Russia: Marx, Lenin, and the Death of an Illusion - The Wise World Traveler: Becoming a Part of All that You Meet - page 139

In 1991 the people of Russia had no practical or past experience with democracy. Their
history was a millennium of autocratic rule. And for seventy-four years, their economy
had staggered and groaned under public ownership of property and centralized government
planning. Libraries worldwide contained shelves of topics instructing social planners how
to achieve the socialist dream of a government-directed economy or perhaps the socialist
dream of public ownership of property. But few if any offered instruction on how to move
from a government-run economy to a market-run economy.
Great social change greatly disrupts citizens' lives, especially the least autonomous
members of society. As part of what was called economic shock therapy, intended to push
Russia quickly into a market economy, the Russian ruble was made convertible to other
currencies and permitted to float freely, to rise and fall according to what it would bring
on the domestic and international markets. The result was ruinous inflation (2,500 percent
in 1992) and skyrocketing prices, especially for imported goods. The elderly, subsisting on
state pensions, were reduced to abject poverty. Many factory workers, without government-
assured sales for their products, went unpaid for months. Some factory managers helped
workers to survive by bartering with other factories for useful products. In 1999, 30 to 40
percent of Russians lived below the poverty line (defined as one dollar per day.) And a
new economic elite, an oligarchy, emerged. Ten percent of the population is estimated to
own 50 percent of the country's wealth. In the former Soviet Union, camouflage attemp-
ted to hide the lifestyle differences between rich and poor. In today's Russia, the newly
rich flaunt their wealth with mansions, flashy cars, elegant clothes, and membership in ex-
clusive health clubs. Their children attend private schools; many go to universities abroad.
Magazines, new to Russian publishing, feature the comings and goings of the rich. Their
lives contrast sharply with those of more ordinary citizens, whose average wage in 2007
was $18.17 a day [129] and today is around $25 a day according to most estimates.
HOW DID THE NEW ELITE ACQUIRE ITS WEALTH?
The elite gained wealth mostly by theft and fraud. Russia's road to capitalism began with
the government selling at auction its vast property holdings, the greatest transfer from pub-
lic to private hands in history. Most coveted were income-producing enterprises; apart-
ment buildings, banks, and television stations were bidders' delights. Even more so were
oil fields and refineries, natural gas wells, pipelines, gold and diamond mines, and depos-
its of industrial minerals. Their products could be marketed abroad, and profits could be
skimmed for safekeeping in foreign banks. Money for auction purchases was pulled from
several sources. High-ranking officials of the former secret police had established secret
bank accounts abroad. The same occurred for the former regime's well-organized criminal
gangs. These funds were repatriated for the auctions.