Customer Reviews

Sale of the Century: Russia's Wild Ride from Communism to Capitalism

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The book is somewhat entertaining, but its style is a bit too sardonic and her attitude vis-à-vis Russians is patronizing. Even Russians who, admittedly, are not my favorites characters, I feel like defending. She calls Alexander Korzhakov, an influential former head of Yeltsin's Security Service, a Russian illustration of the Peter Principal', because he `climbed to a position of power that far outstripped his intellectual resources'. Granted, Korzhakov is no Socrates, but his college degree in jurisprudence and current post of the deputy chairman of the Duma's (Russian Parliament) Defense Committee is a confirmation that perhaps behind a façade of a simpleton is hidden a smart individual. Even notorious (and wanted by the Russian government) Boris Berezovsky, whom the author calls `a jumped-up car salesman', is much more than that - a highbrow Russian `enfant terrible' with a Ph.D. in mathematics for starters.

However, the most important thing is that the book appears, as the French say, engagé. I believe this book's real purpose is to divert attention from the individuals and institutions, which are really responsible for the debacle of the Russian privatization. For one thing, she mentioned the name of Gregory Yavlinsky only once in her 360-page long book about Russian capitalist revolution and only at the end of the book. Yet, Yavlinsky, who is household name in Russia and twice-also-ran-presidential-candidate, was one of the midwives of Russian privatization. His `500 days' program was written in the late 1980s with Mikhail Gorbachev's blessing. It was supposed to transform Soviet centralized economy into a market economy by the end of 1993. Yavlinsky resigned form the government after Gorbachev rejected the program in 1990. Neither this is mentioned in the book, nor the fact the Harvard University fellows, like Graham Allison, were promoting ideas and giving intellectual impetus to Yavlinsky and Shatalin (another Russian co-author of the program).

In the late 80s and early 90s Boris Yeltsin was competing with Gorbachev for power. He decided that the road to power lies through economic radicalism. Yeltsin assembled a competing set of pet economic advisers - most famous among them were Gaidar and Chubais. These two well-educated English-speaking Russians had even more far-reaching ideas than Yavlinsky. Eventually Yeltsin prevailed over Communists, and Gaidar and Chubais moved into the government. They had their own set of Harvard intellectuals to assist and advise them, among them was the Harvard professor Jeffrey Sachs. Sachs is a very interesting figure, whose liberalism and market fundamentalism are fused into one. Freeland mentioned Sachs only once in passing (on page 75), but his personality and ideas were of paramount importance. He was the real intellectual father of Russian `shock therapy'. All in all, the Harvard advisors look to me like sort of collective `éminence grise' to the Russian privatizers of both camps (Gorbachev's and Yeltsin's). What interesting to me is the fact that the author doesn't mention Harvard in the book, except mentioning in `Acknowledgments' that the Harvard University provided her with nonresident fellowship and `stimulating environment to complete the book'.

As I see it, `shock therapy' came from the West, more precisely from the U.S., and specifically from the group of radical Harvard professors, most notably Andrei Shleifer and Jeffrey Sachs, who both were directly advising the Russian government in 1992-1993. These were the years Russia plunged into abyss. And yet, there is nothing of this in the book. There is also nothing to explain how Yegor Gaidar managed to stumble into `shock therapy' idea. He was, according to Freeland, a big fan of Samuelson's textbook `Economics', which `became his bible'. But there is nothing the textbook about `shock therapy'. Indeed I doubt that Samuelson would have approved such an outrageous idea.

Freeland's conclusion is a master stroke. She likes ideas of Richard Pipes, who was her professor at Harvard (déjà vu). These ideas in a nutshell - the tsarist, communist or re-born capitalist Russia represents hypostases of same imperialist, semi-barbaric, Asiatic despotism, which is driven by the eternal messianic zeal.
For Freeland, the free-market-through-minimum-government regime is the best economic system that Russia could have established, but the neo-Bolshevist zeal of `young reformers' spoiled the whole thing up.

