فصل 21

CHAPTER 21

THE OCTOBER REVOLUTION

As the Party was collapsing, I got to know one of its last high priests. Vyacheslav Shostokovsky, an ally of both Yakovlev and Yeltsin, ran the Moscow Higher Party School, the ultimate training ground for young Leninists. In a matter of months, he undid the work of a thousand ideologues, firing faculty, bringing in new, younger teachers, revising the curriculum to include every possible idea and thinker. Suddenly, the students were reading Mill and Locke along with Marx and Lenin. Much of what they read of Soviet history came from foreign and underground editions; there was no time to wait for the Party publishing houses to catch up with the world. It was a desperate mission. Either Shostokovsky would revive the Party with a new crop of young social democrats, he told me one afternoon, “or we die.” “We’re moving toward a multiparty democracy, to a political marketplace, and the Communist Party is just not ready for that,” he said. “I’m afraid even Gorbachev himself is not ready for this marketplace.” After my meeting with the dean, I headed for the exit. On my way out, I noticed a handwritten sign advertising a showing of “an American movie tonight in Lenin Hall.” No title given, but I went anyway. Lenin Hall was packed. The lights dimmed and the familiar faces of Michael Douglas and Charlie Sheen flickered on the screen: the Communist Party Higher Party School presents Wall Street.

If I hadn’t known then that Communist ideology was dead, I knew it by the final credits. The young acolytes, presumably the next generation of Leninist priests, reacted to this morality play of American finance in a way that would have made poor Oliver Stone weep. They did not see it as a warning about the perils of greed, not a propaganda cartoon meant to steer the best and the brightest toward a life of goodness and social work. Not at all. They audibly lusted after the goods on display: the stretch limo (with bar and TV), the sushi-making machine, the steak tartare at “21,” the fabulous cuffs on Michael Douglas’s Turnbull & Asser shirts. God, they loved those shirts. When Charlie Sheen, the young stud stockbroker, first checked out his new East Side apartment, with the wraparound windows and the view to die for, you could hear the sighing of the young Leninists.

“Models are out. Dogma is out,” Shostokovsky had told me. “Now we can only speak about goals.” Precisely. It was pretty clear what the goals were here. The climax of the film came when Douglas, doing his best Ivan Boesky imitation, delivered the killer line: “Zhdanost—eto khorosho!” (“Greed is good!”) The Communists went wild. There were whoops of approval. Unironic whoops.

As we were all leaving Lenin Hall, the student next to me, Muen Tan Kong, an exchange scholar from Vietnam, said, “All I can tell you at this point is that Communism is the contradiction of capitalism—I think,” he said. “And the Party is the vanguard. We’re studying that now. It’s all very confusing. But the movie was good, wasn’t it?” Local elections were scheduled for early March 1990, and they held out the promise of a new vanguard of mayors and ward heelers. Such a sudden test of a multiparty system still in swaddling clothes seemed unfair. The Communists had the resources, the money, and, when all else failed, the KGB to keep them afloat. Most of the new parties consisted of a few dozen people in a rented auditorium making terrifically dull speeches. Sometimes there were sandwiches.

But the democrats were confident of victory. In those first weeks after the collapse of the one-party system, one young politician, Moscow’s Ilya Zaslavsky, made a startling campaign promise. He told the voters of the October Region that if he was elected to the local council and made its chairman, he would do nothing less than reverse seven decades of economic disaster. “We will build capitalism in one district,” he declared. The reference was clear. Zaslavsky would counter Stalin’s greatest ambition to build “socialism in one country.” It was quite a campaign promise. All anyone could do was wish him the best of luck. The same Communist Party apparatchiks I had visited not long after moving in two years before were still running the October Region with singular incompetence. Like everyone else in the neighborhood, I was appalled at the decay: the heaps of uncollected garbage, the empty shops and decrepit buildings, the abandoned construction sites. The district looked like a slum. In this way it looked like almost everywhere else in the country. Now Zaslavsky was proposing as a remedy the very sort of free enterprise that Lenin had long ago declared “parasitism … a thing of the past.” The leaders of the democratic opposition—Zaslavsky included—had all but given up on the national parliament as anything more than a televised debating forum. They knew well that the majority of deputies were at best obedient to Gorbachev and at worst potential followers of a harder line. After that initial burst of drama and glasnost during the first session, the radicals despaired that the Congress did not have the means to push the program of economic or political changes faster or further. And so now the leading reformers of Russia had shifted their focus from national to local politics. Democratic Russia—an alliance of everyone from Memorial to the latest social democratic party—hoped to fill the city halls and regional soviets, or councils, with their people. Popular-front groups in the Baltics, Central Asia, and the Transcaucasus hoped to do the same. Just as Yeltsin wanted to win a seat in the Russian parliament and turn that institution into a power base, Zaslavsky wanted to do the same “at the sidewalk level.” As a Democratic Russia organizer, Zaslavsky advised candidates not only for the October Region, but for the entire city. In a country that had little experience of elections and none at all of the gimmickry of the West, Zaslavsky hired pollsters, ran seminars on campaign techniques, and even found psychologists to help draw up effective campaign literature. He called on well-known writers, who used their own connections to get leaflets printed when the main Party printing plants refused.

