WALTER CRONKITE: In 1992 Russia's new government launched a major campaign of privatization in an effort to quickly establish free markets. It was supposed to cause initial pain, but result in a healthy economy within a short time. Almost ten years later, there's not much health, but lots of pain remains. Producer Reese Erlich visited the Yasnogarsk (yaz'-no-garsk) Machine Factory, 100 miles south of Moscow, to find out how workers such as Andre Guantinfa [guan-teen'-fah] have faired in the last ten years.
[Factory noise: Squealing brakes, pounding, scraping, and hammering]
REESE ERLICH: In the late 1980s, the Yasnogarsk Machine Factory was a bustling, humongous place. It was the largest—indeed the only—Soviet factory producing heavy equipment for coalmines. Over 8000 workers churned out coal cars and sophisticated pumps. Andre Guantinfa, a plumber by trade, offered an informal tour of the factory.
ANDRE GUANTINFA: (Via Translator) Here in workshop #1, we make the train cars that run through the mines.
ERLICH: I didn't meet Andre until after my 1990 trip to the Soviet Union, but he describes what his life was like back in those days.
GUANTINFA: With my wife and I working, we earned enough to buy food, clothes, furniture, a TV, fridge, everything. Medical care was free, and the doctors were better then. The trade union paid for part of the cost of childcare, so it was quite affordable.
ERLICH: Life was far from perfect, Andre says, but it was comfortable and predictable. He strongly resented the lack of political freedom, however, under Soviet style socialism.
GUANTINFA: If you said anything critical, you were taken to prison. It was just a dictatorship of one person or the small number of men in power.
ERLICH: Mikhail Gorbachev tried to change all that. In other countries, Gorbachev is remembered for allowing greater political freedoms in the Soviet Union. Like most Russians, however, Andre focuses on Gorbachev's economic failures.
GUANTINFA: Under him the country began to go to ruin. He is praised everywhere in the world, but what did he do? He passed a law banning vodka, and it backfired. He passed a law on the control of production, and again, it went wrong.
[A truck passes]
ERLICH: A lot has changed in Yasnogarsk over the past ten years. The factory was privatized. The workers received company stock, but because of economic hardship, they had to sell their shares to wealthy investors from Moscow. The promise of democratic capitalism turned into the reality of control by an outside elite. Production is way down, and the once bustling factory of 8000 now employs 2000.
[High frequency tool]
[REESE to a worker] How many of these do they produce in a month?
[WORKER] (Via Translator) One or two. We used to produce up to twelve machines.
On the factory floor, Andre introduces me to fellow worker, Alexandr Sergeivich Gorbachev. ...I know. I was thinking the same thing. So I asked him, "By any chance, are you related to...?"
ALEXANDR SERGEIVICH GORBACHEV: (Via Translator) In fact, no. My grandma says she come from Stavropol region, so maybe we're a distant relation to Mikhail Gorbachev.
ERLICH: Alexandr Gorbachev says that in 1998 everything began to unravel at the Yasnogarsk Machine Factory. Management told workers they couldn't afford to pay their wages. In fact, the Moscow investors had sent money but the managers had invested it, according to Gorbachev.
GORBACHEV: They still didn't pay our wages. They put the money into pyramid schemes and the managers lived on the interest. Then in August 1998, the economic crisis hit and the banks collapsed. They lost all the money for our wages. There was nothing.
ERLICH: In December 1998, the factory director and chief accountant were arrested. The managers were allegedly stealing company assets. The workers were furious and went on strike. Andre says the women strikers were the most stalwart, even blocking the regional railroad tracks as a way to focus attention on the strike.
GUANTINFA: The women were the main fighters. When they were going to block the railroad, the south line, the women went ahead, and I was running after them to help, and they told me "Beat it!"
ERLICH: The strike lasted seven months, but the workers won important concessions. New managers were installed. An elected commission of three workers must now approve all company purchases and sales—an effort to prevent embezzlement by managers
[Tea kettle steaming, clank of tea cups]
In the cramped commission office across from the factory, Andre pours cups of strong, black tea. A benevolent drawing of Lenin peers down at us. Andre explains that Lenin is left over from the days when this was a factory administrative office, and the workers see no reason to remove him. Many Russians still respect Lenin as a strong leader who fought in the interests of the working class.
