The Oligarchs (13 page)

As the cooperative movement blossomed, Luzhkov and Panin began to have their own private doubts. These ambitious new businessmen were rapidly overtaking the early concept of baking pies. They were branching out into work with Soviet industrial enterprises. They were experimenting with finance. The Law on Cooperatives had opened the door to private banks, and a few smart young men had figured out a way to launder government subsidies, intended for factories, into cash for themselves. They were obviously baking money, not pies. They were producing nothing useful for society, Luzhkov feared. “After the cooperative movement grew in scale and it became uncontrolled—then there was no stopping it,” Panin told me. “All barriers were removed. They were allowed to do anything, and then masses of people poured into the movement without any control.”

Loshak, the journalist, recalled that Luzhkov was outwardly still very much part of the system. He wore a black coat with a black fur collar and a fedora of the kind long favored by Communist Party ideologist Suslov. He was driven in an official black Volga car. But inwardly, Luzhkov sensed that the ground was trembling, even if he didn't fully understand why. Loshak got a glimpse of Luzhkov's changing mind-set one night in a long, soul-searching conversation with him. “We met after work; it was late at night, we sat together in his car. And we just drove around Moscow for a long time and talked. Our conversation was about down-to-earth things, about cooperatives and the people who came to the cooperative movement, about Moscow. We were beginning to understand something new in our life.”

Loshak added, “If somebody asks you who is the father of capitalism in Russia, as a rule, there is always only one answer: It is Gorbachev. But in reality, one of the fathers of capitalism was Luzhkov.”

Yet, Loshak added, Luzhkov never could have uttered those words at the time. Luzhkov did not imagine then that capitalism, markets, and private property might come to Russia. He was a “big boss,” a product of the system itself, Loshak recalled. “But at the same time, he was a real person, which made him different from others. His eyes sparkled. I think that back then, he understood that somehow, people's interests must find a way out.”

 

In the summer of 1987, Luzhkov accepted the supposedly suicidal mission of managing the vegetable warehouses. He felt doomed. “Nothing could save it from implosion,” he recalled. In Moscow, discontent was growing over food shortages. One night, at a gala concert, the popular stand-up comedian Gennady Khazanov declared that Moscow “is the city of evergreen tomatoes.” It was a play on words from old hackneyed slogans about the Soviet Union being a land of evergreen forests. When he made the crack about the tomatoes, Luzhkov, who was in the audience, felt the performer looked right at him—and the whole audience laughed.

For Luzhkov, it was a moment of acute humiliation, and right after the show he stormed over to the tomato warehouse. “I was horrified,” he recalled. “I was pacing among the ‘evergreen tomatoes,' squashed and rotting. I knew why they were like this.” In the next few months, Luzhkov, as with the cooperatives, began to search for a few limited market solutions in a sea of socialist folly.

Every day, thousands of people were drafted from their regular jobs to work in the vegetable bases. The workers were drawn from schools, hospitals, laboratories, and institutes, which ordered them to go to the vegetable dungeons. The work was miserable, but they had no choice. “The chilled, humiliated, dirty librarians, engineers, and doctors were working under the supervision of regular warehouse workers, who appeared in their mink hats and sheepskin jackets like nobility and evaluated their efforts in order to inform the district party committee,” Luzhkov recalled.

In a radical break with the past, Luzhkov decided to stop the forced march of ordinary Muscovites to the warehouses every day. He promised to save money by cutting back on waste and using the savings to pay his regular workers better salaries or hire part-timers. Luzhkov recalled the moment when a party official, standing at a large meeting, somewhat dryly announced that the city had stopped drafting people to work in the vegetable bases. It was just another line in the endlessly boring list of party “accomplishments.” Suddenly, the audience erupted in cheers, an outpouring of enthusiasm unheard of in such a setting. The party man was stunned and embarrassed. He later telephoned Luzhkov and demanded to know if a trick had been played on him.

“Everything is true,” Luzhkov reported. No warehouse in Moscow had a worker who was drafted.

