After 15 years of tumultuous change in Russia, Moscow is booming and
parts of the city give the impression that they are part of the West.
Tverskaya Street, the capital's principal artery, is filled with
strollers, late model cars and outdoor cafes. On Novoslobodskaya
Street, coffee houses are filled to capacity and consumers crowd the
new "Friendship" Russo-Chinese shopping center. Everywhere, restored
buildings reveal the beauty of Moscow's 19th-century architecture
and, at night, the illuminated façades of the buildings and gleaming
cupolas of the Orthodox churches create an atmosphere of dynamism and
resurgent grandeur.

On July 31, 2002, a milestone of sorts was reached with the
announcement by Vladimir Sokolin, the chairman of the State
Statistics Committee, that Russians' living standards had returned to
the level they had attained before the financial crisis of August
1998. Sokolin said that the real cash incomes of the population in
June 2002 exceeded the August 1998 figures by 5.4 percent.

The atmosphere of the Moscow streets, so stunning in contrast to the
uniformity and shabbiness of the communist era, has evoked the
enthusiasm of Western observers. Michael Binyon, a correspondent of
The Times of London, wrote that, "Many Russians have never had it so
good." Leon Aron, a biographer of Yeltsin, wrote in The Weekly
Standard,

"The produce shortages and ubiquitous lines of the Soviet era have
been forgotten. Fresh and delicious food is available everywhere. For
the first time since the 1920s, Russia not only feeds its people and
livestock but is a net exporter of grain."

And Anders Åslund, an economic consultant and author, wrote in The
Moscow Times, "As the rest of the world sinks into recession, Russia
booms. . . . It is time to realize that Russia is a country that
solves its problems with an efficacy and speed that the West can only
envy."

Unfortunately, however, the true state of Russia is not simply a
matter of surface appearances. The reforms that have remade Moscow's
urban landscape took place without the benefit of higher values, and
they bequeathed to Russia a moral vacuum. The result is that behind
the façade of relative prosperity made possible by its improving
economy, Russia faces underlying problems--criminalization,
lawlessness, disregard for human life and a deep spiritual
malaise--that threaten the country's long-term survival.

The Rule of the Lawless

The lawlessness in Russia defines the tenor of everyday life. Russian
business operates according to the law of the jungle in which the
most basic functions can only be carried out with the protection of
armed force. The impact of criminalization in Russia is evident both
at the street level, in the terror unleashed on society by gangsters,
and in the corrupt operations of the clan system at the highest
levels of power. At the street level, gangsters create a sense of
permanent insecurity for millions of citizens. It is not possible in
Russia simply to run a business. That business must have protection,
which Russians refer to as a "roof" (krysha). This roof is provided
by a criminal gang that protects the businessman from other criminal
gangs (as well as from itself) in return for a share of his income.

The system of roofs is so well established in Russia that entire
regions are divided up between rival gangs, and businessmen turn to
the gangs to settle their disputes and collect their debts. Moral
boundaries in the process become so blurred that many Russians treat
the demand that they hand over a share of their income as a
legitimate obligation.

The only real competitors of the gangs are the law enforcement
agencies. For a long time, the gangs had a near monopoly on extortion
but, as the heads of law enforcement agencies saw the enormous
profits that were possible, they too entered the protection racket.
Today, security firms connected to the ministry of internal affairs,
the directorate for the struggle with organized crime (rubop), and
the Federal Security Service (FSB) also offer protection to paying
clients, particularly in Moscow. The official "roofs" have some
advantages over the criminal ones. They are less likely to betray
their clients and, unlike the gangs, they can be fired. But the
involvement of police agencies in the protection racket undermines
the whole notion of law enforcement and implicitly treats extortion
as a normal part of life.

While the protection racket dominates Russian business at the street
level, the government serves as the roof for oligarchic businesses
that have their own security forces and are not vulnerable to crude
racketeering. When the reforms in Russia began, money was in the
hands of gangsters and black market operators, whereas property was
in the hands of government officials. The first priority of virtually
every new enterprise was therefore to buy government officials. The
successful purchase of one government official made it possible to
buy others, and Russia soon came to be dominated by oligarchic clans
that had, in effect, put the government on their payroll. The result
of this system was a country characterized by both massive poverty
and a striking concentration of wealth. Eight oligarchic groups today
control 85 percent of the value of Russia's top 64 private companies
and the combined sales of the twelve top private companies equal the
revenue of the government.

