Back In the USSR?

By Leon Aron
Monday, July 14, 2008

Vladimir Putin's appointment this spring as prime minister of the symbolic "union" of Russia and Belarus was yet another example of the troubling similarities between today's Russia and the other most stable and prosperous Russian regime of the past 80 years: Leonid Brezhnev's Soviet Union in the 1970s. That economy, too, was fueled by then-record oil prices. And while there are clear differences between the two Russias, if these tendencies go unchecked, the increasingly authoritarian and economically statist country may soon face crises of the kind that became apparent under Brezhnev and contributed to the Soviet Union's demise.

The most disturbing of these propensities include:

· The national alcoholic binge. In the 1970s, Soviets annually consumed eight liters of strong (40 to 80 percent proof) alcoholic beverages per person -- more than any other country. Between 1964 and 1980, male life expectancy fell from 67 to 62. Today, per capita consumption of vodka, which is four times cheaper in relation to the average salary than 30 years ago, has grown to 10 liters, according to official statistics (outside experts say it is higher). By contrast, the most recent data available from the World Health Organization show the corresponding U.S. figure is 2.57 liters. One in 10 Russian men is thought to be an alcoholic. Life expectancy for Russian men is less than 60.6 years, more than 15 years shorter than in the United States and European Union and below current levels in Pakistan or Bangladesh.

· Oil-for-food. This spring, Putin admitted that 70 percent of the food consumed in Russia's largest cities is imported, a situation he decried as "intolerable." This problem, too, first surfaced in the 1970s, when grain imports were so high that by the end of the decade they supplied the flour for every third loaf of bread. When oil prices collapsed, Russia was forced to spend gold reserves and seek loans -- and eventually found itself without grain or gold. After agricultural land was denationalized in the early 1990s, food became available almost immediately -- for the first time in almost 70 years it could be had without hours-long lines and rationing coupons. Russia started to export grain. Yet agricultural land was never legally privatized, and rules for long-term leasing have been left to local authorities.

Not surprisingly, such legal gray areas have given rise to corruption, increased production costs and hampered innovation. Provincial governors, who are no longer elected and answer only to the president, pressure successful entrepreneurs and farmers to "share" with local authorities. A leading industrialist told me that at least six local agencies conduct almost weekly "inspections" of his potato farm. State agriculture subsidies often go to the largest and best politically connected enterprises, not necessarily the most productive ones.

The ruble's steady appreciation because of huge petro-dollar inflows further depresses the domestic food industry. Should Russia allow the ruble to float, at least partially, to help curb inflation, it would become even more expensive, encouraging demand for better-quality and, often cheaper, imported food.

Putin's remedies have the same flavor as Brezhnev's: Throw billions in subsidized credits and grants at the problem instead of strengthening property rights and making it easier for independent producers to compete.

· One-party rule. With its opposition marginalized and demoralized, and election results rigged, United Russia has emerged as the "ruling party," the term that used be reserved for the Soviet Communist Party. "Today we are the party responsible for the government," a top United Russia functionary told a Russian newspaper this year, "since our leader [Putin, the party's chairman] is the chairman of the government." Those who argue, rightly, that United Russia membership is only a ticket for ambitious apparatchiks to punch should remember that there was precious little ideological fervor and much cynicism in the 1970s as well. Lack of sincerity then did nothing to ameliorate the absence of corrective societal feedback and, with it, the inability to reverse dead-end policies that led to the crisis.

· A new oligarchy. Brezhnev drew some of his loudest cheers in his six-hour "reports" to party congresses when he declared "respect for the cadres." Delivering his presidential valediction this spring, Putin's longest applause came when he cited "stability" as his crowning achievement.

With virtually every top Putin official and adviser retained, sent to the Security Council or made "presidential envoy" to some part of the country, a new nomenklatura has emerged -- insulated from media criticism, spared political competition and effectively immune from criminal prosecution. As in Soviet times, the members of this political master race are almost never fired, only retired with honors or reassigned. Since the Putin "Politburo" and "Central Committee" are a good 20 years younger than Brezhnev's, retirement is not an option.

The 1970s made clear what the belief in official infallibility and omnipotence, utter disregard for public opinion, ossification, and pandemic corruption could lead to. Most of all, the experience of Brezhnev's Russia confirms that authoritarian "stabilization" is a curious political commodity. Its benefits are instantly apparent but its price is revealed only gradually -- and may be devastatingly high. As he moves forward, President Dmitry Medvedev would do well to remember the lessons from Russia's other most stable regime.

Leon Aron is director of Russian studies and a resident scholar at the American Enterprise Institute. He is the author, most recently, of "Russia's Revolution: Essays 1989-2006."

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