Luzhkov figured that stealing in the warehouses was done by three different groups. Roughly one-third of the stealing was done by the workers, one-third by the truck drivers who delivered to the stores, and one-third in the stores. Luzhkov had an idea. If they lost fewer vegetables to spoilage, could they make more money and then pay people more—and perhaps reduce the stealing? It was a capitalist thought.

Luzhkov went to work on it. He asked his deputies for the official spoilage rate. The answer came back: 1 percent. “It was only then that I realized the pervasive cruelty of the system,” he recalled. “With all the monstrous losses of up to 30 percent in the storage process, the system had the nerve to demand a loss of only 1 percent. It was a laughing matter, a myth, a caricature—but there it was.... The Soviet system formulated its laws on the premises of an ideal people living within an ideal social and natural environment. As a result, it did not matter how good you were or how well you worked—at the same time, it also meant that no one could meet the established quotas.”

Luzhkov decided it was time for a change. He contracted a Moscow
biologist's laboratory to give him realistic spoilage quotas for fruits and vegetables. Then he got the
ispolkom
—the city executive committee—to issue an ordinance ratifying these as the new quotas. With the new quotas in place, Luzhkov told the workers they could sell, for their own profit, half of what they saved from spoilage. “Not a third,” Luzhkov intoned to the workers, “but half.”

It worked. The spoilage was reduced, the quality of the produce was improved, and the workers were paid more.

But the higher authorities did not like it. In a reactionary spasm, Luzhkov was called before the committee of the people's control, a party watchdog commission. The committee accused Luzhkov of fiddling illegally with the spoilage rates. They accused Luzhkov of paying “huge bonuses” to a collective. A crime! But after a tense hearing, the committee backed down, and Luzhkov was let off.

Luzhkov had survived the suicide mission, but he never won the kind of popular approbation that Yeltsin enjoyed. The reason was that the vegetable bases went from grim to somewhat better, but the Soviet Union was coming unraveled at the same time. Luzhkov despaired when Yeltsin, who had been a source of support, was dumped as Moscow party chief in November 1987. The following year, he shook the hand of Yeltsin, then an outcast, at a Red Square holiday parade. They spoke for several hours, and Luzhkov expressed hope that they would work together again.
¹³

The command system was growing weaker and getting tomatoes from Azerbaijan to Moscow became even more difficult, even if the vegetable bases were functioning. Despite Luzhkov's reforms, Moscow's food shortages worsened. Then another kind of hurricane approached and took Luzhkov with it.

 

The Gorbachev years of
perestroika
saw Moscow seething with dissatisfaction, but the deepest source of discontent was rotten leadership more than rotten vegetables. When he came to the city, Yeltsin touched a raw nerve with his populist campaigns against party privileges. The reaction went even deeper among the intelligentsia. They were sick and tired of the gray bureaucrats and the party apparatchiks telling them what lines in a script could be performed or what books could be read or what statistics about life expectancy could be published in a scientific journal (i.e., none).

Gorbachev's political liberalization unleashed a tidal wave of new thinking, and Moscow was awash in political clubs, interest groups, demonstrations, and ferment. What is striking about the rise of the “radical” democrats in Moscow is how randomly and even accidentally they all came together in a short period of time. The fall of the Berlin Wall in November 1989 had set the thinkers, artists, and professionals in Moscow afire.

Vladimir Bokser, a pediatrician who had also been an activist for an animal rights group, was one of the early democratic organizers. Bokser had the engaging manner of a friendly small-town doctor. But behind his calm demeanor lay a razor-sharp understanding of grassroots moods and politics. His primary interest was political freedom. He felt the intelligentsia was ripe for change. “Everyone came to understand that the leaders were not very honest people. They lie, they pretend,” Bokser recalled. “That's what ended up uniting everyone. In a very precise way, at the end of the 1970s and in the beginning of the 1980s, a feeling of shame started rising.” The intelligentsia revolted against the Communists, and they revolted first in Moscow. Bokser told me, “It was a revolution of the intelligentsia, purely cultural. There was no other revolution at that time. Before 1990, none of us had even thought about a market to any degree. In fact, people feared that. Most importantly, people didn't want these bureaucrats to sit there anymore, who decided everything for us, told us what films to watch; which books we ought to read. When people started watching what was happening outside the country, they wanted more openness. They wanted not only cultural openness but information openness. The first thing that happened was a revolution of openness, for an open society.”
¹⁴

