From John Helmer’s column in Russia Journal, May 5, 2007
This leaves the lucky minority of Russians who actually received wages, and stayed alive during the Yeltsin period. For most of them, it was a time of unstoppable slide towards poverty. In a new book, The Anatomy of Russian Capitalism, published by EIR in Washington, DC, Stanislav Menshikov reports that in 1991 the average pension was above the measurable poverty line, and then sank to below the subsistence minimum by 1998. In 1992, the average Russian wage level was triple the poverty level; by 2001 it was just 2.2 times higher.
As Menshikov documents the redistributiuon of income and capital in the Yeltsin period, it is evident that the US economic plan for Russia, intended to slash military spending, succeeded. Yegor Gaidar, Yeltsin's government chief, acknowledges in his memoirs that his first major act in taking over the state biuget was to cut in half government spending on weapons and military spending. Breaking the rouble link to the non-Russian republics of the Soviet Union came next. Disconnecting the state from domestic resource industries -- privatization -- was third. No more effective attack on an enemy state's capability to wage war, or defend itself, has ever been carried out -- without a shot being fired. That was until October of 1993, when Yeltsin shelled the parliament into submission; 146 were killed.
The huge sums saved, plus the value not paid out of the Gross Domestic Product as labour income, were diverted on a grand scale to the tiny elite of beneficiaries of the privatization process. They in turn understood the pecking order of authority in the new Russia -- and they kowtowed correctly: first, the US Embassy, then Yeltsin.
In this disintegration of labour income, the four groups of wage-earners who were worst hit, according to Menshikov's compilation of the wage statistics, were doctors, teachers, artists, and farmers. The only sectors of light industry, producing for domestic consumption, which flourished were the two dominated by foreign capital and imports -- cigarettes and alcohol, the two great poisons.
Despite the resource export boom of the past five years, the position of Russians in the health care, education, culture and food production sectors has not improved during the Putin administration, if the average wage for their sectors is expressed as a ratio of the average wage for all industry. Those who are alive today were indubitably better off, statistically speaking, according to Menshikov, in 1970! and, of course, those who are dead are silent, quite untheatrically so.