Disabled, a little snide and condescending, Zaslavsky was not a natural politician. His teachers, his bosses at the textile plant where he worked, even his parents could not comprehend his becoming a politician—much less one of the most famous new names in Russia. He was just thirty years old. But the voters never forgot it when he insisted on calling for a day of national mourning when Sakharov died; and they never forgot that when Gorbachev told him to sit, he did not. Now all the reform candidates for the Moscow city council or the regional councils wanted his endorsement and his organizing talent.

Zaslavsky won his race in the October Region easily. The local council was filled with Democratic Russia candidates, who quickly made Zaslavsky the regional chairman. His personal victory was one among hundreds for Democratic Russia and other reformist groups throughout the union. Many people had, as they put it, “voted a straight democratic line.” Yeltsin was elected to the Russian parliament, and it was obvious that he would try to become its chairman. Gavriil Popov, the economist, went to city hall and became the mayor of Moscow. Anatoly Sobchak, the law professor who became a star of the Congress, was now mayor of Leningrad. Once more, there was a brief wave of euphoria in the most politically active pockets of the Soviet Union, a sense of possibility and confidence. When I went to see Sobchak in Leningrad, he had commandeered an enormous office in the Mariinsky Palace. And yet I could not get past the fact that he still kept an enormous painting of Lenin hanging behind him.

As I was leaving the office, I whispered to an aide, “What’s the painting doing there?” He laughed. “Pay it no mind,” he said. “We tried to take it down, but we found a huge stain on the wallpaper. We don’t have the money for new wallpaper.” In his first months in office, Zaslavsky came to an even deeper understanding of the Communist Party’s legacy. The Party, which had complete control over every store and factory, every police station and fire brigade, had let the October Region fall into a state of economic decay—a typical situation throughout the Soviet Union. Food supplies were erratic; there were days when even the bread shops were empty. The housing shortage was pitiful. Many people lived in studios the size of walk-in closets or in communal apartments with fifteen or twenty people to a bathroom. By reading district documents, Zaslavsky also discovered that the huge showpiece statue of Lenin on October Square had cost 23 million rubles—7 million of which had come from the local budget. In the meantime, garbage lay rotting for days on the streets, uncollected; doctors at the local state hospitals were paid half as much as bus drivers.

One night a week, Zaslavsky sat in a dismal office near October Square listening to residents’ complaints. Widows, pensioners, drunks, and young parents would sit on narrow benches in the hall and wait their turn. To sit next to Zaslavsky from six until long past midnight was to hear a catalog of the failings of “socialism in one separate country”: “Ilya Iosifevich, my husband and I are divorced, but we still have to share the same one-room flat. We’ve been in line for a new apartment since 1978.…” “Ilya Iosifevich, my mother died this week, but they say the only way they will bury her is if I pay bribes to the cemetery manager. I have no bribe money.…” “Ilya Iosifevich, my son has leukemia, but the doctors say they can do nothing. They say the only place he can get treatment is in the West. We have no visa and no money.…” Zaslavsky slumped in his chair, not so much from the specific complaints—everyone knew the problems—but from the sheer number of them, the weight of his responsibility. The self-confidence was slowly draining out of him. He was powerless and sad. After he began his comeback in the Congress of People’s Deputies, Yeltsin had also allowed me once to sit in on his office hours, and while the complaints were similar, he was often able to do something. The apparatchiks may have despised Yeltsin, but they had to listen to him. He was still a former Politburo member and a member of the Central Committee. Yeltsin could make a quick phone call and get his constituent just about anything: an apartment, a wheelchair, a visa to see a daughter in Warsaw. But that was mainly because of his immense authority and connections as a former member of the Kremlin leadership. Zaslavsky could only leaf through the growing stacks of papers and complaints his constituents brought him. He would look into the problems, he told them all, he would do what he could. He wrote letters, he made phone calls. But the system he relied on considered him its enemy.

Zaslavsky knew real change would come only with political and economic reform far beyond the boundaries of the October Region. In the meantime, he could hardly look his constituents in the eye. “They think of me as their last hope,” he said one night between visitors, “and there is so little I can do. How do I tell them it will take years?” At first, Zaslavsky’s only successes were symbolic. New parties were required by law to register, and every new party in the city and Russia itself, it seemed, registered in the October Region because it had the most accommodating regulations. Nearly every Saturday another party would hold its founding congress in the October Region. “It got a little absurd. We’d already registered three different Christian Democratic parties before we ever made a move on economics,” said Grigori Vasiliyev, a thirty-two-year-old economist who was Zaslavsky’s choice to head the region’s ispolkom, or executive committee.

