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Under Stalin incompetent and ideologically opposed leaders were removed from office. This ended after his death. People stayed in the Politburo forever. They became uninterested in expanding the economy away from primarily the military and heavy industry. Consumer goods are more complicated to plan and this was a planned economy. The members aged. New ideas were not brought in. They could have focused on high tech, robotics, automation, personal computing, and other areas. They chose not to do so. Later the members of the government saw the luxurious lifestyles of the rich in America and figured they could live that way if they decided to dissolve the system and steal the public assets outright.Term limits, accountability for performance, mandatory age requirements, and other systems to reduce and eliminate corruption would have helped preserve the system.The Chinese tried isolated economic experiments in special zones. If the experiments were fruitful they would be implemented on a large scale, but gradually not to disrupt the public markets and industries. Gorbachev did totally the opposite—he ignored the advice of his economic planners and rolled out massive changes overnight. The public industries could not compete without price controls but still saddled by regulations not imposed on private industries. This lead to a collapse of the public industries.After Stalin a black market developed. This increased competition in the official markets. Gorbachev permitted these on a much bigger scale. The oligarchs then used private corporations to launder money for organized crime. The black markets undermined the official markets. Gorbachev’s other reforms led to shortages of goods that destroyed the morale of the entire public. Long lines became the norm.Gorbachev’s glasnost opened the doors for dissidents to destroy the public’s faith in communism. Day after day there were sensationalized exposes about the gulags, the purges, the Holomodor and others.Soviets were shown the lifestyles of the rich and famous in America. They were told that abandoning communism would lead them to have better lives, too. After the fall of the Soviet Union they would painfully discover the extent of the lies sold to them. People freezing outside, hunger, the outbreak of communicable diseases, mafia and oligarchs gained control of the government.Gorbachev pulled the plug on central planning of the economy. This had catastrophic consequences. Managers began to produce only the items which were lucrative for their sector and not what the economy actually needed. This led to massive inefficiencies as there were abundant supplies of things not needed and shortages on the things that were needed.Gorbachev’s anti-alcohol campaign that included a partial prohibition had disastrous results. Illegal producers of alcohol began to become rich themselves. Then they desired to increase their private activities and expand capitalism. Meanwhile, people simply drank more alcohol so there was no improvement in labor productivity. The loss in revenue from the sales of alcohol put giant pressures on the system.Individual managers paid their employees more, which led to increase inflation combined with shortages of needed goods from #7.Gorbachev shrank purchases of industrial outputs by the state, causing official manufacturers to sink or swim on the private market. This undermined the state industries.“Initially most of the cooperatives were cafés, restaurants, hairdressers and small construction firms – exactly the sort of business that tends to be quite effectively run on a small scale. However, the cooperative movement quickly came to be dominated by “pocket banks used by their founding enterprises to move funds around discreetly and cooperative banks that were able, when foreign-currency and government debt markets developed, to make large profits from playing very thin financial markets.” Why doesn’t the Soviet Union exist any more? Part 5: Perestroika and glasnost - Invent the Future“Many of the fabulously wealthy Russian gangster-capitalists of the 1990s made their start in ‘cooperative’ banks in the late 1980s. In addition to paving the way for a new finance-capitalist class, the cooperatives also laid the ground for a lucrative non-productive underground economy: “Cooperatives providing consumer goods and services, which had to be readily visible to function, soon ran into difficulties from criminal gangs. Protection rackets developed, and the police were unable or unwilling to stop them.” Id.12. Next Gorbachev hollowed out the economic planning groups in the communist party. So there was no organizational oversights of the activities done by different ministries. This led to chaos.“As we know from historical experience, common sense, and scientific analysis, no reform can be implemented successfully without a well-developed programme and precisely defined goals; a team of vigorous and highly intellectual reformers; a strong and effective system for controlling political phenomena; thoroughly developed and carefully considered methods of instituting the reforms; the mobilisation of the mass media to explain the meaning, goals, and consequences of the reforms for the state as a whole and for the individual person in particular for the purpose of involving as much of the population as possible in the reform process; and the preservation and development of the structures, relations, functions, methods, and lifestyles that have earned the approval of the people. The reform process in China (PRC) developed along approximately similar lines. But nothing like this was done by Mikhail Gorbachev and his team. Labour collectives, party organisations, economic leaders, and much of the intelligentsia were excluded from participating in the renewal of society. The right to define directions and interpret the meaning of the reorganisation processes was appropriated by a small group of top leaders, who were given to superficial improvisation and were unable to organise and direct the reform properly… Instead of the hard work that was urgently needed, they unfolded a parade of political arrogance, demagoguery, and dilettantism, which gradually overwhelmed and paralysed the country. In 1990, the USSR went into recession for the first time. By 1991, its economy was in freefall.” Id.Glasnost proved to be an equal disaster.“What happened in our country is primarily the result of the debilitation and eventual elimination of the Communist Party’s leading role in society, the ejection of the party from major policymaking, its ideological and organisational unravellling, the formation in it of factions, careerists’ and national separatists’ penetration of the leadership of the party and state as well as the party and power structures of the republics, and the political conversion of the group headed by Gorbachev and their shift to the position of elimination of the Communist Party and the Soviet state.” Id.“It’s worth pointing out that Gorbachev never put much meat on the bones of ‘democratisation’. With hindsight, it’s obvious that his use of the term reflected an ideological concession to western capitalism; that he had come to believe that the Soviet Union should aspire to the political norms defined in Western Europe and the US. Such thinking neglects a number of factors that should be well understood by any Marxist:‘Free speech’ in the advanced capitalist countries is essentially a piece of attractive icing beneath which lies a bitter cake of plutocratic repression. Via its monopolisation of the mass media, the ruling class dominates the field of ideas almost comprehensively. There is a level of debate and criticism, but only of a few individual policies and not of systemic features of capitalism. As Chomsky famously put it: “The smart way to keep people passive and obedient is to strictly limit the spectrum of acceptable opinion, but allow very lively debate within that spectrum”.27The political freedoms available in the west are much constrained owing to the correlation between wealth and power. Ordinary citizens have the right to vote, but their choice is nearly always restricted to two or three pro-capitalist, pro-imperialist parties, between which there is little substantive difference (so rare is the appearance of a meaningfully different option within mainstream politics, that when it happens it sends the ruling class into a frenzy of confusion, as is being witnessed at the moment with the rise of the Labour left under the leadership of Jeremy Corbyn). Actual power is monopolised by the wealthy, and challenging it can be extremely dangerous, as is evidenced by the treatment of Irish Republicans that have served time in Britain’s colony in the north of Ireland, or the many longstanding black, Puerto Rican and indigenous political prisoners in the US who have spent decades behind bars on account of their struggle for equality and human rights.In a context of ongoing class struggle waged by the working class of a socialist country against its internal enemies (those that want to restore feudalism or capitalism) and its external enemies (the leading capitalist countries that will inevitably work to destabilise a socialist country), a level of political repression is an unhappy necessity; this is elaborated in the article on ideological deterioration28 in relation to Khrushchev’s denunciation of Stalin. The needs of the few – to get fantastically rich – can’t be allowed to compromise the needs of the many to enjoy a dignified, peaceful and fulfilling life.” Id.“Szymanski describes “a few basic assumptions of Soviet society” that were not debated in the press: socialism as a system, communism as a goal, and the leading role of the Communist Party. “These issues are considered to have been settled once and for all and public discussion of them is considered by the regime to be potentially disruptive of popular rule.” This is consistent with Fidel Castro’s famous formula: “Within the revolution, everything; against the revolution, nothing.” These basic assumptions of socialism can be compared with the basic assumptions of capitalism: the supremacy of private property; profit as the major engine of economic activity; exploitation of labour as the source of profit. Id.“Dissidents and anticommunists were appointed as editors of newspapers and magazines, and were given carte blanche to use their publications to openly attack the basic ideas of socialism and the whole nature of the Soviet system. “Liberal intellectuals were named to run Ogonyok, Sovetskaya Kultura, Moscow News, Znamya, and Novy Mir… The top political leadership had actually given editors, journalists, writers, and economists freedom to write as they wished, using the mass media as their vehicle.” Id.“Added to all this was the fact that Gorbachev and his allies decided to end restrictions on foreign propaganda, for example putting an end to the jamming of Radio Liberty– a generously-funded propaganda arm of the CIA, focused on spreading anticommunist lies around the socialist countries of Europe. So Gorbachev’s idea of “improving socialism” was in fact based on bulldozing its structures and legacy.The attack on the party went so far that Fidel Castro, in December 1989, at an event commemorating the 2,000-plus Cubans who died in the course of their heroic internationalist duties in Angola, was moved to remark:It’s impossible to carry out a revolution or conduct a rectification without a strong, disciplined and respected party. It’s not possible to carry out such a process by slandering socialism, destroying its values, discrediting the party, demoralising its vanguard, abandoning its leadership role, eliminating social discipline, and sowing chaos and anarchy everywhere. This may foster a counter-revolution – but not revolutionary change… It is disgusting to see how many people, even in the Soviet Union itself, are engaged in denying and destroying the history-making feats and extraordinary merits of that heroic people. That is not the way to rectify and overcome the undeniable errors made by a revolution that emerged from tsarist authoritarianism in an enormous, backward, poor country. We shouldn’t blame Lenin now for having chosen tsarist Russia as the place for the greatest revolution in history.” Id.Gorbachev then began a full scale assault on reducing the power of the CPSU, the communist party, in an attempt to consolidate his own power. But by weakening the party he left there no gatekeepers of communism in the society. The party had always been the heart of the worker’s revolution and the keepers of the spirit of Marxism. Once it was destroyed the system was doomed.In China they did the opposite. There was no criticism of the party. All attempts were made to preserve the power of the communist party. There was no trashing Mao or the founders of the government. There was no obsession with supposed crimes committed by the leaders. Economic reforms were slowly rolled out, and with careful deliberation and consultation with economic planners and members of the party. Serious attempts to reduce corruption and maintain ideological purity were made. Market reforms were introduced, but the economy remained primarily a planned economy. The government controls over 75% of the businesses and has party cells in most. Plans are made to develop future industries, such as high tech, solar energy, A.I., robotics, automation, and others.Money was put into improving the educational system. The reforms were enormously successful. The economy has grown so quickly that it will overtake the U.S. by 2032. The standard of living for all Chinese people has risen .The USSR could have survivedEven though the Soviet Union faced economic problems from low oil prices, spending too much on the war in Afghanistan, and helping developing nations around the world with assistance, it could have survived.The primary cause of the fall of the Soviet Union was mismanagement.China went in the opposite direction as has thrived.“But is China even communist anymore?”China is a mixed economy now. It has elements of a socialist economy, but has embraced market reforms.The Soviet Union did not have to embrace capitalist reforms to survive. By focusing on growth industries, increasing productivity, and embracing newer forms of computing power to increase the efficiency of the planned economy it could have been rejuvenated.Had there been term limits, firing of low performing members of the government, those who had lost faith in communism, and those attempting to undermine the system from within, things could have been very different. Mandatory retirement ages wold have ensured younger people a chance to move up in the system. Glasnost and perestroika were poison for the system.Communism in Russia was brutally murdered in 1991. It was beaten to near death by Gorbachev. It was raped by the corrupt members of the Communist Party, wanting to steal the public assets. But it could have still survived. It was on life support. And goddamn Yeltsin pulled the plug. And the West, working with Yeltsin and the oligarchs, plundered the public assets, tossed millions into utter poverty, homelessness, young girls were forced into prostitution, organized crime sprouted up, inequality soared, millions died from starvation, and Russia has never fully recovered.Yeltsin didn’t act alone. He was supported by the U.S.UNITED STATES intelligence helped Boris Yeltsin to gain power by breaking the most secure codes used by the generals behind the 1991 Soviet coup and passing on the information gained to Mr Yeltsin. An American communications specialist was seconded to help Mr Yeltsin secretly contact wavering military commanders without risk of detection.The US intervention, which may have been critical in defeating the coup, has been kept secret to avoid the accusation that Washington was interfering in Russian affairs. It also started a row between the White House and the code-breaking National Security Agency, which strongly objected to revealing to Moscow that its most secure communications were compromised.The degree of support for Mr Yeltsin from the American security services is disclosed by Seymour Hersh, one of the United States' best-known investigative journalists, in the forthcoming issue of the Atlantic Monthly magazine. It is likely to fuel allegations by Mr Yeltsin's opponents that he took power thanks to American support.As soon as the coup started on 18 August 1991, the NSA, America's largest intelligence organisation, was able to decrypt conversations between the coup's two leaders, Vladimir Kryuchkov, chairman of the KGB, and Dmitri Yazov, the Defence Minister, taking place over a supposedly secure landline. President Bush ordered the information to be given to Mr Yeltsin but, fearing Russian reaction if word of American interference leaked out, broke the law by not telling Congress.The information was of critical significance to Mr Yeltsin at a moment when both sides in Moscow were wooing various military commanders across the Soviet Union. Mr Yeltsin knew exactly who supported the coup and who opposed it.An American specialist from the US embassy was sent to Mr Yeltsin's office in the Russian parliament building to make sure that his own communications system was secure.'The Minister of Defence and the KGB chief were using the most secure lines to reach the military commanders,' a US official involved in the operation said. 'We monitor every major command, and we handed it to Yeltsin on a platter. It demonstrated to the Soviet commanders that we can read it all - that we can penetrate it.'The NSA's ability to decrypt what Soviet military commanders - and their Russian successors - said over their communications system is probably the most significant intelligence achievement since Britain broke Germany's Enigma codes during the Second World War.William Odom, head of the NSA until 1988, says the transfer of such highly classified information would lead to 'a terrible, terrible trade-off . . . Now the Russians know what I know. That is such a huge loss for the future.'However, General Odom admitted that it was President Bush's right to decide what to do with such intelligence information, adding: 'There would be those who would think saving Yeltsin is worth it.'In fact on 14 August 1991 - only four days before the attempted coup in Moscow - President Bush had signed an amendment to the law making it illegal for him not to tell House and Senate Intelligence Committees in secret session about covert action such as that in support of Mr Yeltsin.Mr Bush and his aides reportedly decided to flout the law because they feared that Congress might balk at helping Mr Yeltsin because of the possible Russian reaction.There is no information about how the NSA succeeded in penetrating Soviet military communications, or counter-measures taken since by Russian commanders to keep their conversations secret. During the final years of the Soviet Union many secrets, formerly closely held, were sold to Western intelligence services.Mr Yeltsin was clearly grateful to Presidents Bush and Clinton for the support the US gave at a critical moment in his political fortunes, but he also has an incentive to prevent the same breach in security happening again.Mr Hersh says: 'The US intelligence community may no longer be in a position to have advance warning of momentous events inside Russia - as it had months before the coup that brought Yeltsin to power.'Yeltsin book review, page 16Source: US agents helped Yeltsin break coupBoris Yeltsin and his “free market reformers” were part of one of the most hidden and most criminal looting operations in CIA history. It was the rape of Russia by a corrupted circle of treasonous Soviet KGB generals, together with their select young KGB protégés, who were transformed through the operation into billionaire oligarchs. It was an economic rape made possible only through Western banks and the so-called “democracy machinery” of Washington under three successive presidents—Ronald Reagan, George H.W. Bush, and Bill Clinton.Yeltsin: Under Western tutelage, from Soviet bureaucrat to de facto mafia don.Few people in the West could grasp the sadness and anger of Russian President Vladimir Putin when he told a select audience of Russian politicians from the Duma in the Kremlin in September 2016, “You know how I feel about the collapse of the Soviet Union. It was unnecessary. We could have introduced reforms, including those of a more democratic nature, without allowing this.”Putin did not need to describe “this.” Everyone present knew he meant the savage destruction of life, feeling of worth, and pride for most Russians after 1990. If anyone in the US or the EU thought about Putin’s comments—coming amid an unprecedented US and NATO vilification and demonization campaign against the Russian Federation and Putin personally, including economic sanctions—they most likely saw it as confirmation of Washington claims that Putin’s Russia was out to rebuild the Soviet Union.What was unknown to most in the West was the true background of the destruction of life in Russia and the former member states of the USSR. The CIA operation began near the end of the 1980s with a network of CIA actors and their corrupted, bought-and-paid-for Soviet KGB generals. It was called the Yeltsin Era, and it lasted the entire decade of the 1990s until Yeltsin resigned on December 31, 1999. His resignation had been finally forced by a group of nationalist Russians led by a forty-seven-year-old former KGB officer who briefly headed the successor organization to the KGB known as the SVR, or Foreign Intelligence Service of the Russian Federation. The SVR man was Putin, by then Yeltsin’s Prime Minister.The destruction of the Soviet Union was one of the darkest criminal operations ever undertaken by the US government or, more precisely, by a dark, deep state network buried inside that Washington bureaucracy, sometimes referring to themselves as “the Vulcans,” often simply called neoconservatives. The key roles in the rape of Russia were played by US President George H.W. Bush and later by Bush’s close friend and protégé, William Jefferson “Bill” Clinton. The venom directed from Washington towards Putin personally since his reelection as president in 2012 and even beginning his revitalization of Russia after his ascendancy to the presidency on December 31, 1999, the day Yeltsin was forced to abdicate his imagined throne, would become clear. Slowly details emerged of what crimes Bush, Clinton, and their covert intelligence circles committed against Russia after 1989.