#9 - JRL 7248
The National Interest
Summer 2003
A Low, Dishonest Decadence: A Letter from Moscow
It is shortsighted to judge Russia's progress by superficial materialist measures--or have we forgotten what the Cold War was really about?
By David Satter

After 15 years of tumultuous change in Russia, Moscow is booming and parts of the city give the impression that they are part of the West. Tverskaya Street, the capital's principal artery, is filled with strollers, late model cars and outdoor cafes. On Novoslobodskaya Street, coffee houses are filled to capacity and consumers crowd the new "Friendship" Russo-Chinese shopping center. Everywhere, restored buildings reveal the beauty of Moscow's 19th-century architecture and, at night, the illuminated facades of the buildings and gleaming cupolas of the Orthodox churches create an atmosphere of dynamism and resurgent grandeur.

On July 31, 2002, a milestone of sorts was reached with the announcement by Vladimir Sokolin, the chairman of the State Statistics Committee, that Russians' living standards had returned to the level they had attained before the financial crisis of August 1998. Sokolin said that the real cash incomes of the population in June 2002 exceeded the August 1998 figures by 5.4 percent.

The atmosphere of the Moscow streets, so stunning in contrast to the uniformity and shabbiness of the communist era, has evoked the enthusiasm of Western observers. Michael Binyon, a correspondent of The Times of London, wrote that, "Many Russians have never had it so good." Leon Aron, a biographer of Yeltsin, wrote in The Weekly Standard, The produce shortages and ubiquitous lines of the Soviet era have been forgotten. Fresh and delicious food is available everywhere. For the first time since the 1920s, Russia not only feeds its people and livestock but is a net exporter of grain.

And Anders Aslund, an economic consultant and author, wrote in The Moscow Times, "As the rest of the world sinks into recession, Russia booms. ...It is time to realize that Russia is a country that solves its problems with an efficacy and speed that the West can only envy."

Unfortunately, however, the true state of Russia is not simply a matter of surface appearances. The reforms that have remade Moscow's urban landscape took place without the benefit of higher values, and they bequeathed to Russia a moral vacuum. The result is that behind the fac ade of relative prosperity made possible by its improving economy, Russia faces underlying problems-criminalization, lawlessness, disregard for human life and a deep spiritual malaise-that threaten the country's long-term survival.

The Rule of the Lawless

The lawlessness in Russia defines the tenor of everyday life. Russian business operates according to the law of the jungle in which the most basic functions can only be carried out with the protection of armed force.

The impact of criminalization in Russia is evident both at the street level, in the terror unleashed on society by gangsters, and in the corrupt operations of the clan system at the highest levels of power. At the street level, gangsters create a sense of permanent insecurity for millions of citizens. It is not possible in Russia simply to run a business. That business must have protection, which Russians refer to as a "roof" (krysha). This roof is provided by a criminal gang that protects the businessman from other criminal gangs (as well as from itself) in return for a share of his income.

The system of roofs is so well established in Russia that entire regions are divided up between rival gangs, and businessmen turn to the gangs to settle their disputes and collect their debts. Moral boundaries in the process become so blurred that many Russians treat the demand that they hand over a share of their income as a legitimate obligation.

The only real competitors of the gangs are the law enforcement agencies. For a long time, the gangs had a near monopoly on extortion but, as the heads of law enforcement agencies saw the enormous profits that were possible, they too entered the protection racket. Today, security firms connected to the ministry of internal affairs, the directorate for the struggle with organized crime (RUBOP), and the Federal Security Service (FSB) also offer protection to paying clients, particularly in Moscow. The official "roofs" have some advantages over the criminal ones. They are less likely to betray their clients and, unlike the gangs, they can be fired.

But the involvement of police agencies in the protection racket undermines the whole notion of law enforcement and implicitly treats extortion as a normal part of life.

While the protection racket dominates Russian business at the street level, the government serves as the roof for oligarchic businesses that have their own security forces and are not vulnerable to crude racketeering. When the reforms in Russia began, money was in the hands of gangsters and black market operators, whereas property was in the hands of government officials. The first priority of virtually every new enterprise was therefore to buy government officials. The successful purchase of one government official made it possible to buy others, and Russia soon came to be dominated by oligarchic clans that had, in effect, put the government on their payroll. The result of this system was a country characterized by both massive poverty and a striking concentration of wealth. Eight oligarchic groups today control 85 percent of the value of Russia's top 64 private companies and the combined sales of the twelve top private companies equal the revenue of the government.