Zaslavsky also recognized that glasnost was still far from free speech, and so he registered and helped fund newspapers that were too small or too radical to get help from the Party bureaucracy and its printing presses. Sergei Grigoryants, an underground editor whom Gorbachev, in an interview with The Washington Post, described as a parasite, was able to take over a small building and run his magazine Glasnost without government or Party interference. Zaslavsky also opened a book and magazine store in the lobby of the regional headquarters on Shabolovka Street where you could buy émigré journals like Kontinent and Posev. Later he sponsored the openings of newsstands in the metro stations.

The October District also began to wage war on the Communist Party organization that had run things for so long. Zaslavsky stripped the Shabolovka Street headquarters of all its Communist trappings—the busts of Lenin, the hammers and sickles—and then pushed the Party bureaucracy out of the way. He gave them a few bad offices on a high, drafty floor and took away their internal phone lines.

“Let them fend for themselves,” he said. “These people have no more right to this building than the Christian Democrats or the local bird-watchers’ association.” Zaslavsky and his colleagues knew what they wanted to do, but they wanted at least the pretense of consensus before they did it. I went along and heard Zaslavsky tell the local police force that the city, and not the Interior Ministry bureaucracy, should be hiring and firing police officers. I saw him try to describe to a room filled with befuddled factory workers how it was time that they had shares in their own workplace, that inefficient or polluting plants should be shut down and replaced with factories that “worked cleanly and made things that people need.” Zaslavsky also knew that the creation of a real market would lead to higher prices, unemployment, bankruptcies, and the end of relatively equal incomes, and he said so. He was cold and honest, and the reception he got was never easy or enthusiastic. At a machine factory one afternoon, Zaslavsky sat on the podium under a huge banner—“The Name and Work of Lenin Will Live Forever!”—and, once more, got an earful: “What are you going to do about all those Azerbaijanis selling in our markets?” “These kebab salesmen are making a fortune on our backs! They buy up all the meat and they sell it for three and four times the original price!” “Don’t make us your lab rats for capitalism!” The workers were understandably more concerned with their daily disasters than with grand designs and new October revolutions. Zaslavsky tried to explain the difference between the black market and a real market, the need for competition, regulation, incentive. He was getting nowhere. “If I had known about all this, I never would have voted for you!” one worker shouted.

By the end of the session, Zaslavsky and Vasiliyev were depressed. The euphoria of the election campaign was fading fast. “We never understood just how deep the psychology of Bolshevism is in every one of us,” one aide, Ilya Gezentsevei, told me. “The harder we try to push, the harder that psychology pushes back.” For months, they floundered. But slowly, Zaslavsky and Vasiliyev’s economic planning began to pay off. Their first stroke of genius was to make the October Region the Delaware of Moscow. The regional council passed measures making it easy for private businesses to register in the region. With no Party bureaucracy to impress or bribe, the businesses came in droves. More than 4,500 small enterprises registered in the region within twelve months—nearly half of all the new private businesses in Moscow. Restaurants, brokerages, commodities exchanges, private research labs, construction firms, law firms, and an electronics store opened. Taking in a percentage of the business profits as tax, the October Region raised its annual income from 73 million rubles to 250 million rubles in one year.

In the October Region you could see the first signs of a market economy: the ambition, the fast profits, the crime, the bewildering greed. The “October Revolution,” as the local papers called it, was a gold rush for a hustler like German Sterligov, a twenty-four-year-old college dropout and one of the self-proclaimed pioneers of Soviet capitalism. He set up a private commodities brokerage and named it after his dog, Alisa. Just like that. And within six months, he told me, he was worth “tens and tens of millions of rubles.” Sterligov made his fortune in the vacuum left by the collapse of the old command system. As the system deteriorated, it was becoming impossible for builders to get bricks, for truckers to get oil and gas. Alisa filled in where the old ministries would not, or could not. When I visited him at the brokerage house on Leninski Prospekt, he acted like a child sultan. Everywhere there were pretty young blond women wearing spandex miniskirts: Sterligov’s angels. “They are assisting me,” Sterligov said with a leer. He had big dreams and, what was more, he was fulfilling them. Sterligov was the owner of the country’s first professional hockey team and the founder of the Young Millionaires Club, a place where like-minded tycoons could get together and make big plans. “Oh, and another thing,” he said as his secretary stooped to light his Marlboro. “We’re going to take over the Moscow racetrack and bring in the Kentucky Derby people to set up some big-time international racing.” As he grew rich, Sterligov developed a stony heart. “Why should I pity the poor and the lazy?” he said. “Pity the sick and the weak, okay, but if the rest want to live in poverty, God help them. If they want to be slaves—well, then, every slave has his dignity before God. But history is made by the individual, not the crowd. It is only when the ignorant crowd takes part in the historical process that it turns into a mess.

