In 1909, the Russian prime minister Pëtr Stolypin told a foreign journalist: “Give the State twenty years of internal and external peace and you will not recognize Russia.” At that time there were real hopes in Russia’s huge potential. With its natural wealth and vigorous new industries, Russia promised to become the dominant economic power on the European continent. Western capital was heavily invested in Russian industries. The creative forces of a burgeoning democracy were breaking free from the old authoritarian social order, giving life to an exciting new society. But twenty years of peace were a lot to ask. Two years later, in 1911, Stolypin was assassinated—and with him went the chances of political reform before the catastrophe of 1917.

The new capitalist Russia that emerged from the rubble of the Soviet Union in 1991 found itself in a similar position to the capitalist Russia of 1909. In natural resources, Russia is the richest country in the world, with one third of its natural gas, one fifth of its precious metals, and perhaps a quarter of its oil. Given twenty years, it could become a dominant economic power in Eurasia, provided its enormous wealth is not squandered or, worse, plundered by a small handful of businessmen and their partners in the West. Once again, foreign investments are pouring in. Capitalism is transforming major cities, particularly Moscow and St. Petersburg, which today are bright, exciting places barely recognizable from Soviet days. But whether it improves the lives of ordinary Russians will depend on the consolidation of a democratic nation-state.

According to Robert Service, professor of Russian history at St. Antony’s College, Oxford, such consolidation was the grand project of 1991. In his scholarly and well-informed survey of the first post-Soviet decade, Russia: Experiment with a People, Service maintains that Boris Yeltsin came to power with a “national” program of reform, which

encompassed not only liberal democracy and the market economy but also ideological pluralism, local self-government, a legal order, ethnic tolerance, individual freedom and civic nationhood. The rulers in the Kremlin… sought out support in various organisations and social groups and organised propaganda for the project. They contrived a set of state symbols to break with the communist past. This substantial enterprise was tantamount to a project of nation-building even though the rulers did not refer to it as such.

Service explains how this visionary project came to be abandoned during the Yeltsin years, between 1991 and 1999. New elites emerged from the old Communist nomenklatura and the mafia-ridden world of post-Soviet capitalism and seized possession of precious national assets, including the country’s gas and oil, as well as its banks, press, radio, and television, and even threatened the primacy of the state itself. Service has no illusions about the benevolent hand of capitalism. “Democratisation and marketisation have spectacularly failed the Russians,” he concludes.

Andrew Meier, a Moscow correspondent for Time between 1996 and 2001, is similarly pessimistic in his lively and perceptive Black Earth: A Journey Through Russia After the Fall. Meier sets out on a search for hope and meaning in the bleak political landscape of the Yeltsin era. He ventures south to the battle zone of Chechnya, north to the Arctic mining city of Norilsk, a former Gulag settlement, and east to the island of Sakhalin, a penal colony when Chekhov traveled there in 1890, but now an oil-rich enclave controlled by foreign oil companies. On his travels he finds little hope or meaning. Even among the upwardly mobile sections of Moscow’s middle class, Meier meets despondency when he returns to the capital to meet some friends, a lawyer named Andrei and his artist wife, Lera, with whom he had lived before the Soviet fall:

Real estate, vacations, boarding schools: These were the talk of the Moscow business class. Only Chechens now talked desperately of leaving. For Andrei, however, it was all he could think of. Things had gotten better, of course, he said, pouring another glass of wine. Life was fine, “in the details.” You could go to a restaurant, drink Bordeaux, and eat foie gras. You could work hard, or steal well, and buy your own apartment and travel the world. It was just in general that life remained as impossible as ever. “No matter how far you get here,” Andrei said, “you still face a deadend.”

One often hears such views from people like Andrei—it seems that pessimism is the permanent condition of the intelligentsia in Russia—even when they are dining in first-class restaurants and can talk in ways that would not have been conceivable just twenty years ago. Because Western commentators tend to move in these circles, we get, I think, an over-gloomy view of Russian life today. There are in fact optimistic signs—not least a new sense of personal liberty and opportunity that has energized a growing middle class in the big cities. Yet there are also grounds for serious concern.


