Could Mikhail Gorbachev Have Saved the Soviet Union?

The Soviet leader is remembered as the man who killed a superpower. But Gorbachev’s gambit on reforms could have worked -- if only he wasn't betrayed by the Communist Party.

Amid the thousands of protesters who assembled on China’s Tiananmen Square in May 1989, just weeks before the Chinese government sent troops to crush the demonstrations, one person held a placard that declared: “We Salute the Ambassador of Democracy.” The envoy that this protester saluted was neither an activist nor a dissident nor from a country renowned for human rights advocacy. It was Mikhail Gorbachev, the general secretary of the Communist Party of the Soviet Union, who had arrived in Beijing on May 15, 1989, two weeks before the Chinese leadership’s fateful decision to send in troops. The type of democracy he offered was not Western-style liberal capitalism but market socialism. Chinese students took trains from far-flung provinces just to see him. Gorbachev inspired China’s protesters on Tiananmen Square because the Soviet leader’s struggle to refashion the Soviet Union’s centrally planned economy and authoritarian political system mirrored their efforts in China. Reformers in both countries, protesters believed, were fighting similar battles.miller

Gorbachev’s visit, which marked the restoration of normal relations between the People’s Republic of China and the Soviet Union, had been planned long in advance. But Beijing was unsure how to greet Gorbachev, the Soviet superstar. His meeting with Deng Xiaoping came as the Chinese leader was drawing his country away from central planning and toward a market economy. Moreover, it proved impossible for Beijing and Moscow to separate foreign relations and domestic politics. Chinese officials were unnerved by Gorbachev’s strategy of mixing market reforms with democracy. They saw how the Soviet leader’s example encouraged demonstrators on Tiananmen Square to demand that China follow the new path Gorbachev was forging in the Soviet Union.

In a speech in Beijing prior to the Tiananmen crackdown, Gorbachev told his Chinese audience that “economic reform will not work unless supported by a radical transformation of the political system.” This is why, he explained, the Soviet Union had held contested elections the previous month, for the first time in generations. “We are participating in a very serious turning point in the development of world socialism,” Gorbachev explained, in which many socialist countries were embracing freedom of expression, protection of rights, and democracy. Hard-liners in the Chinese government prevented the broadcasting of Gorbachev’s speech.

By the end of the 1980s, Gorbachev had concluded that ending the Communist Party’s political monopoly was the only way to implement his economic agenda. But Deng and his hard-line allies in the Chinese Communist Party leadership were unwilling to give up power without a fight. As Gorbachev left Beijing, the authoritarian wing of the Chinese Communist Party was already preparing a crackdown. On June 4, 1989, Deng sent the army into Tiananmen Square, killing at least several hundred protesters, maybe many more. The lesson, Deng told a meeting of top party leaders on June 16, was simple: “The recent events show how crucial it is that China stick with the socialist road and the leadership of the party. Only socialism” — that is, only one-party rule, Deng said — “can save China and turn it into a developed country.” China needed to focus on its economy, he argued, to ensure nothing like the Tiananmen protests happened again.

Mikhail Gorbachev shakes hands with Chinese leader Deng Xiaoping May 16, 1989, in Beijing prior to a top-level meeting. (Photo by CATHERINE HENRIETTE/AFP/Getty Images)

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Scholars who study China’s government have long noted how closely Beijing studied political and social changes in the Soviet Union. Yet historians have generally overlooked the central role that China played in Soviet debates about how to remake state socialism during the 1980s. Deng’s decision to crush the protests on Tiananmen Square and to double down on authoritarian rule placed China on a path toward a market economy without democracy. The Soviet Union, meanwhile, embraced free speech and multiparty elections even as it plunged into a devastating economic depression before breaking apart into 15 separate countries. Many people blame the post-Soviet chaos on Gorbachev’s decision to democratize Soviet politics. Russia’s economy has since recovered from those tumults, but liberal politics did not survive.

Today, Russia has a market economy and an authoritarian political system. Many Russians wonder whether they would be better off had they taken Beijing’s model of authoritarian capitalism from the beginning. Why did Gorbachev not follow China’s path?