An example of how the system operates was provided by MDM, one of the
most powerful banking groups in the country. In the years since Putin
acceded to power, MDM acquired Russian industrial giants, including
defense plants, at a speed that would not have been possible without
the protection of the government. It became interested in
Nevinnomissky Azot, one of Russia's largest fertilizer factories,
which had an annual profit of $30 million. MDM met resistance,
however, from the factory's director, Viktor Ledovsky, who set up a
firm through which the workers could buy up shares in the factory. He
then appealed to the government not to sell its stake in an
enterprise that was making a profit.

In response, the tax police of the Stavropol region accused Ledovsky
of hatching a scheme to steal money from the workers. Ledovsky
produced a statement from the Russian Institute of the State and Law
that his activities were legal and that workers' rights were
protected, but this was ignored. He was arrested on July 4, 2001,
ostensibly to prevent him from fleeing the country. Evidence of his
intention to flee was a ticket to Munich purchased in his name on
July 8, four days after his arrest. With Ledovsky in prison, the
Russian Federation Property Fund sold the state interest in
Nevinnomissky Azot for $25 million, virtually the starting price, to
a group representing MDM.

Many of the principal oligarchic clans were united by their
connections to Boris Yeltsin and his immediate relatives, known
collectively as "the family." With the accession of Putin, however,
the family has faced competition from the "Leningraders", for the
most part associates of Putin and veterans of the intelligence
services. The basic situation, however, has not changed.

One of Putin's favorite oligarchs is Oleg Deripaska, the director of
Russian Aluminum, which produces nearly 80 percent of Russia's
aluminum. Dzhalol Khaidarov, a former close associate of Mikhail
Chernoy, a partner of Deripaska with close ties to organized crime,
described how the system works in an interview with Le Monde:

"You ask why Russian Aluminum gained one or another factory. They
will say that the shares were purchased. But if you look, you'll find
that the former shareholder is in prison, became a 'drug addict' or
disappeared. When I worked with Mikhail Chernoy, the group every year
gave bribes of $35 to $40 million dollars a year. It was always
possible to buy a judge, a governor, or a law. In the early 1990s,
they murdered. Now they prefer to file a case or put someone in
prison. They can do anything."

Live and Let Die

Besides lawlessness, the future of Russia is threatened by society's
disregard for human life. In the first place, the low value attached
to human life in Russia is reflected in everyday events. In Russia
today, there are 40,000 murders a year, three times as many as there
were in 1990. This gives Russia the second highest murder rate in the
world (after South Africa). Unfortunately, however, this figure may
be a serious underestimate. According to Russian demographers, in
addition to the confirmed murders there are another 40,000 violent
deaths per year in Russia in which the cause of death--murder or an
accident--cannot be established, and there are 20,000 cases a year
where individuals simply disappear.

According to the journal Demoscope Weekly, the figures for all
categories of violent death in Russia far exceed their Western
equivalents. A comparison of Russia and England, for example, shows
that a Russian is five times more likely to die in a traffic accident
than an Englishman, 25 times more likely to accidentally poison
himself (usually with alcohol), three times as likely to die in an
accidental fall, 31 times as likely to drown, seven times as likely
to commit suicide and 54 times as likely to be murdered.

Among the reasons for the lethality of Russian life is that when a
life threatening situation does occur, Russians can rarely count on
timely help. In January of last year, Taras Shugayev, a young Moscow
resident, left a pool hall drunk and awoke to find himself inside a
moving garbage truck, dodging massive blades that were slowly
grinding collected refuse into pulp. For 23 minutes, according to a
transcript of a series of calls made on his cell phone to Moscow's
rescue service operators, he pleaded and cried, saying he was being
squeezed and begging for help. The operators, however, only advised
him to alert the driver by banging from inside the truck. No
discernible action was taken by Moscow's various police forces that,
according to one rescue service spokesman, dismissed the report as a
prank. "Are you in a joking mood to be calling us like this at 6
o'clock in the morning?" a police dispatcher reportedly said.

By Shugayev's fourth call, during which the rescue service was mainly
concerned with trying to learn who might have put him in the truck,
Shugayev was desperate. His last recorded words were, "This is it, I
think I am suffocating. This is it." The police only responded 24
hours later after Shugayev's family reported him missing. They then
pieced together what had happened with the help of phone records. By
that time, however, there was nothing to do but sift through a
suburban dump, looking for possible remains.

