Volume 1, Number 4
2 April 2001

Can Quakers Learn Anything from the Russians?

Dear Friends,

After World War I, Quakers were feeding Russians and Germans. I was too young to know about it at the time, but during the thirties my mother handed me a copy of The New Russia's Primer: The Story of the Five Year Plan, produced by the Soviet Government in 1930 (an English translation was published by Houghton Mifflin in 1931). I was most impressed by how the Soviets would hand power to the people, through communist cells and collectivized agriculture. By the time I was in high school, I was a thorough socialist, posting notices on the bulletin board. I was thrilled when Norman Thomas, socialist candidate for President, came to our school to speak. Later on, I became acquainted with his brother, Evan, through New York Friends Meeting, which I had joined.

To me, common morality required collectivized land. God gave us the land, so why should anyone "own" it? But as I studied economics, politics, and history, I came to understand that for every piece of farmland, someone must manage it, someone must plant seeds, someone must cultivate, someone must harvest, someone must sell the crop, and someone must eat it. We can't all do all those things on any given piece of land. If farms are private, the farmer does most or all the above. If land is public, a governmental elite commands these operations, but the government does not (usually) know as much about farming as the farmer does. In the Soviet Union, the government gave orders to the farmer, and the collective farms failed vastly to supply the people with enough food. To overcome this partially, the Soviets allowed farmers to cultivate their own crops on small pieces of land, and by the end of the Soviet Union private farming — though on only a tiny percentage of land — was supplying about half the food crops of the country.

What is the condition of Russians today? Is it time for Quakers to offer help once again?

A few years ago I was invited to speak to officials in the land privatization program in four cities of Ukraine, whose collectives are similar to the Russian. I discovered that they were not acquainted with how real property was bought and sold in other countries; they knew nothing of mortgage markets, title searches or insurance, or registration of titles. If they were to privatize the land, they had much to learn.

When State enterprises were auctioned off at the end of the Soviet Union certificates were handed out to the people, which could be exchanged for stock. But the elite friends of the Kremlin amassed most of them. Ministers in charge of state monopolies became the owners, converting them into private monopolies that continued to operate as wastefully as before. Whereas under the Soviet Union they had rewarded themselves with high emoluments and privileges, they now milked the enterprises for their private benefit. Much of this "milk" has been placed in secret deposits abroad in the names of the elite owners.

Government agencies still own vast amounts of property. "If it were a business, the presidential property office would be one of the largest in Russia. It owns, by its own account, sanatoria, farms, garages, hundreds of properties, an airline, and a publishing house. Many Russians believe there is much more" (The Economist, 1/30/99.) "The central bank commands an empire that stretches across Russia and beyond. It employs 100,000 people and owns a rich selection of properties, like holiday spas, apartment buildings and stables, as well as branch offices, valued in 1996 at $1 billion" (New York Times, 7/30/99.)

The vast majority of collective farms have not been privatized. They are complete communities, with administrative offices, businesses, and schools, all dominated by officials jealous of their powers. Though farmers have been given shares of collective ownership, the officials usually make it difficult or impossible to trade them in for land over which they have decision-making power. Those few farmers who have managed to obtain private land are hard put to buy seeds and fertilizer, or to sell their output. These purchase/sales channels have been monopolized by the collective, which usually denies them to the private farmer out of revenge for his having left the collective. The collectives are saddled with bloated payrolls and Soviet-era obligations, and they produce far less food than before. By one estimate, farmer productivity is one-quarter that of Chinese peasants in identical conditions. Russia imports one-quarter of its food.

Banks in Russia do not function like banks in the West. "Most were created through currency speculation in the hyperinflationary days of the early 1990s; they have survived on financial manipulations, not loans to productive enterprises. The banks siphon subsidies, hold massive stakes in the country's choicest assets and buy up high-yield government debt" (Wall Street Journal, 7/15/98.) A Russian friend told me she would not put money in a bank because often deposits cannot be withdrawn. When I checked with other Russians, they told the same story.

In 1996, President Boris Yeltsin ordered a top Russian bank to pay $1 billion into the federal budget (New York Times, 6/7/96.) In 1997 the governor of the central bank charged that a former deputy finance minister had caused a $500 million loss of government funds, siphoned through a bank of which that minister later became president. "According to an internal audit of the Russian Central Bank [in 1999], that Bank sent billions of dollars of foreign currency reserves out of the country and into a secret offshore network during the past five years" (Washington Post National Weekly, 3/15/99.) These are but a few of the many reported scandals; doubtless most go unreported. Virtually all banks would be technically bankrupt under Western rules; they survive only because of government loans. Analysts in Moscow call them the "living dead."

"Russia is now so webbed by official corruption that foreign businessmen, economists, and Russian analysts regard this as the largest impediment to the growth of investment and the market economy" (New York Times, 7/3/95). In 1998 President Yeltsin promised the Parliament that if it accepted his appointee for Prime Minister, "its members would be rewarded with bigger dachas [country houses] and faster cars paid for from the presidential slush funds" (The Economist, 5/2/98). "The main culprit for Russia's large budget deficit is the alliance the government has formed with powerful business interests; this alliance has raided the public treasury" (Wall Street Journal, 6/1/98.) Many foreign investors have pulled out, with significant losses. Others have decided to stay, losing money but hoping to gain a foothold in an economy that may be prosperous some day.

