International Viewpoint Archive

The Fourth International’s English-language review, from 1982

USSR: The Formation of a New Market Minded Economic Ruling Layer

· International Viewpoint No. 200, 18 February 1991 · pp 13-18 · 5,181 words

Soviet Union

While the hard right put themselves forward as defenders of Socialism, this does not sum up their economic programme. Colonel Alksnis, who has stepped into the limelight as a spokesperson for Soyuz -and who put in an appearance at a pro-Union Interfront meeting in Lithuania just after the army attack - looks forward to a repeat of the Japanese experience where "The American army and its bayonets led the country on the way to its economic rise.

The idea of a firm hand directing the transition to the market is current across the board in the Soviet bureaucracy; according to Yuri Prokoviev, the head of the Communist Party in Moscow, described as a "centrist": " In this context I will cite not only Japan and South Korea, but also Chile, where the market infrastructure was rapidly created. In all these countries this was done through state investment and state policy."s . Thus the turn to the market will be maintained while the forces of disunion and chaos are reigned in. Concentric circles of control

The law and order turn in the Soviet Union sent a shudder through many in the Eastern Europe. While a return of direct Soviet domination seems highly unlikely, the future for the East European countries, which, with Afghanistan and Mongolia, form an outer circle of Moscow's domain, will indeed be significantly affected by what happens in the inner circle of the non-Russian republics. The issue is not the market, but democracy.

The Kremlin wants strong states throughout the region, that will not infect its own people with radical notions about national self-determination and control from below. In this they will have the connivance — more open in Germany, more duplicitous in the US - of the Western governments, who are both alarmed by the prospect of "chaos" to their East and tempted by the dilomatic and economic opportunities that the situation in the region offers, including for pursuing competition with one another.

Furthermore the Soviet elite have become accustomed to strutting the world stage as a world power - privilege they will not lightly surrender. From this point of view they may be hoping to be included in the post-Gulf War arrangements in the Middle East, accepted — at last! - as a responsible partner by American imperialism.

Both American imperialism and, in its lesser way, the Soviet bureaucracy are on the attack at the moment. But the tide of history is against them; and they can only stem the crumbling of the postwar order for as long as no alternative presents itself.

Whatever their ideological differences, and difference in experiences — and these are vast - the movements in the West against the American intervention in the Gulf and against the new repressive turn in the East have to look to each other to arrive at an alternative to the dying system, rather than looking to its ailing protagonists to impose one. * 1. International Herald Tribune, February 5, 1991. 2. Argumenty i Fakty, no. 3, 1991. 3. Argumenty i Fakty, no. 52, 1990. 4. Quoted by Jean-Marie Chauvier in Le Monde

13 diplomatique, February 1991. 5. International Herald Tribune, February 5, 1991.

USSR The Soviet economy: the fight for control "IT IS NOW OUR TURN to reject that which has not withstood the test of history.! They often try to frighten us that the market is exploitation, the restoration of capitalism, the rule of the shadow economy. In reality, we are talking about the transition to a civilized, cultured market, open to all honest and industrious people." (from the appeal of the Russian parliament to the population to support the "500-day Plan for the Transition to the Market)."2

"I recently read in your paper:....'Employees of the state sector are prepared to become hired workers only on condition that their wages rise significantly.' ....I don't know of any workers in the state sector who would be prepared to become hired slaves. And what can a 'significant' increase, say a doubling, of wages give them if prices rise 5-10 times and if mass unemployment sets in? Criminals, who have amassed capital, are becoming a class of owners and rulers of the destiny of the state." (from the letter of a worker of Kharkov region).3

Published below is the first part of a long article dealing with the current economic situation and the workers response. The second part will appear in the next issue of IV. DAVID SEPPO that the elimination of state control over the economy means that "it will fall into the hands of the mafia." The term "mafia" reflects the popular perception of a growing fusion of the bureaucracy, especially the economic administrators, with the "affairistes" of the private sector. These are the people who hold power in the economy and so also in society.

Any Soviet citizen can readily offer a list of examples drawn from personal experience to support this view. The "mafia" has lately also become a major theme of the press, liberal as well as conservative (there is no mass socialist press). As a social phenomenon its contours are illusive and fluctuating — its shadowy character is in the nature of the beast.

But the term most often refers to the principal kinds of related activity: the creation and maintenance of shortages by monopoly structures and the illicit transfer of state resources and funds into private hands. Both involve the collusion of administrators in the state sector with the "shadow" [tenevaya] economy, itself often indistinguishable from the legitimate private sector.