Besides the hazards of everyday life, the low value assigned to
Russians' lives is reflected in the readiness of the government to
sacrifice them. In a general sense, this was reflected in the nature
of the economic reform program that was undertaken with little regard
for its effect on the health of the population and was accompanied by
five million premature deaths. The death rate in post-communist
Russia was not an accident. It was the product of specific policies
that reflected the authorities' lack of concern for individuals. In
the first place, the government removed all restrictions on the sale
of alcohol. The result was that at a time when the purchasing power
of the average Russian was cut in half, his salary in relation to the
cost of vodka increased threefold. The era of cheap vodka coincided
with the peak of the privatization process and the resulting
tranquilization of the population lowered resistance to the criminal
division of the nation's wealth, albeit at a cost to the nation's
health.

At the same time, the government failed to finance the system of
public health. For the first time, Russians had to pay for many
medical services, from necessary medicines to lifesaving operations,
and the inability to pay led many to give up on their own lives. The
government even failed to finance adequately such hospitals of "last
resort" as the Vishnevsky Surgical Institute in Moscow, which was
underused despite the surge in the death rate.

The disregard for the value of human life has also been reflected in the
Chechen wars in which the authorities have shown little concern for the
lives of either Russian soldiers or Chechen and Russian civilians.
But there was no more graphic, specific illustration of the
authorities' indifference to human losses than their actions during
the hostage crisis when in late October of last year 800 persons were
taken captive by Chechen terrorists in Moscow's Theater on Dubrovka.

From the moment that the theater was seized, it was clear that what
was involved was a test of the government's attitude toward the lives
of its citizens. Never before had so many persons been taken hostage
in a major capital. The terrorists included 18 suicide bombers who
had bombs strapped around their waists. Dozens of other bombs were
fastened to the building's main supports. The terrorists threatened
to detonate the bombs and obliterate the theater if their demands
were not met.

As the crisis began, President Putin said that saving the lives of
the hostages was his first concern, and there were clear indications
that a peaceful solution was possible. The terrorists initially
demanded an end to the war in Chechnya and the withdrawal of Russian
troops, steps that, according to polls, were supported by 65 percent
of the Russian population. On October 25, the second day of the
crisis, the terrorists even agreed that the hostages would be freed
in exchange for a statement by Putin that the war was over and the
verified withdrawal of troops from only part of Chechnya.

At the same time--and perhaps more important--many of the terrorists'
bombs, including a huge one in the center of the hall with a force of
forty kilograms of dynamite, had not been activated. This suggested
that the terrorists never really intended to blow up the building and
kill the hostages. The FSB was aware that many of the bombs had not
been activated because an FSB agent was among the hostages, and he
provided detailed information to his superiors by cell phone about
the number of terrorists and the condition of the bombs.

Despite the fact that negotiations appeared possible, however, the
Russian authorities never engaged in, or apparently even considered,
serious political negotiations with the terrorists. The authorities
did not react to the proposal for a partial withdrawal from Chechnya;
instead they agreed to talks between the terrorists and Viktor
Kazantsev, a presidential representative, at 11 a.m., October 26. But
this was only a diversionary maneuver. The theater was flooded with
toxic gas and stormed by FSB and special forces units six hours
before the talks were scheduled to start.

In the end, the Russian forces killed all 41 of the terrorists,
shooting many of them while they were unconscious. The number of dead
hostages has been variously put at 129 and 136, with 75 persons who
were believed to have been in the theater still missing. All but
three of the dead hostages died as a result of poisoning by the gas
used to "rescue" them.

Not only the refusal to negotiate but the nature of the rescue effort
suggested that the storm was undertaken to destroy the terrorists,
and that saving the lives of the hostages was a very low priority.
Doctors arriving at the scene were not told that the hostages had
been gassed and not provided with the antidote that had to be
injected immediately. The order for ambulances to proceed to the
theater came 45 minutes after the beginning of the operation, the
result being that many hostages had to be taken to hospitals in
buses, microbuses and cars. In one case, 30 hostages were put in a
twelve-seat military microbus, including on the floor, and a 13
year-old girl was crushed under other bodies and died en route.
Although the Moscow health authorities had days to prepare for the
aftermath of the storm, nearly one hundred persons who died from gas
poisoning or other causes could have been saved if the rescue effort
had been properly organized.

Besides criminalization and society's disregard for human life,
Russia's future is threatened by a more fundamental problem: a deep
spiritual malaise that reflects the inability, so far, of Russia to
find a new moral orientation in the wake of the fall of communism.