One is the state of Russian politics. After all the hopes of Russia’s “democratic dawn,” the Yeltsin years must be regarded as a failure, undermining trust in the government and even perhaps belief in democracy. Service places politics at the heart of his analysis, but his view of politics is very broad. He looks at state symbols and propaganda, public opinion and popular culture, mass organizations and political parties. This enables him to place the failure of Yeltsin’s reforms in a convincing social and historical setting (something that, alas, cannot be said of most political science).

Service rightly emphasizes the political legacies of the Soviet system: they can be seen both in the authoritarian post-Soviet politics and in the clientelism by which business cronies of high politicians received lucrative rewards. The Soviet legacy may also help to explain some popular attitudes. According to a poll taken in 1994 (admittedly, a particularly low point for the economy and the war in Chechnya), 43 percent of the Russians thought that a “strong leader” was what the country needed to get out of its predicament. In the early 1990s Yeltsin seemed to fill the bill. He was the hero of the barricades during the military plot against Gorbachev in August 1991. His broad, expansive, slightly reckless (“Russian”) qualities gave him genuinely popular appeal, even if his bouts of heavy drinking sometimes caused embarrassment. But, as Service argues, Yeltsin soon began to lose support. He acted in violation of the constitution—dispersing by force the Supreme Soviet in October 1993 and rigging ballots in the elections of the following December to ratify the newly imposed Constitution of the Russian Federation. As a result, Service writes, he “undermined the chances to build a popular sense of legitimacy for the new Russia.”

More alarming still were the mounting allegations of corruption against the President and his family. There were questions about Yeltsin’s daughter, Tatyana Dyachenko, who lived the life of a multimillionaire, even though she had no obvious job. The financier and media magnate Boris Berezovsky, who had close links with Dyachenko, was said to have paid large sums of money into Yeltsin’s bank account—“royalties” for the second volume of the President’s memoirs. Then, in August 1999, Yeltsin and his daughter were linked to the scandal involving a Swiss-based construction company called Mabetex—a case of money-laundering and bribery on a vast scale. It had, Meier writes, already ensnared Pavel Borodin, Yeltsin’s drinking partner and the chief of the powerful Kremlin Property Department, who was alleged to have taken bribes from a Kosovar Albanianbanian for contracts to refurbish the Kremlin.

The disturbing thing about this mounting evidence was not just what it said about the President; it was also what it said about the nature of the new political system. Powerful and corrupt business magnates and senior politicians were working together to secure their mutual interests. Huge cash funds and support from TV and the press were provided for Yeltsin’s government in exchange for tax exemptions and the sale of state assets at knockdown prices to favored businessmen. For example, Viktor Chernomyrdin used his position in the old Soviet gas authority to set up a private company, Gazprom, the largest gas supplier in the world, to which he then gave tax exemptions when he moved on to become the prime minister in Yeltsin’s government, during the years between 1992 and 1998.

The rise of the “oligarchs”—business tycoons with vast conglomerates in banking, gas and oil, precious metals, and the media—represented the most serious threat to Russia’s fledgling democracy. There was a real danger that the entire state sphere would become corrupted and criminalized, as a small handful of magnates (and the mafia gangs who protected their interests) moved into the sphere of government. By the end of Yeltsin’s reign the magnates gave the impression that they were dictating policy.

It all began with the 1992 privatization program hurried through by Yeltsin’s young reformers Yegor Gaidar and Anatoly Chubais, visionary believers in the panacea of the free market, in consultation with the American economists David Lipton and Jeffrey Sachs. They devised the scheme through which the old Soviet industries were parceled out to Russian citizens in the form of vouchers that could be converted into company shares. Most of them were bought up by businessmen and foreign traders, whose agents on the streets were able to buy many people’s vouchers for about the price of a bottle of vodka. The savings of ordinary Russians had been wiped out by the hyperinflation that followed directly from the government’s decision, in January 1992, to release controls on most prices (“shock therapy”). Many people were desperate.


