Tuesday, January 5, 2016

How A Supermarket Visit Brought Down The Soviet Union

Many point to the fact that the Soviet Union collapse occurred as the Soviets were baited into trying to compete with the defense build-up instituted by Ronald Reagan.

The Soviets just did not have the financial resources to match the United States in defense spending while also tending to the needs of its citizenry. The Soviets spent money on guns rather than butter. Something had to give and the Soviet people were the ones that suffered.

However, a little known visit to a suburban Houston supermarket in 1989 by Boris Yeltsin appears to have been the catalyst that ended up bringing down the Soviet Union.

Yeltsin visited the Johnson Space Center in Houston in September, 1989 to tour mission control and to view a model of the planned International Space Station.

After visiting the Space Center, Yeltsin made an unplanned stop at a local Randall's grocery store that was close by before heading to the airport.

That visit changed the course of history.

At the time, Yeltsin was a newly elected member of the Soviet Parliament and the Supreme Soviet and had been a key ally of the General Secretary of the Communist Party Mikhail Gorbachev, who was initiating reforms but the pace of which was too slow for Yeltsin.

Houston Chronicle reporter Stephanie Asin was with Yeltsin on the visit to the grocery store that day.

Yeltsin, then 58, “roamed the aisles of Randall’s nodding his head in amazement,” wrote Asin. He told his fellow Russians in his entourage that if their people, who often must wait in line for most goods, saw the conditions of U.S. supermarkets, “there would be a revolution.”
“Even the Politburo doesn’t have this choice. Not even Mr. Gorbachev,” he said.
The fact that stores like these were on nearly every street corner in America amazed him. They even offered free cheese samples. According to Asin, Yeltsin didn’t leave empty-handed, as he was given a small bag of goodies to enjoy on his trip.

This is a picture of Yeltsin touring the grocery store.

Credit: Houston Chronicle

This Houston Chronicle story from 2014 fills in the rest of the story.

About a year after the Russian leader left office, a Yeltsin biographer later wrote that on the plane ride to Yeltsin’s next destination, Miami, he was despondent. He couldn’t stop thinking about the plentiful food at the grocery store and what his countrymen had to subsist on in Russia.
In Yeltsin’s own autobiography, he wrote about the experience at Randall’s, which shattered his view of communism, according to pundits. Two years later, he left the Communist Party and began making reforms to turn the economic tide in Russia. 
“When I saw those shelves crammed with hundreds, thousands of cans, cartons and goods of every possible sort, for the first time I felt quite frankly sick with despair for the Soviet people,” Yeltsin wrote. “That such a potentially super-rich country as ours has been brought to a state of such poverty! It is terrible to think of it.”

To give you some perspective on what was available in the Soviet Union at that time, here is a picture of a Russian store from that era.


Credit: Gennady Galperin/Reuters

An aide to Yeltsin later reported that in that visit to the grocery store in Houston “the last vestige of Bolshevism collapsed” inside his boss.

Two years later Yeltsin was elected to the newly created office of President of the Russian Federation after the collapse of the Soviet Union with Gorbachev.

Yeltsin immediately began dismantling the socialist economic system and introducing capitalism to the Russians. In the process he attempted to convert the world's largest command economy into a free-market one.

The results of that transition were rocky in large part to cronyism in the break-up of many of the large state-owned businesses. In the process, many Russian oligarchs were created and Yeltsin eventually resigned his office in 1999 haunted by charges of corruption and incompetence.

His successor?

Vladimir Putin.

The falling price of oil has put a similar squeeze on Putin and the Russians today. Putin has been popular with the Russian people based on his macho style and nationalistic bombast. However, potential trouble lurks for Putin because of the Russian economy.

The Russian consumer is being squeezed with annual inflation of almost 20% and the average Russian spends about 50% of their income on food.

By comparison, the average American spends only 8% of income on groceries.

Will groceries once again determine the future of Russia?

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