“My generation despises the system. It killed everyone and everything it touched. This was the richest state in the world and they destroyed it all down to the bone! But older people don’t understand us. Their psychology is all screwed up. They are so used to being equal in poverty that they assume if you have any money, you are a crook.” Sterligov was not a lonely robber baron. The newspaper Tochka Zreniya (“Point of View”) reported that there were at least 150,000 “ruble millionaires” in the Soviet Union by the end of 1990. “But look, a million rubles on the open market is now twenty-five thousand dollars. Is that really so much?” Sterligov said. “And I don’t have a single free ruble. Everything is tied up in the business.” After our talk, one of Sterligov’s men showed me around the trading floor, which was buzzing with brokers and angels. “Welcome to the future,” said Yevgeny Gorodentsov, an Alisa broker who had just put together a brick deal that brought him 750,000 rubles in commissions. He was twenty-one years old. The brokers all talked of Sterligov as if of a god—a slightly mad deity. His people reminded me of the inner circle around Citizen Kane. They knew he would crash, but they wanted to be next to something transcendent and new. Sterligov’s ambitions were boundless and wild, a mix of Thatcherian free-market zeal, Chicago in the twenties, and P. T. Barnum myth-making. When I last saw him, his newest scheme was to buy a huge tract of land 150 miles from Moscow and build a self-contained “mini Western country,” with factories and accredited schools and universities, airports and heliports, satellite dishes and a “Japanese TV for everyone.” Perhaps the singular feature of Sterligov’s wealth was the envy, and the harassment, it attracted. Once a week, police inspectors showed up at Alisa demanding to see his books. The KGB dropped in too. To avoid racketeers demanding protection money, Sterligov, his wife, and their infant daughter moved from apartment to apartment. The same dangers appeared to await anyone who succeeded in the new marketplace. Of the twelve new members of the Young Millionaires Club, only Sterligov would reveal his name. Dozens of others told him they wanted to join but feared kidnapping and attacks. The Communist Party weekly Glasnost printed an article accusing Sterligov of a “pathological hatred of Communism,” a history of racketeering, and a “real lack of intelligence.” The attacks came from all sides. So successful was Alisa in its first six months of existence that rival entrepreneurs told me that they were sure Sterligov had a working relationship with the KGB. There were rumors that one of his uncles was a minister.

Sterligov, like most plutocrats, immunized himself from criticism and convinced himself that everyone was simply jealous. “It’s still a sin to be rich in this country,” he said. “But we’re going to change all that. It won’t take long.” Liberals in their late thirties and forties were not so much angered as amazed at this new, younger generation. My friend Alex Kahn, a music critic from Leningrad, grew up in semi-dissident circles reading samizdat and listening to pirated tapes of John Lennon. Now the young seemed entranced by money and the possibility of money. “Every month, every week, you see more of these guys around town,” he said. “My generation, in our late thirties and forties, worshiped the ideas and ideals that were forbidden to us. We looked to the poets and the bards. These guys are sick of all that. What they want most is a society that works.” The young millionaires were an arrogant lot, young men (never women) acting without a developed code of behavior or common language. Primitive capitalists, as Marx called them. The hard-liners despised the new breed, and the liberals saw them only as a necessity, a first step toward a decent material life. “Some of them are a crude bunch, but to develop wealth, you need these people. We can’t wait for angels to do the spadework,” said Igor Svinarenko, a reporter for the leading newspaper of the Soviet business world, Kommersant. “These businessmen who make their money selling rotten meat or lousy computers or patched-together trade deals, they’ll accumulate money and build things and set up factories and stores. Some of them may do ugly things or act like barbarians. But they’ll also educate their kids, maybe send them overseas to Harvard. And then the kids will come back with their high-minded ideas and they’ll say, ‘Dad, you are a scoundrel.’ And so they’ll do things in a more refined way. They’ll act on their guilty conscience. And so society will develop from there.” If there was a Soviet model for the young millionaires it was Artyom Tarasov, a high-tech and trading magnate in his forties who was a constant target of KGB and police investigation for the allegedly illegal export of capital. Tarasov was the first of the Soviet millionaires to flaunt his wealth publicly, even describing his real estate deals and foreign trips at a press conference at the Foreign Ministry. He once suggested publicly that Gorbachev might sell the disputed Kuril Islands back to the Japanese for billions of dollars. Infuriated, Gorbachev threatened to sue, and the KGB investigations increased. By 1990, Tarasov was spending most of his time on the French Riviera, fishing and waiting for the right moment to come back home. “I’ve been fascinated watching this generation—these young Tarasovs—and it’s clear they love the game more than the money as an end in itself,” said Vladimir Aleksanyan, an émigré who ran an import-export business with offices in Palo Alto, California, and Moscow. “They work sixteen, eighteen hours a day. Their mentality is completely different from anyone I ever knew before I left twelve years ago. They speak foreign languages. They come to the States and they rent cars, move around. They are absolutely fearless. They talk about renting military transport planes from the army to fly over some product, and they don’t even realize how mind-boggling this sounds to anyone over the age of thirty.” An example of the breed was Anton Danielets, a twenty-four-year-old information services and real estate czar in Leningrad. He was a moon-faced naïf with the bovine grace of a young Jackie Gleason. He claimed by 1991 a fortune of 20 million to 30 million rubles and $1.5 million in foreign banks. Danielets used a dying Communist institution, the Komsomol, to build his nascent empire. In the first rush of cooperative businesses in 1987 and 1988, he opened a video theater with Komsomol help and made 500,000 rubles in personal profit within a year. He learned management from a pirated copy of a business text published abroad. One of the first things he did next was to hire lawyers to “guide me through the thicket of laws.” The key to business amid the “war of laws” between Moscow and the republics, between cities and districts, he said, was to know just who owns what, who has the right to issue licenses.

