resources which the banks invested in the Yeltsin campaign. Following his reelection, therefore, Yeltsin found himself forced to bring new people into power, together with their ideas and programs, and to give them authority in their own right. The details of the deal were obvious: the "young wolves" received power, authority and influence from Yeltsin which they clearly could never have won in any election. Yeltsin, in turn, got a definite program and a technology of government, and his regime acquired a clear goal.

What does the future hold?

The arrival of this new team in key government positions has been the subject of numerous analyses by political scientists. But the consequences of this generational shift in the Russian establishment (and this phenomenon is much broader than simply the coming to power of Chubais’ team) remain unclear.

In spite of the obvious successes of the "young wolves" in politics, business and finance (mainly, of course in Moscow), they are still a minority in the economic establishment. The majority — the economic nomenklatura, the directors of state enterprises, the traditional heavy industry and raw materials establishment — are products of the old culture and are alien and hostile to the young generation. And it is these people — industrialists such as Gazprom’s Rem Vyakhirev and regional leaders such as Bashkortostan’s Murtaza Rakhimov or Sverdlovsk’s Eduard Rossel — who control, to a decisive degree, the social and economic life of the country and most of its production capacity. For them, the rise of the young parvenus, who have received much more political power than their real social weight and control over the economy would warrant, reeks of injustice.

The "new liberal revolution" is seen as an even greater threat by politicians "made in the USSR," such as Viktor Chernomyrdin, Yury Luzhkov, Gennady Zyuganov or Anatoly Kulikov. It is therefore not surprising that Chernomyrdin, Zyuganov and Luzhkov are turning out to be functional allies on questions such as preserving the natural monopolies and sequestering the budget. A vote of no confidence in the government and dissolution of the State Duma would be equally dangerous for all of them.

This game is not over

And it is not only a matter of the objective balance of power; it must also be remembered that Yeltsin never places all his bets on one horse. At first, he kept remnants of the old economic nomenklatura in the upper echelons of power; later, he kept on key people from Gaidar’s routed team, and made sure that Chubais did not get eaten alive. Now, he won’t permit the "old guard" to be handed over to the "young wolves" completely. This is logical: like a pianist playing two pianos, Yeltsin will not deny himself the chance to change his tune.

Translated by Mark Eckert

Andrei Fadin is a commentator with Obshchaya gazeta.


Prism is a publication of the Jamestown Foundation. It is edited by Elizabeth Teague and Stephen Foye.

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