An example of how the system operates was provided by MDM, one of the most powerful banking groups in the country. In the years since Putin acceded to power, MDM acquired Russian industrial giants, including defense plants, at a speed that would not have been possible without the protection of the government. It became interested in Nevinnomissky Azot, one of Russia's largest fertilizer factories, which had an annual profit of $30 million.

MDM met resistance, however, from the factory's director, Viktor Ledovsky, who set up a firm through which the workers could buy up shares in the factory. He then appealed to the government not to sell its stake in an enterprise that was making a profit.

In response, the tax police of the Stavropol region accused Ledovsky of hatching a scheme to steal money from the workers. Ledovsky produced a statement from the Russian Institute of the State and Law that his activities were legal and that workers' rights were protected, but this was ignored. He was arrested on July 4, 2001, ostensibly to prevent him from fleeing the country. Evidence of his intention to flee was a ticket to Munich purchased in his name on July 8, four days after his arrest. With Ledovsky in prison, the Russian Federation Property Fund sold the state interest in Nevinnomissky Azot for $25 million, virtually the starting price, to a group representing MDM.

Many of the principal oligarchic clans were united by their connections to Boris Yeltsin and his immediate relatives, known collectively as "the family." With the accession of Putin, however, the family has faced competition from the "Leningraders", for the most part associates of Putin and veterans of the intelligence services. The basic situation, however, has not changed.

One of Putin's favorite oligarchs is Oleg Deripaska, the director of Russian Aluminum, which produces nearly 80 percent of Russia's aluminum.

Dzhalol Khaidarov, a former close associate of Mikhail Chernoy, a partner of Deripaska with close ties to organized crime, described how the system works in an interview with Le Monde:

"You ask why Russian Aluminum gained one or another factory. They will say that the shares were purchased. But if you look, you'll find that the former shareholder is in prison, became a 'drug addict' or disappeared. When I worked with Mikhail Chernoy, the group every year gave bribes of $35 to $40 million dollars a year. It was always possible to buy a judge, a governor, or a law. In the early 1990s, they murdered. Now they prefer to file a case or put someone in prison. They can do anything."

Live and Let Die

Besides lawlessness, the future of Russia is threatened by society's disregard for human life. In the first place, the low value attached to human life in Russia is reflected in everyday events. In Russia today, there are 40,000 murders a year, three times as many as there were in 1990.

This gives Russia the second highest murder rate in the world (after South Africa). Unfortunately, however, this figure may be a serious underestimate. According to Russian demographers, in addition to the confirmed murders there are another 40,000 violent deaths per year in Russia in which the cause of death-murder or an accident-cannot be established, and there are 20,000 cases a year where individuals simply disappear.

According to the journal Demoscope Weekly, the figures for all categories of violent death in Russia far exceed their Western equivalents. A comparison of Russia and England, for example, shows that a Russian is five times more likely to die in a traffic accident than an Englishman, 25 times more likely to accidentally poison himself (usually with alcohol), three times as likely to die in an accidental fall, 31 times as likely to drown, seven times as likely to commit suicide and 54 times as likely to be murdered.

Among the reasons for the lethality of Russian life is that when a life threatening situation does occur, Russians can rarely count on timely help.

In January of last year, Taras Shugayev, a young Moscow resident, left a pool hall drunk and awoke to find himself inside a moving garbage truck, dodging massive blades that were slowly grinding collected refuse into pulp. For 23 minutes, according to a transcript of a series of calls made on his cell phone to Moscow's rescue service operators, he pleaded and cried, saying he was being squeezed and begging for help. The operators, however, only advised him to alert the driver by banging from inside the truck. No discernible action was taken by Moscow's various police forces that, according to one rescue service spokesman, dismissed the report as a prank. "Are you in a joking mood to be calling us like this at 6 o'clock in the morning?" a police dispatcher reportedly said.

By Shugayev's fourth call, during which the rescue service was mainly concerned with trying to learn who might have put him in the truck, Shugayev was desperate. His last recorded words were, "This is it, I think I am suffocating. This is it." The police only responded 24 hours later after Shugayev's family reported him missing. They then pieced together what had happened with the help of phone records. By that time, however, there was nothing to do but sift through a suburban dump, looking for possible remains.