With a straight face she is saying `The problem was not that the young reformers were too radical, but that they were too fanatical'. Or `I am convinced that the central failure of Russia's capitalist revolution was that it did not go far enough' (page 344). It is a folly. Shock tactics of Gaidar and his western advisers didn't work and couldn't have worked in Russia, regardless how far they would go. They caused nothing but pain and social strife. Withdrawing price control and unleashing unregulated free markets had caused a continuous 25% monthly inflation and falling industrial production of 25% per quarter (faster than during the Great Depression in America). The hyper-inflation wiped out most of people's life savings, which in combination with general decline of living standards and crumbling infrastructure, caused millions premature adult deaths in Russia through the 1990s. During this hurried transition to market democracy, Russia became a society with Third world mortality rates and First World birth rates. This should have been mentioned in the book as the real price of Russian privatization. All in all, the book feels to me like a Disney version of events, nothing more than an attempt to divert attention or may be even reassign the blame to vaguely defined by the author `Russian messianic tendencies'.

Compliments to Chrystia Freeland who has written a comprehensive, intelligent book on how the combination of naive reformers, corrupt officials and ambitious "oligarchs" succeeded in ripping off poor Russia of untold billions as it tried to transform itself from 70+ years of Communism to a free market economy. The West has its share of the blame with its band of greedy investment bankers and other rogues who participated in the heist of the century. An incredible story told with exceptionally clarity by Ms. Freeland , former Moscow bureau chief for the Financial Times of London. I have spoken to people who are very well informed on what is happening in Russia who unanimously support the accuracy of the book and highly recommend it.

The failure of Russia's transition to a market economy easily ranks as one of the most important stories of the 1990s. Unfortunately, while this story is important, it is not well known. In part, this must be blamed on the nature of Russia's market transition: much of it was done behind closed doors in the proverbial "smoke filled room."

This fact makes Crystia Freeland's book all the more valuable, for she, through in-depth interviews with nearly all the important players, has penetrated beyond this haze to give us the real story of the capitalist transition in Russia.

Freeland spent several years in Russia writing for the Financial Times and it shows, as her book echoes with every nuance and detail of this story. Through direct quotes, a myriad of background details, and anecdotes, the leaders of Russia's marketization are transformed from names to living, breathing entities. Furthermore, where other accounts might be satisfied to present only the most oblique facts, Freeland's book digs deep to provide the real story of what happened behind the scenes.

Although the depth of this book is certainly a strong selling point, Freeland's prose is also notable. Often gripping, never cumbersome, her prose exceptionally conveys the details of this story from her notebook to our eyes. Freeland's own analysis and insight gives us a valuable insiders' interpretation of events and adds a personal touch. Where appropriate, irreverent details are sprinkled in providing color to the story as well as quite a few shocks.

Overall, you'd be hard pressed to find a better account of Russia's market transition than the one Crystia Freeland presents in Sale of the Century.

Wow, what a great book! Not just one of the best books on post-Communist Russia, but one of the best books on anything.

Ms Freeland brings to life the key characters in what is undoubtedly one of the most gripping stories of our time. It is a real page-turner. She writes beautifully, colouring her text with engaging personal anecdotes which bring the realities of modern Russia to life.

The book is a work of journalism (based on personal interviews) rather than history or economics. All the same, Ms Freeland also has an excellent understanding of the theory and practice of economic reform. A first-class journalist, she can break a complicated issue down to its essential core, in terms anyone can understand.

Her analysis and judgements are very level-headed and fair. From the perspective of 2001 she is probably too pessimistic about Russia's economic transition. Still, Ms Freeland is a lot more balanced than so many other commentators (notably hysterical Americans of the "who lost Russia?" school). For example, she draws a necessary distinction between the early phase of Russian privatisation, and the sordid "loans-for-shares" scheme of the mid-1990s, which is the centrepiece of the book.

The book probably overstates the centrality of the loans-for-shares scheme. But it isn't really a comprehensive survey of Russian economic transition. Rather it concentrates on the rise (and ultimate falling out) of the oligarchs, whose corrupt and scheming ways culminated in the 1998 crash. As the Financial Times correspondent in Moscow, Ms Freeman knew all these remarkable characters intimately.