The mafia was not of course born under Gorbachev, as the trials at the start of perestroika surrounding Rashidov's reign in Kazakhstan amply showed. But with the further weakening of central control and the legalization of the private sector, the "Rashidovschina" has become much more generalized. The following are a few examples of "mafia" activity that could easily be multiplied. could easily be multiplied.

Watermelons - the missing millions

In September 1990 a deputy of the Moscow Soviet travelled Astrakhan to find out Why tomatoes and watermelons were arriving from the southern region in such small quantities. The local authorities showed him a pile of telegrams from administrators of Moscow's wholesaleretail produce network instructing them to 1. The author would like to thank Allen Fenichel, Andrea Levy, Dave Melnychuk and Leo Panitch for their helpful comments on an earlier draft of this article. 2. Sovetskaya Rossiya, October 10, 1990. 3. Rabochaya tribuna, September 4,1990. 4. The average industrial wage is about 260 rubles a month. 5. Komsomol' skaya pravda, December 12, 1990. 6. Trud, July 11, 1990. 7. Sovetskaya Rossiya, September 30, 1990. 8. A related term, less frequently used, is "bandokratiya" (from the word "banda" - gang) which one economist has defined as "organized crime that has grown up on the basis of bureaucratism and merged with it economically, socially, and even politically." A Buzgalin: "est' li u nas ekspluatatsiya?— Sovetskie Profsoyuzy, no. 17-18, 1990, p. 26. 9. Many factors, of course, contribute to the shortages, but among these monopoly behaviour occupies a special place. For an analysis of the role of monopoly in the Soviet economy, see V. Bogachev, "Monopoliya v sovetskoi ekonomike," Ekonomicheskie nauki, no. 6, 1990, pp. 11-22.

N EARLY DECEMBER 1990, a journalist at the liberal daily Komsomol' skaya pravda purchased a pig from a farmer and brought it to the kolkhoz (private market) to sell. The market price of meat had doubled over the last half year to 30-35 rubles a kilo* (with a 33-66% rise over the past few months alone), and he wanted to understand why. He made the rounds of 16 of Moscow's 33 markets but everywhere was refused access to the counters where he would have been able to offer his meat for sale to the public.

Finally, at the Riga market, Moscow's largest, after paying a "crazy" bribe to the butcher and inspector, he was given a counter among the egg dealers. He posted a sign "Cheapest Meat at the Market" and started to sell at five times below the going price. The reaction was swift. A man purchased a very large piece of meat only to run back a few minutes later shouting that the meat was infected. When this false accusation failed to deter the other clients, our journalist was denied access to the scales, under the pretext that his meat was dirty. He then 14 began to sell the meat unweighed, upon which four large men attempted to drag International Viewpoint #200 • February 18, him away. "The markets of the capital", he concluded, "where, in principle free economic laws hold sway, are today completely monopolized...The mafia structure of a single market takes in several tens of thousands of rubles a day. The whole path is thickly paved with bribes. "S

No power to the Soviets

Some 75% of the respondents in a survey conducted in the Soviet Union in the summer of 1990 stated that their ability to influence political life had increased over the past two years In not another survey in Moscow in the fall, 60% claimed that "power in the localities belongs not to the soviets but to the chiefs of the mafia."

In the sixth year of perestroika, people are waking up to the realization that despite the increased freedom of speech, the competitive elections and the removal of the party apparatus from the levers of political power, they themselves remain almost as powerless as ever. People who only a year ago were fervent supporters of the schemes of the radical marketeers, now typically express fear 1991

stop shipment because of an over-supply in Moscow, which, of course, did not exist. "Prices are now mostly "by agreement""

explained the deputy. "The less goods, the higher the prices can soar. Who profits from the reduced supply of vegetables? Those who sell them. I consider that mafia links along the lines warehouse-shop-speculator are real!"° As for dry goods, the director of a Moscow department store chain estimates that only 18% of the goods in high demand that are produced and imported actually reach the ordinary consumer." Enormous lines stretch around state shops, while at the private markets - and sometimes only a few yards from the door of the state shop itself - one can purchase the same goods without any wait for several times the state price.

The Soviet Union has imported hundreds of millions of dollars worth of medicine over the past two years.

Yet even simply aspirin has become a rare find in the pharmacies. According to the director of a Moscow pharmaceutical trading firm, most of the imported drugs are not those that are in most demand and no one consulted her about this.!2

But someone surely made a bundle in payoffs from the exporters.