Besides the hazards of everyday life, the low value assigned to Russians' lives is reflected in the readiness of the government to sacrifice them. In a general sense, this was reflected in the nature of the economic reform program that was undertaken with little regard for its effect on the health of the population and was accompanied by five million premature deaths. The death rate in post-communist Russia was not an accident. It was the product of specific policies that reflected the authorities' lack of concern for individuals. In the first place, the government removed all restrictions on the sale of alcohol. The result was that at a time when the purchasing power of the average Russian was cut in half, his salary in relation to the cost of vodka increased threefold. The era of cheap vodka coincided with the peak of the privatization process and the resulting tranquilization of the population lowered resistance to the criminal division of the nation's wealth, albeit at a cost to the nation's health.

At the same time, the government failed to finance the system of public health. For the first time, Russians had to pay for many medical services, from necessary medicines to lifesaving operations, and the inability to pay led many to give up on their own lives. The government even failed to finance adequately such hospitals of "last resort" as the Vishnevsky Surgical Institute in Moscow, which was underused despite the surge in the death rate.

The disregard for the value of human life has also been reflected in the Chechen wars in which the authorities have shown little concern for the lives of either Russian soldiers or Chechen and Russian civilians. But there was no more graphic, specific illustration of the authorities' indifference to human losses than their actions during the hostage crisis when in late October of last year 800 persons were taken captive by Chechen terrorists in Moscow's Theater on Dubrovka.

From the moment that the theater was seized, it was clear that what was involved was a test of the government's attitude toward the lives of its citizens. Never before had so many persons been taken hostage in a major capital. The terrorists included 18 suicide bombers who had bombs strapped around their waists. Dozens of other bombs were fastened to the building's main supports. The terrorists threatened to detonate the bombs and obliterate the theater if their demands were not met.

As the crisis began, President Putin said that saving the lives of the hostages was his first concern, and there were clear indications that a peaceful solution was possible. The terrorists initially demanded an end to the war in Chechnya and the withdrawal of Russian troops, steps that, according to polls, were supported by 65 percent of the Russian population.

On October 25, the second day of the crisis, the terrorists even agreed that the hostages would be freed in exchange for a statement by Putin that the war was over and the verified withdrawal of troops from only part of Chechnya.

At the same time-and perhaps more important-many of the terrorists' bombs, including a huge one in the center of the hall with a force of forty kilograms of dynamite, had not been activated. This suggested that the terrorists never really intended to blow up the building and kill the hostages.

The FSB was aware that many of the bombs had not been activated because an FSB agent was among the hostages, and he provided detailed information to his superiors by cell phone about the number of terrorists and the condition of the bombs.

Despite the fact that negotiations appeared possible, however, the Russian authorities never engaged in, or apparently even considered, serious political negotiations with the terrorists. The authorities did not react to the proposal for a partial withdrawal from Chechnya; instead they agreed to talks between the terrorists and Viktor Kazantsev, a presidential representative, at 11 a.m., October 26. But this was only a diversionary maneuver. The theater was flooded with toxic gas and stormed by FSB and special forces units six hours before the talks were scheduled to start.

In the end, the Russian forces killed all 41 of the terrorists, shooting many of them while they were unconscious. The number of dead hostages has been variously put at 129 and 136, with 75 persons who were believed to have been in the theater still missing. All but three of the dead hostages died as a result of poisoning by the gas used to "rescue" them.

Not only the refusal to negotiate but the nature of the rescue effort suggested that the storm was undertaken to destroy the terrorists, and that saving the lives of the hostages was a very low priority. Doctors arriving at the scene were not told that the hostages had been gassed and not provided with the antidote that had to be injected immediately. The order for ambulances to proceed to the theater came 45 minutes after the beginning of the operation, the result being that many hostages had to be taken to hospitals in buses, microbuses and cars. In one case, 30 hostages were put in a twelve-seat military microbus, including on the floor, and a 13 year-old girl was crushed under other bodies and died en route. Although the Moscow health authorities had days to prepare for the aftermath of the storm, nearly one hundred persons who died from gas poisoning or other causes could have been saved if the rescue effort had been properly organized.

Besides criminalization and society's disregard for human life, Russia's future is threatened by a more fundamental problem: a deep spiritual malaise that reflects the inability, so far, of Russia to find a new moral orientation in the wake of the fall of communism.

