April 2 — The crisis in the USSR deepens with every passing day. The counterrevolutionary elements led by Boris Yeltsin, his emissary Stanislav Shatalin (now in the U.S.), Grigory Yavlinsky and the others get bolder and more impudent as Mikhail Gorbachev continues to vacillate, shrinking from taking measures that can effectively deal with the counterrevolution.
An invaluable insight into the process of disintegration was given by USSR Prime Minister Valentin Sergeyevich Pavlov in an interview given to Trud, organ of the trade unions, and published Feb. 12. Excerpts are translated in the March 13 Current Digest of the Soviet Press.
Pavlov tells us that "in January, production dropped by 50% in relation to the preceding year. This means that more than 4% of annual production was lost last month. If we don't check this breakdown, by March we will be in such a slump that society will be on the brink of ruin."
The drop in production, especially such a steep one, cannot be explained on the basis of a lack of demand or earlier overproduction. It can only be explained on the basis of deliberate sabotage. But let us go further.
Prime Minister Pavlov, asked about the basic reasons for his financial policy, says it is to prevent financial catastrophe. Why is there a pending catastrophe?
"It is known that for a long time now preparations have been underway for a large injection of money into the country. This is being done through various means, including buying up 50- and 100-ruble bills. Banking organizations in our country and a number of private banks in Austria, Switzerland and Canada have become involved in this. ...
"The financial war that has been declared on us is continuing. And `war is war.'... We know of an attempt to resell billions in Soviet money through the FRG to Switzerland, and through Hungary to Luxembourg, the Netherlands, etc."
Then he is asked, "To what would such an action by Western banks lead?"
Answer: "[It] would be tantamount to a financial catastrophe. ... We would have an artificially induced hyperinflation."
Hyperinflation would bring about the financial catastrophe. Then "the advocates of rapid privatization would come to power. They would conduct privatization under conditions of mounting inflation and in such a way that our country would be auctioned off dirt-cheap. I will put it in even harsher terms. We would be threatened with a loss of economic independence, with a kind of `quiet,' bloodless annexation."
Such is the situation. It could scarcely be put in clearer terms.
By naming Switzerland, Luxembourg and even Canada, the prime minister avoids the real culprits, namely the U.S., British, French and Japanese banks, because without their approval these satellites of the great imperialist powers would not dare to embark on such a plan.
We see then that this "financial war" is a concerted effort by the capitalist privateers working in conjunction with the big international banks to disrupt and disintegrate the country financially and, inevitably, economically as well.
Thus far Pavlov has described the situation in realistic terms and has shown the connection between the international banks and the domestic counterrevolutionaries who are conspiring, as he puts it, to come to power by means of the rapid privatization of the means of production.
What follows from these dire conclusions?
"The first task of extraordinary importance is to prevent a slide toward catastrophe," Pavlov continues. Indeed it is. But how?
"Unusual measures are needed for this," he says. "Today, we talk a great deal about a market. It must be understood that this is a means to an end, not an end in itself. We are certainly moving toward a market, and we will be taking some very decisive steps in this direction; otherwise there is no future for us.
"But I emphasize that, in addition to a market, the country needs a program for accelerated modernization of industry. Our strategic goal is a highly efficient mixed economy. Here we are united both with our predecessors and with the most radical marketeers. The differences begin with the question of what should be mixed with what, and how. This is extremely important, because the mixing can be done in such a way that the economic foundation of our state is totally demolished."
But a mixed economy is precisely what exists in the Soviet Union today! It has been the proclaimed aim of the Gorbachev administration since 1987. It has been developed and promoted by the administration of which Pavlov is now the prime minister, and it is undermining the socialist sector. His problem is how to arrest the further inroads of the capitalist market, which is causing chaos.
Trud then asks, "So, is privatization necessary?" Pavlov answers, "Without question."
So we are back to square one — privatization. But, says Pavlov, it should fill in the "niches and pores" while "skirting" heavy industry. Why introduce it in the pores and niches of society when it already exists on the broad avenues of Moscow and Leningrad! What's he talking about?
When it comes to the market, he says: "Now we are moving on to fundamentally different things, above all, to stabilization of the ruble at the earliest possible date. The government will make the ruble partially convertible (it will be possible to exchange it for foreign currency)."
But he doesn't tell us how this will be done. To be convertible means being able to freely exchange it for the dollar, the pound, the yen or the deutschmark. Certainly this has been the objective of the Soviet government for a long time.
Who has prevented it, making it so hazardous? The very banks he says are conspiring to bring economic catastrophe in the Soviet Union.