Racing around Leningrad from morning till night in a dilapidated Soviet Fiat, he quickly used his savings to rent and buy valuable properties and put some of his long-held ideas to work. He rented a run-down indoor pool and gym that the city had left for dead and turned it into a profitable sports center, popular with his fellow Soviet millionaires and the foreign community. He saw business on the rise and started a financial information center, a kind of Dow Jones in Leningrad. He started a popular newspaper, Nevskoye Vremya (“Neva Times”), and bought a printing press that had once belonged to the local Communist Party. In Siberia, the Urals, and Karelia, he traded in raw materials “whenever the deal looks good.” He had more than a thousand people working for him. After a while, Danielets finally decided that the backseat of his car was not quite adequate as a corporate headquarters, and so, for 300,000 rubles, he bought the glorious three-story mansion at 47 Herzen Street—Vladimir Nabokov’s childhood home.

“My forebears too were business people, gentry, and we’re going to make this place look like it once did,” Danielets said, pointing to rooms immortalized in Nabokov’s memoir Speak, Memory. “I think of this place as our connection to what we lost and what we want to regain. People forget that there was something known as a Russian business life before the Revolution. Now we are nothing more, nothing less, than a Third World country—at best. I want to restore what we had. So when people come to me with interesting projects, I invest, maybe with cash, maybe with equipment or space.

“Everyone knows that the smart guys in the Communist Party are trying to grab up as much as they can before they finally leave the stage. My attitude is this: Let them. Most of them are so stupid they don’t even know what real business is. It’s the young who are going to do the work over the years. We’re building empires, but not evil ones.” In classical Marxist theory, the initial stages of the accumulation of wealth produce “morbid symptoms.” Chief among them in the Soviet Union was the rapid rise of thuggery: protection rackets, Ponzi schemes, the occasional murder and night of arson. Zaslavsky and the police faced problems with crime all over the district, especially on blocks with new private businesses. For some reason, though, I had better luck meeting the mob in Leningrad.

Alex Kahn said he knew someone who knew someone who sold computers “and whatnot” out of a storefront in the Vasilievsky Region of the city. The businessman, who was named Aleksandr, told us just to bring a bottle or two of Scotch—“Johnnie Walker if you’ve got it”—at two in the afternoon and we “might meet some interesting people.” Happily, the hard-currency store in the Astoria Hotel was well stocked with Johnnie Walker.

The office was a shambles, a room filled with spiderwebs, scrap lumber, dust, and a desk and a phone. Aleksandr quickly said the Scotch was not for him and, “under the circumstances,” he would prefer I didn’t print his last name. It was soon clear why.

Within five minutes, four brawny types arrived. “The Charity Society,” they called themselves. It was time to collect the weekly 5,000-ruble “donation” from Aleksandr. I handed over the Scotch, Aleksandr handed over a paper bag, and the Charity Society boys seemed happy. They were only too pleased to talk, they said brightly.

“Some people call us gangsters,” an ex-athlete named Sergei explained as he popped a knuckle. “We like to think of it this way: we protect people. We persuade them to let us protect them.” Sometimes, Sergei said, they used pistols and Uzis bought on the black market as their instruments of persuasion. Pasha, a wiry hood who “went a little crazy” fighting in Afghanistan, explained how he and his partners did their business during what economists in the press were now calling “the transition period” from a centralized, socialist economy to a free market, and what the punks referred to as “the Wild West” and “Chicago in the thirties”: “First, everything is explained to the businessman in question. Very slowly and carefully. Then if he doesn’t seem to understand the kind of payments he has to make, he’s beaten up. But professionally. A couple of broken ribs, a few nights in the hospital. The next step is, he’s hustled into a car, driven out to the woods, and given a shovel. We tell him to start digging his own grave. That’s usually when they crack.” There was no way to know whether their stories were fact or cheap bravado. But such rackets did exist, such murders went on all the time, and Aleksandr, a Nordic-looking man in his late thirties, tried hard to keep from trembling as he listened. Occasionally he shot me an anxious glance. To make everyone just a little more nervous, Sergei broke into the sort of half-mad giggle that Robert De Niro used to great effect in the film Mean Streets. The mannerisms, it turned out, were as imported as the Reeboks on their feet. Sergei admitted that he had seen the films Once Upon a Time in America and GoodFellas on the Charity Society’s video system. “We learn a lot of what we do that way,” he said.