The communist regime was based on "class values", the notion that right and wrong are determined by the interests of the dominant class. In the wake of communism's fall, moral coherence for society could, as a result, only be achieved through the establishment of universal values. That, as a practical matter, required the efforts of the Russian Orthodox Church and, perhaps, the government. The church, however, was crippled by its history of collaboration with the KGB, and successive governments emphasized not the sanctity of the individual as a source of values but the prerogatives of the state.

The story of the post-communist Russian Orthodox Church is one of lost opportunities. After the failure of the 1991 pro-communist coup, Gleb Yakunin, a dissident priest and member of the parliament, was briefly given access to a section of the KGB archives which showed that the top hierarchs of the Moscow Patriarchate were agents of the KGB. The most important KGB agent was the Patriarch, Alexei II, himself. Yakunin wrote to Alexei and said that he and other church leaders should deny the charges of collaboration or ask for forgiveness, pointing out that "our people are forgiving." But only one archbishop, Khrizostom of Lithuania, had the courage to acknowledge that he worked as an agent for the KGB and to reveal his codename, "Restavrator." All of the other implicated church leaders remained silent.

With the transition to capitalism, the church quickly became the beneficiary of official privileges, including the right to import duty-free alcohol and tobacco and to trade in diamonds, gold andoil. Not surprisingly, this gave rise to widespread corruption. Although the church claimed to lack funds for charitable activities and religious education, its business interests produced enormous profits that then had a tendency to disappear. For example, in 1995 the Nikolo-Ugreshsky Monastery, which is directly subordinated to the Patriarchate, earned $350 million from the sale of alcohol, and the Patriarchate's department of foreign church relations earned $75 million from the sale of tobacco. But the Patriarchate reported an annual budget in 1995-96 of only $2 million.

Against this background, the role of religion in the country's moral resurrection was necessarily limited. Church hierarchs pursued their commercial interests and were in turn imitated by ordinary priests who pursued theirs, blessing businesses, banks, homes and automobiles and exorcising "unclean powers" for a fee. At the same time, the church did not allow itself the slightest political role, remaining silent on such genuine moral issues as Russia's pervasive corruption and the killing of noncombatants in Chechnya.

The government, meanwhile, contributed to Russia's moral malaise by seeking new legitimacy for authoritarian rule through the glorification of state power. One aspect of this effort is the cult of personality that has been created around Putin. First, a children's alphabet book appeared in Russia illustrated with photographs of Putin as a boy. This was followed by the production of sculptures of Putin and paintings of the president gazing out from the Kremlin over the Moscow River in the visionary manner of Stalin or Kim Il-sung. Then, on Putin's fiftieth birthday, he was the subject of laudatory hymns from youth groups, all of which were given extensive coverage in the press. He was presented with a crystal crocodile from Moldova, a slow growing Siberian pine tree from Tomsk, a reproduction of the Czarist Cap of Monomakh and a golden crown encrusted with jewels. He also had a mountain named for him in Kyrgyzstan.

Putin is also the beneficiary of his own youth movement, "Forward Together", which announced its existence with a pro-Putin rally at the Kremlin wall in which young people in t-shirts emblazoned with Putin's picture carried signs declaring, "Together with the president" and "Youth follows the president." Forward Together has since embarked on an effort to "purify Russian literature." On June 27 last year, the group organized a protest in Moscow directed against Vladimir Sorokin, a popular contemporary writer. Forward Together members rigged up a huge toilet bowl as a supposed monument to the writer, then tore up his books and threw them in the bowl, pouring in chlorine after the ripped pages as a supposed disinfectant. Two weeks later, government prosecutors charged Sorokin with pornography, although there is no provision in Russian law for punishing an author for his work.

Perhaps more important than the Putin personality cult, however, is the development of a new ideology that identifies Russia's future well-being with the power of the Russian state. Propounded by intellectual and political figures who describe themselves as "statists" (gosudarstvenniki), this outlook treats Russian history as the story of the development of the Russian government, in which the Soviet period was but an episode. An inevitable result of this approach is the de facto rehabilitation of communism and the glossing over of the lessons of the communist period, making it that much harder for Russian society to gain the democratic moral orientation it so desperately needs.

