The Soviet Collapse and Its Lessons for Modern Russia: Gaidar Revisited

In his 2007 book “Collapse of an Empire: Lessons for Modern Russia” the late Russian prime minister and economist Yegor Gaidar identified key drivers behind the disintegration of the Soviet Union 25 years ago, drawing lessons for the Russia of the 2000s. I have taken the liberty of trying to discern whether some of these factors may be relevant for today’s Russia. It appears that many of them are either absent or not as robust in the Russia of 2016. However, while modern Russia is far from teetering on the verge of collapse as the Soviet Union was in the late 1980s, its leadership still needs to address longer-term challenges to Russian statehood before they significantly weaken the country.

Gaidar identified about a dozen structural, longer-term factors and several more immediate triggers whose confluence led to the disintegration of the Soviet Union. The predominant factor was the inefficiency of the Soviet economy, which could not cope with a sharp drop in revenues from oil exports. That drop caused the regime to default on its socio-political contract with the Soviet population, which was much more extensive and rigid than the one between President Vladimir Putin and the people of post-Soviet Russia, according to Gaidar. The Soviet regime didn’t pursue fundamental reforms in earnest even when its leaders realized that such reforms had become a matter of life and death. The last Soviet leader, Mikhail Gorbachev, stalled out of concern that the population and parts of the elite would not accept the painful sacrifices such reforms required. Gaidar, who can fairly be called the father of market reforms in post-Soviet Russia, argues that in the absence of action by the Soviet government falling oil prices triggered a “crisis in balance of payments and [the] accounting system that developed into a broader economic crisis and led to a steep decline in production and standards of living, political destabilization and finally collapse.”

Like the Soviet Union, the Russia of the 1990s and 2000s was also dependent on exporting commodities, whose prices are volatile, and, therefore, it remained likely to suffer an economic recession if these prices fell and stayed low, Gaidar warned in his book. (Indeed his forecast came true in 2015-2016 when a decline in oil prices served as the leading cause of Russia’s economic recession.) However, the Russia of the 2000s had a softer version of authoritarianism than the Soviet Union of the 1980s. Structurally, therefore, the post-Soviet regime was better suited to stave off major political instability in the short to medium term, he argued.

Russia has evolved in many ways since Gaidar’s analysis, but some of the challenges he identified remain. Therefore, it’s worth taking a second look at the drivers behind the Soviet collapse and assessing which of them may be relevant for today’s Russia or could become relevant in the near to medium-term future.

The chart (follow link below) compares the conditions in the Soviet Union as described by Gaidar with those in today’s Russia, in an attempt to glean some lessons from the latter days of the Soviet Union.