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December 24, 2009
Reflections on Yegor Gaidar: Russia’s ‘shock therapist’

Kostroma Market

Kostroma Market. Photo: Flickr user Michael Clark

One of the architects of the so-called “shock therapy” economic reforms that dismantled post-Soviet Russia’s state-controlled economy died last week.

Yegor Gaidar, who served as deputy prime minister in charge of economic reform and later as finance minister and acting prime minister, passed away outside of Moscow at 53.

Gaidar presided over one of the most transformative periods in Russian history, ushering in the basic elements of a market economy: free prices and free trade. In the aftermath of his decree allowing free trade, people rushed to sell their goods.

With the abolishment of price controls, prices skyrocketed and hyperinflation swept the country, wiping out the life savings of millions of Russians. This, along with the subsequent mass privatization of state industry, did not make Gaidar a popular man.

Whether he “saved the country from hunger, civil war and collapse,” as his compatriot Antaly Chubais noted, or brought Russia to the brink of ruin, remains a matter of debate.

Worldfocus researcher Christine Kiernan spoke with Nina Khrushcheva, a professor of international relations at the New School in New York City, about Gaidar’s legacy.

Worldfocus: You say you’re not really a fan of Yegor Gaidar’s. Why not?

Krushcheva: Well how many fans do you know? I think his intentions were good, as Yeltsin’s were at the time. I’m just not sure he knew what he was doing. Russia has never been a democracy. And Russia certainly was not a truly capitalist country. Pre-socialism it was to a certain extent a feudal economy still.

Gaidar went into this in the most ideological way possible, probably with good intentions in mind. Everything and anything he knew about capitalism and how it worked came from American books. But Russia is a big country, and from Gaidar’s standpoint it was a lab. From Yeltsin’s standpoint, they needed to do it all fast. That ended up being a serious problem, a serious disaster. Although his intentions were good, he had no way of knowing what capitalism is. He’d never tested it. He had a completely crazy belief in the markets.

Moscow shopping area. Photo: Flickr user Melvin T. Schlubman

Worldfocus: In an interview, speaking about the time, Gaidar said, “It was clear that if nothing were done, and everyone was afraid to act, that there would be a catastrophe.”

Krushcheva: Gaidar’s argument was that we couldn’t do it slower, in an evolutionary way, that it needed to be done in a revolutionary way. But we know from Russian history that revolutions never work… I can’t dismiss the possibility that it was partly because of this all or nothing approach that Putin came in. Perhaps if it had been a slower process people wouldn’t have gotten so disillusioned or wanted a great Russia back at any cost.

Worldfocus: What kind of legacy does he leave behind?

Krushcheva: He and Anatoly Chubais [another member of Yeltsin’s team who oversaw the privatization effort] are blamed. There was an expression in the 1990’s: “Gaidar i Chubaitsy” – a plural and hyphenated name to describe those who brought that completely unruly, irresponsible capitalism to Russia. Their legacy was very tainted.

He was certainly very bright. No question about it. And very privileged. He was the grandson of a very prominent Soviet writer of children’s literature. Yet he made his own name, which was difficult. That is what I respect him for.

Gaidar was one of those 1990s tragedies – those people didn’t fit into the country and the country didn’t fit into them. He presided over a historical period where, as his successor [Prime Minister Victor] Chermordyn put it really well, “we wanted to make it better but it turned out to be like always.”

That’s a formula for Russian life.

For more on how Yegor Gaidar and his reforms will be remembered:

  • A commentary by economist Anders Asland, expert on economic transition who served as advisor to the Russian government
  • A New York Times opinion piece on Gaidar’s mixed legacy
  • An editorial in Russia’s The New Times in which he is characterized as a “great politician, because he made the only decision necessary for the country”
  • Yegor Gaidar shares his reflections on Russia’s economic and political changes in the PBS series Commanding Heights

– Christine Kiernan

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