— Bush’s CIA “Old Boys” —George H.W. BushGeorge H.W. Bush, former director of the CIA, ran the entire foreign and national security operations of President Ronald Reagan from the Office of the Vice President. Through Executive Order 12333, a national security directive drafted by then vice president Bush and signed by Reagan, Bush had made sure he was in charge of all Reagan-era US foreign and national security operations after 1981. [Editor Note: This of course presaged an almost identical scenario when his son George W Bush Jr ascended to power in 2001, and handed over on a silver platter foreign and national security policy to Dick Cheney and his mob.]People close to [Reagan-era] CIA Chief Bill Casey said that as President, Reagan had little interest in foreign policy. The true role of Bush in the Reagan years was well hidden, however. When Bush’s son George W. Bush Jr took office as President in 2001, one of his first acts was to sign Executive Order 13233, an extraordinary act that cited “national security” as grounds to conceal records of past presidents, especially his father’s activities during the 1990 and 1991 collapse of the Soviet Union and the communist Eastern Europe states. Consequently, those records are no longer accessible to the public. The truth can be gathered by evidence of participants in Russia, Eastern Europe, and in the USA, deep research, and congressional and other testimonies of those with direct knowledge. The picture of the destruction that resulted is staggering.George H.W. Bush ran things covertly through his “old boy” CIA networks, often using various private companies they had set up during the Bush’s illegal Iran–Contra operation of the mid-1980s. The Iran–Contra affair was an illegal, top-secret Bush–Colonel Oliver North scheme to sell US weapons to Iran in violation of an official US arms embargo to Iran, then to divert a part of the Iran arms profits to illegally finance the CIA-backed Contras of Nicaragua, who paid for the weapons with cocaine dollars, hence the name Iran–Contra Affair.All was done without required the US congressional approval, in violation of US law. When President Jimmy Carter forced the early retirement of 800 CIA agents, many of them loyal to former CIA Director Bush, they regrouped as a private intelligence and business network, a kind of covert “deep state,” informally calling itself “the Enterprise.” This network, active for Vice President George H.W. Bush in the Iran–Contra affair, was used by Bush, now as US president, to loot and deform all of communist Eastern Europe and, ultimately, Russia under their asset, Boris Yeltsin.The companies George H.W. Bush sanctioned under the code name “the Enterprise” were soon to be responsible for the CIA-financed coup that brought down Mikhail Gorbachev and the Soviet Union in 1991. But the machinery and organization of the Enterprise was also responsible for bribing or corrupting key KGB generals and creating what came to be called the “Russian oligarchs” to loot the crown jewels of the former Soviet State, now legally known as the Russian Federation. Their looting included the entire gold reserves of the Russian National Bank in the early 1990s. That loot was funneled into the vaults of handpicked CIA-controlled banks in Switzerland, o shore bank havens, and New York.— The CIA’s Yeltsin “Democracy” Coup —The rape of Russia—the Russian nation, the Russian state, the Russian people—which began at the end of the 1980s, was a coup d’état engineered by the American CIA’s rogue and not so rogue networks directed by former CIA Director, now President, George H.W. Bush. Western accounts of what took place inside the Russian Federation during the Yeltsin years of the 1990s speak of “Russian mafia” or “Russian organized crime.” Never do they mention or even hint that those Russians who plundered their own country were organized and paid, or made rich, by the West or, to be more precise, by the old boy CIA networks loyal to former CIA director and then US president George H.W. Bush.What took place in the 1990s under the Russian presidency of Boris Yeltsin was described by one knowledgeable US insider, Mortimer Zuckerman, himself an establishment member of the Council on Foreign Relations and owner of US News & World Report, as “the largest giveaway of a nation’s wealth in history.” The giveaway, or more precisely “theft,” was done through outright robbery, currency war, and a fraudulent loans-for-company stock shares program that was a precondition demanded by Washington to getting aid and loans from the World Bank and the IMF—aid and loans that “never touched ground in Russia,” as Zuckerman noted.Washington, covertly working with a circle of very select US and European banks, made it possible for the Yeltsin clan to loot the Russian Treasury of its gold reserves. They then offered desperately needed US money to a privatization scheme that created and installed a kleptocracy regime, and created a cabal of hyper-rich oligarchs under Yeltsin, referred to by some in the Russian media as the “Yeltsin Family,” as in the Mafia. Washington and US mainstream media cynically called it “bringing democracy and free market capitalism” to post-communist Russia.In 1989, soon after his election, US President George H.W. Bush initiated the operation to loot the Soviet Union. The National Endowment for Democracy (NED) and covert US government money to Poland’s Solidarność had severely weakened Moscow’s control over Poland during the decade of the 1980s and ignited anti-communist protest movements all over communist Eastern Europe.That Polish success—notably, that it was not suppressed by Soviet Red Army tanks as in 1956 in Hungary or during the Prague Spring of 1968—had given major encouragement to similar underground, anti-regime movements across Soviet-dominated Eastern Europe, from Hungary to Czechoslovakia to East Germany.In Afghanistan, after ten bloody years, Soviet Red Army troops finally gave up and left the country in 1989, humiliated in defeat from CIA-trained and armed Islamist Mujahedeen terrorists. In Dresden in East Germany–the German Democratic Republic as it was formally called–from the mid-1980s until the fall of the Berlin Wall in November 1989, a young KGB officer named Vladimir Putin was stationed, watching as the power of Moscow evaporated everywhere.Moscow itself was financially in dire straits, dramatically so ever since a US State Department–Saudi oil price collapse operation was deliberately launched by Washington in 1986. That oil price collapse hit at the heart of the Soviet primary hard currency sources: its oil export; [the oil price collapse also] severely hurt Soviet earnings of badly needed dollars for Western technology purchases, as well as for countering CIA operations in Nicaragua, Afghanistan, and Eastern Europe. The decade-long covert CIA campaign in Afghanistan, using fanatical Mujahedeen terrorists mostly recruited by a Saudi CIA asset named Osama bin Laden, had given the Soviet Union what President Carter’s national security director, Zbigniew Brzezinski, later called “Russia’s Vietnam.”Then in 1989, President George H.W. Bush gave the order to launch an all-out takeover and looting of the crown jewels of the largest and most strategic part of the USSR, the formerly communist Russian Federation. The dissolution of the Soviet Union itself rapidly followed the August 1991 Ukrainian declaration of independence from the USSR. State-owned oil and gas companies, key raw materials, such as nickel and aluminum, and high-tech Soviet military companies were the prime looting targets of select Western interests trading with insider connections.Now finally as president, George H.W. Bush decided to go for the kill against a severely weakened Russian Federation. Bush and a CIA network of Western bankers, US government officials, and the International Monetary Fund (IMF), together with a cabal of young Harvard University economists—they were dubbed the Harvard Boys—brought into Russia by George Soros in league with a corrupted network of KGB traitors, unleashed one of the greatest criminal looting operations in history.Confused Russian citizens, fed up with the years of Soviet control and lack of improvement in their daily lives from Mikhail Gorbachev’s Perestroika attempts at reforming the Soviet system, naively and with great hope turned to the West, most especially to Wall Street and Washington. In 1987, in a desperate attempt to calm growing social unrest over the deteriorating Soviet economy, Gorbachev permitted Soviet citizens to own dollars. It was a disaster of untold dimension. Overnight, a huge black market for dollars grew and the ruble became de facto worthless inside the Soviet Union. Russians, forbidden to travel to the West, were fed the illusion that everything in America was “bigger and better.” Secret, prohibited shortwave broadcasts from the US State Department’s Radio Free Europe/Radio Liberty out of Munich fed those illusions of an American capitalist paradise.The majority of Russians believed, for the most part, nothing could be worse than life under Soviet communism with the chronic shortages in the shops, endless queues, and lack of basic goods, let alone of luxury goods. They were soon to realize they were dreadfully wrong. It could be worse. The bottom fell out in the daily life for most Russians as Yeltsin’s clan and their Western collaborators proceeded to loot the country following the abolition of a communist state during the 1990s. Pensions went unpaid and medical insurance ended abruptly, as did daycare for working mothers and most state support.’Source: THE RAPE OF RUSSIA: The CIA’s Yeltsin Coup d’État.The U.S. has a long history of meddling in Russian electionsWhat many Russians, but few Americans, know is that 20 years before Russia tried to swing an American presidential election, America tried to swing a presidential election in Russia. The year was 1996. Boris Yeltsin was seeking a second term, and Bill Clinton desperately wanted to help. “I want this guy to win so bad,” he told Deputy Secretary of State Strobe Talbott, “it hurts.”Clinton liked Yeltsin personally. He considered him Russia’s best hope for embracing democracy and capitalism. And he appreciated Yeltsin’s acquiescence during nato’s march eastward, into the former Soviet bloc.Unfortunately for Clinton, ordinary Russians appreciated their leader far less. Yeltsin’s “shock-therapy” economic reforms had reduced the government’s safety net, and produced a spike in unemployment and inflation. Between 1990 and 1994, the average life expectancy among Russian men had dropped by an astonishing six years. When Yeltsin began his reelection campaign in January 1996, his approval rating stood at 6 percent, lower than Stalin’s.So the Clinton administration sprang into action. It lobbied the International Monetary Fund to give Russia a $10 billion loan, some of which Yeltsin distributed to woo voters. Upon arriving in a given city, he often announced, “My pockets are full.”Three American political consultants—including Richard Dresner, a veteran of Clinton’s campaigns in Arkansas—went to work on Yeltsin’s reelection bid. Every week, Dresner sent the White House the Yeltsin campaign’s internal polling. And before traveling to meet Yeltsin in April, Clinton asked Dresner what he should say in Moscow to boost his buddy’s campaign.It worked. In a stunning turnaround, Yeltsin—who had begun the campaign in last place—defeated his communist rival in the election’s final round by 13 percentage points. Talbott declared that “a number of international observers have judged this to be a free and fair election.” But Michael Meadowcroft, a Brit who led the election-observer team of the Organization for Security and Cooperation in Europe, later claimed there had been widespread voter fraud, which he had been pressured not to expose. In Chechnya, which international observers believe contained fewer than 500,000 adults, one million people voted, and Yeltsin—despite prosecuting a brutal war in the region—won exactly 70 percent. “They’d been bombed out of existence, and there they were all supposedly voting for Yeltsin,” exclaimed Meadowcroft. “It’s like what happens in Cameroon.” Thomas Graham, who served as the chief political analyst at the U.S. embassy in Moscow during the campaign, later concededthat Clinton officials knew the election wasn’t truly fair. “This was a classic case,” he admitted, “of the ends justifying the means.”Why does this history matter now? Because acknowledging it begs a question that few American pundits and politicians have answered yet: Is the problem with Russia’s behavior in 2016 that it violated principles of noninterference in other countries’ elections that America should respect as well? Or is the problem simply that America’s ox was gored?During the Cold War, America’s leaders saw nothing wrong with electoral interference, so long as the United States was conducting it. Dov Levin, a postdoctoral fellow at the Institute for Politics and Strategy at Carnegie Mellon University, has identified 62 American interventions in foreign elections between 1946 and 1989. The large majority—like Russia’s in 2016—were conducted in secret. And, overall, America’s favored candidates were no more committed to liberal democracy than their opponents; they simply appeared friendlier to American interests. In 1968, for instance, Lyndon Johnson’s administration—fearful that the people of Guyana would choose a socialist, Cheddi Jagan—helped Jagan’s main opponent, Forbes Burnham, win an election marked by massive voter fraud. Burnham soon turned Guyana into a dictatorship, which he ruled until his death in 1985.U.S. officials sometimes claimed that the left-leaning candidates America worked to defeat were more authoritarian than their right-leaning opponents. But as the Boston College political scientist Lindsey O’Rourke notes in her forthcoming book, Covert Regime Change: America’s Secret Cold War, “There is no objective truth to their claim that the leftist parties” the U.S. “targeted were ‘inherently antidemocratic.’ To the contrary, many of these groups had repeatedly committed themselves to working within a democratic framework, and, in some cases, U.S. policymakers even acknowledged this fact.” The University of Kansas’s Mariya Omelicheva, who has also researched America’s Cold War election meddling, told me she “cannot think of a case in which America’s democracy concerns superseded its national-security concerns.”But in recent decades, some experts contend, America’s behavior has changed. First, America’s interventions have grown more public. In 1983, Ronald Reagan created the National Endowment for Democracy (NED), which—by giving grants to “political parties, trade unions, free markets and business organizations, as well as the many elements of a vibrant civil society”—does openly what the CIA once did in secret. Second, the United States now focuses primarily on strengthening democratic processes and institutions, not backing particular candidates. “Unlike Russian electoral meddling,” argues Thomas Carothers of the Carnegie Endowment for International Peace, “U.S. democracy promotion does not … favor particular candidates, or undercut the technical integrity of elections. On the whole, it seeks to help citizens exercise their basic political and civil rights.”These principles, when followed, distinguish America’s recent behavior from Russia’s. There is a moral difference between open interventions and secret ones. If a government publicly urges another country’s citizens to elect a particular candidate, then those citizens can judge for themselves whether the intervening country has their best interests at heart. That’s why Russia’s attacks on Hillary Clinton via the English-language television station RT—which it openly funds—were less worrying than its clandestine social-media campaign, let alone its alleged hacking and disclosure of Democratic Party emails.It’s also legitimate for governments to fund organizations that promote free elections and human rights. The United States isn’t alone in doing that; many European governments do, too. In theory, foreign governments should be able to do the same in the U.S. Imagine if Russia gave money to the NAACP to combat voter ID laws that suppress the African American vote. Sean Hannity would howl. But unless the U.S. government was prepared to shut down NED, it would have little basis upon which to object.If Americans believe in these principles, however—if they want to draw a distinction between America’s behavior and Russia’s—then they must defend them not just against Vladimir Putin, but against their own government. Carothers may be right that since the Cold War, America’s electoral interventions have become more transparent and less focused on engineering a particular outcome. But America’s Cold War habits haven’t entirely disappeared. Clinton has admitted that in 1996, the same year he tried to elect Yeltsin, he also “tried to help Shimon Peres to win the election” against Benjamin Netanyahu in Israel. In 2002, a key NED grantee—the International Republican Institute—helped conservative opposition groups in Haiti work to oust left-leaning president Jean-Bertrand Aristide. In his memoir, the former Defense Secretary Robert Gates accuses Richard Holbrooke, the Obama administration’s special representative for Afghanistan and Pakistan, of “doing his best to bring about the defeat of [Hamid] Karzai” in the Afghan elections of 2009.If such interventions grew rarer after 1989, it’s largely because global circumstances changed. Once the Cold War ended, American leaders simply didn’t care as much about the outcome of foreign elections. Even if countries elected anti-American candidates, those candidates could no longer link up with a rival superpower. It was this “change in U.S. interests,” notes Carothers, which helped prompt “an evolution of norms in many parts of the U.S. policy establishment about the acceptability” of Cold War–style meddling.But great-power competition is now back. European elections now shift the power balance between America and Russia in a way they haven’t since the 1980s. In countries like the Philippines, they also shift the power balance between America and China. This could easily erode the fragile norm against secret interference on behalf of particular candidates that has emerged in the United States since the Cold War. Imagine an election in Italy or France between a pro-Russian political party and a pro-American one. I suspect that some of the hawks who are most upset about Russia’s interference in recent American and European elections would support American interference to meet fire with fire. Trump himself may have little interest in meddling to defeat a pro-Russian party, since he seems to consider American and Russian interests closely aligned. But it’s not hard to imagine him embracing Cold War–style political subversion in U.S. adversaries like Venezuela or Iran. Before becoming national-security adviser, John Bolton declared, “We once had a capacity for clandestine efforts to overthrow governments. I wish we could get those back.”Washington’s current burst of nationalist indignation, like the one that followed 9/11, is both vital and dangerous if not tempered by an awareness of America’s own capacity for misdeeds. When liberals start calling people “traitors” for acknowledging that capacity, they’ve gone badly astray.Source: The U.S. Needs to Face Up to Its Long History of Election MeddlingThe U.S. and Western financiers helped plunder Russia and give rise to the oligarchsAfter seven years of economic “reform” financed by billions of dollars in U.S. and other Western aid, subsidized loans and rescheduled debt, the majority of Russian people find themselves worse off economically. The privatization drive that was supposed to reap the fruits of the free market instead helped to create a system of tycoon capitalism run for the benefit of a corrupt political oligarchy that has appropriated hundreds of millions of dollars of Western aid and plundered Russia’s wealth.The architect of privatization was former First Deputy Prime Minister Anatoly Chubais, a darling of the U.S. and Western financial establishments. Chubais’s drastic and corrupt stewardship made him extremely unpopular. According to The New York Times, he “may be the most despised man in Russia.”Essential to the implementation of Chubais’s policies was the enthusiastic support of the Clinton Administration and its key representative for economic assistance in Moscow, the Harvard Institute for International Development. Using the prestige of Harvard’s name and connections in the Administration, H.I.I.D. officials acquired virtual carte blanche over the U.S. economic aid program to Russia, with minimal oversight by the government agencies involved. With this access and their close alliance with Chubais and his circle, they allegedly profited on the side. Yet few Americans are aware of H.I.I.D.’s role in Russian privatization, and its suspected misuse of taxpayers’ funds.At the recent U.S.