Consortium News, 1/2/24

The National Security Archive recently published a 1994 memo by E. Wayne Merry, a U.S. diplomat in Moscow who provided an on-the-ground assessment of U.S. policies toward a Russia that was in chaos. 

In his memo — sent by telegram — Merry criticized the U.S. tendency to prioritize experimental shock therapy rather than laying the foundation for the rule of law. 

He also said that Russia’s historical and cultural experience was not conducive to the same lionization of unfettered free markets that Americans had.

The memo represented a different view of how the U.S.-led West could have managed its relationship with and guided reforms in post-Soviet Russia — a view that unfortunately was not followed.      

Natylie Baldwin:  You wrote an assessment of what was going on in Russia for the State Department in March of 1994.  It was entitled “Whose Russia Is It Anyway? Toward a Policy of Benign Respect.” The National Security Archive published it in December 2024 and described it as “The Long Telegram of the 90’s.”  What was your formal role for the U.S. government at that time and what prompted you to write this assessment?

Wayne Merry: From August 1991, I was chief of the Political/Internal section of the U.S. embassy in Moscow, in charge of reporting and analysis on political developments in the late Soviet Union and then Russia.  I had worked in this section a decade earlier and was very familiar with the role. 

Given the historic events underway from 1991 through 1994, it was a central part of my job to attempt to explain these events to a Washington readership and especially to challenge misperceptions in Washington about Russia through the advantage of being on the ground.

Baldwin: One of several themes in the assessment was the U.S./West’s insistence on implementing exploitative neoliberal economic policies on Russia in that era that were leading to a lot of destabilization and major social problems.  These policies were understandably unpopular among most Russians.  

You made the point that, as far as U.S. interests relating to Russia were concerned, Washington should have prioritized diplomacy and the successful building up of democracy and the rule of law and let the Russians decide their own domestic economic policies.  Explain how you arrived at that conclusion about U.S. interests and how our policies at the time were problematic.

Merry:  It was not difficult in-country to see that the macro-economic stabilization policies which had been fairly successful in Poland were not so in Russia and that more maturity of post-Soviet Russia’s political institutions was essential to permit a non-criminalized development of a market economy. 

There was considerable debate on the American side, in Washington and in Moscow, as to which should have priority — market economics or rule of law.  As someone with years of in-country experience of Russia, I felt strongly that political and legal reforms should take priority. 

In 1998, demonstrators in Pereslavl, Russia, with banner saying “Jail the redhead!” in reference to Anatoly Chubais, the Russian politician and economist responsible for the privatization program under President Boris Yeltsin. (Pereslavl Week, Yu. N. Chastov, Wikimedia Commons, CC-BY-SA 3.0)

Baldwin:  In making your case on that point, you predicted that U.S. policies were eroding much of the good will that Russians had toward the West in general and the U.S. in particular, right after the Cold War ended.  Indeed, Russians did become very disillusioned by the U.S./West and ended up having a less than positive view of democracy because it became associated with the poverty, crime and chaos that accompanied Western involvement in their country in the ‘90s. To what extent were you already seeing this resentment from Russians at the time that you wrote this in 1994?

Merry:  These developments began under [the last Soviet leader Mikhail] Gorbachev and were well advanced by 1994.

Baldwin:  In your assessment you stated:

“Thus, ‘reform’ of the Russian economy will, of necessity, be the work of many years.  The Russian approach to this process will be different from our own, reflecting a better appreciation of their needs and societal preferences.  In facing the colossal mistakes of the Soviet period, Russia can and will fall back on traditions long pre-dating the Leninist state: traditions amenable and sometimes even rational in a Russian context, even if they differ sharply from American experience and inclination.” 

To most people, I think this point you make about Russia progressing on the road of economic reform in a manner that reflects their unique history — and you also go on to mention geography and climate — seems like common sense.  Why do you think U.S. decision-makers couldn’t understand this and act accordingly?

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Merry:  Most advocates of “shock therapy” in Russia had little or no experience of the country, let alone of its social and political cultures.  They simply believed in their macro-economic ideology as applicable anywhere on earth.  I had encountered this perspective among academic economists in the United States during my student years but had learned from other economists with a broader range of thought.

Baldwin:  To continue with that line of thought, when reading your 1994 assessment, it is notable that you provide an analysis based on an acknowledgment of objective reality.  Today that really seems to be missing from so much that is written by supposed experts in the U.S. about Russia and policies toward it. 