[Sound of rattling contract papers and talking]
Ironically, the worker's commission may be operating closer to Lenin's ideal of working class control than anything implemented in the old Soviet Union. As we're speaking, a factory secretary rushes in asking for signatures on a sheaf of papers.
[Papers rustling, workers talking]
Nothing moves in or out of the factory without commission approval. So Andre says the commission members—all workers—must learn a lot about how to run a factory.
GUANTINFA: Those papers came from the head of the supply department. If we don't find the price satisfactory for the purchase, we don't sign it. Same for the prices of goods we sell. We try to adjust the prices so they are more profitable for the factory.
[REESE asks Andre if the factory is making a profit?]
I really can't say that there is any profit, but you're going to talk to the factory director. So I'm interested myself in what he will say.
[Sounds of walking up stairs, door opens]
ERLICH: Factory director Yuri Karunin's office hasn't changed much since the old Soviet days. The door with thick leather padding still guards the inner sanctum. Karunin says the factory, even after ten years of privatization, isn't making a profit. Monthly income meets expenses, he says, but the factory can't pay off old debts.
YURI KARUNIN: We need an infusion of one million dollars to survive. On paper we are making just enough money, but actually, we work without a profit.
ERLICH: The problem, says Karunin, isn't the alleged embezzlement by former managers. He claims that they made business mistakes but aren't criminals, and notes the case is still under investigation by authorities. Karunin says the factory mainly suffers because of the huge decline in Russia's coal industry.
KARUNIN: The government has abandoned the coal industry. It's a mess. We used to sell equipment to the Ukraine, but it is not even in the same country anymore. The miners do need the machinery, but the mines lack money, and the situation remains difficult.
ERLICH: I asked Karunin why a large majority of Russians say their lives were far better in the Socialist Soviet Union?
KARUNIN: It was more convenient for people, the system of production and distribution, the stable wages, but we produced machinery whether there was demand or not. I've talked to miners, and they said they used to accumulate machinery that they never used. The old system was ineffective and so bad; it had to break down.
[A door closes, walking out of manager's office, then factory sounds]
ERLICH: Back on the factory floor, Andre introduces me to another worker, 61 year-old Pyotr Kalensnikov. Pyotr acknowledges that a lot of things didn't work very well in the old Soviet Union. But life was far better for ordinary working people, he says. Employment was virtually guaranteed and everyone had a decent, if minimal, level of social services such as health care and education. Today, says the bitter Kalesnikov, the social system has broken down, particularly for the youth.
PYOTR KALENSNIKOV: The young people now resist education. There used to be Young Pioneer camps and sports schools for them. Now there's nothing. They're not interested in anything. They even try to steal electrical power lines from the power poles.
[Sound of factory ambiance slowly fades away]
ERLICH: Andre and I leave the factory for a bit of respite at a park across the street. The bushes are overgrown. A statue of Lenin resolutely pointing the way forward is covered with bird droppings.
[Outdoor sounds, birds]
The Yasnogarsk Machine Factory is all too typical of Russia's economic morass. Privatized industries were supposed to become more efficient and productive. In reality, Russia's new economic elite is far more interested in a quick ruble than in long-term investment. The economy is becoming increasingly monopolized by a small number of businessmen who have little concern for workers like Andre. When asked if the new capitalism, for all its faults, will ultimately provide a better life for Russian workers, Andre laughs.
GUANTINFA: In this country it is not profitable to produce anything. It's profitable to sell things because people who sell things live well at the expense of consumers and workers. When privatization began, nobody explained anything. So now management says, "Well, you supported privatization." But we didn't know better.
ERLICH: For workers like Andre, the promises of free markets and democracy have proven hollow. He's part of a small, but angry worker's movement trying to organize for the rights of ordinary Russians.
For the Russia Project, I'm Reese Erlich, Yasnogarsk, Russia.
© 2001 by The Stanley Foundation
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