One of the strongest voices came from a man with a very unremarkable appearance—short and slightly hunched over, with a full head of salt-and-pepper hair and a small mustache. Gavriil Popov, an economist who had once been dean of the economics department of Moscow State University, was then editor of a journal,
Questions of Economics
. Popov had doubts about the system in the late Brezhnev years, and as
perestroika
took off, he was a prominent voice leading society toward something new. Popov was a close ally of Yeltsin in the new elected parliament, the Congress of Peoples' Deputies, and he was constantly pushing Gorbachev to pursue more radical reforms.

The Moscow radical democrats were a loose group of political
clubs, various associations for specific causes, human rights groups, and a host of curious and dissatisfied loners, many of them scientists. Under Popov, they came together to create a coalition, Democratic Russia. They decided to wage a campaign for the March 4, 1990, elections to the Mossovet, which had been reduced in size to 498 seats. This was a critical decision for the insurgent democrats—they decided to go local and make Moscow, not the national government, an engine for real change.

The democrats staged a noisy campaign: slogans blared from their megaphones in the subway underpasses, sound trucks roamed the streets. They had meetings in apartment houses, held two big street rallies, distributed thousands of mimeographed handbills, and put up posters in shops and the subways. They were the intellectual elite: among their candidates, 64.3 percent came from careers in higher education, science, engineering, the media, and arts.
¹⁵

They scored a stunning victory, taking over the Moscow city government. They won 282 of the seats. On April 16, 1990, the newly empowered democrats assembled at the Mossovet and chose Popov as their chairman. The insurgents were ebullient to be capturing Moscow. They had shown they could compete with all those selfimportant men who had told them what to read and what to think. Ilya Zaslavsky, a chemical engineer who had been elected to the council, declared with boundless hope, “We will begin a new life.”
¹⁶

But as Popov and the other victors were soon to discover, a potential disaster was hurtling toward them. Food shortages were mounting. Hoarding and panic gripped the city; hundreds of thousands of people flooded into Moscow from the provinces looking for food. Lines sometimes blocked the big avenues. Each wave of rumors spread more panic: meat was running out! Bread was almost gone! Six weeks after taking office, Popov acknowledged that “the situation in the city is getting critical. There is a real danger of things spinning out of control. Hundreds of thousands of people are in the shops.”
¹⁷
Bokser recalled, “Everyone was expecting there to be a famine in Moscow. Maybe it was exaggerated, but everyone expected it.” A secret CIA analysis at the time reported the most probable outlook for the Soviet Union was “deterioration short of anarchy,” and one thing that could push it toward total anarchy would be “massive consumer unrest.” The CIA analysis said that any reactionary putsch, or takeover, would certainly target the radical democrats, including Popov.
¹⁸

Popov's first major decision was to appoint a new chairman of the
ispolkom
, the city executive committee. Saikin, the previous boss, had gone on vacation. The head of the
ispolkom
would run the city, and if he ran it badly, the outcry would certainly wreck the reformers' chances of holding onto power.

None of those around Popov knew how to manage the sprawling metropolis. His inner circle included Bokser and Vasily Shakhnovsky, a one-time engineer who worked on thermonuclear synthesis at the Kurchatov Institute in Moscow. Shakhnovsky had been drawn into the blossoming world of debates, clubs, and elections in 1989, and he was elected to the Mossovet.
¹⁹
Another aide was Mikhail Shneider, a physicist at the Institute of Geomagnetism and the Ionosphere who had helped organize the elections with Bokser. Popov too was primarily a thinker. A common, albeit respectful jibe was that Popov needed to lie on the couch and think for several hours a day.
²⁰
A theorist, even a bit of a romanticist, Popov did not think about potholes and streetlamps. He had no idea how many tons of vegetables were in the Moscow warehouses. He had no idea how to cope with the cigarette riots or the food shortages.