Yet the economy of Russia survives, and in some places even prospers. How? My friend Nicolai Petro, an American of Russian ancestry who has lived in and studied the city of Novgorod, writes that the ingenuity of Russian people has often found ways around the political morass. They conduct business by barter or with foreign currencies (the U.S. dollar is a favorite), they start enterprises without permission — known as the "informal" (or "black") economy — and many do not pay taxes or abide by government regulations. Because of sharp devaluations, more goods are now produced in the local economy, replacing imports. In 1997, a new regulation required all retail establishments to use only the ruble as the currency of businesses. Many establishments — realizing this would be their death knell — did not obey. If the government were to enforce all the requirements it announces, the economy would stop — and the politicians know that.

International agencies, such as the International Monetary Fund, and foreign governments have tried to "bribe" the Russian government into enforcing rules acceptable to the international community, such as improve the tax collection system, privatize inefficient state enterprises, balance the government budget, and not print inflationary money. They have failed, because the government is unable to decree a culture. All they have accomplished has been to keep the corrupt elite in power a little longer. Foreign economists have recommended policies to the Russian government, which were either not adopted or not implemented.

It was only when I studied history, political science, and economics in college that I became disillusioned with Russian socialism. Ultimately the Soviet Union became revealed to me as a concentration of power in the elite. Robert Conquest's The Harvest of Sorrow was a revelation, telling how farm collectivization in the thirties had caused millions of deaths, some killed outright as the army invaded the farms, many through starvation because forced sales of crops to the cities had left too little to eat on the farms. In addition, Stalin purged (killed) his enemies — thousands of them — with sham trials or no trials. The Soviet government was established with fear. How could I have been so blind?

The Soviet Union collapsed because it could not feed its people and provide them with the amenities the more developed world was enjoying. Oh yes, visitors to Moscow found enough food, but much of it was imported in exchange for Soviet raw material and manufactured exports. Since they spent on food the foreign exchange that they needed for mines, factories, and farm equipment, both industry and agriculture deteriorated to a critical point. Then the Soviet Union fell into its component parts, as independent countries.

At one city where I was speaking in Ukraine, my interpreter told me, "All our lives we have depended on the government. Now that the government has failed us, we do not know how to take care of ourselves."

Now I have a question for you. Some Quakers have told me they would seek a "humanitarian socialism" where property is owned in common but its use is divided according to humane rules. Others say that if property nationwide is not owned privately, it will be controlled by an unscrupulous few. Instead, they say, we need a society with widespread ownership of private property so that no one has too little, and with checks and balances among owners.

We do not have either society in the Western world today. We don't have humanitarian socialism. We do have private property, but many have too little. So, which kind of society do you want to work for, or do you have a totally different society in mind? Will socialism of any sort mean property controlled by the unscrupulous few, as it was in the Soviet Union? Or, can our private-property society to evolve toward one in which no one has too little? How? What does Russia have to teach Quakers?

I leave you with these questions. Please send your ideas. Thank you.

Yours in Peace and Friendship,

Jack Powelson

Readers' Comments

Please send comments on this or any TQE, at any time. Selected comments will be appended to the appropriate letter as they are received. Please indicate in the subject line the number of the Letter to which you refer! The email address is tqe-comment followed by @quaker.org. All published letters will be edited for spelling, grammar, clarity, and brevity. Please mention your home meeting, church, synagogue (or ...), and where you live.

I hope you're wrong but fear you're right.

— Stephen Williams, Bethesda (MD) Friends Meeting, who has lectured on law in Russia many times.

We do need a society with widespread ownership of private property so that no one has too little, and with checks and balances among owners. But we also need more property (and other assets and responsibilities) as part of the commons. We need to devote more of our resources to the physical and cultural commons.

— Vici Oshiro, Minneapolis (MN) Friends Meeting.

The University of Louisville awarded the Grawemeyer Award for Ideas to Improve World Order to Janine R. Wedel of the University of Pittsburgh for her book Coercive Inducement. This is an interesting exposé of the mistakes that were made in the attempt to remake the Soviet system. Many of them were criminal, of course, as we now know. The Grawemeyer Award is prestigious. $200,000 cash! You may enjoy reading the book.

— Lee B. Thomas, Jr., Friends Meeting of Louisville (KY).


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Publisher: Russ Nelson, St. Lawrence Valley (NY) Friends Meeting

Editorial Board

  • Virginia Flagg, San Diego (CA) Friends Meeting.
  • Herbert Fraser, Richmond (IN) Friends Meeting.
  • Asa Janney, Herndon (VA) Friends Meeting.
  • Gusten Lutter, Mountain View Friends Meeting, Denver (CO).
  • Jack Powelson, Boulder (CO) Meeting of Friends, Principal Editor.
  • J.D. von Pischke, a Friend from Reston, VA.
  • Bob Schutz, Santa Rosa (CA) Friends Meeting.
  • Wilmer Tjossem, Des Moines Valley (IA) Friends Meeting.
  • Faith Williams, Bethesda (MD) Friends Meeting.

Members of the Editorial Board receive Letters several days in advance for their criticisms, but they do not necessarily endorse the contents of any of them.

This newsletter was formerly known as The Classic Liberal Quaker.

Copyright © 2001 by Jack Powelson. All rights reserved. Permission is hereby granted for non-commercial reproduction.

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