With private business growing by the day here, life was good for the Charity Society. They shook down everyone from the owners of newspaper kiosks to department stores selling foreign goods.

“Just the price is different,” Sergei said.

“When I get about two or three million for myself, then maybe I’ll go out and get some principles,” Pasha said. “I’ve got plenty of time later on to buy a farm and live quietly.” After the Charity Society left, Aleksandr said paying protection money was “just part of doing business nowadays.” His only other expense was his phone bill. “This country is in a state of transition, a wild time, and so there are no rules, no stability. It’s open season,” he said. “I know of one guy who couldn’t make his payments and they tortured him with a soldering iron. Ninety-nine percent of the businessmen in town—me included—violate a lot of rules. Taxes, hard-currency restrictions, the laws on hiring people. We have to break the law if we want to get anything done. And so the racketeers know we can’t resist. Calling in the police is hopeless. That is, unless you want to spend the rest of your life in a fortress. Or dead in the canal.” During the Brezhnev era, the personification of sleazy business dealings was the tolkach, the weary factory representative who would travel the country to make sure he got the supplies his firm needed. Bribes and gifts were his stock in trade. If he was from Moldavia, he would bring cases of wine to sway his clients; if he came from Astrakhan, it would be quart-size tubs of black caviar. But the tolkach was only the comic face of a degraded, dishonest system. Corruption permeated the centralized economy from the bottom to the top: from the state butcher shop manager who sold his best beef on the black market to the members of the Council of Ministers who lied about production levels to curry favor with the general secretary.

That legacy of cynicism and lawlessness, despite all the talk of reform, still lingered. “The standard of ‘dual honesty’ for seventy years here has led to a deterioration of ethical standards,” said Vladimir Aleksanyan, the émigré import-export executive. “You rob your workplace. You cut in line. You skip out on contracts if it’s convenient. Dishonesty is deep-rooted. When a person in business is honest, it is because he has made a conscious, and usually temporary, decision to be honest. There is not a deep-rooted sense of ethics.” Corruption was a matter of course. In Leningrad’s Kirov District, officials and businessmen said, merchants quickly discovered that to do a simple remodeling job on a building or to get a decent location for a kiosk they had to pay off the district government’s architect. Finally, the local police caught the architect, Timur Kuriyev, taking a 9,000-ruble bribe in a public bathroom. One of the great scams of the Gorbachev era was known as the “convenient collapse.” In an effort to encourage semiprivate cooperative businesses, the government issued huge start-up loans at low interest rates. Some cooperators used the funding to open stores or services. But others, who did not believe the period of liberalization would last more than a few months and wanted to make a quick fortune, grabbed the money and, when the loan came due, said, “Sorry, the business failed.” The bank could do little more than put a 12 percent lien on the debtor’s meager state salary. Every time a new form of commerce began, it seemed, a new racket appeared alongside it. After Sotheby’s held its first auction of modern Soviet paintings in Moscow in July 1988, black marketeers discovered a source of quick income. Soviet artists told me that a man identifying himself as Oleg Petrovich—alias “the Gypsy”—showed up with his henchmen at various artists’ studios demanding works that he knew would bring in big money when sold abroad for hard currency. “Friends of mine were hit bad, and they told me that I was on the guy’s list for four or five paintings—specific ones that they saw in the Sotheby’s catalog,” said Lev Tabenkin, a Moscow painter who had sold many of his canvases abroad. “They’re very systematic. So far they haven’t gotten to me, but I haven’t been working very much in my studio these days either.” Lieutenant Nikolai Mirikov, chief of the Moscow police investigations department, said the “evolving economic situation,” the conversion to a market economy, will keep the rate of crime soaring for years. He said that while he needs five thousand police to cope with rising crime rates, he has lost more than a thousand officers in the past two years. “They mainly go off to work in cooperatives, where their salaries are a lot higher,” he said. KGB officers, some of them at the highest levels, often took an early retirement to use their connections in the official and underground economies and make a killing as businessmen. Sometimes the police went into business without turning in their uniforms. A Moscow detective was caught shaking down street vendors for bribes of 10,000 rubles a month, the business newspaper Kommersant reported. In 1990, the same officer had been voted the city’s Detective of the Year.

Businessmen in the October Region and elsewhere told me it was easy to make millions of rubles. Step One: Get a short-term loan of, say, 10 million rubles. Step Two: Launder the rubles. That is, convert them into dollars. One of the most common back-channel methods is to buy from a third party a paper obligation for money owed in “semihard” currencies: Indian rupees, Chinese yuan. The paper obligation, for which you have paid dearly, makes the transfer to dollars much easier. Step Three: Buy goods—Japanese VCRs, Hong Kong computers, American blue jeans. Volume and a foreign label matter far more than quality. Step Four: The easiest part—sell the goods to a middleman or a commission store or a workplace. Make sure your prices are absurd; Soviet consumers are desperate, and the demand curve knows no bounds. Step Five: Collect your money and pay off the bank. In three or four months, if all goes smoothly, you will be several million rubles richer.