But the worst scandal was the scheme of “loans for shares” introduced in 1995. Yeltsin’s government was strapped for funds to pay its public workers, many of whom had not received their salaries for months. Facing reelection in 1996, it was in danger of losing power to a resurgent Communist Party unless Yeltsin could find some ready cash. In deepest secrecy Chubais brought together the leading oligarchs (Mikhail Khodorkovsky, Boris Berezovsky, Vladimir Gusinsky, Vladimir Potanin, and Roman Abramovich among others) and offered them a deal allowing them to pay—through “loans”—for temporary ownership of the controlling shares in major oil and mining companies belonging to the state. The shares were sold through rigged auctions which the businessmen controlled themselves. Khodorkovsky bought 45 percent of the shares in Yukos, one of Russia’s biggest oil giants, at the bargain price of $159 million, just $9 million more than the opening price. Potanin purchased the controlling stake, 38 percent, in the Norilsk mining complex at just $100,000 over the opening price of $170 million. These acquisitions became permanent when the government predictably proved unable to repay the loans on time.

Through this controversial scheme Yeltsin raised an estimated $500 million for his electoral campaign in 1996. It was enough to overwhelm the press and television with anti-Communist propaganda and to make possible a sweeping victory. But the real balance of political power now lay with the oligarchs. And even though their fortunes fell when the ruble crashed in 1998, they never lost as much as the Western banks which had invested heavily in them.

During the past three years President Putin has begun to reassert the power of the state. His rhetoric has been about restoring national pride, and the honor of the state, and bringing order to society. On TV he has a sober, earnest image, which seems to reinforce his message about giving Russians the chance of a “normal life.” But it has taken a large measure of Soviet-style authoritarianism to break the power of the oligarchs. In the summer of 2000 Putin ordered the arrest of Vladimir Gusinsky, whose television station NTV had criticized the war in Chechnya and also, in the satirical puppet show Kukly, ridiculed Putin. Gusinsky was released after an international outcry about freedom of political expression. He soon fled Russia, and now lives abroad. Putin also went after the media magnate Boris Berezovsky, a former associate of Prime Minister Mikhail Kasyanov and a major influence behind the scenes of Yeltsin’s government, who had played kingmaker to President Putin before falling out with him shortly after his election in 2000. Berezovsky was forced to sell his shares in ORT, another TV station that had criticized the government. Like Gusinsky, Berezovsky fled abroad, first to France and then to London, where he continues to speak out against Putin’s government.*

For a while it seemed that Putin’s war against the oligarchs had stopped. But in recent months the President has signaled his intentions to act against Mikhail Khodorkovsky, ordering investigations of his companies. Even Roman Abramovich, the most loyal of the oligarchs, is not safe from prosecution: his recent purchase of Chelsea Football Club, London’s most glamorous soccer team, may be taken as an indication that he too is looking for an exit from Russia.


At the heart of Yeltsin’s reform project was the idea of creating a Russian nation-state. Russia had never been a nation-state. Its national identity had been subsumed in the Russian Empire until 1917, and then, between 1923 and 1991, it was submerged in the Soviet Union. From the late Stalin period onward the Russians were regarded as the dominant people of the USSR and a sort of Russian chauvinism—rooted in the “victory of the Russian people” in the Great Patriotic War between 1941 and 1945—became the state’s unofficial ideology, supplanting the internationalism that had been a major feature of the Bolshevik Revolution and the Soviet Union in its early years. Yet even then the Russians lacked the trappings of quasi nationhood given to the other Soviet republics. They did not even have their own Communist Party.

The breakup of the Soviet Union was not well received by most Russians. According to one poll taken in 1995, it was opposed by three quarters of the Russian population. Five years later, only 4 percent were “totally positive” about the dissolution of the USSR. Polls also showed that people wanted Russia to expand in size, incorporating “Russian” territories that had been lost to the other republics on the breakup of the Soviet Union—for example, the Crimea and the Don Basin, which had been given to Ukraine.

In 1991 Yeltsin’s victory over Gorbachev was secured by taking “Russia” out of the Soviet Union. Yeltsin’s mission was to build a federal state on the basis of a national consciousness. The Russian Federation has a large minority of non-Russians—it is an “empire” in itself—so it was important to foster a multinational feeling of identification with the Russian state. On television, Service notes,

Yeltsin addressed his viewers not as russkie but as rossiyane. The linguistic distinction was deliberate. Russkie is the word for Russians implying ethnicity; it specifically excludes the other national and ethnic groups living in Russia. By contrast, rossiyane is an inclusive word and refers to all citizens of the Russian state. Yeltsin insisted that all citizens should enjoy equal “rights in their entirety” and that a free Russia had to be “a democracy, not an empire.”

