Gorbachev’s Final Gamble

By Gary Kasparov
The Wall Street Journal, 06/07/91

MOSCOW — The West is once again in a state of turmoil
about the Soviet Union: The dying embers of “Gorbymania” may
again be transformed into an all-consuming forest fire. “New
trends” in Moscow are forcing Western politicians to seek
unusual solutions. The Group of Seven leading industrialized
countries is said to be almost certain to invite Mikhail
Gorbachev to its meeting in London next month. It is perhaps
time for London bookmakers to accept bets: Will the West give
him the money he seeks, or not?

But what, in fact, is this all about? What is the cause of
such a commotion?

Mr. Gorbachev’s emissaries to the West have for some time
ceased to be taken seriously, since everyone knows well their
boss’s habit of saying one thing, signing another, and doing
a third. (However, when shaking hands with Yevgeny Primakov,
now back in Moscow after leading a delegation that met with
President Bush last week, it would not be out of place to
remember that this close adviser to Mr. Gorbachev was with a
special mission in Baku during the genocide of Armenians in
the terrible days of January 1990.) But there is now a new
face among the odious representatives of the old guard:
Grigory Yavlinsky, a young, imposing economist, who gained
fame for himself by participating in the “500 Days” program
for economic recovery, which was rejected last year.

Many in the West see Mr. Gorbachev’s support of the
economic reform plan that Mr. Yavlinsky is working on with
Harvard faculty members as the sign of a major change of
course by the Soviet leader. (Mr. Yavlinsky, who was part of
last week’s delegation, remains in the U.S.) This conclusion
is too hasty, as seen both by the plan itself and by comments
made by Deputy Prime Minister Vladimir Shcherbakov. Mr.
Shcherbakov, who also was a member of the delegation, has
rejected any link between financial aid and political reform.
Moreover, Mr. Yavlinsky’s reformist plans in no way
contradict Mr. Gorbachev’s strategic course.

First, Mr. Yavlinsky is in favor of a single plan to get
all the republics out of the crisis, assigning to the center
an exceptionally important role in economic and political
reform. Second, in the spirit of Bolshevik dialectics, Mr.
Yavlinsky continues to believe in the possibility of
controlling any processes within ideally constructed
theoretical schemes.

Of course, the plan that is about to be conceived at
Harvard will be a cut above the Ryzhkov-Abalkin program or
Pavlov’s anti-crisis parody. But one crucial drawback
nullifies all the good intentions of its authors: The
envisioned active interference of the state in economic life
during the implementation of reforms makes it impossible to
solve the main political problem — how to dismantle
socialism.

There should be no doubt that Mr. Gorbachev is against
allowing any radical change in the existing social structure
of the country. Privatization and the equal standing of all
forms of property can, with a certain sleight of hand, be
transformed into the attributes of “improved socialism.”
Without constitutional guarantees of private ownership of
land and the means of production, privatization remains the
monopoly of the state bureaucrats, who are in charge of the
privatization funds.

Under such conditions, Western credit — which would allow
Mr. Gorbachev to maneuver between the Soviet bureaucracy and
the new governments in the republics — becomes his trump
card in the struggle to retain personal power. During the
Primakov-Yavlinsky trip to Washington, the Soviet press and
television showered the public with reports of the success of
the mission. This was essential to strengthening the public’s
shaky faith in the international prestige of the Soviet
president. But the main purpose was to suggest to the state
organs that, in an emergency, Mr. Gorbachev’s prestige could
be transformed into ready cash.

Returning to the Yavlinksy program, I should also mention
that, carried away by the magnitude of the economic problems,
Mr. Yavlinsky is agreeing to the freezing of political
reform, evidently allowing the development of the Soviet
Union within the “Chinese model.” Possibly Mr. Yavlinsky is
trying to draw attention away from the War Industry, a
monster devouring the last resources of the totalitarian
state.

Despite the gigantic deficit in the state budget, spending
by the military is constantly growing. It and related
industries constitute approximately one-third of the nation’s
total production capacity. One is led to ask, won’t one-third
of the help requested from the West end up in this dominating
sphere, which is crushing the entire Soviet economy
underfoot?

I will not deny that Western aid is extremely necessary
for Russia and the other republics ruined by communism. But
money directed by the central government will inevitably
disappear in the Bermuda Triangle of the Soviet economy,
without essentially influencing the course of reform.

It is a surprising thing, but in resolving the question of
how to help the U.S.S.R., Western politicians persistently
ignore the historical experience of democratic countries,
which teaches that progress is guaranteed by an increase in
the role of private capital. According to estimates of the
U.S.S.R. Association of United Cooperatives, the private
sector last year made a profit of 30 billion rubles, compared
with a 70 billion ruble loss in the state sector. At the
start of this year, the private sector constituted 10% of
GNP.

Thus, a force capable of guaranteeing a peaceful approach
to democracy and the free market has appeared on the horizon.
To overlook it means missing a historic opportunity. Western
governments should not take on unaccustomed banking
functions, by offering credit, but should demand of Mr.
Gorbachev and other Soviet leaders the creation of conditions
for the unhindered development of free enterprise. A radical
change in the U.S.S.R.’s political and economic climate will
open the way for Western capital to enter the Soviet market
— not for use in hypothetical projects, but for
participation in genuine business for real profit.

I fear that it is already too late to change anything. Too
much influence is wielded by those in the West for whom a
rejection of support for Mr. Gorbachev is equivalent to an
admission of their own political failure. And how can one
leave in the lurch those French, German and Italian banks and
companies that trusted the leaders of their countries and
indiscriminately began investing in “perestroika”? After all,
they are now despairingly waiting for Moscow to pay off its
multibillion-dollar debts.

Subtly sensing the state of play, Mr. Gorbachev has staked
all in a game of political poker by placing in the kitty a
$100 billion chip. And one after another, Western leaders
have lowered their eyes and passed, not wishing to declare
bankrupt someone who has already taken upon himself the airs
of a partner. Will President Bush be able to cut short this
run of moral capitulation and, showing his cards, call Mr.
Gorbachev’s bluff? If not, future generations in both the
East and West will have to pay for the actions of politicians
who placed their own interests higher than that of our
future.

—

While Mr. Gorbachev was receiving the Nobel Peace Prize in
Oslo this week, the Azerbaijan Black Berets, supported by the
Soviet army, were continuing the forcible eviction of
Armenians from the region from which my maternal grandparents
came to Baku 60 years ago.

—

Mr. Kasparov, the world chess champion and head of the
Moscow region branch of the Democratic Party of Russia, is a
contributing editor of the Journal.