At the same time, though, the book shows the complexity of post-communist Russia, with a colourful cast that goes beyond the oligarchs and their cronies. Here are the "young reformers", whose story of hubris followed by nemesis gives the tale elements of classical tragedy (Ms Freeland draws apt parallels with the stories of Dr Faustus and Dr Frankenstein). Here are the New Russians and Red Directors. The shifting alliances and conflicts between them are expertly described, with telling personal detail. Ms Freeman shows how these conflicts are as much social and generational as economic - which is essential to understand what post-communist Russia is really all about.

I think that this book will become a classic, which people will read in decades to come to get a first-hand understanding of Russia during the turbulent 1990s.

I have lived in Moscow since 1997, and worked there since 1991. I was peripherally involved in a lot of the things that are described in this book, and much of my job involved commenting on them. I can recommend this book to both experts and amateurs.

Ms Freeland was the FT correspondent in Moscow during the heyday of Russia's oligarchs, and her story is based on a framework of meetings with all the people who helped a small group of bankers walk off with a significant chunk of Russia's state-owned assets. One of the things that I most enjoyed about this book are the personal details about the players, and the gossippy anecdotes about the things they got up to. The detail is important in Russia, and although she covers it, she never gets you bogged down in it.

I think that this will have staying power as one of the better contemporary accounts of a fascinating period in history. I can certainly voice for its authenticity. One of my colleagues, who was closer to the action, feels that she seemed to have too much admiration for a group of people who are, when all is said and done, criminals. Sometimes you do have to remind yourself that the interviewee would be in jail in any civilised country. But then, the quality of a story is not in its moral judgements, but in whether it conveys the information, and keeps you interested. This book definitely does that.

The doings of the so-called Russian oligarchs are almost daily mentioned in the western media, but due to the way they operate, largely in the shadows, always manoeuvering and plotting, much of it has remained obscure. Chrystia Freeland, who has worked extensively as a journalist in Russia, has succeeded in interviewing practically all the main protagonists. Amazingly enough, oligarchs such as Berezovsky, Gusinsky and others (there are said to be seven of them) are quite open to her about their political motives and how they managed to amass such wealth in Russia through a series of pseudo-privatizations in such a short period of time, around the mid-1990s. It becomes clear how ruthless they operate, scheming incessantly, sometimes with each other and often against each other. In the meantime, they are trying to win protection and support for their economic deals from a practically collapsing and totally corrupt Russian state. They succeeded in robbing their weak state and thereby the Russian people of a large part of its wealth. Very often, observers of the Russian scene tend to focus on presidential elections, the wars in Chechnya and other dramatic political events. This book explains important developments which have reshaped the Russian economy and will exert their influence for years to come, also in the political field. A lot of what happened in this field consisted of unclear backroom deals and manoeuverings which were only partially described in the media, Russian or western. It is the achievement of Chrystia Freeland that she makes this process understandable and writes about it in a very exciting and illuminating way. A great read, this book, and wholeheartedly recommended.