It is easy for the Soviet Union to make the ruble convertible either partially or completely. But that puts the ruble at the mercy of the foreign banks. Why? Because they can at any time on the basis of conspiracy create a run on the ruble and bring about the type of financial catastrophe he's talking about.
A convertible ruble would be a theoretical possibility if there were in truth a free capitalist market and free capitalist currencies. But the reality is that the Western currencies are subject to control and manipulation by the big seven capitalist powers, who regularly meet in secret for this purpose. They publicize the meetings but never say what they discuss. But they regularly agree to lower or raise a particular currency.
They attempt to rig their currencies because they are always in fear of a so-called free fall of any of the major currencies.
To make the ruble even partially convertible at this time is to strengthen the hand of the imperialist banks against the USSR. Or should one take the word of the bankers that they will be nice to the Soviet Union?
Finally, converting the ruble with the object of expanding trade strengthens and widens the capitalist market in the USSR and thereby strengthens the capitalist privateers. Even without the conversion of the ruble in part or whole, the USSR has embroiled itself with the international banks by means of loans it is hard-pressed to make prompt payments on. It has sought loans from some of the smaller capitalist countries like Spain and is now in the process of getting loans even from China.
Before Gorbachev and his grouping took over, the Soviet Union was the most credit-worthy country in the world. Today its debt status is similar to some of the underdeveloped countries. How could all this happen when the USSR is also the second-largest gold producer in the world?
While Pavlov is very firmly against private ownership of the basic means of production, he supports the significant concessions that have already allowed deep inroads into the socialist state structure. And he's for widening the capitalist market.
Pavlov supports, as does Gorbachev, the comprehensive change in the price structure that has just gone into effect.
This is what agitates the masses most. They know that higher prices for basic items will inevitably become the means for expropriating the working class in favor of the bourgeoisie, despite promises that wages will be raised to compensate for higher prices.
The price increases were originally conceived to mollify the bourgeois elements in Soviet society by means of a massive redistribution of the national income so as to favor the rich at the expense of the masses. Gorbachev is the architect of this, and began to agitate for it back in 1987. In many public speeches, he argued that the price of bread was so unrealistically low that children were using loaves of bread as footballs.
Now the prices have been raised drastically on items of mass consumption which for years and years were regarded as stable.
There may also be price increases on TVs and other goods considered luxury items, but this doesn't really bother the rich because they have lots of money. The burden falls on the masses and not on the well-to-do. Those who have hidden sources of money, all these hideous social strata who lead a parasitic existence — speculators, petty entrepreneurs, etc. — will gain as a result of the price increases.
The price increases will hurt the masses the most because they have no other income. It's Robin Hood in reverse, taking from the poor to give to the rich. No wonder it caused apprehension from the beginning, as did the attacks on "levelers," that is, anyone wanting more equality, not less, in Soviet society.
The irony is that while this price move is calculated to mollify the bourgeois elements, they just use it to inflame the masses against the Gorbachev administration — in the same way bourgeois politicians do in capitalist countries.
Thus, the capitalist press takes delight in interviewing people waiting on long lines for basic foods.
This is so reminiscent of the Polish experience of 1980, when the International Monetary Fund, which had gradually gained control of Poland's economic levers through its growing foreign debt, demanded broad increases in the price of food. The capitalist media then fanned the flames of outrage into a counterrevolutionary movement against the very government which had carried out its dictates.
In the Trud interview, Prime Minister Pavlov gives the impression that he supports orthodox communist practice against the bourgeois elements, and is for raising productivity in heavy industry which will later spur the production of consumer items. But in reality his analysis is abstract, scholastic and shallow. He divorces economics from the actual political situation by defending theoretical propositions which the bourgeoisie doesn't really oppose — industrialization and the rationalization of industry. They're not opposed to heavy industry; they just want to take it over.
Pavlov is closing his eyes to what is happening politically. The counterrevolution is utilizing all these developments, especially the price increases, to discredit the Gorbachev administration. That is what's behind the Moscow demonstrations.
No economic measures that the Gorbachev government takes should disregard the existence of social classes and groupings in the USSR. The question is what to do politically with the bourgeoisie. It is becoming more arrogant, more impudent and is wrecking and sabotaging the socialist sector of the economy.
The question is, what political measures is the government ready to take against the profits and social and political privileges of the bourgeoisie? The question is one of social inequality. But first, what measures must be taken politically against the bourgeois counterrevolution? Then the government must decide how to economically fortify the socialist sector.
Last updated: 19 February 2018