Mikhail Sergeyevich Gorbachev is dead, and the eulogies are flowing thick and fast, but mainly from those outside Russia. He may well have the record for the most praise for someone who made the worst botch-up of the job he was appointed to do. He is praised in the West for dismantling the Soviet Union, but that was the last thing he was trying to do. He believed that liberalizing the economy would improve the lot of Russians. After he was deposed and the USSR fell, the GDP of Russia almost halved, and only too much that was left fled the country in the hands of a few oligarchs. You see comments by Bill Browder on how bad Putin is, but he made a billion dollars from the ignorance of the ordinary Russian and according to Russia, he never paid a cent in tax to Russia. Quite simply, Gorbachev gave the country that hated Russia (the US) what it wanted and completely failed Russia. He had a dream, but he never checked to see whether it was realistic, and he never had a workable plan to implement it.
Gorbachev’s early important jobs related to agriculture. The Soviet Union should have been a major food exporter, but in the 1970s, in part because of poor weather, it had to import grain. Gorbachev was supposed to do something about this, and his response was to blame central decision-making. That may well have been a factor, but it was not the required answer. I visited the USSR in the early 1980s, and in a drive through the countryside of Uzbekistan the problem was easy to see. There were huge areas of the steppe that had been ploughed, and then, nothing. Not even harrowed to at least make it look as if something was being done. But in small “oases” there was extremely intense productivity. Those in the collective were given very small areas of land for themselves to use, and basically they concentrated on that. This was where almost all the local food came from, a tiny percentage of the total land. Now, if I could see this in a short visit which was really more as a tourist (I was getting over jet lag and enjoying a weekend before heading to Moscow for what I went there for) surely Gorbachev could have found this out if he wanted to.
Part of my life has been devoted as a consultant to fixing problems, and my first rule of fixing a problem has always been, first examine the problem in intense detail and understand it. To examine it, you actually have to go and look at it yourself. Reading a report is no good unless there is a recommendation to fix it, because if whoever wrote the report does not know how to fix it, perforce (s)he does not understand it. This is probably a major failing of leaders everywhere, but it was much worse in the USSR. If the leader cannot take the time off to look at it, he should delegate to someone who can. At this time fixing agriculture was Gorbachev’s main job; he was the delegated man, and at this point he failed. The USSR kept importing food, which also was a drain on foreign currency. One could argue that the system prevented success, but Gorbachev had Yuri Andropov as a friend, and if he could persuade Andropov, almost certainly what he recommended would be done. The simple answer is the farmers had to have an incentive to increase the communal yield. That introduces the most significant problem in economics: how to properly reward people. Something needed to be tried, such as giving small groups of farmers (since they had to maintain some part of communism) the right to take shares of the yield from a block of the commune land.
When Gorbachev became effectively the leader of the USSR, he had learned nothing from his agrarian program, and while he recognized industry needed a better output and productivity, he still relied on central planning, while ignoring implementation. A plan that might work is only of use if there is a working procedure to make it work. For his plans to work, first he had to remove the many layers of bureaucrats between the major decision and implementation. His first move was to remove the “old guard”. This was a clear mistake as a first move. They knew someone younger was needed, which was why they put him there. Many should have been potential allies. His replacements included people like Yeltsin, who ended up doing everything he could to subvert Gorbachev. Gorbachev was not a good judge of character, and completely failed the next step: if you want to run a central system the top priority is to find someone who gets things done. They are seldom people who play the political game making fine speeches praising Lenin. Gorbachev tried to introduce some sort of limited private enterprise and market economics, but because of the layer of incompetents under him and his demand that central planning be retained, that did not work.
The next major blunder was “glasnost”; giving the people the right to complain. There was too much to complain about. Freedom to criticize is all very well, but if the criticisms are going to be well-grounded and nobody is fixing them, the society fragments. Gorbachev apparently thought that if the people knew about all the problems they would rally behind his efforts to fix them. That was ridiculous. The noisiest dissidents are the least constructive. He needed fixers in place before allowing people to shout out what needed fixing. After all, a lot was obvious. Again, I recall going into a building in the old USSR that was supposed to be where you bought things. The shelves were empty. Fixing food production and providing a range of consumable goods should have been the first priority. If everyone had more to purchase, and higher incomes from the increased productivity, now open criticism would be harmless.
Gorbachev made an impression on Western leaders. The nuclear disarmament treaty was an achievement, but when it came to the reunification of Germany and the USSR giving the Warsaw Pact countries their independence from Moscow control, Gorbachev badly needed to ensure that NATO did not march East. Given that he was offering a lot, he needed a signed treaty ensuring the “neutral zone”. He could have obtained that from the Eastern countries, although he probably also needed the US to agree, but for some reason he made no effort at all, which eventually brings us to the current Ukraine conflict. He was to permit some of the republics to leave the USSR, but he made no effort to settle the legal conditions of doing so, which later led to the Georgian and now Ukrainian problems. The USSR owned all the factories, etc, in the breakaway republics, but these ended up in the hands of a very few oligarchs. Gorbachev had great ideas, but was seemingly uninterested in the details of achieving them, or of ensuring decisions were not undermined by others. The end result was the rule of Yeltsin, and the impoverishment of a very large fraction of the population, the transfer of virtually all of Russia’s industrial and resource assets into the hands of a few oligarchs, the almost halving of the nation’s GDP, and all this really followed from Gorbachev’s inept governance. Gorbachev seemed to think people would rally behind to get the best outcome. That is delusional. They follow incentives or they fly off in different directions. He failed to provide incentives or control where things went. He achieved nothing of substance for those who depended on him. He is popular with those who took advantage of him.