The Future Is History: How Totalitarianism Reclaimed Russia

Like all Russians, in 1992 Lyosha's family got privatization vouchers, watermarked certificates roughly five by three inches in size, with a picture of the Moscow White House in an elliptical frame in the middle. They had a little over a year to decide what to do with the vouchers: sell, invest, or ignore. They exchanged their three vouchers for shares of Doka Pizza, a new restaurant that advertised on billboards all over town. They never saw any dividends. Some of Galina's friends told her she should have done what they did: bought shares in one of the newly privatized oil companies. These would indeed be worth money in a few years.

In the new world of vouchers, private companies, and investments, one story caught Lyosha's attention. A company called MMM saturated the airwaves with thirty-second TV spots devoted to the financial life of a dowdy middle-aged man named Lyonya Golubkov. At first Lyonya did not know what to do with his rubles, which were losing purchasing power so rapidly. Then he figured out that he could convert his worthless cash into MMM shares and live off dividends. This allowed him to buy a new pair of black leather cowboy boots for his wife, then a full-length fur coat for her, then a car and a house. The wife, who in the early ads seemed too young and tall for Lyonya, was now sitting in a chair in her pink housecoat, eating bonbons, looking less glamorous and perfectly domesticated, while Lyonya swelled with newfound financial confidence. Lyonya's brother, a miner, criticized Lyonya for doing nothing, but Lyonya found the words to argue that, far from being a sloth, he was a shrewd investor who made money with hard-earned money. When Lyonya bought tickets to the United States to see a soccer match between the Russian and Brazilian national teams, his brother, seated next to him in the stands, had to concede his point, tearfully.⁹

Like any pyramid scheme, MMM collapsed. It happened in the summer of 1994. People who had handed over their savings to the company numbered in the millions. When the founder of MMM was arrested for tax evasion, hundreds of these investors camped out in front of the company's headquarters in Moscow demanding his release and the return of a company in which they continued to have faith. In Solikamsk, nine-year-old Lyosha was devastated: he realized he was in love with Lyonya Golubkov, who was now gone from TV.

pyramid schemes abounded. A company called Hoper-Invest ran a fifteen-second spot that showed a cheerful military officer walking into a modern-looking office where two nearly identical women in feminine business attire poured him a cup of tea while they handed him his shares.¹⁰ Millions of people bought Hoper shares at two dozen branches across the country.¹¹ A Ponzi scheme that called itself Chara Bank eschewed television advertising in favor of word of mouth, and members of the urban educated classes entrusted it with their savings—in exchange for handsome monthly dividends— because they felt they were in the know. The companies issued watermarked certificates that looked no less or more official than the state's privatization vouchers and supported them with assurances that sounded no less or more credible than the government's. MMM promised boots, a car, and a trip to America; Hoper dangled the prospect of looking and acting like imaginary Western office workers; Chara guaranteed a worry-free future in an uncertain world; and the government said that everyone would be rich. In August 1992, introducing the voucher program, privatization chief Anatoly Chubais claimed that with time each certificate would be worth as much as two Volgas.¹² All these promises sounded equally new and bizarre.

In the early 1990s, Lev Gudkov was trying to make sense of Russians' emerging relationship to wealth. Adjusting expectations was a traumatic process, he found, one that opened up chasms between generations. In the postwar Soviet Union, each successive generation had lived moderately better than the last. Aspirations were passed on from parents to children with only minor adjustments. Most Soviet citizens had hoped that they, or their grown children, would be able to graduate from a room in a communal apartment to a one-room-plus-a-kitchen apartment of their own, and then to two rooms and a kitchen. With luck, they would eventually add a dacha and a Soviet-made Fiat. No one except the elites dreamed of palaces or Volgas—and the elites were safely hidden from view by their seven fences and seven locks. Now most of what Russians saw on television —commercials, government announcements, and even the sets of the Latin American soap operas everyone seemed to be watching—told them to aspire to more. Only the Soviet movies, which the television also still showed, allowed the weary eye and mind to rest on the reassuringly modest decorations of the bygone era.