A file photo shows students from Beijing University during a massive demonstration at Tiananmen Square on May 18, 1989 before they start a hunger strike as part of the pro-democracy protests against the Chinese government. (Photo by CATHERINE HENRIETTE/AFP/Getty Images)

The crackdown on Tiananmen Square transformed China’s politics, and it marked a turning point for the Soviet Union, too. In 1989, at the very moment China was forging anew its authoritarian system, Gorbachev was freeing the press, liberalizing political speech, and introducing competitive elections. In just two years, Gorbachev tore down the Soviet autocracy and began building the foundations of a democratic polity. Yet this political change was accompanied by a series of shake-ups that undermined the Soviet state. Local elites began mobilizing ethnic minorities in the Soviet Union’s far-flung regions, from the Fergana Valley of Central Asia to the Caucasus. The growing power of regional elites meant that Gorbachev’s writ was increasingly ignored outside of Moscow. The Soviet media — newly freed by Gorbachev’s reforms — took aim not only at Gorbachev’s enemies but at his own failings, too. Never since the Bolshevik Revolution had a leader been subject to such public criticism.

The Soviet leader’s greatest problem, however, was his country’s economy. After crushing the Tiananmen protests, China suffered a brief economic slowdown in 1990 but quickly rebounded. The Soviet economy, by contrast, spiraled inexorably downward. Gorbachev implemented a series of measures to introduce market incentives and legalize private businesses in industry and agriculture. Many of these changes — at least in aim, if not in execution — were broadly similar to the economic reforms that Deng instituted in China. Amid these policy changes, however, the Soviet Union faced a growing budget crisis that Gorbachev was powerless to address. Unlike in China, Soviet politics were gridlocked, and Gorbachev had little room to maneuver. The budget deficit continued to spike upward, and because Moscow had only limited access to debt markets at home or abroad, the deficit was financed by creating credit and printing rubles. This caused a surge of shortages and inflation that exacerbated the country’s economic difficulties and eroded the government’s authority. By the end of 1991 — just two years after Gorbachev’s visit to China — the Soviet economy was in tatters. Factories ceased production, transport ground to a halt, and bread lines grew ever longer.

Gorbachev was powerless to resolve the crisis. The desperate economic situation meant there was no money with which to appease separatists or disgruntled ethnic groups across the Soviet Union. Meanwhile, Gorbachev’s weakness vis-à-vis the military, powerful industrial groups, and the country’s vast network of collective farms meant that he was unable to impose budget cuts. His only other chance of balancing the budget and defeating inflation and shortages was to hike consumer prices — as post-Soviet Russia would eventually do in 1992. But Gorbachev knew that price increases would eliminate whatever popularity he retained. Any attempt to balance the budget, either by cutting spending or raising prices, could easily cause his downfall. Political paralysis produced by the powerful forces who opposed economic reform was the ultimate cause of the Soviet Union’s collapse.

Confronting these entrenched elites, Gorbachev hesitated, fearing the political forces arrayed against him and hoping that the economic reforms he pushed through would spark economic growth. This was a gamble that Gorbachev did not win.

The military coup he long feared finally arrived in August 1991. The security forces, who conspired with big industrial lobby groups, locked Gorbachev in his Crimean dacha and seized power. The coup failed after just three days, but not by Gorbachev’s efforts — he remained stuck in Crimea — but because of Russian President Boris Yeltsin’s skill in mobilizing Moscow against the coup. Gorbachev watched impotently from his vacation home as Yeltsin defeated the putsch. Four months later, in December 1991, the leaders of the Russian, Ukrainian, and Belorussian republics met discreetly in a forest lodge and declared that the Soviet Union — the country Gorbachev governed — would no longer exist. The Belavezha Accords were signed on Dec. 8 and began the process that effectively dissolved the Soviet Union. As the clock rolled over into Dec. 26, 1991, the world’s largest country officially no longer existed.

The abolition of the Soviet Union and the emergence of an independent Russia did nothing to resolve the country’s economic problems, however. Yeltsin, the president of newly independent Russia, inherited Soviet shortages and its gaping budget deficit. In response, he freed price restrictions on consumer goods, eliminating shortages but creating rapid inflation that wiped out most families’ savings. Yeltsin also slashed military spending, threatening to put former soldiers and defense sector employees out of work. Farm subsidies were cut, pushing agricultural regions into poverty. Some industries fared better; several, such as Gazprom, the state-owned gas company, managed even to increase their influence. Yet the 1990s were, for most Russians, a period of tumult and tragedy.