It seemed painless. But then I met Oleg Falkovich.

A plump man with a heavy measure of guile, Falkovich worked for twenty-five years in the state economy in Siberia and the far east before he began dealing privately in construction materials, clothes, and video equipment. Eventually, he became a buyer for a company called ARTO, which was looking to obtain millions of rubles’ worth of video equipment for resale on the Soviet market. Falkovich contacted another firm, Terminal, which agreed to get the televisions and VCRs from Japanese suppliers. A few weeks later, however, Terminal said the deal in Tokyo had fallen through, and Falkovich had to give the bad news to ARTO. But ARTO said it was going to suffer losses in the millions as a result of the deal’s collapse because it had taken out short-term loans with high interest rates. The ARTO bosses told Falkovich that the burden for getting back the money was on him.

One spring afternoon, Falkovich said, and other sources confirmed, three men forced him into a car and drove him to the Rossiya Hotel near the Kremlin. “Once we were in a room, they started threatening me, saying that unless I signed a contract handing over to them five million rubles, they would rape me, kill me, kill my wife and daughter. This went on for days. But when they got to my family, I signed. I would have signed anything.” Falkovich managed to reach one of his partners by phone, and the partner called some members of their acquaintance in the Uzbek mafia to come to Moscow and set their boss free. The team flew to Moscow and knocked on the door of the hotel room. But Rustam, the Uzbek leader, recognized one of the three men as an old friend and colleague. “It was a nightmare,” Falkovich said. “Instead of freeing me, Rustam turned to one of the others and said, ‘Once you beat the five million out of him, we’ll beat out another million.’ ” Eventually, the police arrived at the Rossiya and sent everyone home. Later, they arrested the three men whom Falkovich accused of kidnapping him. But the men were released after three days of questioning; the police said there was insufficient evidence to prosecute. “Falkovich claims the men were extortionists and the three said they were not. The whole situation was a blur,” said Genri Reznik, the lawyer for ARTO.

In the meantime, Falkovich said he is sure he is “a hunted man.” He has moved his family from their home in Magadan to a secret location, and he is hoping to emigrate to the United States. With no relatives there, his chances for an entrance visa are not good. “I can’t live this way any longer,” Falkovich said. “In a normal world, they settle these things with contracts or, if it comes to that, with lawsuits. This kind of thing will go on and on in this country until we have real laws, real business, and not the kind of insanity we have now.” Despite the “morbid symptoms” of the new capitalism, Zaslavsky and Co. had no intention of scaling back their ambitions. They were world-beaters. Dmitri Chegodayev, the twenty-seven-year-old chairman of the district’s media committee, began holding meetings with foreign investors about setting up a thirty-two-station cable television system featuring an “October channel.” “We want to hook into Europe via cable TV,” he said. There were meetings about how best to attract foreign investors—the “capitalist leeches” of Stalinist legend. The most ambitious plan—one that smacked of megalomania to Communist Party loyalists—was to create a huge business center on Gagarin Square modeled on the La Defense complex in Paris. Important-looking documents were drawn up. The center would include luxury hotels, office buildings, underground parking lots, an exhibition center, a computer and communications center, a trade center, and a medical complex.