-Russian Investment Symposium at Harvard’s John F. Kennedy School of Government, Yuri Luzhkov, the Mayor of Moscow, made what might have seemed to many an impolite reference to his hosts. After castigating Chubais and his monetarist policies, Luzhkov, according to a report of the event, “singled out Harvard for the harm inflicted on the Russian economy by its advisers, who encouraged Chubais’s misguided approach to privatization and monetarism.” Luzhkov was referring to H.I.I.D. Chubais, who was delegated vast powers over the economy by Boris Yeltsin, was ousted in Yeltsin’s March purge, but in May he was given an immensely lucrative post as head of Unified Energy System, the country’s electricity monopoly. Some of the main actors with Harvard’s Russia project have yet to face a reckoning, but this may change if a current investigation by the U.S. government results in prosecutions.The activities of H.I.I.D. in Russia provide some cautionary lessons on abuse of trust by supposedly disinterested foreign advisers, on U.S. arrogance and on the entire policy of support for a single Russian group of so-called reformers. The H.I.I.D. story is a familiar one in the ongoing saga of U.S. foreign policy disasters created by those said to be our “best and brightest.”Through the late summer and fall of 1991, as the Soviet state fell apart, Harvard Professor Jeffrey Sachs and other Western economists participated in meetings at a dacha outside Moscow where young, pro-Yeltsin reformers planned Russia’s economic and political future. Sachs teamed up with Yegor Gaidar, Yeltsin’s first architect of economic reform, to promote a plan of “shock therapy” to swiftly eliminate most of the price controls and subsidies that had underpinned life for Soviet citizens for decades. Shock therapy produced more shock–not least, hyperinflation that hit 2,500 percent–than therapy. One result was the evaporation of much potential investment capital: the substantial savings of Russians. By November 1992, Gaidar was under attack for his failed policies and was soon pushed aside. When Gaidar came under seige, Sachs wrote a memo to one of Gaidar’s principal opponents, Ruslan Khasbulatov, Speaker of the Supreme Soviet, then the Russian parliament, offering advice and to help arrange Western aid and contacts in the U.S. Congress.Enter Anatoly Chubais, a smooth, 42-year-old English-speaking would-be capitalist who became Yeltsin’s economic czar. Chubais, committed to “radical reform,” vowed to construct a market economy and sweep away the vestiges of Communism. The U.S. Agency for International Development (U.S.A.I.D.), without experience in the former Soviet Union, was readily persuaded to hand over the responsibility for reshaping the Russian economy to H.I.I.D., which was founded in 1974 to assist countries with social and economic reform.H.I.I.D. had supporters high in the Administration. One was Lawrence Summers, himself a former Harvard economics professor, whom Clinton named Under Secretary of the Treasury for International Affairs in 1993. Summers, now Deputy Treasury Secretary, had longstanding ties to the principals of Harvard’s project in Russia and its later project in Ukraine.Summers hired a Harvard Ph.D., David Lipton (who had been vice president of Jeffrey D. Sachs and Associates, a consulting firm), to be Deputy Assistant Treasury Secretary for Eastern Europe and the Former Soviet Union. After Summers was promoted to Deputy Secretary, Lipton moved into Summers’s old job, assuming “broad responsibility” for all aspects of international economic policy development. Lipton co-wrote numerous papers with Sachs and served with him on consulting missions in Poland and Russia. “Jeff and David always came [to Russia] together,” said a Russian representative at the International Monetary Fund. “They were like an inseparable couple.” Sachs, who was named director of H.I.I.D. in 1995, lobbied for and received U.S.A.I.D. grants for the institute to work in Ukraine in 1996 and 1997.Andrei Shleifer, a Russian-born émigré and already a tenured professor of economics at Harvard in his early 30s, became director of H.I.I.D.’s Russia project. Shleifer was also a protégé of Summers, with whom he received at least one foundation grant. Summers wrote a promotional blurb for Privatizing Russia (a 1995 book co-written by Shleifer and subsidized by H.I.I.D.) declaring that “the authors did remarkable things in Russia, and now they have written a remarkable book.”Another Harvard player was a former World Bank consultant named Jonathan Hay, a Rhodes scholar who had attended Moscow’s Pushkin Institute for Russian Language. In 1991, while still at Harvard Law School, he had become a senior legal adviser to the G.K.I., the Russian state’s new privatization committee; the following year he was made H.I.I.D.’s general director in Moscow. The youthful Hay assumed vast powers over contractors, policies and program specifics; he not only controlled access to the Chubais circle but served as its mouthpiece.H.I.I.D.’s first awards from U.S.A.I.D. for work in Russia came in 1992, during the Bush Administration. Over the next four years, with the endorsement of the Clinton Administration, the institute would be awarded $57.7 million–all but $17.4 million without competitive bidding. For example, in June 1994 Administration officials signed a waiver that enabled H.I.I.D. to receive $20 million for its Russian legal reform program. Approving such a large sum as a noncompetitive “amendment” to a much smaller award (the institute’s original 1992 award was $2.1 million) was highly unusual, as was the citation of “foreign policy” considerations as the reason for the waiver. Nonetheless, the waiver was endorsed by five U.S. government agencies, including the Treasury Department and the National Security Council, two of the leading agencies formulating U.S. aid policy toward Russia. In addition to the millions it received directly, H.I.I.D. helped steer and coordinate some $300 million in U.S.A.I.D. grants to other contractors, such as the Big Six accounting firms and the giant Burson-Marsteller P.R. firm.A s Yeltsin’s Russian government took over Soviet assets in late 1991 and early 1992, several privatization schemes were floated. The one the Supreme Soviet passed in 1992 was structured to prevent corruption, but the program Chubais eventually carried out instead encouraged the accumulation of property in a few hands and opened the door to widespread corruption. It was so controversial that Chubais ultimately had to rely largely on Yeltsin’s presidential decrees, not parliamentary approval, for implementation. Many U.S. officials embraced this dictatorial modus operandi, and Jonathan Hay and his associates drafted many of the decrees. As U.S.A.I.D.’s Walter Coles, an early supporter of Chubais’s privatization program, put it, “If we needed a decree, Chubais didn’t have to go through the bureaucracy.”With help from his H.I.I.D. advisers and other Westerners, Chubais and his cronies set up a network of aid-funded “private” organizations that enabled them to bypass legitimate government agencies and circumvent the new parliament of the Russian Federation, the Duma. Through this network, two of Chubais’s associates, Maxim Boycko (who co-wrote Privatizing Russiawith Shleifer) and Dmitry Vasiliev, oversaw almost a third of a billion dollars in aid money and millions more in loans from international financial institutions.Much of this largesse flowed through the Moscow-based Russian Privatization Center (R.P.C.). Founded in 1992 under the direction of Chubais, who was chairman of its board even while head of the G.K.I., and Boycko, who was C.E.O. for most of its existence, the R.P.C. was legally a private, nonprofit, nongovernmental organization. In fact, it was established by another Yeltsin decree and helped carry out government policy on inflation and other macroeconomic issues and also negotiated loans with international financial institutions. H.I.I.D. was a founder of the R.P.C., and Andrei Shleifer served on the board of directors. Its other members were recruited by Chubais, according to Ira Lieberman, a senior manager in the private-sector development department of the World Bank who helped design the R.P.C. With H.I.I.D.’s help, the R.P.C. received some $45 million from U.S.A.I.D. and millions from the European Union, individual European governments, Japan and other countries, as well as loans from the World Bank ($59 million) and the European Bank for Reconstruction and Development ($43 million), which must be repaid by the Russian people. One result of this funding was the enrichment, political and financial, of Chubais and his allies.H.I.I.D. helped create several more aid-funded institutions. One was the Federal Commission on Securities, a rough equivalent of the U.S. Securities and Exchange Commission (S.E.C.). It too was established by presidential decree, and it was run by Chubais protégé Dmitry Vasiliev. The commission had very limited enforcement powers and funding, but U.S.A.I.D. supplied the cash through two Harvard-created institutions run by Hay, Vasiliev and other members of the Harvard-Chubais coterie.One of these was the Institute for Law-Based Economy, funded by both the World Bank and U.S.A.I.D. This institute, set up to help develop a legal and regulatory framework for markets, evolved to encompass drafting decrees for the Russian government; it got nearly $20 million from U.S.A.I.D. Last August, the Russian directors of I.L.B.E. were caught removing $500,000 worth of U.S. office equipment from the organization’s Moscow office; the equipment was returned only after weeks of U.S. pressure. When auditors from U.S.A.I.D.’s inspector general’s office sought records and documents regarding I.L.B.E. operations, the organization refused to turn them over.The device of setting up private organizations backed by the power of the Yeltsin government and maintaining close ties to H.I.I.D. was a way of insuring deniability. Shleifer, Hay and other Harvard principals, all U.S. citizens, were “Russian” when convenient. Hay, for example, served alternately and sometimes simultaneously as aid contractor, manager of other contractors and representative of the Russian government. If Western donors were attacked for funding controversial privatization practices of the state, the donors could claim they were funding “private” organizations, even if these organizations were controlled or strongly influenced by key state officials. If the Chubais circle came under fire for misuse of funds, they could claim that Americans made the decisions. Foreign donors could insist that the Russians acted on their own.Against the backdrop of Russia’s Klondike capitalism, which they were helping create and Chubais and his team were supposedly regulating, the H.I.I.D. advisers exploited their intimate ties with Chubais and the government and were allegedly able to conduct business activities for their own enrichment. According to sources close to the U.S. government’s investigation, Hay used his influence, as well as U.S.A.I.D.-financed resources, to help his girlfriend, Elizabeth Hebert, set up a mutual fund, Pallada Asset Management, in Russia. Pallada became the first mutual fund to be licensed by Vasiliev’s Federal Commission on Securities. Vasiliev approved Pallada ahead of Credit Suisse First Boston and Pioneer First Voucher, much larger and more established financial institutions.After Pallada was set up, Hebert, Hay, Shleifer and Vasiliev looked for ways to continue their activities as aid funds dwindled. Using I.L.B.E. resources and funding, they established a private consulting firm with taxpayer money. One of the firm’s first clients was Shleifer’s wife, Nancy Zimmerman, who operated a Boston-based hedge fund that traded heavily in Russian bonds. According to Russian registration documents, Zimmerman’s company set up a Russian firm with Sergei Shishkin, the I.L.B.E. chief, as general director. Corporate documents on file in Moscow showed that the address and phone number of the company and the I.L.B.E. were the same.Then there is the First Russian Specialized Depository, which holds the records and assets of mutual fund investors. This institution, funded by a World Bank loan, also worked to the benefit of Hay, Vasiliev, Hebert and another associate, Julia Zagachin. According to sources close to the U.S. government’s investigation, Zagachin, an American married to a Russian, was selected to run the depository even though she lacked the required capital. Ostensibly, there was to be total separation between the depository and any mutual fund using its services. But the selection of Zagachin defied this tenet of open markets: Pallada and the depository were run by people with ties to each other through H.I.I.D. Thus the very people who were supposed to be the trustees of the system not only undercut the aid program’s stated goal of building independent institutions but replicated the Soviet practice of skimming assets to benefit the nomenklatura.Anne Williamson, a journalist who specializes in Soviet and Russian affairs, details these and other conflicts of interest between H.I.I.D.’s advisers and their supposed clients–the Russian people–in her forthcoming book, How America Built the New Russian Oligarchy. For example, in 1995, in Chubais-organized insider auctions of prime national properties, known as loans-for-shares, the Harvard Management Company (H.M.C.), which invests the university’s endowment, and billionaire speculator George Soros were the only foreign entities allowed to participate. H.M.C. and Soros became significant shareholders in Novolipetsk, Russia’s second-largest steel mill, and Sidanko Oil, whose reserves exceed those of Mobil. H.M.C. and Soros also invested in Russia’s high-yielding, I.M.F.-subsidized domestic bond market.Even more dubious, according to Williamson, was Soros’s July 1997 purchase of 24 percent of Sviazinvest, the telecommunications giant, in partnership with Uneximbank’s Vladimir Potanin. It was later learned that shortly before this purchase Soros had tided over Yeltsin’s government with a backdoor loan of hundreds of millions of dollars while the government was awaiting proceeds of a Eurobond issue; the loan now appears to have been used by Uneximbank to purchase Norilsk Nickel in August 1997. According to Williamson, the U.S. assistance program in Russia was rife with such conflicts of interest involving H.I.I.D. advisers and their U.S.A.I.D.-funded Chubais allies, H.M.C. managers, favored Russian bankers, Soros and insider expatriates working in Russia’s nascent markets.Despite exposure of this corruption in the Russian media (and, far more hesitantly, in the U.S. media), the H.I.I.D.-Chubais clique remained until recently the major instrument of U.S. economic aid policy to Russia. It even used the high-level Gore-Chernomyrdin Commission, which helped orchestrate the cooperation of U.S.-Russian oil deals and the Mir space station. The commission’s now-defunct Capital Markets Forum was chaired on the Russian side by Chubais and Vasiliev, and on the U.S. side by S.E.C. chairman Arthur Levitt Jr. and Treasury Secretary Robert Rubin. Andrei Shleifer was named special coordinator to all four of the Capital Markets Forum’s working subgroups. Hebert, Hay’s girlfriend, served on two of the subgroups, as did the C.E.O.s of Salomon Brothers, Merrill Lynch and other powerful Wall Street investment houses. When The Nation contacted the S.E.C. for information about Capital Markets, we were told to call Shleifer for comment. Shleifer, who is under investigation by U.S.A.I.D.’s inspector general for misuse of funds, declined to be interviewed for this article. A U.S. Treasury spokesman said Shleifer and Hebert were appointed to Capital Markets by the Chubais group–specifically, according to other sources, by Dmitry Vasiliev.In fact, H.I.I.D. projects were never adequately monitored by U.S.A.I.D. In 1996, a General Accounting Office report described U.S.A.I.D.’s management and oversight of H.I.I.D. as “lax.” In early 1997, U.S.A.I.D.’s inspector general received incriminating documents about H.I.I.D.’s activities in Russia and began investigating. In May Shleifer and Hay lost their projects when the agency canceled most of the $14 million still earmarked for H.I.I.D., citing evidence that the two managers were engaged in activities for “private gain.” The men had allegedly used their positions to profit from investments in the Russian securities markets and other private enterprises. According to sources close to the U.S. investigation, while advising the Russian government on capital markets, for example, Hay and his father allegedly used inside information to invest in Russian government bonds. Hay and Shleifer may ultimately face criminal and/or civil prosecution. Shleifer remains a tenured professor at Harvard, and Hay continues to work with members of the Chubais clique in Russia. Sachs, who has stated he never invests in countries where he advises and who is not implicated in the current U.S. government investigation, remains head of H.I.I.D. After Yeltsin’s Cabinet shakeup in March, Chubais was moved to a new position of prominence. His role in Russia’s political-economic affairs had been tarnished by reports of personal enrichment. Two examples:§ In February 1996, Chubais’s Foundation for the Protection of Private Property received a five-year, $2.9 million unsecured interest-free loan. According to the pro-Yeltsin, pro-reform Izvestia, Stolichny Bank, an institution that enjoys lines of credit from the European Bank for Reconstruction and Development and the World Bank, made the loan in return for a small percentage of the Sibneft oil company when it was sold at auction, and for later control of one of the state’s largest banks. Chubais defended himself by saying such practices were common in the West, but failed to provide any reasonable explanation for some $300,000 in 1996 income not accounted for by his government salary.