A picture taken on Aug. 19, 1991 shows Soviet Army tanks parked near the Kremlin in Moscow's Red Square during the coup attempt against Mikhail Gorbachev. (Photo by DIMA TANIN/AFP/Getty Images)

At the time of Gorbachev’s visit to China in 1989, few people would have guessed that a decade later Deng’s policies would look smart and Gorbachev’s reckless. In the late 1980s, Gorbachev was widely hailed for his liberalizing policies. He won the Nobel Peace Prize in 1990 for reshaping the Soviet Union and ending the Cold War. Meanwhile, China’s decision to crush the Tiananmen protests was not only condemned worldwide by governments and media; it was also interpreted as evidence of Beijing’s backwardness.

But by his death in 1997, Deng’s decision appeared vindicated, as world opinion had turned decisively in his favor. Deng had seen enough of Russia’s tumultuous politics to know where he stood: sacrifice political liberalization for stability’s sake, because the alternative was chaos and collapse. Chinese analysts of Soviet politics continue to fault Gorbachev for abandoning central planning too rapidly and in a disorganized fashion. Rather than liberalizing politics, they argue, Gorbachev should have focused on the economy.

Today, top Chinese leaders cite the Soviet Union as an example of why China’s Communist Party must keep its fist clenched on power, even as it casts off the last remaining vestiges of the Maoist economy. Jiang Zemin, who succeeded Deng as China’s leader, argued in 1990 that the Soviet Union’s main problem was that Gorbachev was a traitor like Leon Trotsky, the Soviet revolutionary who was found guilty of betraying Marxism-Leninism by then-leader Joseph Stalin. That was an ironic charge coming from the official who first formally welcomed China’s business classes into the supposedly communist ruling party. Yet in December 2012, Chinese President Xi Jinping echoed this analysis. “Why did the Soviet Union disintegrate?” he asked a group of Communist Party members. “Their ideals and convictions wavered,” he explained. “Finally, all it took was one quiet word from Gorbachev to declare the dissolution of the Soviet Communist Party, and a great party was gone.” Yet it is Deng’s logic that has come to dominate most interpretations of the Soviet Union’s collapse. “My father,” reported Deng’s youngest son, “thinks Gorbachev is an idiot.”

In Russia, many agree. Russians regularly rate Gorbachev as one of their worst leaders of the 20th century. A 2013 poll found that only 22 percent of Russians perceive Gorbachev positively or slightly positively, while 66 percent have a negative impression. By contrast, Leonid Brezhnev, who presided over two decades of stagnation, is viewed positively by 56 percent of Russians. Even Stalin, who managed a murderous reign of terror, gets positive marks from half of Russians. It is not surprising, then, that Deng’s reputation in Russia has risen. Many Russians see China as a model of what their country should have done during the 1980s and 1990s. Liberal politics cause chaos and economic distress, many Russians have concluded, and only a strong hand can deliver economic growth.

Given the growing appeal of market economics combined with authoritarian rule, it comes as no surprise that dictators such as Russian President Vladimir Putin criticize democrats like Gorbachev. The Communist Party was the institution that held the Soviet Union together; it ensured that laws were obeyed and taxes were paid. Once Gorbachev began his assault on the party’s authority in the late 1980s, is it any surprise that the country fell apart?

Lost in this explanation is the fact that the Soviet system gave power to a new ruling class of generals, collective farm managers, and industrial bosses, all of whom benefited from economic waste and inefficiency. Deng managed to compromise with other elites, letting them retain their authority in exchange for their support in pursuing economic reforms that allowed China to grow. But in the Soviet Union, economic reform meant destroying the power base of the special interest groups, leaving a potential military coup lurking in the background and hanging over Gorbachev’s head. That was a threat Deng never faced.

The reason why Gorbachev lost out is not because the Soviet economy was unreformable. China’s example proved that the transition from a centrally planned to a market economy was possible. Rather, the Soviet Union collapsed because vast political power was entrusted to groups that had every reason to sabotage the efforts to resolve the country’s decades-long financial dilemmas.

In the end, the political clout of these interest groups proved far greater than Gorbachev anticipated. In his quest to reform his country and steer it away from calamity, Gorbachev brought about the very process that would eventually lead to the Soviet Union’s collapse.

This article is adapted from Chris Miller’s new book, The Struggle to Save the Soviet Economy: Mikhail Gorbachev and the Collapse of the USSR.

Top image credit: Getty Images/RPS/Ullstein Bild/Foreign Policy Illustration

Chris Miller is the associate director of the Brady-Johnson Program in Grand Strategy at Yale University. (@crmiller1)