The communist regime was based on "class values", the notion that
right and wrong are determined by the interests of the dominant
class. In the wake of communism's fall, moral coherence for society
could, as a result, only be achieved through the establishment of
universal values. That, as a practical matter, required the efforts
of the Russian Orthodox Church and, perhaps, the government. The
church, however, was crippled by its history of collaboration with
the KGB, and successive governments emphasized not the sanctity of
the individual as a source of values but the prerogatives of the
state.

The story of the post-communist Russian Orthodox Church is one of
lost opportunities. After the failure of the 1991 pro-communist coup,
Gleb Yakunin, a dissident priest and member of the parliament, was
briefly given access to a section of the KGB archives which showed
that the top hierarchs of the Moscow Patriarchate were agents of the
KGB. The most important KGB agent was the Patriarch, Alexei II,
himself. Yakunin wrote to Alexei and said that he and other church
leaders should deny the charges of collaboration or ask for
forgiveness, pointing out that "our people are forgiving." But only
one archbishop, Khrizostom of Lithuania, had the courage to
acknowledge that he worked as an agent for the KGB and to reveal his
codename, "Restavrator." All of the other implicated church leaders
remained silent.

With the transition to capitalism, the church quickly became the
beneficiary of official privileges, including the right to import
duty-free alcohol and tobacco and to trade in diamonds, gold and oil.
Not surprisingly, this gave rise to widespread corruption. Although
the church claimed to lack funds for charitable activities and
religious education, its business interests produced enormous profits
that then had a tendency to disappear. For example, in 1995 the
Nikolo-Ugreshsky Monastery, which is directly subordinated to the
Patriarchate, earned $350 million from the sale of alcohol, and the
Patriarchate's department of foreign church relations earned $75
million from the sale of tobacco. But the Patriarchate reported an
annual budget in 1995-96 of only $2 million.

Against this background, the role of religion in the country's moral
resurrection was necessarily limited. Church hierarchs pursued their
commercial interests and were in turn imitated by ordinary priests
who pursued theirs, blessing businesses, banks, homes and automobiles
and exorcising "unclean powers" for a fee. At the same time, the
church did not allow itself the slightest political role, remaining
silent on such genuine moral issues as Russia's pervasive corruption
and the killing of noncombatants in Chechnya.

The government, meanwhile, contributed to Russia's moral malaise by
seeking new legitimacy for authoritarian rule through the
glorification of state power. One aspect of this effort is the cult
of personality that has been created around Putin. First, a
children's alphabet book appeared in Russia illustrated with
photographs of Putin as a boy. This was followed by the production of
sculptures of Putin and paintings of the president gazing out from
the Kremlin over the Moscow River in the visionary manner of Stalin
or Kim Il-sung. Then, on Putin's fiftieth birthday, he was the
subject of laudatory hymns from youth groups, all of which were given
extensive coverage in the press. He was presented with a crystal
crocodile from Moldova, a slow growing Siberian pine tree from Tomsk,
a reproduction of the Czarist Cap of Monomakh and a golden crown
encrusted with jewels. He also had a mountain named for him in
Kyrgyzstan.

Putin is also the beneficiary of his own youth movement, "Forward
Together", which announced its existence with a pro-Putin rally at
the Kremlin wall in which young people in t-shirts emblazoned with
Putin's picture carried signs declaring, "Together with the
president" and "Youth follows the president." Forward Together has
since embarked on an effort to "purify Russian literature." On June
27 last year, the group organized a protest in Moscow directed
against Vladimir Sorokin, a popular contemporary writer. Forward
Together members rigged up a huge toilet bowl as a supposed monument
to the writer, then tore up his books and threw them in the bowl,
pouring in chlorine after the ripped pages as a supposed
disinfectant. Two weeks later, government prosecutors charged Sorokin
with pornography, although there is no provision in Russian law for
punishing an author for his work.

Perhaps more important than the Putin personality cult, however, is
the development of a new ideology that identifies Russia's future
well-being with the power of the Russian state. Propounded by
intellectual and political figures who describe themselves as
"statists" (gosudarstvenniki), this outlook treats Russian history as
the story of the development of the Russian government, in which the
Soviet period was but an episode. An inevitable result of this
approach is the de facto rehabilitation of communism and the glossing
over of the lessons of the communist period, making it that much
harder for Russian society to gain the democratic moral orientation
it so desperately needs.