§ During Yeltsin’s 1996 presidential campaign, security officials apprehended two close associates of Chubais as they were walking out of a main government building with a box containing more than $500,000 in cash for Yeltsin’s campaign. According to tapes of a later meeting recorded by a member of one of Russia’s security services, Chubais and his cronies strategized about burying evidence of any illegal transaction, while publicly claiming that any allegations of chicanery were the work of political enemies. A protracted, lackadaisical investigation began but was eventually dropped–more evidence of Chubais’s remarkable resilience. He remained valuable to Yeltsin largely because of his perceived ability to deal with the West, where many still regard him as a symbol of Russian reform.During the five years that the Chubais clique presided over Western economic aid and policy in Russia, they did enormous harm. By unconditionally backing Chubais and his associates, the Harvard operatives, their U.S. government patrons and Western donors may have reinforced the new post-Soviet oligarchical system. Shleifer acknowledged as much in Privatizing Russia, the book he wrote with Chubais crony Maxim Boycko, who with his patron would later be caught in another financial indiscretion involving taking a “veiled bribe” in the form of advances on a book on the history of Russian privatization. “Aid can change the political equilibrium,” they said, “by explicitly helping free-market reformers to defeat their opponents.”Richard Morningstar, U.S. aid coordinator for the former Soviet Union, stands by this approach: “If we hadn’t been there to provide funding to Chubais, could we have won the battle to carry out privatization? Probably not. When you’re talking about a few hundred million dollars, you’re not going to change the country, but you can provide targeted assistance to help Chubais.” In early 1996, after he was temporarily removed from high office by Yeltsin because he represented unpopular economic policies, H.I.I.D. came to his rescue by placing him on its U.S.A.I.D.-funded payroll, a show of loyalty that former U.S.A.I.D. assistant administrator Thomas Dine says he supported. Western policy-makers like Morningstar and Dine have depicted Chubais as a selfless visionary battling reactionary forces. In the spring of 1997, Summers called him and his associates a “dream team.” With few exceptions, the U.S. mainstream media have promulgated this view.United States policy toward Russia requires a full-scale Congressional investigation. The General Accounting Office did investigate H.I.I.D.’s Russian and Ukrainian projects in 1996, but the findings were largely suppressed by the agency’s timid management. The audit team concluded, for example, that the U.S. government exercised “favoritism” toward Harvard, but this conclusion and the supporting documentation were removed from the final report. Last fall Congress asked the G.A.O. to look into Eastern European aid programs and Shleifer’s role in the Gore-Chernomyrdin Commission. Such questions need to be answered, but any serious inquiry must go beyond individual corruption and examine how U.S. policy, using tens of millions in taxpayer dollars, helped deform democracy and economic reform in Russia and helped create a fat-cat oligarchy run amok.Source: The Harvard Boys Do RussiaWill Russia ever recover? What would Stalin say about what happened?Stalin would start throwing up and never be able to stop. He predicted perfectly what would happen if the USSR collapsed. The result was “The End of History,” as capitalist apologists would claim. Neoliberalism has overtaken the West, but has brought Russia with it.These people greatly miss the Soviet UnionQuorans on the USSR:Michael Buleev:It was monstrous. My parents were representatives of the working intelligentsia - qualified specialists who worked in the defense industry. At the time, we were roughly in the middle class. After the collapse of the Soviet Union was a terrible inflation, rampant crime, hunger, lack of work and lack of prospects for life. This lasted until the arrival of Putin in 1999. Only after this moment the situation in the country stabilized, and then there was a slow rise in living standards. By the way, the collapse of the USSR divided me and my relatives - my cousins and their parents suddenly turned out to be Ukrainians, and I and my parents - Russians. And now, for example, I am banned from entering Ukraine only because I have Russian citizenship. So I haven't seen my cousins in 27 years.Source: Mikhail Buleev's answer to How did the collapse of the Soviet Union affect you?Nick Levin's answer to What was everyday life like for people in the Soviet Union under Lenin and Stalin?Cristian A. Rodriguez's answer to What were the good things done by the Soviet Union?Alexander Finnegan's answer to Is it true that a single mother with one job was able to live well in the Soviet Union?Sergey Bobyk's answer to Do you miss living in the USSR?Jimmy Brown's answer to What was life like in the Soviet Union?Nikolay Pavlov:I was born in 1973 and remember that period quite well. I would say that a lot of problem usually get exaggerated. Also, was the rest of the world totally free of any problems of any sort? Ye,there were things like - again depending on the place - a long queue, years to get you telephone installed (well, we and neighbours get ours easily). The hunting for clothe, goods and food items that people mentioned was mostly driven by the fact that it was rare for a moment. In society with roughly same monetary capabilities that was a way to show up which most people put a big effort to. The number of private cars were perhaps x2 less than Western Europe of that time which I guess again itself was x2 behind USA. Again, the way the life was organized most people lived within walking distance of their job or were provided company run buses. The motivation to have a car was often because of “dacha” (some private piece of land outside of the city, which was quite common).The individual’s future was quite secure, it was easy to find almost any kind job you want and with free education (well, it was not totally free till 1950s or so) . People who choose to just chase money (that was possible if going to Siberian construction sites, achieving good results in work paid not on hours but on quantity, ’ grey’ business) were rather looked at with suspicion. Also, even for low level workers and engineers there was a system set to get paid for inventions and process innovations. Some people could double their income that way. Overall attitude was relatively lay down but of course it does not mean people did not compete e.g. for promotion and such competition would involve some exercises in demagogy (surprisingly similar to modern corporate world). The fact that you would not be immediately terminated from your job if e.g. drunk or you can still easily find another job had obvious negative effect. There was some chance to build your carrier up to the very top starting anywhere - e.g. looking at Soviet leaders most of them were not even from Moscow.Regarding things like ‘freedom of speech’ I would say that certainly modern corporate world gives you way more narrow way (talking post-Stalin mostly). The bosses were rather limited in a way they can screw you up while there were more way for the opposite. Note that is not necessary good thing regarding overall efficiency of the company.And one has to say overall standards of living were not too bad. E.g. there was a lot of long distance flights for vacations,etc. Regarding food - yes the choices were smaller but in principle if you desperately want something there were ways to get almost anything if paying extra. And general obesity was an issue already back then.But let’s face the question - why this topic bring interest more than 25 years after?We obviously see inequality, unemployment, overall pessimism growing all over the world ( well , don’t know about China,etc). I guess people ask whether the alternative systems are possible. I think it was shown it is possible, and it is important to say that de-facto the current logistics (centrally-driven, thanks to Internet) and economy occupied by creating workplaces rather than products becoming more of the same type. However, the growing inequality in distribution of wealth, decline of mass culture, science and education give rather pessimistic view.Source: Nikolay Pavlov's answer to What was life like in the Soviet Union?N Kuncewicz:I see so many Westerners telling here how bad it was, so I feel like I have to share with you my Father’s experience ( as I was born during the collapse of the union).In general, both of my parents (born in 1970′s) sincerely miss the old soviet times. My grandparents came from random small villages across modern day Russia and Belarus. Eventually, they were offered jobs in the coastal town of Jurmala, Latvian SSR. A huge bonus to that was that the government would also give them flat with a walking distance to the new offered jobs ( Now imagine that the government is offering you a job and a flat within 10 min walking to the coast. Pretty neat, right?) Obviously it was a no brainer for most people. Going back to my dad. He was about like any average teenager in the 80’s. Riding moped, bleach-colouring his t-shirts, listening to Black Sabbath, Metallica and Iron Maiden (they were censored , but it was widely available anyway) on his boombox and styling his hair in a funny way. He travelled quite a lot within USSR for cheap. He went to Polytechnic for free and gained education which allowed him straight away to work in his field after competition. As he was sharing one bedroom flat with his mother, he was given 1 bedroom flat in the same apartment block (for free, from government) at the age of 18!!!He didn’t have to worry about money as there was always work available (it was illegal to be unemployed, you would be arrested). Which means there was no fear of becoming homeless.Most people I know had not just flats, but also a “dacha” ( summer house) where they were able to live outside the city’s life and grow their own crops.There was not lots of food available in the shops, but it was ENOUGH! Nobody starved in the 70’s or 80’s . There was no need to eat excess junk food, drink caramel lattes or many other things you cannot imagine your life without. If you cannot get something in the shop. Fine! You can go fishing, you can grow your vegetables or fruits or you can get your ass and go berry or mushroom harvest in the forest!The major drawback in USSR I can see is the border restriction. It really bummers me to think that those people were not able to see the world. However, it seems that it didn’t bother much people as they believed they have all they need in USSR. They have open borders in Latvia now, but what is the point if people are so poor they cannot afford to go abroad?I understand that life in the Soviet Union was not perfect and was not so culturally and technically advanced as in the west. But you have to realise that It is completely different culture, different people and environmental conditions. Why do you people have to compare quality of life using US as some kind of “gold standard”? It is just like any other country with its own advantages and disadvantages. Leave us be.Source: N Kuncewicz's answer to What was life like in the Soviet Union?Anna Hag:I am jewish and I was born in 1972 USSR in Leningrad and my life was prosperous there. I loved it very much, it was a rich peaceful country, so huge, diversious and most beautiful one. Since 1991 I live abroad. I wouldn't left my beautiful USSR if it wouldn't collapse. Since then I lived in Israel, Canada, Japan, now in Finland. However USSR is always the best. I am still a patriot of USSR despite that USSR doesn't exist anymore.I was living in USSR my first 18 years and I really enjoyed to grow up there. It was a peaceful beautiful prosperous country with kind and beautiful people around.I would never leave USSR if it wouldn't be collapsed. It was an unforgivable mistake of my generation to let it collapse. So sad. Obviously Russia is still beautiful and peaceful country as always but USSR was definitely much bigger, stronger and better in general.In USSR the education and a medicine was free. Every family owned a summer house outside of my city that government provided for free. Government provided apartments in the city for free as wellSummer houses had a sufficient amount of the land where we planted strawberries, apples, greens, carrots and other berries and vegetables. Those who lived in villages owned chickens, pigs and cows additionally to growing fruits and vegetables. So we enjoyed ecologically clean our own food all summer aroundUSSR was a dream come true for the average liberal in the modern EU, and as they are majority in EU now. So they work hard to re-enact USSR in EU. So far they are succeeding.I am a jewish and I am an Israeli citizen since 1991. In USSR jewish population was reach and prosperous. I never met any poor jews in USSR.In 1991 I left USSR.What I've seen in terms of poverty and deprivation in the West, I hadn't seen even in the most downtrodden Soviet village. Pravda was telling the truth! The problem is that when we were seeing the "pretty pictures" of the West, we thought everyone lives like that. Far from it.....I think the biggest mistake the USSR made was to stop people from travelling to the West. They should have said, go on, live there for 6 months, let's see how you get along. :)That said, at the time, the Western governments were spending shed-loads of money to attract and keep the "escapees from Communism". Funnily how that dried up exactly in the early 1990s. There was no need to spend that money any more.The other tragedy that bothers me if how many people actually died because of the USSR collapse: either from actual military conflicts (including thousands in the Nagorno-Karabakh conflict), as well as from hunger (the Leningrad hunger 1991), poverty, and rampant banditism. How many children were never born, because people didn't know if they could survive another day. If that was not a genocide..... then there is no justice in the world.The loss of the Soviet Union was an enormous blow to the advancement of humankind. After its fall the U.S. had no one to stop it from its aggression, colonialism, and imperial power. Look what a distraction Obama did in the Middle East.Yeltzin was set up by Americans to destroy Russia to the end. Unfortunately he carried through its task and meet the expectations of the westerns. In 1917 Westerns destroyed the Russian empire and in 1991 they did the same with USSR.If only we knew then what we know now, we would probably have fought for the preservation of the USSR. I was stupid enough, as a student, to support the "freedom and democracy" movements. If I knew that we were going to be robbed blind, treated as "dumb natives" that gave their birthright away for the promise of shiny beads, and that everything that our parents and grandparents had worked and died for would be so blatantly abused..... It really breaks my heart to see what we have done...... And I, personally, am really sorry. We had it all, that's why we wanted more, and didn't realize what we had until we lost it. Oh well, I'll just have to live with it....Life in Russia in 1982:More about the life in USSR and the state of mind of homo sovieticus you can gather from here:I noticed many people who were never living in USSR think that they are qualified to give a description and the judgement about USSR. Their description of USSR is not credible because as a tourist you cannot understand the beautiful sides of the life in USSR. Tourist perception is very superficial therefore nonessential and only as a tourist perception the opinion can be valid, and that's why such opinion is deeply incorrect from the point of local SU citizen.The Western europeans cannot understand that it is basically wrong to compare USSR with small countries. Russia can be comparable with other big countries of the Russian size. To live in big countries is always better than in small countries. I tried both. There is something especially deep about the Russian psyche, the Russian soul, just the way the Russians are, their frankness, their simplicity. In Russia everything is very much. Large areas, large and diverse cities, large and severe frosts in winter. People in Russia, if they love it very much and if they have happiness, then it is great happiness, and if woe, then it is also big woe. Russians and Americans have the closest understanding of physical and metaphysical space. It has been said that Russians have “large souls” and it may be because they have a sense of space and time that is incompatible with either Western Europeans or Asians. The Russian sense of time is non linear.Any comparison of USSR or Russia with any of microscopic European countries is absolutely invalid and irrelevant. The size is the matterThe judgement of european tourists could be absolutely different and even opposite from the local SU people judgement. I can give two examples from my personal life experience :a) Israel. When tourists visit Israel they got excited about Tel Avivian paradise: beaches, sea, sunbathing, swimming all year around , tasty food, smiley half-naked happy people everywhere. However when they become citizens and live there permanently the reality turned on 180 degree and shows its ugly dark sides: everything is expensive, lack of parkings, no public transportation in the weekends, military conflicts etc. All those dark Israeli sides are absolutelyinvisible for tourists. Not everything that looks shiny is a gold .b) Canada. When I came to Canada, first few weeks it seemed to me absolutely worthless place on the earth. I didn't understood why people are so struggling to immigrate there. However after I settled down in Montreal I understood how prosperous rich life there with the highest living standard that I ever experienced. It took me a year to realistically value the canadian life. All those beautiful Canadian sides absolutely invisible for tourists. Canada is a huge low populated country always reminded me former USSR in the end of 1980′s.Conclusion:Not everything that look dirty is a trash . Not everything that looks shiny is a gold. Watch deeply.Source: Anna Hag's answer to What was life like in the Soviet Union?