But by the summer and fall of 1990, something else was happening. The Communist Party newspapers were beginning to hint at a counterrevolution. Suddenly, the most prominent free-market advocates in the country were under attack—Zaslavsky included. Like the Soviet Union itself, Zaslavsky was flying into the heavy weather of a market economy without a flight plan or a radar screen. His vision of the future—a world of stock markets, computer centers, and shopping malls—met head-on with the endless barriers of habit and instability: the obstinate psychology of a people grown used to “equality in poverty.” Perhaps a little sooner than the rest of the country, the radical free-market leaders of the October Region encountered the limits of people’s tolerance. Some workers in the district were growing angry with the new businesses. There were small demonstrations. Some of Zaslavsky’s supporters began to turn on him. “Many people in the district saw businesses like Alisa succeeding very quickly while they still had to stand in lines for food. It outraged them, and they started screaming, ‘Give us! Give us!’ ” said Zaslavsky’s aide, Gezentsevei. “Many people could not understand that the idea of government is not to provide, the way parents provide for a child. What we were trying to do was set up the structures, the possibilities for everyone to have the chance to work and succeed.” It came as no shock to Zaslavsky that a lot of the negative letters he got in the mail, to say nothing of the articles in the nationalist press, were anti-Semitic. As the business explosion intensified and the average wage bought less and less, resentment eventually made its way toward that fine end. Anyone with a little extra was a Jew. You heard the grumbling on the buses, on the streets, on park benches. Sometimes it became the stuff of public meetings and demonstrations. On June 6, 1990, at the Red October cultural hall in Moscow, seven hundred members of something called the People’s Orthodox Movement met, and the level of hatred was startling. “We declare that the Jews bear collective responsibility for the genocide of the Russian people and other peoples of our country!” said one speaker, Aleksandr Kulakov. “And we demand that Jews be forbidden to leave the country until a tribunal of the Russian people decides their fate. We express solidarity with the Arab world, which struggles with this evil! We also express solidarity with the German people. The Jews were never victims of the German people. The Germans were the victims of Jewish deception!” Groups like the United Workers’ Front, Motherland, and Unity all emitted similarly horrifying grunts, all in the name of “proletarian justice” and the call for a class war. Zaslavsky showed me some of his mail, where the word Zhid—Yid—appeared more frequently than commas. It was as if he had ended up on the wrong side of a perverse class war, a focus of class resentment. Nash Sovremenik, Moscow Worker, and Molodaya Gvardiya were the main publications supporting this strange amalgam of nationalism, neo-Stalinism, and pure resentment that was fast becoming known as National Bolshevism. “We face a paradox,” wrote Richard Kosolapov in the Moscow Worker. “An actual ban on the class approach and its false contrast with universal human values is happening at a time when the gap between rich and poor is widening. We are stubbornly being told that there is a need for fraternization between striking coal miners and the growing ranks of millionaires … despite the fact that our entire historical experience is literally crying out about the inevitability of conflict.” Zaslavsky had begun his term in early 1990 with the support of more than a hundred of the 150 October Region deputies. But by winter, he could rely on only forty or so. The rest, with help from various Communist Party organizations, began to plot against him. Articles began appearing in the Russian Communist Party paper Sovetskaya Rossiya accusing Zaslavsky of incompetence, of “aggressive anti-Communism,” of taking power out of the hands of the people and putting it in the hands of a few young millionaires. “Zaslavsky was not the man we thought he was,” said Alla Vlasova, a conservative on the council. “He turned arrogant. He would only listen to the inner circle around him. He has to go.” Inexperience and a measure of arrogance also gave Zaslavsky’s enemies ammunition for the approaching political battle. Some members of the city’s executive committee, it turned out, were also businessmen. Vasiliyev’s deputy, Shota Kakabadze, for one, was president of the law firm Assistant, which did legal work for the region. Although the lawyers said they did their municipal work free, the impression of a conflict of interest became indelible. “We started falling victim to our own stupidity and inexperience,” Chegodayev said.

The biggest mistake was in the way Zaslavsky handled the privatization of several thousands parcels of land and new enterprises. The Municipal Property Board was in charge of holding auctions and selling off land in order to help create businesses, hotels, or plants that fit in with the October Region’s plans for the future. Zaslavsky saw the dilemma of mixing the state and the private sectors, but he argued that this was often done in other developing countries. “And that,” he said, “is what we are, let’s face it. A developing country that happens to have nuclear weapons.” Upper Volta with rockets. Zaslavsky’s enemies pounced all over him, accusing him of funneling profits to his cronies. And while the charge was never proved, it hurt him badly. Suddenly, the young politician who had started with a pristine image was stained.

To make matters worse, Zaslavsky took a hit from a powerful corner. For months, Zaslavsky had been telling the press and even audiences abroad that Gorbachev was a “lost cause” who was getting far too much credit for even beginning perestroika. He said that it was Ronald Reagan’s strategy of negotiation through strength that brought the Kremlin to its knees. “I will never forget what Gorbachev did at the start,” Zaslavsky said, “but it would be a mistake to put all our hopes in one man anymore. Thank God, we’re beyond that.” Gorbachev, who was then turning sharply to the right, went before a meeting of the Moscow Communist Party organization and railed against the “so-called democrats.” It was one of his most conservative speeches during a conservative winter in the Kremlin. Zaslavsky in particular, Gorbachev said, had “disappointed” him.

On the bitter cold afternoon of February 13, 1991, Zaslavsky’s opponents called a council session and put a no-confidence vote on the agenda. To bring down Zaslavsky, however, they needed a quorum of ninety-nine deputies. Zaslavsky’s only remaining strategy was to block the quorum, to keep his people outside the hall. As he sat in his second-floor office, his opponents hammered him in the auditorium.

“All summer Zaslavsky was in the United States. He is learning to destroy our political, economic, and ideological system!” said Alla Zhokina.

“Zaslavsky’s emissaries took their training in the United States!” said Gennadi Markov. “All his people now have cushy jobs.” Yuri Mazenich said Zaslavsky’s team “tried to establish a totalitarian regime based on the arbitrary seizure of regional property.” The denunciations went on from five to nearly midnight. Although the deputies were five short of a quorum, they held a no-confidence vote anyway, with seventy-eight voting for Zaslavsky’s resignation. It was beginning to look as though the October Revolution would not lead to the shining future of “capitalism in one district.” Zaslavsky sat in his office exhausted. He was surrounded by the mementos of his rise to fame: the bric-a-brac from his trip to the United States, the aides who doted on him, the map of the future—the gleaming region he saw in his mind’s eye. The revolution was at a stalemate. “It turns out this is going to be a very long game,” he said.