Anyone with enough money can obtain needed drugs by bribing the pharmacy or warehouse manager on the black market or at Moscow's little-known but now quite legal foreign currency drug store.

According to one report, the volume of illegal trade in medicine is already approaching that of the state pharmacies. 13

Shortages act as political tranquilliser

Besides economic gain, shortages also play a useful political role for those interested in maintaining popular quiescence.

People are so preoccupied with the material struggle for survival that they have little time or energy for sustained political activity (this is not, of course, to claim that the shortages are the result of a political conspiracy, though in some cases, even this hypothesis should not be dismissed. In any case, one can argue with confidence that, were it not for the political role played by the shortages, efforts to deal with them would be more intense and successful.)

USSR

And when political tenrise sions dangerously,

"defitsit" (a collective for term scarce goods)

suddenly "thrown" onto the market. According to a resident of the industrial town of

Sverdlovsk, soon after a mass political demonstration, the authorities "began to

"throw out Austrian boots,

Romanian blouses and deoderant from somewhere or other." Naturally lines spring up, then lists, guardians of the lists and guardians of the night lines. The committee elected at the demonstration soon found itself isolated from the rest of the population. 14

As shortages grow more serious, the practice of selling "defitsit" directly in the enterprises has expanded.

This is a commonly used and quite widespread tool in the hands of the administration for reinforcing the workers' dependence. A worker who speaks up against management might miss out.

At the same time, there are never enough goods to go round, and the squabbling over who is to receive what can seriously undermine solidarity within the collective.

This practice also has a deeply corrupting influence on workers, since the goods that are sold are often not scarce basic consumer goods but items such as cars, electronic equipment, video cassettes and

French perfumes, which the workers then resell at a large profit. Management is, of course, perfectly aware of this.

Shortages also serve as a political football for conservatives and liberals who want to discredit each other. With the potato crop rotting in the fields, party officials accused the "democrats" elected to the soviets in the spring of 1990 of doing nothing to mobilize their constituents for the harvest (this used to be the role of the party apparatus until it was stripped of its administrative functions in the economy).

The liberal press, in its turn, blamed the

10. Kuranty (Moscow), October 4, 1990.

11. Rabochaya tribuna, October 9, 1990.

12. Vechernaya Moskva, September 27, 1990.

13. "Apteka gde est' vse", Nedelya, no. 41, October 8,

1990, p.5.

14. G. German, "Ochered", Rabochii vestnik (Perm'), no. 5, May 1990, p.3.

15. Central Soviet television, September 21, 1990. At the same session, Sukhov also called on the leadership to be honest enough to admit that the better life they are proposing is one that will take place under capitalconservatives for sowing panic in order to discredit the "democrats". These latter pointed their finger at the central economic apparatus for failing to take measures in time, when the problem was foreseeable even a year ago. Indeed, the first reaction of Gavril Popov, Moscow's liberal mayor, was to refuse to mobilize his constituents, suggesting instead that the incompetent ministerial apparatus be sent to the fields.

Leonid Sukhov, a taxi driver from Kharkov and member of the USSR parliament expressed a widespread view when he suggested that "someone" is consciously creating a desperate situation with the aim of preparing the workers psychologically to accept any reform, including the market.! The "democrats" argue that they lack real power to change the situation. And while there is much truth to this claim, they have done little to mobilize the population in order to change the correlation of forces. Mafia — vanguard of capitalist civilization

There is a general reluctance on the part of the liberals, stemming from their ideological orientation, as well from more concrete political considerations, to apply "administrative methods" — the only ones that could be effective against monopoly — to rein in the mafia. For, as the Russianborn American economist Vasily Leontieff has argued, today's mafia is tomorrow's class of "civilized" capitalists.

Direct robbery of the consumer is only one source of "mafia" profits. Parallel to this, and sometimes overlapping, is theft from the state. Workers tell of the "pocket" cooperativesl6 and joint ventures set up by enterprise management for the illicit sale abroad or to the private sector of raw materials and semi-manufactured goods. In a typical case, the director of the state research and manufacturing association Gidrolizprom authorized the creation of the cooperative Khimtekhnika and transferred to it — free of charge — the association's large store of defective titanium hydrolysis apparatuses.