The merchant class rose to great prominence under the Tokugawa period.Rise of Merchants as a Class in Tokugawa-Bakufu: Sector-wise Analysis - Eastern InterestTokugawa period had a very dynamic economic growth and the centre of this growth was the merchant class. Though the Merchant was the lowest among all the social class but they held great economic power.https://easterninterest.com/rise-of-merchants-as-a-class-in-tokugawa-bakufu-sector-wise-analysis/“Tokugawa period had a very dynamic economic growth and the centre of this growth was the merchant class. Though the Merchant was the lowest among all the social class but they held great economic power. This merchant was also played an important role in the Meiji restoration. A number of the great Japanese multi-national corporations of today came from simple beginnings in the Tokugawa period.Introduction“A great peace is at hand. The shogun rules firmly and with justice at Edo. No more shall we have to live by the sword.I have seen that great profit can be made honourably. I shall brew sake and soy sauce and we shall prosper.”— Mitsui Takatoshi (1622-1694), founder of the Mitsui empireThis statement by Mitsui Takatoshi explained itself about the successful trading system, which was developed during the Tokugawa period. Many big business houses of modern Japan have their foundation from that era. Historically, in every society Merchant played a significant role in the exchange of money and goods. In the Tokugawa period, Merchants were considered lowest in hierarchy. The principal status divisions of the period were codified in the occupational distinctions—samurai, farmer, artisan, merchant (shi-no¯-ko¯-sho¯)—that are still rooted in textbook generalizations about premodern Japanese society.[1] This was taken from the Chinese classics the notion of well-ordered society classes were arranged in order of their contribution to the society. The first century of Tokugawa rule was a period of political and military unification and economic reconstruction. The pace of economic growth was limited and conditioned largely by the centralized feudal system aimed at keeping society static and peaceful.[2] This class system also indicated the administration policy of Bakufu and the han towards the trading community. Agriculture got first priority during this time. In villages, many wealthy landlords entered the field of commerce where they could earned more cash. Following the emergence of rich merchants and rich peasants, money in the form of capital began to invest in manufacturing such as spinning, weaving, pottery and sake and miso production.[3]Merchants positions in the Early Tokugawa PeriodAs, we have already mentioned that the status of the society was based on the occupation. The class division was rigid and enforced by the Hideyoshi, where he divided the classes as samurai, peasants, artisans and merchants. These rigid class lines were established initially by force or the threat of force, which may go some way towards explaining the general acceptance of them. In return for their acceptance of their position at the bottom of the shinikisho hierarchy and for the loss of some degree of independence and of certain privileges which merchants enjoyed in some ports and commercial towns like Sakai, a fast-developing and expanding money economy gave them opportunities in domestic commerce and finance.[4] With the coming modern techniques, the rural economy was becoming self-sufficient, we can Around 1780, Takasawa Tadayori, a prominent official of Kaga han set down his impressions of the state of the realm. As noted by R. Flershem:“. . .During the previous century the castle town,Kanazawa, had been expanding, and its citizens,Samurai and merchants, were increasingly indulgingIn luxury as urban life developed. This tendency,It seemed, was even spreading to the villages.Peasants were still not as bad as merchants, butThere were knowing, worldly villagers who likedThe fleshpots of the towns and were moving toThem, deserthing the land, whenever they saw theChance. The more fortunate of the villagers wereBecoming merchants, wore fine clothes, dissipated,And idled. Such conduct roused envy, and thoseWho wished to escape from husbandry into commerceWere increasing in number.”[5]The rapid growth of the regional economies was due importantly to the improved technique of production which enabled a specialization of production in each region. The best example can be seen from the growth of sericulture in Shindatsu during the eighteenth and nineteenth centuries which changed the character of its rural economy from a self-sufficient village economy based on cereals to a regional economy centered around rearing silkworms and processing raw silk.[6]Factors which helped Merchants to growSocial and economic structure during the isolation policy (1639-1854)During this time Japan adopted the international isolation policy, “it was dynamically evolved rather than a stagnant dark age”. Notable economic changes were happening in Japanese society mainly in the agricultural sector with other areas too ranging extent from trade to finance. We can say that these developments help out with the upcoming modernization process in the future. This period saw many transformations, first and foremost was the political unity and stability which provides a better way to administration and policymaking. Though economic policies were more decentralized, Bakufu was not very capable (or interested in) of consistent economic policies, On the other hand, Han was allowed to implement its different policies whether related to the administration, economic, taxation, education, issuing paper money and other industrialization.there were many reasons cited by the scholars.Let us list these pre-conditions at the outset:(1) Political unity and stability(2) Agricultural development in terms of both area and productivity(3) The development of transportation and the emergence of nationally unified markets(4) The rise of commerce, finance and the wealthy merchant class(5) The rise of pre-modern manufacturing (food processing, handicraft, etc.)(6) Industrial promotion by local governments (sometimes successful but not always)(7) High level of education[7]Socio-Tech-Infrastructure brought by the Sankin-KotaiEdo society had a politically centralized system. The centre government (Bakufu) had total power over Han and Edo society was divided into the class system, in which there were 4 categories Samurai (ranked no 1), farmers (ranked no.2), craftsmen (no.3), and merchants (no.4). These four classes were called Shi-Nou-Kou-Shou (from top to bottom). These divisions made tax collection much more feasible. although the farmers were in the 2nd rank, mainly because of the rice tax collection system though they were not much respected in the society. Han couldn’t deny the orders from Bakufu and the political system was formed in a way that Hans was not able to increase their power in comparison to Bakufu but what made this political and economic system was very interesting is checks and balances system implemented by Bakufu over each Han. Sanin-kotai was an alternate residence duty which was started in Warring states period and perfected by Tokugawa Shogunate, In this system, daimyos were asked to live in Edo for every other year and rest of time to their Han and it led to many economic developments in certain aspects. During the procession of the Damiyos, they travelled to a certain path or some of them took the Tokaido route, which is a very important and developed highway in Japan today, since this journey would take several days, the daimyo would make many stops on this route. These stops would then grow to become post towns where the daimyo lords could relax and, have a snack, or lodge for the night.[8] These stops would then grow to become post towns where the daimyo lords could relax and, have a snack, or lodge for the night. With this, it helped create cities to cater to these travellers, allowing many cities to become “cities of merchants” as Osaka became during this time. Moreover, with the wealthy daimyo residing in Edo for long periods, Edo would become a major consumption centre. People travelled with the Damiyos also helped to develop the small villages into cities which brought many socio-economic changes in the society. This whole system led to the migration of people in or around the Edo, Damiyos continuously shifting made easy to exchange ideas, cultural values and information between the Han and Edo, which eventually helped the central government to aware about what was occurring in Han, and maintained the sense of National and Cultural unity which ultimately helped Japan in the Modernization Process. All these factors were the reason that Edo became the largest urban settlement of that time with over 1 million population. Many towns where Damiyos had their castles turned into the large cities (Osaka, Hiroshima, Nagoya, Kanazawa). Osaka was the leading trading and financial centre. This urbanization during the Tokugawa period provided the basis for a unified national economy, stimulated demand for agricultural and other goods produced in rural areas, and led to an urban-centred commercial economy[9].Other than the Sankin-kotai, there was the system of irregular assignment of public work such as building and repairing canals, waterworks, castles, roads etc given by centre to each Han so that they utilized most of their funds and would not get more powerful than bakufu. This whole system brought many changes and developed in a centralized manner, which eventually led to the perfect preconditions for the modernizationTRANSPORTATION, COMMERCE AND INDUSTRYPrivate and Centre both kinds of the transportation system was there, though, from many shreds of evidence we found out that many time it happened that Bakufu tried to control the private transportation system too, it’s still a matter of debate between scholars, which one is a better policy. “The Bakufu designated five official highways and opened major sea lanes. But private inns, restaurants, shippers, baggage carriers, etc. provided the necessary service. Farming villages near the highway were required to provide horses when necessary (part of their nontax obligation). Sankin kotai (bi-annual commuting by daimyos) also stimulated the development of the road system. At the same time, due to military reasons, Bakufu did not encourage the free movement of people and merchandise.At major checkpoints, sekisho (passport controls) were created. Some rivers were left without bridges, intentionally and for military reasons. Hans were not allowed to build ships or maintain a navy”[10].Edo, Osaka had their importance as Osaka was the main commercial centre and Edo was the main political and consumption centre, as these cities were important enough to make a well connected through sea links. The pre-modern industry was starting to emerge and produce products extended from tea, tobacco, wax, indigo, salt, knives, sword, pottery, lacquerware, silk, cotton, soy sauce, sake, paper, stone cutting, medicine, chemicals. Kenichi Ohno mentioned some of the Han which was succeeded to promote the local industries and products so that they would be able to collect more revenue out of itTokushima han (indigo)Takamatsu han (sugar)Satsuma han (military technology)AgricultureAgriculture was the most preferred occupation; each family was assigned on a piece of land and they were instructed to cultivate. these lands ended the big family system because of the land survey done at the starting and the ending of the Edo period. Rice tax was implemented by each Han according to their will and bakufu too, levied the rice tax under the area directly ruled by it. Each village had to give the tax to the Han and bakufu according to the area governed by them. “There were two ways to determine the rice tax obligation. One was the kemi (inspection) system where an official inspector came to check the actual yield every year. Naturally, village representatives treated the official with lots of food and gifts. Some officials only had drinking parties and did not check the fields. The bribed official happily understated the crop output (often very substantially) so villages paid much less taxes. According to Prof. Shinzaburo Oishi (historian), such corruption was an important reason for chronic revenue shortage of the government. On the other hand, if the visiting official was arbitrary and uncooperative, he might raise the tax obligation to the chagrin of the farmers. Another method was the jomen (fixed amount) system where the rice tax was unchanged for three or five years based on the average output of the preceding years. Under this system, the government could expect a more stable tax revenue and also minimize the inspection cost. Farmers borne a greater risk for crop failure, but the incentive to produce was also greater (if they worked hard, additional output was all theirs). According to Prof. Tanaka, farmers often preferred the jomen system because they did not want to cope with corrupt officials every year”[11].The agricultural phase can be divided into 2 phases, first from the mid-15th century to the late 17th century (this includes the previous Sengoku Jidai (warring period) as well as the early Edo period), the process of expansion of the agricultural farmland was done, during this time many canal-building projects was done. The population increased rapidly (such population growth was very unusual for a pre-modern society). Prof. Shinzaburo Oishi calls this “The Great Age of Opening Fields, and the second period was After the late 17th century, land expansion came to a halt. The rapid growth of farmland in the previous period also brought some negative effects, including (i) shortage of labour force; and (ii) deforestation and frequent occurrence of floods. From this period onward (even today), Japanese agriculture emphasized intensive cultivation with large inputs of labour and technology.Many changes were done during the middle of this period, many farmers were able to rose the productivity and sell their rice and other products to the market which was nationally connected. At the end of the Edo period, many uprisings of farmers were increased because of many reasons and one of them was landless farmers number which was increasing by the time and led to the landlord-tenant relationship.The sale of tax rice dominated the cities business transactions and provided means for the merchants to swell their profits in a gradually more complicated money economy. The rice merchants then were co-opted into the feudal lord’s retainers and were granted certain privileges of the warrior’s class. Merchant capital in the early period therefore had a limited role in the cities, and mostly served the needs of the lords in exchanging goods for cash[12].Comparison between European and Japanese Trading environmentEurope had many advantages over Japan, the expansion of Europeans trade links was all over the world, which gave them upper hand to distribute their products. Trade with the New World, Asia and Africa, which resulted in the rise of the Atlantic economy in the eighteenth century, on the one hand, and in European hegemony in the Indian and other Asian seas, on the other, was undoubtedly a significant phenomenon. Equally significant, however, was trade within Europe including the Levant, whose seventeenth-century growth was accompanied by a gradual but decisive shift in the centre of gravity of international trade from the traditional Mediterranean to the emerging North Sea area. So, the merchants of Europe received much more resources than their Japanese counterpart in the same time period. The Japanese modernization though begun with the Meiji restoration but the foundation of capital investment was became possible because of the previous favourable situations.Japan is the only country in the eastern side which transformed itself from feudal society to modern capitalist society. Having said that, this became possible because of the political changes and involvement of western countries in the mid-19th century. During the tokugawa period, increasing agriculture activity also gave opportunities to the merchant class to expand. Another factor that shaped the regime’s economy was the removal of the warrior class from the villages into the castle-towns. This urbanization process, which continued for several decades in the early Tokugawa period, drew a new line of distinction between the cultivators, those remaining on the land, and the feudal aristocracy, those members of the daimyo’s retainers gathered at his castle headquarters[13].In order to stimulate the country’s economy, the bakufu announced a free trade policy and prohibited the formation of merchant guilds. Tokugawa Ieyasu, immediately after having established his hegemony, proceeded to unify the monetary system by securing the right of coinage exclusively in his own hands. Standardization of weights and measures, though less extensive, came rapidly into effect even in districts not under the jurisdiction of the bakufu. All these policies developed the circulation of goods throughout the country. By the middle of the first century of Tokugawa rule, commerce and handicraft had already flourished, in the shogun and daimyo’s castle-towns. The region which was the most advanced in the course of economic growth in the Tokugawa period was the Kinai. It includes the five provinces (kuni); Settsu, Kawachi, Izumi, Yamato and Yamashiro. The region developed commercial agriculture from an early date because it included the cities of Kyoto and Osaka. Many cities like Kyoto, Nara and Sakai had seen centuries of commercial and agricultural development.[14] As a result, the agriculture production was increasing with the processing goods of town people. Which eventually helped to established Edo, Kyoto and Osaka to became the trading centre of that era. After the westward shipping route (nishimawari) was established in 1672 to facilitate trade with the northern provinces, Osaka increased its importance as a major rice market and other commodities from the sea coast as well. It is estimated that during the first quarter of the seventeenth century one million koku* of rice was shipped to the Kinai region annually. Total national rice production at the end of the sixteenth century is estimated to have been around eighteen and one half million koku. All these conditions helped merchants to grow rapidly during this time[15].ConclusionMerchant class during tokugawa period had such an interesting and intriguing history, their role can be seen in the different manner. The first phase can be seen, when the unification was happening and they were considered as the lowest class in the hierarchy system, as it was believed they are not producing anything for the society, yet because of the Sankin-kotai system, there was an increasing need for exchange of goods and money. Which eventually helped in rise of merchant class in the capital city. Soon in the early 18th century, the market was expanded in the different part of the country as the result of regional economic growth. This phase helped merchants to grow beyond the castle town. The infrastructure and the policies used during the Tokugawa period certainly helped out the Merchants to flourish and this merchant capital later gave foundation for the Meiji restoration.References-Charles David Sheldon, The rise of merchant class in tokugawa Japan, 1600-1868Johannes Hirschmeier and Tsunehiko Yui, The Development of Japanese Business 1600-1980 (London:George Allen & Unwin, 1981), p. 11.Osamu Saito, Pre-Modern Economic Growth Revisited: Japan and The WestDr. Thanet Aphornsuvan, Merchant Capital in Tokugawa JapanRobert G. Flershem, “Some Aspects of Japan Sea Shipping and Trade in the Tokugawa Period, 1603-1867,” Proceedings of the American Philosophical Society, Vol. 110,No. 3, (1966).Stephen Gregory Vlastos, “Tokugawa Peasant Mobilization,” Ph.D. Dissertation, University of California, Berkeley, 1977.Kenichi ohno, The economic development of japan(GRIPS Development Forum,2006)Oishi, Shinzaburo, Edo Jidai (The Edo Period), Chuko Shinsho, 1977Iwanami Shoten, Kindai Seicho no Taido, Nihon Keizaishi 2 (Signs of Modern Development, Japanese Economic History vol. 2), H. Shimbo & O. Saito, eds, 1989[1] Charles David Sheldon, The rise of merchant class in tokugawa Japan, 1600-1868[2] Johannes Hirschmeier and Tsunehiko Yui, The Development of Japanese Business 1600-1980 (London:George Allen & Unwin, 1981), p. 11.[3] Dr. Thanet Aphornsuvan, Merchant Capital in Tokugawa Japan[4] jstor[5] Robert G. Flershem, “Some Aspects of Japan Sea Shipping and Trade in the Tokugawa Period, 1603-1867,” Proceedings of the American Philosophical Society, Vol. 110,No. 3, (1966), p.183.[6] Stephen Gregory Vlastos, “Tokugawa Peasant Mobilization,” Ph.D. Dissertation, University of California, Berkeley, 1977.[7] Kenichi ohno, The economic development of japan(GRIPS Development Forum,2006)[8] Oishi, Shinzaburo, Edo Jidai (The Edo Period), Chuko Shinsho, 1977[9] Iwanami Shoten, Kindai Seicho no Taido, Nihon Keizaishi 2 (Signs of Modern Development, Japanese Economic History vol. 2), H. Shimbo & O. Saito, eds, 1989[10] Kenichi ohno, the economic development of japan (GRIPS Development Forum,2006)[11] Kenichi ohno, The economic development of japan(GRIPS Development Forum,2006)[12] Osamu Saito, Pre-Modern Economic Growth Revisited: Japan and The West[13] Osamu Saito, Pre-Modern Economic Growth Revisited: Japan and The West[14] Dr. Thanet Aphornsuvan, Merchant Capital in Tokugawa Japan[15] Dr. Thanet Aphornsuvan, Merchant Capital in Tokugawa JapanAshish DangwalScience & Tech Archives - Eastern InterestSerum Institute CEO Adar Poonawalla, in an interview with the British newspaper The Times, confessed that has been receiving phone calls from the “most powerful” including Indian chief ministers, business tycoons and others, for instant supplies of Covishield.https://easterninterest.com/category/science-tech/The author is currently pursuing his Masters from University of Delhi. Graduated in Physics, he likes to be au courant with technological impact on the Foreign Policy architectures as well as Geopolitical operationality in the Indo-Pacific.MJP