Chrystia Freeland, Moscow bureau chief for the Financial Times, chronicles Russia's roller-coaster ride from communism to crony capitalism. She writes poetically, with creative metaphors, colorful word pictures, and a keen insight into Russian history. The copious adverbs, adjectives, and details--sometimes superfluous-may, however, irritate those reading her book for the "bottom line." The book also omits analysis of organized crime in general. On the other hand, a key strength of Sale of the Century is Freeland's ability to bring to life the key players in Russian politics: Yeltsin, Gaidar, Chubais, and the handful of wealthy oligarchs. As a journalist, she was able to meet most of them often. The book enables the reader to develop a more refined and differentiated understanding of the oligarchs.
Among these are Mikhail Friedman ("the outsider") who heads the Alfa Group, an oil, industrial, trading, and financial conglomerate. As a Jewish Ukrainian barred from prestigious educational establishments, Friedman began his entrepreneurial ventures early, starting with illegal bartering of theater tickets and later obtaining Western consumer goods for top officials (p. 115).
Mikhail Khordokovsky ("the apparatchik") is also Jewish and leads Menatep, the bank and financial-industrial conglomerate. Outwardly docile with a soft voice and slight stutter, Khordokovsky is adept at winning the trust of the government officials, having pursued a parallel career in the Komsomol. Beneath the subordinate exterior, however, lies a ruthless person who installs hidden video cameras in his buildings and does not hesitate to fire slackers (p. 121).
Unlike Friedman and Khordokovsky, Vladimir Potanin ("the blueblood") was the son of a senior Soviet trade official and already had a promising Soviet career. He realized in the nick of time that, as the Soviet Union's collapse accelerated, "the advantages that had ensured Potanin's advancement suddenly threatened to become golden handcuffs" (p. 129). He started his own business, which eventually became Oneximbank, which now handles the "juiciest" government accounts, including the State Customs Agency .., and the state arms-trading company "Rosvooruzheniye," which keeps "a few tens of millions" on Potanin's books (p. 131).
Vladimir Gusinsky ("the impresario") dabbled in many entrepreneurial activities (driving a gypsy cab, peddling blue jeans, and "medicinal" copper bracelets) and also worked as a theater director before founding the consortium of banks (the Most group) and persuading his patron Yuri Luzhkov, mayor of Moscow, to transfer money to them from Soviet-era banks. He founded inter alia the newspaper Segodnya and the first independent television channel (NTV).
His main rival is Boris Berezovsky ("the nomad"), although the two oligarchs have functioned temporarily as allies. Perhaps the most unsavory of all the oligarchs, Berezovsky, also Jewish, has been particularly good at winning the favour of members of Yeltsin's entourage (especially the latter's youngest daughter, Tatyana Dyachenko) and directly influencing the presidential elections of 1996 and 2000.---Johanna Granville, Ph.D.

As other reviewers and readers have noted, Freeland's book _The Sale of the Century_ offers a vivid account of the human side of the story that is so essential to grasping the magnitude of what really happened in the Russian Nineties. The narrative clearly reveals the author's exceptional competence in the area of Russian current affairs. Her familiarity with the turns of history so central to Russia's shaky experiment in marketization makes this work indispensable for the student of contemporary Russia. While the myriad anecdotes, names, and intricate descriptions of events can definitely require slogging through, a careful reading will be an excellent education in the political and economic history of contemporary Russia. Also included, scattered amidst the detailed journalistic narrative, are intense historical insights on the nature of Russia's destiny and self-image in civilizational history. Overall, highly recommended.

I arrived in Moscow at the same time Chrystia Freeland did. Like her, I found fascinating material for a book on contemporary Russia almost every day.

The terrible thing is Ms. Freeland has now written the book I had planned to write. She had great access to Russia's prominent players and has written a lasting, undeniably readable, work on current political and economic developments in Russia. She has an entertaining style built upon a savvy Westerner's view of Russia as well a knack for finding a memorable phrase to encapsulate her characterization of specific traits, periods and events. These bon mots appear so regularly I took to keeping a list. My list of 25 includes "unofficial capitalist politburo," "the Kremlin's own Dirty Harry" and "gladiator capitalism." The best of all may be on page 121, but you must judge for yourself. "Sale of the Century" and Yevtushenko's "Don't Die Before You're Dead" are far and away the two best books on the New Russia.

Now that Chrystia Freeland is herself far away from Russia, perhaps she will permit me another chance to share my views on a Reborn Russia.

Freeland's book concentrates on the specifics of economic and political upheaval during the 1990s. What is great is that it gets into the heads of the Russian natives, shows their motivations and how they achieved their goals. Much is discussed on the politically astute strategy and tactics. While some of the author's dialog reads like a Cold War spy thriller, as in Tom Clancy's "The Hunt for Red October (1984)," this reviewer has read other books that cover similar ground and confirms that the scenarios are realistic and not just a fictionalized expose. In short, Freeland's book is a Soviet real-life Perestroika epic.