Khimtekhnika traded these for from six to nine million rubles worth of computers and video players, of which Gidrolizprom had none. After several narrow escapes from the economic police and tax inspectors, Khimtekhnika's directors transferred these assets to a joint Soviet-Swiss venture, Intercomplex, created specially for that purpose (joint ventures enjoy a two-year tax holiday). ism. In that case, he suggested, the Communist Party's name should be changed to the Capitalist Party. 16. Soviet cooperatives are often ordinary private enterprises that employ hired labour. Asked in September 1990 what would happen if the state legalized private property, Artem Tarasov, vice-president of the Union of Cooperators, answered: "Nothing. We would simply get rid of the camouflage and call things by their names...[My cooperative would become a com- 15 pany with private capital." Rabochaya tribuna, September 4, 1990.

USSR

Since then, the Gidrolizprom association has been disbanded. Its former institutes and factory, now independent, face large debts and bleak futures. Not so the former director of Gidrolizprom, who now stands at the helm of Intercomplex.

Sub-contracting work to cooperatives is a common way of turning non-cash credits into cash. In the Soviet economy monetary exchanges between state enterprises take the form of bookkeeping transactions between the State Bank accounts of the different enterprises. In such exchanges, no cash changes hands.

Big profits in computer imports

On the other hand, in transactions between state enterprises and cooperatives, which are non-state enterprises, cash is paid out of these accounts, allowing state managers to receive kickbacks or salaries as members or employees of the cooperative. There are also fortunes to be made in foreign dealings. Most of Moscow's joint venture construction companies are too busy importing and selling computers to put up any buildings. And why should they, when their profits can reach 4000%?18

As a minister in the Latvian government put it, "cooperatives and joint enterprises are often oriented not towards the production of consumer goods but towards their redistribution. From the state's pockets into their own. If we are to call things by their name, they are involved in speculation on a very large scale. "9 Under Brezhnev, a "gift" of jeans or whisky helped to seal foreign export deals to the Soviet Union. Under perestroika, when foreign currency dealings have been decentralized, large cash sums of foreign currency have become the norm."

Mention must also be made of the party apparatus, many of whose former and current members are using their connections and illegally accumulated wealth to go into business. In Leningrad, for example, the once mighty regional party apparatus has been reduced to 37 people. But they keep busy renting out offices to cooperatives, private banks and foreign companies in the Smolny Institute, a historic landmark and prime piece of real estate that rightfully belongs to the people. They have also turned one of the committee's hotels into a joint venture.?1

But it is not only members and former members of the bureaucratic clans who are involved in these activities. A scandal broke out in the Moscow Soviet when a deputies' club by the name of Stolitsa (capital tried to oust the local temperance society from its premises on Chekhov St. It was discovered that this club's goals are "production and commercial activities." Further inquiry revealed that its founders work in the Soviets' Commission on EcoTO somolskaya pravda remarked: "The - nomic Policy and Entrepreneurship. Komexample of Stolitsa, unfortunately, is not unique, but is even typical of the existing structure of society: different commissions of local soviets often create various commercial organizations and pay part of their profits, not to the local budget, but directly to their founders. And the founders, of course, repay the kindness."22

In December 1990, 35 members of the Oktyabr'skii District Soviet in Moscow publicly accused its chairman, Ilya Zaslavskii, a liberal luminary, of "organizing monopoly structures, as similar to classic "shadow" formations as two peas in a pod.... Judge for yourselves: the chairman of the District Soviet, the chairman of its executive committee, and almost all his deputies, having become heads of the district's political structures, are at the same time directors of cooperatives, commercial banks and firms. [There follows a long list of these firms] Exceptionally favourable conditions are created for the activity of all these firms, and tens of thousands of rubles are being pumped at an intensive rate into their financial accounts from the basic budgetary funds of the district executive committee, that is, they are openly robbing you and me of funds intended for the socio-economic development of the district. " Vegetable harvest sabotaged

The deputies went on to accuse the executive, busy with realizing Zaslavski's conception of the "market economy and financial independence of the district" of sabotaging the district's vegetable harvests campaign. The housing programme, they argued, was also failing: while the executive was selling state apartments primarily to occupants who openly stated their intention of leaving the country and reselling the apartments for foreign currency or renting them out to foreign companies, 60,000 people in the district still lived in communal apartments.23

These developments - the "transition to the market" as the uncontrolled sway of monopoly formations and the illicit transfer of public wealth into private hands, popularly termed the "mafiaization" of the economy, do not come as a surprise to Soviet Marxists, who are the only ones even to attempt a serious analysis of the underlying causes of the "com17. 1. Bogacheva,

