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. Last Updated: 07/27/2016

The Making of a New Class

The privatization process was always conceived of as a class struggle. Not, as its opponents said, because the shapers of it were Bolsheviks in liberal guise, but because what had been conceived of as a political and social system was never going to be comparable to selling off British Telecom -- though Margaret Thatcher, who happened upon privatization first, did view it as a means of conforming her political base and weaning part of the working class away from support of a Labour Party politically wedded to public housing. For the few at the top, power, prestige and money were all at stake in the loss of state control. But if seen only in that way, the difficulties of the privatization process have no explanation. For the many, the system worked in providing not just a steady job but steady accommodation, supplies, medical and other services. And the transition to a new system will, for a greater or lesser amount of time, not work -- or at least not work well. Thus they have a stake in it too, however modest. It is thus a struggle not just with the leaders of the Soviet-created working class, but with the class as a whole. A class is after all not born, but made. Though the failures of the Soviet system are legion, its success in creating human beings in the image of the system's founders' notions is underestimated. That which Marx-Engels-Lenin-Stalin put together, will take Smith-Hayek-Sachs-Chubais a long time to put asunder. It is worth a moment's reflection on how far the ideals of communism found some kind of practical reality. The feeling that they did is borne in upon the foreigner the longer he remains here. The reality, in Brezhnev's time, was security and relief of basic material care for those who had little desire to be politically or intellectually active. For many, it was not a bad deal in comparison to the past: It was certainly worth trying to cling on to the remnants of it, even if people try to do so while preserving freedom of political and cultural choice as well. Capitalism co-exists with freedom of the mind and the spirit only on the explicit understanding that it produces a higher standard of wealth: Where it does not, it can be as tyrannous as post-Stalinist Communism, if even more unstable. It certainly has not yet done so here: Until it does, the class struggle will hang in the balance. Hence the need to move away from the tactic of breaking the power of the leaders of the class (in the first phase) to creating new leaders of a bourgeois class (in the second). These people are now, to some extent, in place: in banks, finance houses, in a few enterprises, in trading companies, in law offices, even in local and central governments. They know, a little more each day, what must be done and are becoming better at doing it. But they are still uncertain. The major business leaders, fearful of assassination, surround themselves with little armies and live inside walled compounds and shuttered offices, with a higher decree of personal security than a paranoid first secretary. The new marketeers live outside the law, even if "only" the tax law: very nice for disposable income, but hopeless in building a state in which personal enrichment is sanctioned and secure. They do not know if the old class can still lash back at them: They certainly know that its once-vigilant guardians in the KGB, the interior forces and the militia will do very little to protect them unless specifically paid or hired to do so. They are like the first real merchants, fearful of the feudal society they are breaking from even as they were contemptuous of it. Privatization's class struggle moves, as the communists used to say, into its sharpest phase. The next year, or year and a half, will be decisive. And very rough. John Lloyd is Moscow bureau chief for the Financial Times.