This is particularly obvious in the teaching of history in which the Gulag and mass repression are described as a tragic page in the nation's history but not the most important. Instead, attention is drawn to the Soviet Union's victory in the Second World War, the improvement of the material standard of living and the building of a superpower. There is no attempt to say that the Gulag was the basis of the Soviet system, or that the system was itself defective. Nor is there any effort to analyze seriously the Soviet ideology or to compare Soviet communism with its competitor in mass annihilation, Nazism.

In keeping with the tendency to see the Soviet past as part of a progressive trend that was on the whole positive, some now seek to rehabilitate even those figures from the Soviet past who were directly involved in mass repression. Moscow mayor Yuri Luzhkov has suggested that the statue of Felix Dzerzhinsky, the first head of the Cheka and the founder of the "Red Terror", be reinstalled in the square in front of the headquarters of the FSB (formerly the KGB headquarters). A plaque commemorating Yuri Andropov, the former Soviet leader who, as head of the KGB, was responsible for the suppression of the dissident movement in the 1980s, has already been reinstalled on the wall of the main FSB building.

More Building, Fewer People

The problems of lawlessness, lack of respect for human life and moral disorientation shadow the visible changes in Moscow that have led many to describe Russia as a political and economic success. The improved appearance of Moscow (although not the rest of the country) is indisputable, but it is mainly a product of the high price of oil. Every dollar difference in the price of oil translates into roughly $1 billion in budget revenue; a high price for oil has therefore become the key to the government's ability to balance the budget, pay state employees and repay Russia's foreign debt. If the price should fall significantly and stay relatively low, as it did in much of the 1980s and 1990s, Russia will be plunged into a severe economic crisis. At that point, the invisible moral factors in Russia's situation will be become critical to its stability.

There has been a very unfortunate tendency, both in Russia and the West, to interpret success in Russia strictly in economic terms. Much of the discussion of the Russian reform experience, for example, concerned the relative merits of "shock therapy" versus government regulation. But a market economy is based on a system of equivalent exchange that can only be guaranteed within a framework of morality and law. Without such a framework, the result is no longer a free market but just another articulation of the rule of force.

In the final analysis, Russia can only overcome the systemic problems that threaten its future on the basis of respect for the dignity of the

individual and the establishment of the authority of transcendent values as reflected in the rule of law. Unfortunately, this is precisely the element that has been missing in the whole reform process. W.H. Auden famously called the 1930s a "low, dishonest decade." What we see in Russia today is a low, dishonest decadence.

Perhaps the most striking example of the way these factors shape Russian society is the country's progressive depopulation. Russia combines one of the lowest birth rates in the world with the death rate of a country at war. According to Igor Gundarov, the head of the Russian state center for prophylactic medicine, if present trends continue, the population of Russia will be reduced by half in 80 years, to about 73 million, making the present Russian state untenable.

In the years 1992-94 there was an almost vertical rise in the death rate. Mortality rose one-and-a-half times by comparison with the second half of the 1980s. The rise was so dramatic that Western demographers at first did not believe the figures.

The rise in the death rate was explained as a result of the sudden impoverishment of the population. Poverty alone, however, could not have been the reason for the rise in deaths. The economic level in the 1990s fell to that of the 1960s but in the 1960s the death rate in the Soviet Union was the lowest in the developed world. Gundarov concluded that poverty, state encouraged alcoholism, and the downgrading of the system of public health accounted for only 20 percent of the reduction in longevity in Russia. The remaining 80 percent was attributable to the spiritual condition of the population in the wake of the failure to offer any new ideal for Russian society after the fall of communism. "There proceeded an attempt to 'transplant souls' and replace the old, non-market soul with a new, pragmatic businesslike approach to life", Gundarov said. This change was unaccompanied by an effort to provide . . . a reason for which the change should be undertaken. For many people, who needed something to live for, this change was intolerable and they lost the will to live because life no longer had any meaning.

Nikolai Berdyaev, the Russian religious philosopher, wrote that, In the soul of the Russian people, there should appear an immanent religiosity and immanent morality for which a higher spiritual beginning creates internally a transfiguring and creative beginning. In this, he saw the hope for the future. The Russian people, he wrote, need to enrich themselves with new values and replace a "slavish religious and social psychology" with a "free religious and social psychology." They need to recognize the godliness of human honesty and honor. "At that point", he wrote, "the creative instincts will defeat the rapacious ones." We and the Russian people are still waiting for "that point."