Pravitel' stvennyi vestnik, no. 50, December 1990, p.6. 18. Such is the finding of a Moscow research institute. Personal communication by M. Malyutin, director of the sociological service of the Moscow Soviet. 19. I. Litvinova, "Zaslon spekulyatsii", Nedelya, no. 42, October 15, 1990, p.4. 20. Private communications from German and Italian businessmen. 21. From Leningrad TV, November 5, 1990. Smolnyi, once a school for girls of the nobility, was seized by the Bolshevik and other revolutionary organizations in 1917. 22. Komsomol'skaya pravda, October 3, 1990.

International Viewpoint #200 • February 18, 1991 mand" system's failure. 2 They have always insisted that the basic issue in economic reform is power, that is a social issue, and that the market-versus-plan debate is about mechanisms of regulation that in and of themselves do not determine the nature of a social system.

No more "one big factory"

The failure of the "command" system cannot be explained by simply citing the allegedly "utopian nature of a planned economy," though the Marxists themselves call for a revision of the old model of "one big factory", including a significant expansion of the role of market relations in the Soviet economy. But this task, however important, cannot be resolved successfully in the interests of the great majority without directly confronting the issue of power.

For the Marxists, the underlying social cause of the crisis of the old system is the absence of control over the economy's administrators, who after the revolution usurped the power of the economy's official owner, the people, without becoming full owners themselves.

Under Stalin, at the origins of the "command" economy, some control from above did exist. A manager who failed to carry out assigned tasks knew that he or she would be sanctioned, often in a drastic manner. Khrushchev eliminated the terror but did not replace it with democratic control from below. He merely played with democracy.

But even his timid reforms provoked the opposition of the bureaucracy that was able to find allies in the majority of the political leadership. Brezhnev thus came to power as the candidate of the bureaucracy. What Soviets today call "the period of stagnation" was probably the purest expression of the rule of the bureaucracy increasingly free of outside political control. During this period administrators, especially at the top and middle levels, did not need particularly to fear punishment for failing to carry out official duties. Real sanctions were reserved for those who violated the informal rules, the esprit de corps, of the bureaucratic caste mired in corruption.

From this point of view, Gorbachev, though himself a reformer, has favoured the process that he inherited from Brezh23. Rabochaya tribuna, December 9, 1990. 24. Non-Russian readers will find Soviet analyses that share this basic framework in D. Mandel (ed): La perestroika: économie et société, Québec: Presses de 'Université du Québec, 1990 (articles by V. Bogachev, V. Dementev, Yu. Sukhotin) as well as in the review Alternatives (Montréal and Moscow) No. 1, forthcoming, spring 1991 (articles by V. Buzgalin, B. Kagarlitskii, A. Kolganov, Yu. Sukhotin, G. Rakitskaya, B. Rakitskii). For an attempt to briefly summarize the position common to many of the Soviet socialists see D. Mandel, "A market without thoms: the ideological struggle for the Soviet working class", Studies in Political Economy, Ottawa. no. 38, autumn 1990, pp. 30-36.

USSR ed the firm Nevskaya pernev: today the centre has spektiva, through which become almost as powerthey will buy up...the consuless as the people them-

(LES mer goods and food industry selves against the economic bureaucracy, which is free to exploit its monopoly positions in perfectly predictable ways; restricting the volume of goods put on the market, cutting quality CHIRAN and raising prices. This is the inevitable consequence of an attempted "revolution from above" which has entrusted the economic reform to the bureaucracy itself. Its aim is to preserve the power 1s to preserve the power of the city along with the trade network - all this, naturally, to help the citizens and Leningrad Soviet. At the conclusion of these operations, the city will still be run by the same old adminis- trative structure, only its elements will enjoy new opportunities, which hitherto were considered criminal. "28

While this in itself is worrying to the social democrats, who want a "normal"

and privilege of at least a part of the bureaucracy by transforming the mode of domination and exploitation. This requires bringing new elements into the ruling class and sacrificing some of the old.

The developments in the Soviet economy described above are forcing the liberals to come to terms with the unpleasant reality. Their standard argument that the deepening economic crisis and the "debauch of the mafia" are due to the absence of "real" reform has lost much of its force, since ordinary citizens have already experienced enough of the market to form a quite clear picture of what a "real" transition to the market holds in store for them.

