Some authors, such as Anders Aslund, offer a more upbeat assessment of the post-Communist economy. They point out that official output data need to be adjusted to take account of unregistered activity. Allowance must also be made for the high degree of waste in Soviet-era GDP. Taking these factors into account, the decline in output was much less marked. More broadly, they emphasise the shortcomings of the old economic system and the magnitude of the crisis that was bequeathed to the new regime. Even privatisation, it is argued, contributed to a strengthening of democratic potential in the former Soviet Union. (One might add that the results ofprivatisation, like the Stolypin land reform, will take at least a generation to be fully realised.) Finally, if transition was so disastrous, the argument runs, why was there so little resistance to radical reform?
One explanation may be the short-term recourse to mechanisms of self- help and barter. Barter reflects a loss of confidence in the domestic currency and a readiness to conceal transactions from the tax authorities. The partners involved in non-monetary transactions are predisposed to trust one another rather than to put their faith in the market and in financial institutions. The consequences of barter include disincentives to develop new methods of production or new products. The phenomenon represents a diversion of entrepreneurial talent and time, and promotes other inefficiencies, because resources are tied up in storing and offloading stocks. But, as Paul Seabright suggests, barter arrangements are not unlike krugovaia poruka ('collective obligation', or 'mutual responsibility') whereby peasants sustained themselves by a system of mutual dependency. Barter became widespread in Russia and Ukraine during the i990s, even though inflation was brought under control and confidence in money was restored. Enterprises engaged in barter as a means of exchange and as settlement of inter-enterprise debt. Firms lacking sufficient working capital (perhaps because the government failed to settle its obligations) paid wages in the form of their own output. As well as being an inefficient arrangement the increased recourse to barter were a symptom of wider political and economic dislocation. But equally its prevalence suggests the durability of social networks that were established prior to the 'transition'.
The rupture of inter-republican links following the collapse of the USSR posed major problems ofadjustment. Enterprises had to renegotiate contracts with suppliers or to find new sources of supply. Products were now traded at world market prices, rather than being subsidised by the Soviet state. Some of the successor states exploited opportunities to engage in international trade, specialising on the basis of natural resource endowments, such as natural gas in Turkmenistan. Political instability and military conflict in Tajikistan and Georgia, for example, helped to depress economic activity. On the other hand, the Baltic states successfully stabilised their budgets, reduced inflation rates and promoted foreign direct investment, as preparation for joining the enlarged European Union in May 2004. Within the resource-rich Russian Federation, non-Russian ethnic groups sought to redress 'wrongs' done during the Soviet period. Thus a vocal Siberian lobby, speaking on behalf of 32 million people, demanded compensation for environmental damage.
Demographically the transition was extremely painful. To be sure, the project of Soviet 'modernity' itself bequeathed a legacy of environmental degradation, declining health conditions and increasing infant mortality. But transition has thus far done little to reverse the decline. Adult male life expectancy plummeted. Many citizens, including some of the former inmates of remote Soviet prison camps, reverted to a subsistence economy. Ordinary citizens often required two or more jobs in order to compensate for meagre and/or uncertain wages. Again, mutual support networks played an important part in maintaining a basic standard of living. A more extreme response was emigration; according to official figures between 1992 and 1998 some 700,000 people left Russia to settle in countries outside the former Soviet Union. Germany was by far the most popular destination.17
Account also needs to be taken of the demographic consequences ofthe sudden disintegration of the USSR in 1991. Around 280 million ex-Soviet citizens
17 Julie DaVanzo and Clifford Grammich, Dire Demographics: Population Trends in theRussian Federation (Santa Monica, Calif.: Rand, 2001), ch. 2.
were now scattered amongst fifteen sovereign states. More than 25 million Russians lived beyond the borders of the Russian Federation (this figure is taken from the 1989 census), and it has not been difficult to portray them as vestiges of Soviet 'colonialism'.[17] Throughout the 1990s concerns were expressed about their status, entitlements and prospects. Those who made their way to Russia survived by capitalising where possible upon networks of mutual support. But the lack of housing and of state benefits has rendered their position in Russia precarious.
Conclusions and assessment
The economic history of Russia's twentieth century is full of absolutist prescriptions for improved economic performance. Before the revolution, the talk was of foreign investment and enterprise (under Witte), and of 'rational' land consolidation (under Stolypin). Under NEP the emphasis shifted to a combination of state control and circumscribed private enterprise, with continued espousal of the doctrine of improvement for the peasant economy, primarily by means of expert intervention from outside the rural sector. Stalin preferred the twin instruments of central economic planning and terror, in orderto realise his vision of Soviet socialist modernisation. Khrushchev pinned his hopes on extracting greater efforts from workers and peasants, partly by means of incentives, but also by exhorting them to work harder and to become pioneer settlers on virgin land. The advocates ofperestroika after 1985 believed in a mixture of state control and market mechanisms, accompanied by the reform of property rights. Post-Soviet prescriptions have favoured the route of privatisation, claiming that the shortcomings of transition are the result of timidity in engaging with the challenge of economic transition. Each successive nostrum has been accompanied by a set of campaigns, to pinpoint the 'problem' (including aberrant personal behaviour) and/or to identify the 'enemy' to be confronted, unmasked and defeated.
What have been the results of these various economic visions? The Soviet economic project came to dominate the twentieth century. It is worth reflecting on what this means. First, for more than seven decades the experience of millions of Soviet citizens was closely bound up with a centralised system of economic administration and a lack of exposure to overseas economic stimuli. But the domination of the Soviet system did not rest wholly or even largely on the instruments of terror, even under Stalinism. The state also derived a degree of legitimacy from the promise and the reality of economic growth, technological modernisation and social progress. There were genuine and important gains in literacy and life expectancy from one generation to the next. In the words of a broadly hostile critic, Soviet economic policies secured 'some broad acquiescence on the part of the people'.[18] That acquiescence rested upon Soviet-style welfare provision and opportunities for upward social mobility, which generated a sense of civic commitment and left a positive legacy. On the other hand, Soviet economic modernisation also left scars on the landscape, in the form of large, dirty and obsolescent factories, decrepit farms and polluted waterways and lakes.
17
The Russian census originally scheduled for i999 was delayed by the financial crisis in i998. It finally took place in October 2002.
18
Alexander Gerschenkron,