This is particularly obvious in the teaching of history in which the
Gulag and mass repression are described as a tragic page in the
nation's history but not the most important. Instead, attention is
drawn to the Soviet Union's victory in the Second World War, the
improvement of the material standard of living and the building of a
superpower. There is no attempt to say that the Gulag was the basis
of the Soviet system, or that the system was itself defective. Nor is
there any effort to analyze seriously the Soviet ideology or to
compare Soviet communism with its competitor in mass annihilation,
Nazism.

In keeping with the tendency to see the Soviet past as part of a
progressive trend that was on the whole positive, some now seek to
rehabilitate even those figures from the Soviet past who were
directly involved in mass repression. Moscow mayor Yuri Luzhkov has
suggested that the statue of Felix Dzerzhinsky, the first head of the
Cheka and the founder of the "Red Terror", be reinstalled in the
square in front of the headquarters of the FSB (formerly the KGB
headquarters). A plaque commemorating Yuri Andropov, the former
Soviet leader who, as head of the KGB, was responsible for the
suppression of the dissident movement in the 1980s, has already been
reinstalled on the wall of the main FSB building.

More Building, Fewer People

The problems of lawlessness, lack of respect for human life and moral
disorientation shadow the visible changes in Moscow that have led
many to describe Russia as a political and economic success. The
improved appearance of Moscow (although not the rest of the country)
is indisputable, but it is mainly a product of the high price of oil.
Every dollar difference in the price of oil translates into roughly
$1 billion in budget revenue; a high price for oil has therefore
become the key to the government's ability to balance the budget, pay
state employees and repay Russia's foreign debt. If the price should
fall significantly and stay relatively low, as it did in much of the
1980s and 1990s, Russia will be plunged into a severe economic
crisis. At that point, the invisible moral factors in Russia's
situation will be become critical to its stability.

There has been a very unfortunate tendency, both in Russia and the
West, to interpret success in Russia strictly in economic terms. Much
of the discussion of the Russian reform experience, for example,
concerned the relative merits of "shock therapy" versus government
regulation. But a market economy is based on a system of equivalent
exchange that can only be guaranteed within a framework of morality
and law. Without such a framework, the result is no longer a free
market but just another articulation of the rule of force.

In the final analysis, Russia can only overcome the systemic problems
that threaten its future on the basis of respectfor the dignity of
the individual and the establishment of the authority of transcendent
values as reflected in the rule of law. Unfortunately, this is
precisely the element that has been missing in the whole reform
process. W.H. Auden famously called the 1930s a "low, dishonest
decade." What we see in Russia today is a low, dishonest decadence.

Perhaps the most striking example of the way these factors shape
Russian society is the country's progressive depopulation. Russia
combines one of the lowest birth rates in the world with the death
rate of a country at war. According to Igor Gundarov, the head of the
Russian state center for prophylactic medicine, if present trends
continue, the population of Russia will be reduced by half in 80
years, to about 73 million, making the present Russian state
untenable.

In the years 1992-94 there was an almost vertical rise in the death
rate. Mortality rose one-and-a-half times by comparison with the
second half of the 1980s. The rise was so dramatic that Western
demographers at first did not believe the figures.

The rise in the death rate was explained as a result of the sudden
impoverishment of the population. Poverty alone, however, could not
have been the reason for the rise in deaths. The economic level in
the 1990s fell to that of the 1960s but in the 1960s the death rate
in the Soviet Union was the lowest in the developed world. Gundarov
concluded that poverty, state encouraged alcoholism, and the
downgrading of the system of public health accounted for only 20
percent of the reduction in longevity in Russia. The remaining 80
percent was attributable to the spiritual condition of the population
in the wake of the failure to offer any new ideal for Russian society
after the fall of communism. "There proceeded an attempt to
'transplant souls' and replace the old, non-market soul with a new,
pragmatic businesslike approach to life", Gundarov said.

This change was unaccompanied by an effort to provide . . . a reason
for which the change should be undertaken. For many people, who
needed something to live for, this change was intolerable and they
lost the will to live because life no longer had any meaning.

Nikolai Berdyaev, the Russian religious philosopher, wrote that,

"In the soul of the Russian people, there should appear an immanent
religiosity and immanent morality for which a higher spiritual
beginning creates internally a transfiguring and creative beginning."

In this, he saw the hope for the future. The Russian people, he
wrote, need to enrich themselves with new values and replace a
"slavish religious and social psychology" with a "free religious and
social psychology." They need to recognize the godliness of human
honesty and honor. "At that point", he wrote, "the creative instincts
will defeat the rapacious ones." We and the Russian people are still
waiting for "that point."