From the start, however, Yeltsin had to deal with the nationalist and secessionist demands of the non-Russian republics and autonomous regions—in Tatarstan, Kalmykia, and Chechnya, where Moscow was drawn into a disastrous war. Even in those regions of the federation where ethnic Russians were predominant there were dangerous signs of fragmentation. Market forces exacerbated regional divisions that had been softened by the All-Union structures of the planned economy. The old Soviet system of subsidizing poorer regions was abolished, leaving areas like the Russian North in a desperate condition. The early 1990s saw the emergence of powerful regional movements and even some secessionist campaigns in places like the Urals and the Trans-Baikal, where Moscow’s presence was extremely weak.

Once “Russia” was disentangled from the Soviet Union, it was unclear what could hold it together as a federal state. It was doubtful whether promises of “equal rights” and “democracy” would be enough to counteract the centrifugal forces of nationalism and Muslim fundamentalism. Among the Russians it was not even clear that there was a widespread sense of belonging to “Russia.” According to a poll in 1998, only 28 percent of Russians (rossiyane) felt they had a national bond with their fellow citizens.

In this sense, the collapse of the Soviet Union has taken Russia back to the crisis of national identity from which it suffered in the nineteenth century—and from which its arts and literature drew so much of their inspiration. The search for a national idea is discussed at length in both books under review. Meier recounts the amusing tale of Yeltsin’s efforts to commission a new Russian ideology at the start of his second presidential term in 1996. The time, he said, had come to find a new national idea. In the twentieth century alone, Russia had gone from monarchy to totalitarianism to perestroika, before embarking on the democratic path. “Each epoch had its own ideology,” he thundered. “Now we don’t have one—and this is bad!” The country needed a new slogan, something pithy and unifying. Like “The Third Rome.” Or the “Orthodoxy, Autocracy, and Nationhood” of Nicholas I. Or the Soviets’ “We Are Building Communism!” Yeltsin ordered a commission.

Thankfully the commission failed to grasp the idea of the New Russia. This is not the time, and Russia not the place, for abstract notions of nationality. Asked by Meier for his own opinion, the widely-respected cultural historian Dmitry Likhachev was amused, but not surprised, by the commission’s failure. “In Russia one ideology cannot suffice to unify the country,” he said.

Ours is a rich culture, but a culture of many peoples. Reality must dictate any political doctrine; a country so vast cannot be bound by a single idea. Each region—be it Vladivostok, St. Petersburg, the far north, or the Caucasus—has its own distinct culture. We must not try to disguise this truth, for the more diverse the culture, the richer it is.

Service concentrates on the government’s efforts to promote a patriotic ideology in the mass media and schools. As he demonstrates, these efforts have been undermined because they are out of line with popular sensibilities, especially among the young, for whom such ideological discussions are largely irrelevant. In a fascinating chapter, Service also looks at the government’s attempts to seize upon and propagandize symbols of national unity. But it turned out that there were none. The Russians are politically divided about all the major symbols of the state: the Russian flag, the national anthem, the commemoration of historical events, national festivals and holidays, the names of cities, streets, and metro stations, even whether to preserve the Lenin mausoleum on Red Square. The result has been confusing compromise (itself perhaps a symbol of the Russian state today). The Soviet national anthem was retained—but with new words (“Russia—you are our most sacred state…”). St. Petersburg reverted to its original name—yet it remained in the oblast (district) of Leningrad. New holidays were added to the old Soviet holidays, and all the holidays of the Russian Church were restored to the calendar, so that Russia now has more public holidays than any other country in the world.


“We are a rich country of poor people,” Putin told Russians on his election as president in 2000. Russia’s wealth in oil and precious metals has underpinned its impressive economic performance during the past ten years. As foreign corporations have set up business in the capital, Moscow has enjoyed an economic boom. But in the provinces there is widespread poverty. Agriculture is in a sorry state. Even in the most remote Russian towns virtually everything that can be bought is imported from abroad. In Okha, a city in the north of Sakhalin, Andrew Meier shops from street kiosks—“the primary point of purchase for Russian consumers. Food, beer, cigarettes, tampons, videos, Pampers and Bordeaux—they all were here.”

