Moscow, December 25, 1991

At first the rivals chose to enter into an alliance to meet the crisis. The command system having failed so catastrophically, Gorbachev and Yeltsin agreed to cooperate on a crash program to create a market economy. The task of drawing up a blueprint was given to a joint working group led by radical economist Stanislav Shatalin, a balding adviser to Gorbachev with a quick sense of humor who referred to himself as the Diego Maradona of economics, and Yeltsin’s deputy prime minister, Grigory Yavlinsky. Gorbachev and Yeltsin at last had a civilized meeting. For five hours in late August, as the rain beat down incessantly outside the Kremlin, they agreed to implement the forthcoming economic plan together. The Russian leader felt Gorbachev treated him as an equal for the first time. He mollified the Soviet president by declaring that for Russia to go it completely alone would mean destroying the Union, and he had rejected that notion.

The accord between Gorbachev and Yeltsin didn’t last. Gorbachev balked when Shatalin and Yavlinsky produced a five-hundred-day plan similar to the shock therapy applied in Poland earlier in the year. It involved the step-by-step lifting of price and currency controls, withdrawal of state subsidies, and largescale privatization, with October 1, 1990, as the starting date. The Soviet leader caved in to ferocious pressure from the military and industrial sectors, which feared losing their generous subventions, and from party hard-liners who saw in the plan the disintegration of the Soviet Union if the center lost its ability to issue commands to the republics. In mid-October, unable to give up the old Bolshevik notion of the leader as the ultimate social designer, or of himself as the wise compromiser, he reconciled Shatalin’s plan with a reform program drawn up earlier by Soviet Prime Minister Nikolay Ryzhkov. A vain apparatchik known as the “Weeping Bolshevik” for his emotional outbursts, Ryzhkov proposed keeping much of the old system intact and maintaining Kremlin control over all the rights designated for the republics. Gorbachev considered and then ruled out holding a referendum on his compromise.³

The radical reformers were furious. Feeling betrayed, Yeltsin called the compromise a blueprint for chaos, saying, “You cannot cross a hedgehog with a snake.”⁴ In a speech he threatened that Russia would go ahead and implement the five-hundred-day plan on its own. Outraged, Gorbachev called an emergency meeting of his presidential council in the Kremlin. There was near hysteria over Yeltsin’s threat and the possibility that other republics would follow in defying the center. Chernyaev found the room filled with fear and hatred.⁵ Ryzhkov screamed that they would all be shot or hanged, that everything was out of control. At one point Gorbachev left the room briefly to greet a U.S. delegation led by Dick Cheney, switching as he did to the role of garrulous and charming master statesman, and then, as soon as the Americans had gone, continuing his outburst in the corridor against Yeltsin’s people, “who all deserve a good punch in the face.”

Yeltsin had as yet no way of carrying out his threat to go it alone. His departments had little or no resources to implement any economic plan. His industry minister, Viktor Kisin, complained that at the time there was only one person in the ministry—the minister himself, and there was no office, no chair and no telephone. Yeltsin’s helplessness was exposed when his officials placed an order for two armored limousines with the Gorky factory in Moscow in October. The order was refused, on directions from the Kremlin.

The rivals met again in the Kremlin, but another five hours of discussion led nowhere. At the meeting Yeltsin asked, “Why are you moving to the right so sharply?” “Because society is moving to the right,” replied Gorbachev. “You then simply do not know what is happening in society,” retorted Yeltsin. The next day Yeltsin reported the conversation to the Russian parliament, in what Chernyaev described as his usual rude and insulting manner. Gorbachev complained to his aides he would be forced to declare war on Yeltsin.

But Gorbachev was becoming isolated from Soviet society, and Yeltsin had the backing of the people. On November 7, after Gorbachev and his comrades had reviewed the annual military parade in Red Square commemorating the October Revolution, Yeltsin appeared at the head of an anticommunist crowd organized by the radical group Democratic Russia. They carried pictures of the last tsar, Nicholas II, and banners displaying black humor, such as “1917 the crime—1990 the punishment.”