After Stalin a black market developed. This increased competition in the official markets. Gorbachev permitted these on a much bigger scale. The oligarchs then used private corporations to launder money for organized crime. The black markets undermined the official markets. Gorbachev’s other reforms led to shortages of goods that destroyed the morale of the entire public. Long lines became the norm.Gorbachev’s glasnost opened the doors for dissidents to destroy the public’s faith in communism. Day after day there were sensationalized exposes about the gulags, the purges, the Holomodor and others.Soviets were shown the lifestyles of the rich and famous in America. They were told that abandoning communism would lead them to have better lives, too. After the fall of the Soviet Union they would painfully discover the extent of the lies sold to them. People freezing outside, hunger, the outbreak of communicable diseases, mafia and oligarchs gained control of the government.Gorbachev pulled the plug on central planning of the economy. This had catastrophic consequences. Managers began to produce only the items which were lucrative for their sector and not what the economy actually needed. This led to massive inefficiencies as there were abundant supplies of things not needed and shortages on the things that were needed.Gorbachev’s anti-alcohol campaign that included a partial prohibition had disastrous results. Illegal producers of alcohol began to become rich themselves. Then they desired to increase their private activities and expand capitalism. Meanwhile, people simply drank more alcohol so there was no improvement in labor productivity. The loss in revenue from the sales of alcohol put giant pressures on the system.Individual managers paid their employees more, which led to increase inflation combined with shortages of needed goods from #7.Gorbachev shrank purchases of industrial outputs by the state, causing official manufacturers to sink or swim on the private market. This undermined the state industries.“Initially most of the cooperatives were cafés, restaurants, hairdressers and small construction firms – exactly the sort of business that tends to be quite effectively run on a small scale. However, the cooperative movement quickly came to be dominated by “pocket banks used by their founding enterprises to move funds around discreetly and cooperative banks that were able, when foreign-currency and government debt markets developed, to make large profits from playing very thin financial markets.” Why doesn’t the Soviet Union exist any more? Part 5: Perestroika and glasnost - Invent the Future“Many of the fabulously wealthy Russian gangster-capitalists of the 1990s made their start in ‘cooperative’ banks in the late 1980s. In addition to paving the way for a new finance-capitalist class, the cooperatives also laid the ground for a lucrative non-productive underground economy: “Cooperatives providing consumer goods and services, which had to be readily visible to function, soon ran into difficulties from criminal gangs. Protection rackets developed, and the police were unable or unwilling to stop them.” Id.12. Next Gorbachev hollowed out the economic planning groups in the communist party. So there was no organizational oversights of the activities done by different ministries. This led to chaos.“As we know from historical experience, common sense, and scientific analysis, no reform can be implemented successfully without a well-developed programme and precisely defined goals; a team of vigorous and highly intellectual reformers; a strong and effective system for controlling political phenomena; thoroughly developed and carefully considered methods of instituting the reforms; the mobilisation of the mass media to explain the meaning, goals, and consequences of the reforms for the state as a whole and for the individual person in particular for the purpose of involving as much of the population as possible in the reform process; and the preservation and development of the structures, relations, functions, methods, and lifestyles that have earned the approval of the people. The reform process in China (PRC) developed along approximately similar lines. But nothing like this was done by Mikhail Gorbachev and his team. Labour collectives, party organisations, economic leaders, and much of the intelligentsia were excluded from participating in the renewal of society. The right to define directions and interpret the meaning of the reorganisation processes was appropriated by a small group of top leaders, who were given to superficial improvisation and were unable to organise and direct the reform properly… Instead of the hard work that was urgently needed, they unfolded a parade of political arrogance, demagoguery, and dilettantism, which gradually overwhelmed and paralysed the country. In 1990, the USSR went into recession for the first time. By 1991, its economy was in freefall.” Id.Glasnost proved to be an equal disaster.“What happened in our country is primarily the result of the debilitation and eventual elimination of the Communist Party’s leading role in society, the ejection of the party from major policymaking, its ideological and organisational unravellling, the formation in it of factions, careerists’ and national separatists’ penetration of the leadership of the party and state as well as the party and power structures of the republics, and the political conversion of the group headed by Gorbachev and their shift to the position of elimination of the Communist Party and the Soviet state.” Id.“It’s worth pointing out that Gorbachev never put much meat on the bones of ‘democratisation’. With hindsight, it’s obvious that his use of the term reflected an ideological concession to western capitalism; that he had come to believe that the Soviet Union should aspire to the political norms defined in Western Europe and the US. Such thinking neglects a number of factors that should be well understood by any Marxist:‘Free speech’ in the advanced capitalist countries is essentially a piece of attractive icing beneath which lies a bitter cake of plutocratic repression. Via its monopolisation of the mass media, the ruling class dominates the field of ideas almost comprehensively. There is a level of debate and criticism, but only of a few individual policies and not of systemic features of capitalism. As Chomsky famously put it: “The smart way to keep people passive and obedient is to strictly limit the spectrum of acceptable opinion, but allow very lively debate within that spectrum”.27The political freedoms available in the west are much constrained owing to the correlation between wealth and power. Ordinary citizens have the right to vote, but their choice is nearly always restricted to two or three pro-capitalist, pro-imperialist parties, between which there is little substantive difference (so rare is the appearance of a meaningfully different option within mainstream politics, that when it happens it sends the ruling class into a frenzy of confusion, as is being witnessed at the moment with the rise of the Labour left under the leadership of Jeremy Corbyn). Actual power is monopolised by the wealthy, and challenging it can be extremely dangerous, as is evidenced by the treatment of Irish Republicans that have served time in Britain’s colony in the north of Ireland, or the many longstanding black, Puerto Rican and indigenous political prisoners in the US who have spent decades behind bars on account of their struggle for equality and human rights.In a context of ongoing class struggle waged by the working class of a socialist country against its internal enemies (those that want to restore feudalism or capitalism) and its external enemies (the leading capitalist countries that will inevitably work to destabilise a socialist country), a level of political repression is an unhappy necessity; this is elaborated in the article on ideological deterioration28 in relation to Khrushchev’s denunciation of Stalin. The needs of the few – to get fantastically rich – can’t be allowed to compromise the needs of the many to enjoy a dignified, peaceful and fulfilling life.” Id.“Szymanski describes “a few basic assumptions of Soviet society” that were not debated in the press: socialism as a system, communism as a goal, and the leading role of the Communist Party. “These issues are considered to have been settled once and for all and public discussion of them is considered by the regime to be potentially disruptive of popular rule.” This is consistent with Fidel Castro’s famous formula: “Within the revolution, everything; against the revolution, nothing.” These basic assumptions of socialism can be compared with the basic assumptions of capitalism: the supremacy of private property; profit as the major engine of economic activity; exploitation of labour as the source of profit. Id.“Dissidents and anticommunists were appointed as editors of newspapers and magazines, and were given carte blanche to use their publications to openly attack the basic ideas of socialism and the whole nature of the Soviet system. “Liberal intellectuals were named to run Ogonyok, Sovetskaya Kultura, Moscow News, Znamya, and Novy Mir… The top political leadership had actually given editors, journalists, writers, and economists freedom to write as they wished, using the mass media as their vehicle.” Id.“Added to all this was the fact that Gorbachev and his allies decided to end restrictions on foreign propaganda, for example putting an end to the jamming of Radio Liberty– a generously-funded propaganda arm of the CIA, focused on spreading anticommunist lies around the socialist countries of Europe. So Gorbachev’s idea of “improving socialism” was in fact based on bulldozing its structures and legacy.The attack on the party went so far that Fidel Castro, in December 1989, at an event commemorating the 2,000-plus Cubans who died in the course of their heroic internationalist duties in Angola, was moved to remark:It’s impossible to carry out a revolution or conduct a rectification without a strong, disciplined and respected party. It’s not possible to carry out such a process by slandering socialism, destroying its values, discrediting the party, demoralising its vanguard, abandoning its leadership role, eliminating social discipline, and sowing chaos and anarchy everywhere. This may foster a counter-revolution – but not revolutionary change… It is disgusting to see how many people, even in the Soviet Union itself, are engaged in denying and destroying the history-making feats and extraordinary merits of that heroic people. That is not the way to rectify and overcome the undeniable errors made by a revolution that emerged from tsarist authoritarianism in an enormous, backward, poor country. We shouldn’t blame Lenin now for having chosen tsarist Russia as the place for the greatest revolution in history.” Id.Gorbachev then began a full scale assault on reducing the power of the CPSU, the communist party, in an attempt to consolidate his own power. But by weakening the party he left there no gatekeepers of communism in the society. The party had always been the heart of the worker’s revolution and the keepers of the spirit of Marxism. Once it was destroyed the system was doomed.In China they did the opposite. There was no criticism of the party. All attempts were made to preserve the power of the communist party. There was no trashing Mao or the founders of the government. There was no obsession with supposed crimes committed by the leaders. Economic reforms were slowly rolled out, and with careful deliberation and consultation with economic planners and members of the party. Serious attempts to reduce corruption and maintain ideological purity were made. Market reforms were introduced, but the economy remained primarily a planned economy. The government controls over 75% of the businesses and has party cells in most. Plans are made to develop future industries, such as high tech, solar energy, A.I., robotics, automation, and others.Money was put into improving the educational system. The reforms were enormously successful. The economy has grown so quickly that it will overtake the U.S. by 2032. The standard of living for all Chinese people has risen .The USSR could have survivedEven though the Soviet Union faced economic problems from low oil prices, spending too much on the war in Afghanistan, and helping developing nations around the world with assistance, it could have survived.The primary cause of the fall of the Soviet Union was mismanagement.China went in the opposite direction as has thrived.“But is China even communist anymore?”China is a mixed economy now. It has elements of a socialist economy, but has embraced market reforms.The Soviet Union did not have to embrace capitalist reforms to survive. By focusing on growth industries, increasing productivity, and embracing newer forms of computing power to increase the efficiency of the planned economy it could have been rejuvenated.Had there been term limits, firing of low performing members of the government, those who had lost faith in communism, and those attempting to undermine the system from within, things could have been very different. Mandatory retirement ages wold have ensured younger people a chance to move up in the system. Glasnost and perestroika were poison for the system.Communism in Russia was brutally murdered in 1991. It was beaten to near death by Gorbachev. It was raped by the corrupt members of the Communist Party, wanting to steal the public assets. But it could have still survived. It was on life support. And goddamn Yeltsin pulled the plug. And the West, working with Yeltsin and the oligarchs, plundered the public assets, tossed millions into utter poverty, homelessness, young girls were forced into prostitution, organized crime sprouted up, inequality soared, millions died from starvation, and Russia has never fully recovered.Yeltsin didn’t act alone. He was supported by the U.S.UNITED STATES intelligence helped Boris Yeltsin to gain power by breaking the most secure codes used by the generals behind the 1991 Soviet coup and passing on the information gained to Mr Yeltsin. An American communications specialist was seconded to help Mr Yeltsin secretly contact wavering military commanders without risk of detection.The US intervention, which may have been critical in defeating the coup, has been kept secret to avoid the accusation that Washington was interfering in Russian affairs. It also started a row between the White House and the code-breaking National Security Agency, which strongly objected to revealing to Moscow that its most secure communications were compromised.The degree of support for Mr Yeltsin from the American security services is disclosed by Seymour Hersh, one of the United States' best-known investigative journalists, in the forthcoming issue of the Atlantic Monthly magazine. It is likely to fuel allegations by Mr Yeltsin's opponents that he took power thanks to American support.As soon as the coup started on 18 August 1991, the NSA, America's largest intelligence organisation, was able to decrypt conversations between the coup's two leaders, Vladimir Kryuchkov, chairman of the KGB, and Dmitri Yazov, the Defence Minister, taking place over a supposedly secure landline. President Bush ordered the information to be given to Mr Yeltsin but, fearing Russian reaction if word of American interference leaked out, broke the law by not telling Congress.The information was of critical significance to Mr Yeltsin at a moment when both sides in Moscow were wooing various military commanders across the Soviet Union. Mr Yeltsin knew exactly who supported the coup and who opposed it.An American specialist from the US embassy was sent to Mr Yeltsin's office in the Russian parliament building to make sure that his own communications system was secure.'The Minister of Defence and the KGB chief were using the most secure lines to reach the military commanders,' a US official involved in the operation said. 'We monitor every major command, and we handed it to Yeltsin on a platter. It demonstrated to the Soviet commanders that we can read it all - that we can penetrate it.'The NSA's ability to decrypt what Soviet military commanders - and their Russian successors - said over their communications system is probably the most significant intelligence achievement since Britain broke Germany's Enigma codes during the Second World War.William Odom, head of the NSA until 1988, says the transfer of such highly classified information would lead to 'a terrible, terrible trade-off . . . Now the Russians know what I know. That is such a huge loss for the future.'However, General Odom admitted that it was President Bush's right to decide what to do with such intelligence information, adding: 'There would be those who would think saving Yeltsin is worth it.'In fact on 14 August 1991 - only four days before the attempted coup in Moscow - President Bush had signed an amendment to the law making it illegal for him not to tell House and Senate Intelligence Committees in secret session about covert action such as that in support of Mr Yeltsin.Mr Bush and his aides reportedly decided to flout the law because they feared that Congress might balk at helping Mr Yeltsin because of the possible Russian reaction.There is no information about how the NSA succeeded in penetrating Soviet military communications, or counter-measures taken since by Russian commanders to keep their conversations secret. During the final years of the Soviet Union many secrets, formerly closely held, were sold to Western intelligence services.Mr Yeltsin was clearly grateful to Presidents Bush and Clinton for the support the US gave at a critical moment in his political fortunes, but he also has an incentive to prevent the same breach in security happening again.Mr Hersh says: 'The US intelligence community may no longer be in a position to have advance warning of momentous events inside Russia - as it had months before the coup that brought Yeltsin to power.'Yeltsin book review, page 16Source: US agents helped Yeltsin break coupBoris Yeltsin and his “free market reformers” were part of one of the most hidden and most criminal looting operations in CIA history. It was the rape of Russia by a corrupted circle of treasonous Soviet KGB generals, together with their select young KGB protégés, who were transformed through the operation into billionaire oligarchs. It was an economic rape made possible only through Western banks and the so-called “democracy machinery” of Washington under three successive presidents—Ronald Reagan, George H.W. Bush, and Bill Clinton.Yeltsin: Under Western tutelage, from Soviet bureaucrat to de facto mafia don.Few people in the West could grasp the sadness and anger of Russian President Vladimir Putin when he told a select audience of Russian politicians from the Duma in the Kremlin in September 2016, “You know how I feel about the collapse of the Soviet Union. It was unnecessary. We could have introduced reforms, including those of a more democratic nature, without allowing this.”Putin did not need to describe “this.” Everyone present knew he meant the savage destruction of life, feeling of worth, and pride for most Russians after 1990. If anyone in the US or the EU thought about Putin’s comments—coming amid an unprecedented US and NATO vilification and demonization campaign against the Russian Federation and Putin personally, including economic sanctions—they most likely saw it as confirmation of Washington claims that Putin’s Russia was out to rebuild the Soviet Union.What was unknown to most in the West was the true background of the destruction of life in Russia and the former member states of the USSR. The CIA operation began near the end of the 1980s with a network of CIA actors and their corrupted, bought-and-paid-for Soviet KGB generals. It was called the Yeltsin Era, and it lasted the entire decade of the 1990s until Yeltsin resigned on December 31, 1999. His resignation had been finally forced by a group of nationalist Russians led by a forty-seven-year-old former KGB officer who briefly headed the successor organization to the KGB known as the SVR, or Foreign Intelligence Service of the Russian Federation. The SVR man was Putin, by then Yeltsin’s Prime Minister.The destruction of the Soviet Union was one of the darkest criminal operations ever undertaken by the US government or, more precisely, by a dark, deep state network buried inside that Washington bureaucracy, sometimes referring to themselves as “the Vulcans,” often simply called neoconservatives. The key roles in the rape of Russia were played by US President George H.W. Bush and later by Bush’s close friend and protégé, William Jefferson “Bill” Clinton. The venom directed from Washington towards Putin personally since his reelection as president in 2012 and even beginning his revitalization of Russia after his ascendancy to the presidency on December 31, 1999, the day Yeltsin was forced to abdicate his imagined throne, would become clear. Slowly details emerged of what crimes Bush, Clinton, and their covert intelligence circles committed against Russia after 1989.