Russia Is Ripe for Dangerous Forces

There are no riots, no tanks on the streets. Few Russians seem to be expiring from hunger. True, there has been a scramble to sell rubles and buy dollars in the last few days as prices creep up. And true, sporadic strikes and other protests continue. But the scene that greeted me on returning to Moscow late last week, after a fortnight on my old stamping ground in Los Angeles, was disconcertingly normal.

Ringing in my ears was the question posed by Californian friends: How and why do the Russians put up with it all? Yet the absence of any spontaneous mass protest over Russia’s latest economic crisis--prompted by the ruble’s devaluation and what amounts to a debt default--does not mean the situation is not dangerous. It is.

There is a critical loss of faith. Faith in the ruble. Faith in the country, as a borrower. Faith in Western ideology, particularly market economics. Commitment to these three concepts was always flimsy; now they face extinction.

The reasons for Russia’s current sullen calm are plentiful. Crucially, there is no real forum for popular protest. Though full of sound and fury, the political opposition, including the numerous but feebly led Communists, prefer to keep their seats in parliament than genuinely confront the Kremlin. The trade unions are equally compromised by a traditionally cozy relationship with the ruling elite. Sure, they are planning mass protests--but not until Oct. 7! The media, though often noisy, are shackled by oligarchic ownership and infected by localized corruption. Last year a price list circulated around Moscow, listing the bribes payable to journalists in return for a favorable article in different publications.

The mechanisms to which the aggrieved naturally turn for representation in a democratic society are either absent, bought up or broken down. In this particular crisis, Russians are also insulated from some of the nastier side effects by their own poverty. Last week’s devaluation does inevitably mean painful price rises. But this is a country where cash and personal credit play a far smaller role than in the U.S. The average Russian buys just over half his food and either grows the rest or receives it as gift or barter. Nine out of 10 do not have a car; most pay small, heavily subsidized power and rent bills. Almost no one has a credit card, and few have mortgages. It is a miserable existence, but most survive.

But what has happened is a catastrophe, nonetheless. The destruction of faith among foreign investors is possibly even more important than the ruble’s devaluation. Moscow stands no chance of raising significant funds from the international capital markets for the next 18 months and probably longer. The banks, still grumbling over the rescheduling of Soviet debt, can hardly be expected to gamble again. Russia must run a budget surplus, a tall order in a country in which most of the population can’t or won’t pay taxes. Thus, it has doomed itself to a period of economic isolation, turning its giant back on the rest of the world, just as so often in the past.

Direct foreign investment--in industry, for instance--which briefly picked up last year, can be expected to return to its previously miserly levels. Still worse, devaluation will further corrode Russia’s dwindling faith in Western methods. They have heard the mantra of market economics too often, but seen none of the profits. Only a few extremely wealthy beneficiaries of the half-baked transition process believe in, or even understand, its fundamentals of privatization, competition, choice, the right to buy and sell land.

These days, Russians tend to define their politics less by what they believe in than by whom they hate most. The result is a perilous vacuum. The lack of a democratic political tradition means that the electorate is easily manipulated. It allows itself to be herded wearily into the desired direction by clever campaigning, as Boris Yeltsin’s team demonstrated in 1996, returning him to power despite a first term that saw the Chechen war, multidigit inflation and a privatization program that created vastly rich monopolies but did nothing for the stricken population.

The public is open to ideas that capture the despair of the moment, no matter how ugly. This has happened before: In the 1993 parliamentary election, the madcap ultra-nationalist, Vladimir Zhirinovsky, the clown of Russian politics, led the field. Happily, he now looks like a spent force. So far, the other likely contenders for the Kremlin look relatively benign, although the mayor of Moscow, Yuri Luzhkov, has an alarmingly autocratic streak, and the usually moderate reserve paratrooper general, Alexander Lebed, who once described Mormons as “scum,” has his bad moments. But a new, dangerous force could rapidly emerge on the landscape from nowhere. Instead of quibbling interminably over its president’s sexual peccadilloes, America should be worrying about what that would mean for us all.