Each night I scanned the shelves, like a menu, for dinner. Nearly everything now, except the water, vodka and black bread, was imported:
Can of corn from Nagykoros, Hungary (15 rubles)
Can of pitted black olives from Spain (28 rubles)
Half litre of apple juice from Chisinau, Moldova (14 rubles)
Jar of pickles from Bulgaria (9 rubles)
Poong Jeon Nice potato chips from Gwangju, South Korea (7 rubles)
Styrofoam cup of ramen with chicken bits. Two options: one from Ho Chi Minh City, Vietnam (10 rubles), the other from South Korea (12 rubles).

Sakhalin is a depressing illustration of the paradox highlighted by Putin. In July 1999, a Texan-Japanese oil consortium struck oil off the island’s shores. Within two years, the major Western oil companies had moved in, vowing to invest $50 billion in the next decade to pump the oil from the Sakhalin shelf. The 600,000 residents of Sakhalin are among the poorest in Russia, with an average income of around $35 (1,000 rubles) per month, yet few jobs were created for them. The only Russians Meier met on the oil rigs were “performing the most dangerous job,” linking and unlinking “giant pipes, extensions to the rig’s drill, several times their size.”

Their faces and chests were dark with [toxic] sludge. The air around them was filled with the bitter smell of chemicals. A notice, written in white chalk on a grimy sidewall, gave bilingual instructions: DON’T PISS HERE. ETO NE TOILET (THIS IS NOT A TOILET).

The oil from Sakhalin is pumped to the mainland. All the gasoline used on the island is imported, and prices for it there are the highest in Russia.

Meier tells us that he went to Sakhalin to find out whether Russia “would succeed in squandering its resources.” The evidence he found is not encouraging. But it does not mean that we should regard Russia as a hopeless colony—a vast supplier of raw materials whose riches line the pockets of a small handful of capitalist barons and their corporate partners in the West. High oil prices have enabled the Russian economy to recover from the ruble crash of 1998. Today Russia has one of the fastest-growing service sectors in the world, with new companies selling everything from computer programming to auto repairs. And a new middle class is emerging—albeit one highly concentrated in Moscow and St. Petersburg—which can afford to buy new homes and cars, and pay for private education and foreign holidays. It is true the country has enormous social problems—a huge gap between rich and poor, corruption and criminality, a crumbling housing stock, a rundown health system, alcoholism, and the highest rates of HIV outside Africa. Putin understands that the state must have a bigger social role, and for that to happen, it has to be reformed. There is a lot to do—politicians must be made accountable; the police and judges must stop taking bribes; and more taxes must be collected from the rich and powerful. But, in these matters at least, Putin is moving in the right direction.

None of this can happen overnight. As in 1909, Russia needs at least two decades of internal and external peace to build the foundations of a stable new society. There are a good many positive signs of Russia’s rapid transformation since the collapse of the Soviet Union. Among those old enough to remember the old days, there is a genuine appreciation of the new freedoms. People have a taste for liberty. They have at last a private life. There is more respect for personal space and individual difference. Russia has become a more tolerant society. It is open to the West, whose influence has energized the young and talented. It is an exciting place.

Russia will develop in its own peculiar forms of public life and civil society. It will move toward its own version of “normality.” The West must watch objectively. It cannot turn a blind eye to the human rights abuses by the Russian troops in Chechnya, or dismiss the war as “an internal matter,” even if it is alleged that the Chechens have been helped by al-Qaeda and Islamic extremists. There is also concern, especially among journalists, about the lack of television stations and newspapers that are truly independent from the government. When it comes to the free market and democracy, however, the West should hold its tongue: it has already done sufficient harm with its “shock therapies” of the early Yeltsin years; now the Russians must be left to find their own remedies. Meier quotes from George Kennan’s article “America and the Russian Future.” Looking forward to the collapse of the Communist system, he warned Washington against attempts “to produce,” as Meier puts it, “in short order a replica of the Western democratic dream”:

When Soviet power has run its course…let us not hover nervously over the people who come after, applying litmus papers daily to their political complexions to find out whether they answer to our concept of “democratic.”… Give them time, let them be Russians; let them work out their internal problems in their own manner. The ways by which peoples advance toward dignity and enlightenment in government are things that constitute the deepest and most intimate processes of national life. There is nothing less understandable to foreigners, nothing in which foreign interference can do less good.

This Issue

October 23, 2003