— Bush’s CIA “Old Boys” —George H.W. BushGeorge H.W. Bush, former director of the CIA, ran the entire foreign and national security operations of President Ronald Reagan from the Office of the Vice President. Through Executive Order 12333, a national security directive drafted by then vice president Bush and signed by Reagan, Bush had made sure he was in charge of all Reagan-era US foreign and national security operations after 1981. [Editor Note: This of course presaged an almost identical scenario when his son George W Bush Jr ascended to power in 2001, and handed over on a silver platter foreign and national security policy to Dick Cheney and his mob.]People close to [Reagan-era] CIA Chief Bill Casey said that as President, Reagan had little interest in foreign policy. The true role of Bush in the Reagan years was well hidden, however. When Bush’s son George W. Bush Jr took office as President in 2001, one of his first acts was to sign Executive Order 13233, an extraordinary act that cited “national security” as grounds to conceal records of past presidents, especially his father’s activities during the 1990 and 1991 collapse of the Soviet Union and the communist Eastern Europe states. Consequently, those records are no longer accessible to the public. The truth can be gathered by evidence of participants in Russia, Eastern Europe, and in the USA, deep research, and congressional and other testimonies of those with direct knowledge. The picture of the destruction that resulted is staggering.George H.W. Bush ran things covertly through his “old boy” CIA networks, often using various private companies they had set up during the Bush’s illegal Iran–Contra operation of the mid-1980s. The Iran–Contra affair was an illegal, top-secret Bush–Colonel Oliver North scheme to sell US weapons to Iran in violation of an official US arms embargo to Iran, then to divert a part of the Iran arms profits to illegally finance the CIA-backed Contras of Nicaragua, who paid for the weapons with cocaine dollars, hence the name Iran–Contra Affair.All was done without required the US congressional approval, in violation of US law. When President Jimmy Carter forced the early retirement of 800 CIA agents, many of them loyal to former CIA Director Bush, they regrouped as a private intelligence and business network, a kind of covert “deep state,” informally calling itself “the Enterprise.” This network, active for Vice President George H.W. Bush in the Iran–Contra affair, was used by Bush, now as US president, to loot and deform all of communist Eastern Europe and, ultimately, Russia under their asset, Boris Yeltsin.The companies George H.W. Bush sanctioned under the code name “the Enterprise” were soon to be responsible for the CIA-financed coup that brought down Mikhail Gorbachev and the Soviet Union in 1991. But the machinery and organization of the Enterprise was also responsible for bribing or corrupting key KGB generals and creating what came to be called the “Russian oligarchs” to loot the crown jewels of the former Soviet State, now legally known as the Russian Federation. Their looting included the entire gold reserves of the Russian National Bank in the early 1990s. That loot was funneled into the vaults of handpicked CIA-controlled banks in Switzerland, o shore bank havens, and New York.— The CIA’s Yeltsin “Democracy” Coup —The rape of Russia—the Russian nation, the Russian state, the Russian people—which began at the end of the 1980s, was a coup d’état engineered by the American CIA’s rogue and not so rogue networks directed by former CIA Director, now President, George H.W. Bush. Western accounts of what took place inside the Russian Federation during the Yeltsin years of the 1990s speak of “Russian mafia” or “Russian organized crime.” Never do they mention or even hint that those Russians who plundered their own country were organized and paid, or made rich, by the West or, to be more precise, by the old boy CIA networks loyal to former CIA director and then US president George H.W. Bush.What took place in the 1990s under the Russian presidency of Boris Yeltsin was described by one knowledgeable US insider, Mortimer Zuckerman, himself an establishment member of the Council on Foreign Relations and owner of US News & World Report, as “the largest giveaway of a nation’s wealth in history.” The giveaway, or more precisely “theft,” was done through outright robbery, currency war, and a fraudulent loans-for-company stock shares program that was a precondition demanded by Washington to getting aid and loans from the World Bank and the IMF—aid and loans that “never touched ground in Russia,” as Zuckerman noted.Washington, covertly working with a circle of very select US and European banks, made it possible for the Yeltsin clan to loot the Russian Treasury of its gold reserves. They then offered desperately needed US money to a privatization scheme that created and installed a kleptocracy regime, and created a cabal of hyper-rich oligarchs under Yeltsin, referred to by some in the Russian media as the “Yeltsin Family,” as in the Mafia. Washington and US mainstream media cynically called it “bringing democracy and free market capitalism” to post-communist Russia.In 1989, soon after his election, US President George H.W. Bush initiated the operation to loot the Soviet Union. The National Endowment for Democracy (NED) and covert US government money to Poland’s Solidarność had severely weakened Moscow’s control over Poland during the decade of the 1980s and ignited anti-communist protest movements all over communist Eastern Europe.That Polish success—notably, that it was not suppressed by Soviet Red Army tanks as in 1956 in Hungary or during the Prague Spring of 1968—had given major encouragement to similar underground, anti-regime movements across Soviet-dominated Eastern Europe, from Hungary to Czechoslovakia to East Germany.In Afghanistan, after ten bloody years, Soviet Red Army troops finally gave up and left the country in 1989, humiliated in defeat from CIA-trained and armed Islamist Mujahedeen terrorists. In Dresden in East Germany–the German Democratic Republic as it was formally called–from the mid-1980s until the fall of the Berlin Wall in November 1989, a young KGB officer named Vladimir Putin was stationed, watching as the power of Moscow evaporated everywhere.Moscow itself was financially in dire straits, dramatically so ever since a US State Department–Saudi oil price collapse operation was deliberately launched by Washington in 1986. That oil price collapse hit at the heart of the Soviet primary hard currency sources: its oil export; [the oil price collapse also] severely hurt Soviet earnings of badly needed dollars for Western technology purchases, as well as for countering CIA operations in Nicaragua, Afghanistan, and Eastern Europe. The decade-long covert CIA campaign in Afghanistan, using fanatical Mujahedeen terrorists mostly recruited by a Saudi CIA asset named Osama bin Laden, had given the Soviet Union what President Carter’s national security director, Zbigniew Brzezinski, later called “Russia’s Vietnam.”Then in 1989, President George H.W. Bush gave the order to launch an all-out takeover and looting of the crown jewels of the largest and most strategic part of the USSR, the formerly communist Russian Federation. The dissolution of the Soviet Union itself rapidly followed the August 1991 Ukrainian declaration of independence from the USSR. State-owned oil and gas companies, key raw materials, such as nickel and aluminum, and high-tech Soviet military companies were the prime looting targets of select Western interests trading with insider connections.Now finally as president, George H.W. Bush decided to go for the kill against a severely weakened Russian Federation. Bush and a CIA network of Western bankers, US government officials, and the International Monetary Fund (IMF), together with a cabal of young Harvard University economists—they were dubbed the Harvard Boys—brought into Russia by George Soros in league with a corrupted network of KGB traitors, unleashed one of the greatest criminal looting operations in history.Confused Russian citizens, fed up with the years of Soviet control and lack of improvement in their daily lives from Mikhail Gorbachev’s Perestroika attempts at reforming the Soviet system, naively and with great hope turned to the West, most especially to Wall Street and Washington. In 1987, in a desperate attempt to calm growing social unrest over the deteriorating Soviet economy, Gorbachev permitted Soviet citizens to own dollars. It was a disaster of untold dimension. Overnight, a huge black market for dollars grew and the ruble became de facto worthless inside the Soviet Union. Russians, forbidden to travel to the West, were fed the illusion that everything in America was “bigger and better.” Secret, prohibited shortwave broadcasts from the US State Department’s Radio Free Europe/Radio Liberty out of Munich fed those illusions of an American capitalist paradise.The majority of Russians believed, for the most part, nothing could be worse than life under Soviet communism with the chronic shortages in the shops, endless queues, and lack of basic goods, let alone of luxury goods. They were soon to realize they were dreadfully wrong. It could be worse. The bottom fell out in the daily life for most Russians as Yeltsin’s clan and their Western collaborators proceeded to loot the country following the abolition of a communist state during the 1990s. Pensions went unpaid and medical insurance ended abruptly, as did daycare for working mothers and most state support.’Source: THE RAPE OF RUSSIA: The CIA’s Yeltsin Coup d’État.The U.S. has a long history of meddling in Russian electionsWhat many Russians, but few Americans, know is that 20 years before Russia tried to swing an American presidential election, America tried to swing a presidential election in Russia. The year was 1996. Boris Yeltsin was seeking a second term, and Bill Clinton desperately wanted to help. “I want this guy to win so bad,” he told Deputy Secretary of State Strobe Talbott, “it hurts.”Clinton liked Yeltsin personally. He considered him Russia’s best hope for embracing democracy and capitalism. And he appreciated Yeltsin’s acquiescence during nato’s march eastward, into the former Soviet bloc.Unfortunately for Clinton, ordinary Russians appreciated their leader far less. Yeltsin’s “shock-therapy” economic reforms had reduced the government’s safety net, and produced a spike in unemployment and inflation. Between 1990 and 1994, the average life expectancy among Russian men had dropped by an astonishing six years. When Yeltsin began his reelection campaign in January 1996, his approval rating stood at 6 percent, lower than Stalin’s.So the Clinton administration sprang into action. It lobbied the International Monetary Fund to give Russia a $10 billion loan, some of which Yeltsin distributed to woo voters. Upon arriving in a given city, he often announced, “My pockets are full.”Three American political consultants—including Richard Dresner, a veteran of Clinton’s campaigns in Arkansas—went to work on Yeltsin’s reelection bid. Every week, Dresner sent the White House the Yeltsin campaign’s internal polling. And before traveling to meet Yeltsin in April, Clinton asked Dresner what he should say in Moscow to boost his buddy’s campaign.It worked. In a stunning turnaround, Yeltsin—who had begun the campaign in last place—defeated his communist rival in the election’s final round by 13 percentage points. Talbott declared that “a number of international observers have judged this to be a free and fair election.” But Michael Meadowcroft, a Brit who led the election-observer team of the Organization for Security and Cooperation in Europe, later claimed there had been widespread voter fraud, which he had been pressured not to expose. In Chechnya, which international observers believe contained fewer than 500,000 adults, one million people voted, and Yeltsin—despite prosecuting a brutal war in the region—won exactly 70 percent. “They’d been bombed out of existence, and there they were all supposedly voting for Yeltsin,” exclaimed Meadowcroft. “It’s like what happens in Cameroon.” Thomas Graham, who served as the chief political analyst at the U.S. embassy in Moscow during the campaign, later concededthat Clinton officials knew the election wasn’t truly fair. “This was a classic case,” he admitted, “of the ends justifying the means.”Why does this history matter now? Because acknowledging it begs a question that few American pundits and politicians have answered yet: Is the problem with Russia’s behavior in 2016 that it violated principles of noninterference in other countries’ elections that America should respect as well? Or is the problem simply that America’s ox was gored?During the Cold War, America’s leaders saw nothing wrong with electoral interference, so long as the United States was conducting it. Dov Levin, a postdoctoral fellow at the Institute for Politics and Strategy at Carnegie Mellon University, has identified 62 American interventions in foreign elections between 1946 and 1989. The large majority—like Russia’s in 2016—were conducted in secret. And, overall, America’s favored candidates were no more committed to liberal democracy than their opponents; they simply appeared friendlier to American interests. In 1968, for instance, Lyndon Johnson’s administration—fearful that the people of Guyana would choose a socialist, Cheddi Jagan—helped Jagan’s main opponent, Forbes Burnham, win an election marked by massive voter fraud. Burnham soon turned Guyana into a dictatorship, which he ruled until his death in 1985.U.S. officials sometimes claimed that the left-leaning candidates America worked to defeat were more authoritarian than their right-leaning opponents. But as the Boston College political scientist Lindsey O’Rourke notes in her forthcoming book, Covert Regime Change: America’s Secret Cold War, “There is no objective truth to their claim that the leftist parties” the U.S. “targeted were ‘inherently antidemocratic.’ To the contrary, many of these groups had repeatedly committed themselves to working within a democratic framework, and, in some cases, U.S. policymakers even acknowledged this fact.” The University of Kansas’s Mariya Omelicheva, who has also researched America’s Cold War election meddling, told me she “cannot think of a case in which America’s democracy concerns superseded its national-security concerns.”But in recent decades, some experts contend, America’s behavior has changed. First, America’s interventions have grown more public. In 1983, Ronald Reagan created the National Endowment for Democracy (NED), which—by giving grants to “political parties, trade unions, free markets and business organizations, as well as the many elements of a vibrant civil society”—does openly what the CIA once did in secret. Second, the United States now focuses primarily on strengthening democratic processes and institutions, not backing particular candidates. “Unlike Russian electoral meddling,” argues Thomas Carothers of the Carnegie Endowment for International Peace, “U.S. democracy promotion does not … favor particular candidates, or undercut the technical integrity of elections. On the whole, it seeks to help citizens exercise their basic political and civil rights.”These principles, when followed, distinguish America’s recent behavior from Russia’s. There is a moral difference between open interventions and secret ones. If a government publicly urges another country’s citizens to elect a particular candidate, then those citizens can judge for themselves whether the intervening country has their best interests at heart. That’s why Russia’s attacks on Hillary Clinton via the English-language television station RT—which it openly funds—were less worrying than its clandestine social-media campaign, let alone its alleged hacking and disclosure of Democratic Party emails.It’s also legitimate for governments to fund organizations that promote free elections and human rights. The United States isn’t alone in doing that; many European governments do, too. In theory, foreign governments should be able to do the same in the U.S. Imagine if Russia gave money to the NAACP to combat voter ID laws that suppress the African American vote. Sean Hannity would howl. But unless the U.S. government was prepared to shut down NED, it would have little basis upon which to object.If Americans believe in these principles, however—if they want to draw a distinction between America’s behavior and Russia’s—then they must defend them not just against Vladimir Putin, but against their own government. Carothers may be right that since the Cold War, America’s electoral interventions have become more transparent and less focused on engineering a particular outcome. But America’s Cold War habits haven’t entirely disappeared. Clinton has admitted that in 1996, the same year he tried to elect Yeltsin, he also “tried to help Shimon Peres to win the election” against Benjamin Netanyahu in Israel. In 2002, a key NED grantee—the International Republican Institute—helped conservative opposition groups in Haiti work to oust left-leaning president Jean-Bertrand Aristide. In his memoir, the former Defense Secretary Robert Gates accuses Richard Holbrooke, the Obama administration’s special representative for Afghanistan and Pakistan, of “doing his best to bring about the defeat of [Hamid] Karzai” in the Afghan elections of 2009.If such interventions grew rarer after 1989, it’s largely because global circumstances changed. Once the Cold War ended, American leaders simply didn’t care as much about the outcome of foreign elections. Even if countries elected anti-American candidates, those candidates could no longer link up with a rival superpower. It was this “change in U.S. interests,” notes Carothers, which helped prompt “an evolution of norms in many parts of the U.S. policy establishment about the acceptability” of Cold War–style meddling.But great-power competition is now back. European elections now shift the power balance between America and Russia in a way they haven’t since the 1980s. In countries like the Philippines, they also shift the power balance between America and China. This could easily erode the fragile norm against secret interference on behalf of particular candidates that has emerged in the United States since the Cold War. Imagine an election in Italy or France between a pro-Russian political party and a pro-American one. I suspect that some of the hawks who are most upset about Russia’s interference in recent American and European elections would support American interference to meet fire with fire. Trump himself may have little interest in meddling to defeat a pro-Russian party, since he seems to consider American and Russian interests closely aligned. But it’s not hard to imagine him embracing Cold War–style political subversion in U.S. adversaries like Venezuela or Iran. Before becoming national-security adviser, John Bolton declared, “We once had a capacity for clandestine efforts to overthrow governments. I wish we could get those back.”Washington’s current burst of nationalist indignation, like the one that followed 9/11, is both vital and dangerous if not tempered by an awareness of America’s own capacity for misdeeds. When liberals start calling people “traitors” for acknowledging that capacity, they’ve gone badly astray.Source: The U.S. Needs to Face Up to Its Long History of Election MeddlingThe U.S. and Western financiers helped plunder Russia and give rise to the oligarchsAfter seven years of economic “reform” financed by billions of dollars in U.S. and other Western aid, subsidized loans and rescheduled debt, the majority of Russian people find themselves worse off economically. The privatization drive that was supposed to reap the fruits of the free market instead helped to create a system of tycoon capitalism run for the benefit of a corrupt political oligarchy that has appropriated hundreds of millions of dollars of Western aid and plundered Russia’s wealth.The architect of privatization was former First Deputy Prime Minister Anatoly Chubais, a darling of the U.S. and Western financial establishments. Chubais’s drastic and corrupt stewardship made him extremely unpopular. According to The New York Times, he “may be the most despised man in Russia.”Essential to the implementation of Chubais’s policies was the enthusiastic support of the Clinton Administration and its key representative for economic assistance in Moscow, the Harvard Institute for International Development. Using the prestige of Harvard’s name and connections in the Administration, H.I.I.D. officials acquired virtual carte blanche over the U.S. economic aid program to Russia, with minimal oversight by the government agencies involved. With this access and their close alliance with Chubais and his circle, they allegedly profited on the side. Yet few Americans are aware of H.I.I.D.’s role in Russian privatization, and its suspected misuse of taxpayers’ funds.At the recent U.S.