Free Life, the Journal of the Libertarian Alliance

The visitor to the socialist countries comes away with the overwhelming impression of having travelled backwards in time. The smell of coal fires, the sight of trams and steam trains, the decaying uncared-for buildings, the empty shops, the queues of people in drab imperfect clothing, the sense of an overbearing public concern which gathers people up and robs them of initiative: all this returns the visitor to a distant experience, a confused memory of ration books and Pathé newsreels

(Roger Scruton, Untimely Tracts, Macmillan Press, London, 1987, p.34).

Millions of unfortunate people have for years endured the grim portrait of life sketched out by Professor Roger Scruton. Exchanging this life for the sunny freedom of capitalism has been one of the hardest tasks of the century. There are vitually no precedents and people have had to learn from scratch.

It is difficult enough to make changes in Great Britain, where a Tory government has barely reduced the size of the State despite being in office for 14 years. But the task in the former Soviet Union is Herculean by comparison. The attempt by Mikhail Gorbachev to improve living standards and throw off the dead hand of socialism was littered with failure, bitterness and only partial success, argues Marshall Goldman, in a superb and succinct study of the period. His book represents a first-class description of the challenges facing any would-be reformer and also shows how Gorbachev's mistakes contributed to present problems.

Long shop queues for basic foodstuffs, shoddy and non-existent goods, lousy pay and working conditions are, as any classical liberal would predict, features of a system with virtually no private property, no price mechanism, little competition and little meaningful trade with the outside world. While Gorbachev certainly succeeded in ending much of the repressiveness of the Soviet regime, he had very limited success, Mr Goldman argues, in introducing capitalist features that we in the West take for granted.

A number of points stand out in the book. First, any reformer has to confront some of the most pig-headed bureaucrats in the world. As a class, they are very strong and highly adept at frustrating reforms. Secondly, Mr Goldman makes it clear that life is saturated with a debilitating cynicism about any change. Socialism created an attitude summed up in the remark: "The State pretends to pay us in worthless rubles and we pretend to work". Habits of diligence, attention to detail, honesty and trustworthy dealing, all features of the market system, have been crushed in a system built on unimaginable human suffering.

Mr Goldman describes Gorbachev's rise to power, his early reform efforts, constant changes of mind and subsequent troubles in brief but telling detail. Mr Goldman is clearly a pro-market writer, and his basic thesis seems to be that for reforms to work, they must embrace red-blooded, no-holds-barred capitalism and not a botched combination of statism and market economics.

The village boy's impressive rise to that of Soviet leader inevitably meant early acceptance, or at least acquiescence in, the Soviet system. He would have been jailed or suffered a worse fate otherwise. So only until very late were there signs that Gorbachev might not be just another party hack. Once in power, he instituted political changes which were eventually to trigger the massive power shifts in Eastern Europe, and, most symbolically, the collapse of the Berlin Wall. Glasnost, or openness, and the warming of relations between the Warsaw Pact and NATO, were impressive achievements.

However, although "Gorby" was a popular figure in the West, his own people rapidly lost confidence in him despite their relief that not another old brute had taken over in the Kremlin. For Gorbachev's biggest task was to modernise a country left behind by the capitalist powers. A country with some of the richest agricultural land on earth was importing massive quantities of grain from the West; glimpses of television suggested Europeans and Americans were enjoying unimaginably good lifestyles while Soviet Man was forced to drive smelly old cars and queue for salt and bread. The Great Socialist Experiment had become one of the Big Jokes of history. "Gorby's" burning ambition was to change all that but Mr Goldman claims he largely failed. Why?

Mr Goldman makes it clear that even the cleverest reformer would have endured great problems, but says Gorbachev's failures in part stemmed from his own timidity and bewildering changes of direction. He began his rule by actually strengthening central power and the planning process, and by emphasising such things as "discipline". A classic example was the futile crackdown on vodka sales in a bid to reverse endemic alcoholism. The experience of Prohibition in the United States should surely have been a dire warning of the uselessness of such campaigns. There was little early appreciation of the importance of private property, and nothing like the radical moves towards capitalism which were being undertaken in China. On the contrary, Mr Goldman stresses how Gorbachev created new "super ministries" and stressed central control. This did not work and, as a result, Gorbachev squandered a valuable honeymoon period with the Soviet people. By 1987 he realised a new approach was needed.

One of the first signs of change was the decision to legalise individual farming and co-operative businesses from May 1, 1987. And yet the man chosen to oversee agricultural reforms was that old hard-liner, Ligachev, who was not removed from power until 1990! It was a bit like hiring Arthur Scargill as a privatisation adviser. There were all kinds of restraints limiting farmers' freedom of action, thereby sabotaging the whole enterprise. Indeed, a theme running through all of Gorbachev's economic efforts is the way he crippled reforms with such compromises. This was sending a boxer into the ring with one arm tied behind his back.

Because only a few cooperatives and private farmers set themselves up and such enterprises often charged high prices. Unable to compete fairly with state businesses benefiting from subsidies, private initiatives often met considerable obstacles. To work, the reforms needed to be pushed through with real gusto, yet Gorbachev was still making disparaging remarks about trade. In contrast, the Chinese leader Teng Hsao Peng was famous for the remark: "It is good to be rich".

It was certainly a bold step to allow foreign firms into the former Soviet Union. New ideas and skills could be brought in and a number of companies, such as MacDonald's, have taken up the chance to set up in the East. But the lack of a stable currency, horrendous red tape and state interference meant joint ventures had only limited success, at least until very recently.

However, the growing budget deficit and roaring inflation, caused by an over-supply of rubles and under-supply of goods, led to huge problems, and aggravated ethnic and political tensions. Half-hearted privatisation measures only led to higher prices for some goods and a shortage of other supplies. Hoarding became common. Features of a market which we take for granted, like wholesalers and efficient delivery systems, hardly existed. A shift away from socialism was bound to cause painful dislocation, but the half-hearted nature of Gorbachev's efforts meant there seemed to be all pain and no gain. If Gorbachev had been more bold in liberalising the market for consumer goods, for example, then people would have seen some early benefits and supported further reforms. But even until the time of his fall from power, Gorbachev did not fully embrace serious radical change.

In fairness, one of Gorbachev's largest achievements, albeit unintended at first, was the gradual collapse of the central planning system. Hopefully the brightest individuals will be able to exploit this in the years ahead. Much depends on what leaders like Boris Yeltsin can achieve.

Mr Goldman's book does not leave one with much optimism that things are going to get better very quickly. Although we should be wary of cultural determinism, the history of the Soviet Union and life under the Czars suggests there is huge inertia and resistance to change. This could change, perhaps. Mr Goldman has presented a lucid account of how Perestroika went wrong and what needs to be done. Any moves in the right direction will take great courage and willpower.

(Tom Burroughes is a journalist specialising in court reporting at the East Anglian Daily Times in Ipswich. A graduate in History from Brighton Polytechnic, he has written for the LA, Salisbury Review and a number of other publications.)