An economic error committed as early as May 1985 (and for which Ryzhkov was entirely blameless, since he opposed the policy on the grounds that it would lead to a serious reduction of state revenue) was the adoption of an anti-alcohol programme. The production of alcohol in state distilleries and wineries was drastically reduced, many retail outlets were closed, and illicit alcohol production filled the gap. The state's monopoly of this industry had previously, given the high level of alcohol consumption (especially of vodka in the Slavic parts of the Soviet Union), made a massive contribution to the revenue side of the budget. Since alcoholism and drunkenness were alarmingly widespread in Russia, the measure had some support, especially from women; but, in spite of apparent early success in reducing alcohol consumption, it was ultimately a failure. The prime movers in the Politburo for a major effort to reduce alcohol consumption were Egor Ligachev and Mikhail Solomentsev, but Gorbachev became associated with the campaign in the minds of most of the public, for he supported the principle of a fresh attempt to tackle what he recognised to be a serious social and moral problem.
A combination of the policy's growing unpopularity and Ligachev's loss of his position as second secretary of the CPSU in 1988 meant that from that year on the campaign was quietly abandoned.[27] There had been previous propaganda campaigns against excessive alcohol consumption, but none had been successful in the long term. By making it much harder for alcohol to be obtained legally at convenient locations and times, this new assault on the hard drinking culture did produce a sharp drop in legal sales which was reflected both in the official statistics, suggesting that vodka consumption in 1987 was less than half of what it had been in 1985, and by the hole that was left in the state budget.[28] However, if moderate drinkers drank less because of a reluctance to stand in long queues at the reduced number of shops selling alcohol, those at whom the measure was primarily aimed were less easily deterred. Hardened drinkers were prepared to queue for as long as it took or to fill the gap in legal supplies with 'moonshine', thus depriving the state of the large element of turnover tax on each bottle of liquor.
Bad luck as well as bad decisions complicated economic policy during per- estroika. Whereas a rise in oil prices had partially disguised Soviet economic inefficiency in the 1970s, a fall in oil prices in the second half of the 1980s did nothing to cushion economic reform. It is arguable, though, that this may have been a blessing in disguise in that it became increasingly clear that the existing economic system needed to be replaced by one operating on fundamentally different principles. Very few Soviet economists, not to speak of party and government officials, held such a view in 1985. Between then and 1990, however, the economic philosophy of many of the social scientists, in particular, underwent a fast evolution. By 1990 the view was widely held among them that central planning would have to give way to an essentially market economy. There were, though, differences of opinion among reformers between those who favoured a mixed ownership system (state, co-operative and private) and those who wished to go the whole hog to private ownership.
The first move towards recognising a role for non-state economic enterprise was the Law on Individual Economic Activity of November 1986. This legalised individual and family-based work, such as car repairs, taxi services and private tuition. A much more ambitious piece of legislation was introduced the following year. The Law on the State Enterprise, a compromise measure following debate within the leadership, in which Gorbachev played a leading role, devolved more authority than hitherto to the enterprise level - in particular, to factory managers. While the diagnosis that the Soviet economy was too centralised and that economic ministries had too much power was correct, the law did not achieve any of its intended results. The State Planning Committee (Gosplan) and the economic ministries found ways of maintaining many of their powers over the enterprises, even though the number of plan indicators was cut drastically. To the extent that there was some real devolution of authority to the factory level, it did more harm than good. Enterprises were able to charge higher prices for work of no higher quality than before. The law thus had inflationary consequences and also contributed to an increase in inter-enterprise debt. Decentralisation without price liberalisation and competition was doomed to failure, although at the time many Soviet reformers and Western observers saw the Enterprise Law as a step forward. This was so only in the sense that since the attempt to reform the Soviet economy proceeded on the basis of trial and error, and in conditions of glasnost', the failures could soon be brought into the light of day. One of the most important of the unintended consequences of the Enterprise Law became apparent in the last years of the Soviet Union and in early post-Soviet Russia when a process of insider privatisation occurred. Taking advantage of the enhancement of their legal rights provided by the 1987 law, factory managers, often aided and abetted by local party officials, began to convert their control of industrial enterprises into ownership.
A more successful legislative act was the Law on Co-operatives of 1988. Going well beyond the law which had legalised individual economic enterprise, this law prescribed no maximum to the number of people who could be employed in a 'co-operative'. Many of the co-operatives became indistinguishable from private enterprise but it was an advantage in the late 1980s that the former terminology could be supported by quotations from Lenin who in 1989 still topped a serious poll of Soviet citizens who perceived him as being by far the greatest person who had ever lived.[29] An open acceptance of large-scale private economic activity would have been seen as an embrace of capitalism to which a majority of the population, as well as a majority of the political elite, were at the time opposed.
Nevertheless, as political tensions rose in 1990 and the economy showed no signs ofthe 'acceleration' which one ofthe earlier slogans ofthe Gorbachev era had demanded, Gorbachev and Yeltsin came to an agreement in the summer of that year to set up a team of specialists to come up with concrete proposals for transition to a market economy. The group was to be drawn in equal numbers from Gorbachev and Yeltsin nominees. The leader of Gorbachev's team was Stanislav Shatalin, a sophisticated critic of the Soviet command economy of an older generation, while Yeltsin, in his capacity as chairman of the Russian Supreme Soviet, nominated Grigorii Iavlinskii, a much younger enthusiast for the market. In endorsing this project, Gorbachev completely bypassed the Communist Party hierarchy and offended the head of the government, Ryzhkov. The document that the Shatalin-Iavlinskii group produced became known as the '500-Days Plan', an ambitious attempt to make the transition to a market economy within that time period.[30] The 238-page programme did not so much as mention 'socialism' and made no concessions to traditional Soviet ideology. It envisaged the speedy construction of market institutions, large-scale privatisation and extensive devolution of power to the republics of the Soviet Union. Gorbachev, after reading the document more than once, and Yeltsin, without reading it, both gave the programme their initial enthusiastic endorsement. In response to the backlash from within the ministerial network, including the strong objections of Ryzhkov and the first deputy prime minister, Leonid Abalkin (himself a reformist economist), as well as from CPSU, military and KGB critics, Gorbachev retreated from his earlier support for the '500-days' document.
27
Stephen White,
29
Even in 1994 and 1999 when the same question was put to Russian respondents by the leading survey research organisation which had conducted the 1989 survey, Lenin came second only to Peter the Great in the list of 'most outstanding people of all times and nations' in the perception of respondents. See Boris Dubin, 'Stalin i drugie: Figury vyssheivlastivobshchestvennom mneniisovremennoiRossii',