-Russian Investment Symposium at Harvard’s John F. Kennedy School of Government, Yuri Luzhkov, the Mayor of Moscow, made what might have seemed to many an impolite reference to his hosts. After castigating Chubais and his monetarist policies, Luzhkov, according to a report of the event, “singled out Harvard for the harm inflicted on the Russian economy by its advisers, who encouraged Chubais’s misguided approach to privatization and monetarism.” Luzhkov was referring to H.I.I.D. Chubais, who was delegated vast powers over the economy by Boris Yeltsin, was ousted in Yeltsin’s March purge, but in May he was given an immensely lucrative post as head of Unified Energy System, the country’s electricity monopoly. Some of the main actors with Harvard’s Russia project have yet to face a reckoning, but this may change if a current investigation by the U.S. government results in prosecutions.The activities of H.I.I.D. in Russia provide some cautionary lessons on abuse of trust by supposedly disinterested foreign advisers, on U.S. arrogance and on the entire policy of support for a single Russian group of so-called reformers. The H.I.I.D. story is a familiar one in the ongoing saga of U.S. foreign policy disasters created by those said to be our “best and brightest.”Through the late summer and fall of 1991, as the Soviet state fell apart, Harvard Professor Jeffrey Sachs and other Western economists participated in meetings at a dacha outside Moscow where young, pro-Yeltsin reformers planned Russia’s economic and political future. Sachs teamed up with Yegor Gaidar, Yeltsin’s first architect of economic reform, to promote a plan of “shock therapy” to swiftly eliminate most of the price controls and subsidies that had underpinned life for Soviet citizens for decades. Shock therapy produced more shock–not least, hyperinflation that hit 2,500 percent–than therapy. One result was the evaporation of much potential investment capital: the substantial savings of Russians. By November 1992, Gaidar was under attack for his failed policies and was soon pushed aside. When Gaidar came under seige, Sachs wrote a memo to one of Gaidar’s principal opponents, Ruslan Khasbulatov, Speaker of the Supreme Soviet, then the Russian parliament, offering advice and to help arrange Western aid and contacts in the U.S. Congress.Enter Anatoly Chubais, a smooth, 42-year-old English-speaking would-be capitalist who became Yeltsin’s economic czar. Chubais, committed to “radical reform,” vowed to construct a market economy and sweep away the vestiges of Communism. The U.S. Agency for International Development (U.S.A.I.D.), without experience in the former Soviet Union, was readily persuaded to hand over the responsibility for reshaping the Russian economy to H.I.I.D., which was founded in 1974 to assist countries with social and economic reform.H.I.I.D. had supporters high in the Administration. One was Lawrence Summers, himself a former Harvard economics professor, whom Clinton named Under Secretary of the Treasury for International Affairs in 1993. Summers, now Deputy Treasury Secretary, had longstanding ties to the principals of Harvard’s project in Russia and its later project in Ukraine.Summers hired a Harvard Ph.D., David Lipton (who had been vice president of Jeffrey D. Sachs and Associates, a consulting firm), to be Deputy Assistant Treasury Secretary for Eastern Europe and the Former Soviet Union. After Summers was promoted to Deputy Secretary, Lipton moved into Summers’s old job, assuming “broad responsibility” for all aspects of international economic policy development. Lipton co-wrote numerous papers with Sachs and served with him on consulting missions in Poland and Russia. “Jeff and David always came [to Russia] together,” said a Russian representative at the International Monetary Fund. “They were like an inseparable couple.” Sachs, who was named director of H.I.I.D. in 1995, lobbied for and received U.S.A.I.D. grants for the institute to work in Ukraine in 1996 and 1997.Andrei Shleifer, a Russian-born émigré and already a tenured professor of economics at Harvard in his early 30s, became director of H.I.I.D.’s Russia project. Shleifer was also a protégé of Summers, with whom he received at least one foundation grant. Summers wrote a promotional blurb for Privatizing Russia (a 1995 book co-written by Shleifer and subsidized by H.I.I.D.) declaring that “the authors did remarkable things in Russia, and now they have written a remarkable book.”Another Harvard player was a former World Bank consultant named Jonathan Hay, a Rhodes scholar who had attended Moscow’s Pushkin Institute for Russian Language. In 1991, while still at Harvard Law School, he had become a senior legal adviser to the G.K.I., the Russian state’s new privatization committee; the following year he was made H.I.I.D.’s general director in Moscow. The youthful Hay assumed vast powers over contractors, policies and program specifics; he not only controlled access to the Chubais circle but served as its mouthpiece.H.I.I.D.’s first awards from U.S.A.I.D. for work in Russia came in 1992, during the Bush Administration. Over the next four years, with the endorsement of the Clinton Administration, the institute would be awarded $57.7 million–all but $17.4 million without competitive bidding. For example, in June 1994 Administration officials signed a waiver that enabled H.I.I.D. to receive $20 million for its Russian legal reform program. Approving such a large sum as a noncompetitive “amendment” to a much smaller award (the institute’s original 1992 award was $2.1 million) was highly unusual, as was the citation of “foreign policy” considerations as the reason for the waiver. Nonetheless, the waiver was endorsed by five U.S. government agencies, including the Treasury Department and the National Security Council, two of the leading agencies formulating U.S. aid policy toward Russia. In addition to the millions it received directly, H.I.I.D. helped steer and coordinate some $300 million in U.S.A.I.D. grants to other contractors, such as the Big Six accounting firms and the giant Burson-Marsteller P.R. firm.A s Yeltsin’s Russian government took over Soviet assets in late 1991 and early 1992, several privatization schemes were floated. The one the Supreme Soviet passed in 1992 was structured to prevent corruption, but the program Chubais eventually carried out instead encouraged the accumulation of property in a few hands and opened the door to widespread corruption. It was so controversial that Chubais ultimately had to rely largely on Yeltsin’s presidential decrees, not parliamentary approval, for implementation. Many U.S. officials embraced this dictatorial modus operandi, and Jonathan Hay and his associates drafted many of the decrees. As U.S.A.I.D.’s Walter Coles, an early supporter of Chubais’s privatization program, put it, “If we needed a decree, Chubais didn’t have to go through the bureaucracy.”With help from his H.I.I.D. advisers and other Westerners, Chubais and his cronies set up a network of aid-funded “private” organizations that enabled them to bypass legitimate government agencies and circumvent the new parliament of the Russian Federation, the Duma. Through this network, two of Chubais’s associates, Maxim Boycko (who co-wrote Privatizing Russiawith Shleifer) and Dmitry Vasiliev, oversaw almost a third of a billion dollars in aid money and millions more in loans from international financial institutions.Much of this largesse flowed through the Moscow-based Russian Privatization Center (R.P.C.). Founded in 1992 under the direction of Chubais, who was chairman of its board even while head of the G.K.I., and Boycko, who was C.E.O. for most of its existence, the R.P.C. was legally a private, nonprofit, nongovernmental organization. In fact, it was established by another Yeltsin decree and helped carry out government policy on inflation and other macroeconomic issues and also negotiated loans with international financial institutions. H.I.I.D. was a founder of the R.P.C., and Andrei Shleifer served on the board of directors. Its other members were recruited by Chubais, according to Ira Lieberman, a senior manager in the private-sector development department of the World Bank who helped design the R.P.C. With H.I.I.D.’s help, the R.P.C. received some $45 million from U.S.A.I.D. and millions from the European Union, individual European governments, Japan and other countries, as well as loans from the World Bank ($59 million) and the European Bank for Reconstruction and Development ($43 million), which must be repaid by the Russian people. One result of this funding was the enrichment, political and financial, of Chubais and his allies.H.I.I.D. helped create several more aid-funded institutions. One was the Federal Commission on Securities, a rough equivalent of the U.S. Securities and Exchange Commission (S.E.C.). It too was established by presidential decree, and it was run by Chubais protégé Dmitry Vasiliev. The commission had very limited enforcement powers and funding, but U.S.A.I.D. supplied the cash through two Harvard-created institutions run by Hay, Vasiliev and other members of the Harvard-Chubais coterie.One of these was the Institute for Law-Based Economy, funded by both the World Bank and U.S.A.I.D. This institute, set up to help develop a legal and regulatory framework for markets, evolved to encompass drafting decrees for the Russian government; it got nearly $20 million from U.S.A.I.D. Last August, the Russian directors of I.L.B.E. were caught removing $500,000 worth of U.S. office equipment from the organization’s Moscow office; the equipment was returned only after weeks of U.S. pressure. When auditors from U.S.A.I.D.’s inspector general’s office sought records and documents regarding I.L.B.E. operations, the organization refused to turn them over.The device of setting up private organizations backed by the power of the Yeltsin government and maintaining close ties to H.I.I.D. was a way of insuring deniability. Shleifer, Hay and other Harvard principals, all U.S. citizens, were “Russian” when convenient. Hay, for example, served alternately and sometimes simultaneously as aid contractor, manager of other contractors and representative of the Russian government. If Western donors were attacked for funding controversial privatization practices of the state, the donors could claim they were funding “private” organizations, even if these organizations were controlled or strongly influenced by key state officials. If the Chubais circle came under fire for misuse of funds, they could claim that Americans made the decisions. Foreign donors could insist that the Russians acted on their own.Against the backdrop of Russia’s Klondike capitalism, which they were helping create and Chubais and his team were supposedly regulating, the H.I.I.D. advisers exploited their intimate ties with Chubais and the government and were allegedly able to conduct business activities for their own enrichment. According to sources close to the U.S. government’s investigation, Hay used his influence, as well as U.S.A.I.D.-financed resources, to help his girlfriend, Elizabeth Hebert, set up a mutual fund, Pallada Asset Management, in Russia. Pallada became the first mutual fund to be licensed by Vasiliev’s Federal Commission on Securities. Vasiliev approved Pallada ahead of Credit Suisse First Boston and Pioneer First Voucher, much larger and more established financial institutions.After Pallada was set up, Hebert, Hay, Shleifer and Vasiliev looked for ways to continue their activities as aid funds dwindled. Using I.L.B.E. resources and funding, they established a private consulting firm with taxpayer money. One of the firm’s first clients was Shleifer’s wife, Nancy Zimmerman, who operated a Boston-based hedge fund that traded heavily in Russian bonds. According to Russian registration documents, Zimmerman’s company set up a Russian firm with Sergei Shishkin, the I.L.B.E. chief, as general director. Corporate documents on file in Moscow showed that the address and phone number of the company and the I.L.B.E. were the same.Then there is the First Russian Specialized Depository, which holds the records and assets of mutual fund investors. This institution, funded by a World Bank loan, also worked to the benefit of Hay, Vasiliev, Hebert and another associate, Julia Zagachin. According to sources close to the U.S. government’s investigation, Zagachin, an American married to a Russian, was selected to run the depository even though she lacked the required capital. Ostensibly, there was to be total separation between the depository and any mutual fund using its services. But the selection of Zagachin defied this tenet of open markets: Pallada and the depository were run by people with ties to each other through H.I.I.D. Thus the very people who were supposed to be the trustees of the system not only undercut the aid program’s stated goal of building independent institutions but replicated the Soviet practice of skimming assets to benefit the nomenklatura.Anne Williamson, a journalist who specializes in Soviet and Russian affairs, details these and other conflicts of interest between H.I.I.D.’s advisers and their supposed clients–the Russian people–in her forthcoming book, How America Built the New Russian Oligarchy. For example, in 1995, in Chubais-organized insider auctions of prime national properties, known as loans-for-shares, the Harvard Management Company (H.M.C.), which invests the university’s endowment, and billionaire speculator George Soros were the only foreign entities allowed to participate. H.M.C. and Soros became significant shareholders in Novolipetsk, Russia’s second-largest steel mill, and Sidanko Oil, whose reserves exceed those of Mobil. H.M.C. and Soros also invested in Russia’s high-yielding, I.M.F.-subsidized domestic bond market.Even more dubious, according to Williamson, was Soros’s July 1997 purchase of 24 percent of Sviazinvest, the telecommunications giant, in partnership with Uneximbank’s Vladimir Potanin. It was later learned that shortly before this purchase Soros had tided over Yeltsin’s government with a backdoor loan of hundreds of millions of dollars while the government was awaiting proceeds of a Eurobond issue; the loan now appears to have been used by Uneximbank to purchase Norilsk Nickel in August 1997. According to Williamson, the U.S. assistance program in Russia was rife with such conflicts of interest involving H.I.I.D. advisers and their U.S.A.I.D.-funded Chubais allies, H.M.C. managers, favored Russian bankers, Soros and insider expatriates working in Russia’s nascent markets.Despite exposure of this corruption in the Russian media (and, far more hesitantly, in the U.S. media), the H.I.I.D.-Chubais clique remained until recently the major instrument of U.S. economic aid policy to Russia. It even used the high-level Gore-Chernomyrdin Commission, which helped orchestrate the cooperation of U.S.-Russian oil deals and the Mir space station. The commission’s now-defunct Capital Markets Forum was chaired on the Russian side by Chubais and Vasiliev, and on the U.S. side by S.E.C. chairman Arthur Levitt Jr. and Treasury Secretary Robert Rubin. Andrei Shleifer was named special coordinator to all four of the Capital Markets Forum’s working subgroups. Hebert, Hay’s girlfriend, served on two of the subgroups, as did the C.E.O.s of Salomon Brothers, Merrill Lynch and other powerful Wall Street investment houses. When The Nation contacted the S.E.C. for information about Capital Markets, we were told to call Shleifer for comment. Shleifer, who is under investigation by U.S.A.I.D.’s inspector general for misuse of funds, declined to be interviewed for this article. A U.S. Treasury spokesman said Shleifer and Hebert were appointed to Capital Markets by the Chubais group–specifically, according to other sources, by Dmitry Vasiliev.In fact, H.I.I.D. projects were never adequately monitored by U.S.A.I.D. In 1996, a General Accounting Office report described U.S.A.I.D.’s management and oversight of H.I.I.D. as “lax.” In early 1997, U.S.A.I.D.’s inspector general received incriminating documents about H.I.I.D.’s activities in Russia and began investigating. In May Shleifer and Hay lost their projects when the agency canceled most of the $14 million still earmarked for H.I.I.D., citing evidence that the two managers were engaged in activities for “private gain.” The men had allegedly used their positions to profit from investments in the Russian securities markets and other private enterprises. According to sources close to the U.S. investigation, while advising the Russian government on capital markets, for example, Hay and his father allegedly used inside information to invest in Russian government bonds. Hay and Shleifer may ultimately face criminal and/or civil prosecution. Shleifer remains a tenured professor at Harvard, and Hay continues to work with members of the Chubais clique in Russia. Sachs, who has stated he never invests in countries where he advises and who is not implicated in the current U.S. government investigation, remains head of H.I.I.D. After Yeltsin’s Cabinet shakeup in March, Chubais was moved to a new position of prominence. His role in Russia’s political-economic affairs had been tarnished by reports of personal enrichment. Two examples:§ In February 1996, Chubais’s Foundation for the Protection of Private Property received a five-year, $2.9 million unsecured interest-free loan. According to the pro-Yeltsin, pro-reform Izvestia, Stolichny Bank, an institution that enjoys lines of credit from the European Bank for Reconstruction and Development and the World Bank, made the loan in return for a small percentage of the Sibneft oil company when it was sold at auction, and for later control of one of the state’s largest banks. Chubais defended himself by saying such practices were common in the West, but failed to provide any reasonable explanation for some $300,000 in 1996 income not accounted for by his government salary.§ During Yeltsin’s 1996 presidential campaign, security officials apprehended two close associates of Chubais as they were walking out of a main government building with a box containing more than $500,000 in cash for Yeltsin’s campaign. According to tapes of a later meeting recorded by a member of one of Russia’s security services, Chubais and his cronies strategized about burying evidence of any illegal transaction, while publicly claiming that any allegations of chicanery were the work of political enemies. A protracted, lackadaisical investigation began but was eventually dropped–more evidence of Chubais’s remarkable resilience. He remained valuable to Yeltsin largely because of his perceived ability to deal with the West, where many still regard him as a symbol of Russian reform.During the five years that the Chubais clique presided over Western economic aid and policy in Russia, they did enormous harm. By unconditionally backing Chubais and his associates, the Harvard operatives, their U.S. government patrons and Western donors may have reinforced the new post-Soviet oligarchical system. Shleifer acknowledged as much in Privatizing Russia, the book he wrote with Chubais crony Maxim Boycko, who with his patron would later be caught in another financial indiscretion involving taking a “veiled bribe” in the form of advances on a book on the history of Russian privatization. “Aid can change the political equilibrium,” they said, “by explicitly helping free-market reformers to defeat their opponents.”Richard Morningstar, U.S. aid coordinator for the former Soviet Union, stands by this approach: “If we hadn’t been there to provide funding to Chubais, could we have won the battle to carry out privatization? Probably not. When you’re talking about a few hundred million dollars, you’re not going to change the country, but you can provide targeted assistance to help Chubais.” In early 1996, after he was temporarily removed from high office by Yeltsin because he represented unpopular economic policies, H.I.I.D. came to his rescue by placing him on its U.S.A.I.D.-funded payroll, a show of loyalty that former U.S.A.I.D. assistant administrator Thomas Dine says he supported. Western policy-makers like Morningstar and Dine have depicted Chubais as a selfless visionary battling reactionary forces. In the spring of 1997, Summers called him and his associates a “dream team.” With few exceptions, the U.S. mainstream media have promulgated this view.United States policy toward Russia requires a full-scale Congressional investigation. The General Accounting Office did investigate H.I.I.D.’s Russian and Ukrainian projects in 1996, but the findings were largely suppressed by the agency’s timid management. The audit team concluded, for example, that the U.S. government exercised “favoritism” toward Harvard, but this conclusion and the supporting documentation were removed from the final report. Last fall Congress asked the G.A.O. to look into Eastern European aid programs and Shleifer’s role in the Gore-Chernomyrdin Commission. Such questions need to be answered, but any serious inquiry must go beyond individual corruption and examine how U.S. policy, using tens of millions in taxpayer dollars, helped deform democracy and economic reform in Russia and helped create a fat-cat oligarchy run amok.Source: The Harvard Boys Do RussiaWill Russia ever recover? What would Stalin say about what happened?