Analysis today seems to be very ideologically/narrative driven and facts seem to be easily dismissed if one simply doesn’t like the facts or they don’t fit a preferred narrative.  

What do you think may explain this?  Is there a difference in the education and training of academics and government officials these days?  It’s safe to say that arrogance breeds foolishness — is it just arrogance due to the fact that we’ve been the lone superpower for several decades? 

A young boy and U.S. President Ronald Reagan in Red Square, Moscow, 1988. (Reagan White House, Wikimedia Commons, Public domain)

Merry:  I am not familiar with recent education in this country about Russia, but certainly the policy arrogance we saw in Iraq and Afghanistan had its parallels in our policy in Russia in the ‘90s.  

Baldwin:  At one point in your assessment, you refer to the legislative elections that had taken place in December of 1993. You said the following:

“What the election showed, yet again, is that Russia is a very different society than America. In contemporary American rhetoric, ‘democracy’ and ‘the market’ are treated as synonymous terms and certainly as mutually dependent. 

Few, if any, Russians perceive them so. American dogma portrays ‘democracy’ and ‘the market’ as freedom of choice for the individual in the political and economic realms, with highly positive ethical connotations.  Russians (and most non-Americans) are simply baffled by this vision of a societal double helix of political and economic decisions leading to a higher moral and material state of being. Very, very few Russians impart positive ethical content to market forces, and unfortunately more of these are mafia than economists.”

Can you discuss this difference in outlook by Russians about the relationship between democracy and the market?  What are those differences rooted in for Russians?  To what extent do you think this is still true in Russia today?

Merry:  I think Russia remains closer to its pre-Soviet roots than to any kind of contemporary Western market economy.  I would recommend reading the works of Nikolai Leskov, a late 19th Century Russian author, to get a grip on the realities of 21st Century Russia.

Baldwin:  You also noted that, given Russians’ seven decades of experience with Soviet socialism, one thing they were weary of was economic theory.  The last thing they wanted after communism fell was to be the subjects of a socioeconomic laboratory experiment which is how many Western officials and academics viewed Russia in the 90’s. Can you expound on that?

Merry:  Certainly, many of the Western economists who came to post-Soviet Russia did so with an enthusiasm for large-scale market experimentation.  I recall that one of the most common slogans in public demonstrations under Gorbachev and [the Russian President Boris] Yeltsin was “no more experiments.”  

Yeltsin ahead of the 1996 presidential election. (Kremlin.ru, Wikimedia Commons, CC BY 4.0)

The Soviet system fairly exulted in its mass social and economic experiments, which most people came to loath.  

Most Russians pretty much assumed that Americans and Europeans must know the correct way to run a modern economy, so did not need to experiment.  They were not amused when many of the Westerners who came to “educate” Russia in market economics saw their roles as one of mass experimentation. 

Russians said they wanted to live “normal” lives.  That word, “normal,” in Russian carries with it a very deep well of frustration and dissatisfaction both with their own leaders and with the outsiders with their view of the Russian people as little better than laboratory animals for experimentation.   

Baldwin:  You also discussed the fact that Yeltsin was losing his popularity at the time.  Yeltsin went from being very popular in 1991 to now being seen by many Russians as one of the worst leaders the country has ever had.  As someone who had a front row seat during that period, what factors would you say led to his popularity taking such a nosedive and virtually destroying his legacy?

Merry:  Yeltsin suffered from excessive expectations, especially after Gorbachev.  Yeltsin enjoyed very high levels of popular acceptance in 1991, but this proved fragile under the pressure of high levels of inflation; loss of employment and access to consumer goods; loss of great power status and pride, plus the poor human relations exhibited by some of his team.  

Yeltsin could be a terrific leader in a crisis, but keep in mind that the patience of the Russian public with its government had eroded badly even under [Soviet leader Leonid] Brezhnev.  Yeltsin had great instincts for tearing down the old Soviet system, but little grasp of what could or should come after.  I think his military interventions in Chechnya also were catastrophic errors, both at home and in terms of his image abroad.  

Baldwin: What do you think are the biggest lessons from that period that would be helpful for U.S. policymakers to understand now in our relationship with Russia?

Merry:  Humility would be a great asset in U.S. policy, but I do not expect to live to see it.