In the words of the USSR Minister of Finance: "One can argue whether we are prepared or not for the transition to the market, if competition has been established among producers or if that still remains a very distant goal, but the reality is such that the market is already imperiously intruding into our lives. Over 60% of prices are not under control of the state. That means that they are rising, and very significantly...Monopolism in industry, agriculture and transport has very strong positions. "25 This is quite an admission in view of the fact that there has been no official price reform. In the spring of 1990, Gorbachev solemnly promised that there would be no price reform without first consulting the population, itself overwhelmingly opposed to price rises.

Lumpen-bourgeois ethic

Liberal sociologist Leonid Razikhovskii argues that the Soviet economy is dominated by a "lumpen-bourgeois" ethic: the desire to increase one's own property at the expense of state property, which is "no one's property." This has yielded "a unique, historically unprecedented monster - a completely mafia-ized economy." All this, he attributes, of course, to the socialist revolution itself. But he is not far from the Marxists' analysis when he describes perestroika as "the privatization of the bureaucratic-mafia structure: the ministry becomes a monopolist concern and the city trade administration - an association of private shops." Nevertheless, he warns that it would be silly to believe that anything is possible, since the "mafia-nomenklatura" is where the power is.

Ethics by the millimeter

And so, however distasteful, one must hold the course since "only in conditions of open private property will it be possible to begin, drop by drop, to crush monopoly and the mafia,...millimeter by millimiter to restore the common human ethic26 and to get rid of the lumpen bourgeoisie."? In essence, Radzhikovskii is proposing to hold one's nose and support the revolution from above. He does not even mention the possibility of a popular revolution as an alternative. For the wresting of power from the "mafianomenklatura" by the people itself might jeopardize his goal of a capitalist restoration.

Leningrad's social democrats, advocates of a "mixed" (but predominantly capitalist) economy, have also recently come to the realization that "privatization will mean the transfer of property into the hands of the directors; and the introduction of a market economy — their freedom from any limitation whatsoever." The following are only the most striking of the developments along these lines in their city:

"The 26 largest enterprises, having formed the 'Association of Industrial Enterprises' have now founded the bank 'Rossiya', in which they are investing millions of rubles. They have also creat25. Trud, December 30, 1990. 26. Soviet liberals oppose "common human values" that supposedly predominate in "normal" (capitalist) societies to the "class values" which allegedly inspired Stalinism. This has prompted one Leningrad socialist to quip that the "common human values" of the liberals must surely be dollars. 27. L. Radzikhovskii, , "Kapitalizm v otdel'no vzyatoi kvartire", Nedelya, no. 48, November 25, 1990, p. 7. 28. V. Dudchenko and A. Karpov "O vozmozhnykh posledsviyakh naibolee ochevidnogo i pryamogo puti

Western-style economy for the Soviet Union, they clearly fear even more that "political instability" and "social unrest" will result. "People in the factories will not wait for long when they discover that society is being ruled by the same actors, leading the same kind of life, along with all their relatives and friends and with a part of the most amenable democrats, the only difference being that they will have exchanged their black Volgas for black Mercedes."

The Leningrad social democrats are fervent partisans of what they call the "parliamentary path". "There are two alternatives: try to use the extreme instability of the situation to destroy the remaining structures and on the wave of mass actions hope to become political leaders "expressing the interests of the people"; or try to prevent the social explosion by any methods available, preserving the parliamentary path of development of events. The Bolsheviks of 1917 were the most consistent partisans of the first option..... We know the consequences of trying to make a social revolution." Inevitable move to Mercedes

Consequently the social democrats see the bureaucrats' move from Volgas to Mercedes as virtually inevitable. All they can think to propose is to invite Western capitalists in the hope that they will introduce a "civilizing" element into Soviet business. Another proposal is for the Leningrad Soviet itself to go into business, as a counterweight to the mafia. But, they sadly note, in that case there would be no guarantee against the Soviet itself becoming "mafia-ized" 29 k privatizatsii", September 2, 1990 (unpublished document). The authors are leaders of the Leningrad social democrats. Karpov is a delegate to the Leningrad soviet and a member of its economic reform commission. ra Saveley, 1990 eskaya shed document) in. 29. O. Savel'ev, Savel'ev, "Obsluzhivanie demokratii," Informatsionnyi byulleten' Sotsial-demokraticheskoi assotsiatsii (Leningrad), no. 24, September 1990. This account is also partly based on conservations with social demo- 17 cratic leaders.

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