Russia, on the brink of a free market

October 28, 2011

As winter began to set in 20 years ago, lines of bundled shoppers congealed along the ever snowier sidewalks of Moscow — lines for bread, for boots, for sugar, for soap. In late October, Boris Yeltsin, the president of the Russian republic, announced that he was going to free prices to get goods back on the shelves again and get the economy moving.

This sent a wave of shock through the public. Now, many thought, everything will be scarce and expensive. How, they wondered, could higher prices possibly help the shortages that were a fixture of the Soviet economy? If socks were in deficit, wasn’t it just adding insult to injury to make people pay more when they did find them?

Yeltsin’s plan sent a jolt through the other Soviet republics, too. All of them were still using the Soviet ruble. If Russia unilaterally freed prices from Soviet control, how would the rest cope?

People predicted bread riots, even civil war.

It didn’t happen. Yeltsin applied a great big wrench to Russian society, but it didn’t break under the strain. The teetering Soviet Union, on the other hand, was all but brushed aside with this one move. Yeltsin wasn’t going to drag Central Asia and the Caucasus and even the Ukraine along with him; his responsibility was to Russia and the rest would have to fend for themselves.

The Soviet system had taught its citizens that it was immoral (not to mention illegal) to buy something at one price and sell it at a higher price. Speculators and parasites did that. For many in 1991, it wasn’t an easy mental leap to a free-market economy. When Yeltsin made good on his announcement, the following January, people here were outraged when they found one store selling something at a different price from another store. How, they wondered, could that not be wrong?

But the thing was, by January the stores had stuff to sell. Critics of the Soviet economy used to think that its problem stemmed from bad planning, or lousy transport. But when the profit motive was allowed to kick in, the goods materialized.

They were, of course, much more expensive. Russians were in for a hard decade, and poverty was nearly all-embracing. Health and nutrition suffered terribly, but people made do, and held up.

Most of the other republics, which went their own way in December of that year, eventually followed Yeltsin’s example. Belarus has been the most notable holdout, preserving much of the old Soviet ways. Only now, two decades later, has it descended into crisis and economic collapse.

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