Ms Freeland is a young Harvard and Rhodes Scholar trained journalist, at 26 was assigned as Moscow bureau chief and reported for 9 years. She had a penchant in investigative journalism for UK's Financial Times, a well-respected business newspaper. Obviously from the intimate details, she had help from FT's native staff, an extended field of friends, research troopers and family, in order to turn a pile of newspaper articles and interviews into a coherent, cohesive book. Even so, it was still amazing that she was able to get so many detailed interviews from the characters in the book.

While the hc book has no pixs of the author, she must be a good looking, articulate in Russian, and perhaps a gutsy single at the time. In order to validate her credibility, this reviewer viewed a documentary film (Shelley Saywell, 94, Icarus) on women journalists on the Sarajevo and Afganistani War front. Psychologically women correspondents (esp Lyse Doucet, CBC, now BBC) have an unique edge to get truthful, detailed interviews, where their male counterparts fail; from starving street urchins to generals and guerrilla commanders.

Ms Freeland is a 3rd generation Slav from Ukraine, an immigrant farming family whose granddaughter grew up in Alberta province, Canada px,8. Freeland (b1968), now 40, is currently the US Managing Editor of FT.

There is much-italicized native "slang" sprinkled throughout the book, but no compendium or glossary list. In the front she has a cast of 44 characters and an event timeline to just before the election of Putin. The book covers Boris Yeltsin's and Bill Clinton's watch.

She doesn't cover anything during the Gorbachev era or have a preface on why the USSR agriculture and military-heavy industry complex was failing in the first place. This reviewer strongly recommends a broader book on modern RU history, such as Hosking, a Harvard historian. You need to understand Stalin, Khrushchev, Brezhnev and Gorbachev's economic policy, which prefaced the end of a strict centralized control from Moscow.

There are no further maps or pixs in the book; 7-pg footnotes mainly referencing hundreds of personal interviews (assumed tape recorded) and a 22-pg index. Most readers will need some geo-assistance, such as Google Maps, to keep your bearings in Moscow and country.

The stories concentrate on privatization of the state-owned monolithic companies, in banking, autos, oil, telecomm, chemicals, power, natural resources, strategic metals, defense, transportation, and cohorts in the media TV and newspapers. Each story includes the who and how men (first and last name) and RU invented unwritten rules, insider corruption, and the "Godfather" mafiya gun p106 to greedily collect all the spoils as fast as they could. With the "free" pricing system in chaos, they squirreled their monies into Swiss and off-shore banks p258.

Of the 13 chapters, Chap3 "The Iron General privatizes RU," Chap4 "Who gets the Loot?" Chap6 "The Oligarchs: the outsider, the apparatchik, and the blue blood," Chap11 "Champagne too Soon: stories from the new Russia," and Chap13 "Things Fall Apart, appears to be most important.

As Freeland sees it, the key people in the "Young Reformers" have 12 key players. Anatoly Chubais, with Yeltsin's blessing, orchestrated the new capitalism with Russian characteristics p52. Yegor Gaidar took care of politics [blue blood] Chap2 p24-49. Boris "Borya" Berezovsky cultivates Putin's daughter, Tatyana Dyachenko p140, 211 friendship gifts for favors and access to her cellphone number. So does Aleksandr Korzhakov, Putin's friend and bodyguard p157. This puts Tatyana in a bind. Read Chap10 Dividing the Spoils, when half a million in cash comes into jeopardy...the Russian mafiya at work p269.

In Chap6 of 22 pgs, outsider is Mikhail Friedman (Jew) p113 import technology; apparatchik is Mikhail Khodorkovsky (Jew) p120-7 investment banking; blue blood is Vladimir Potanin p128 mezzanine banking are discussed in detail. Khodorkovsky, low key approach to becoming a conglomerate with investment banking subsidiary, is a excellent tale in how one man overcame adversity and achieve much in spite. Freeland's Khodorkovsky article won the Biz J Year Awards 2004 ([...]).

Upon reading Khodorkovsky's Wiki, it shows that because he was publicized in the Western press as a billionaire and possibly forming a competing political party as well as getting really chummy with western oil companies. He was arrested in 2003, accused of fraud and tax evasion in his Yukos / Siberian oil holdings and sentenced to 9 yrs in a Siberian Gulag attached to a radioactive Uranium mine.

Interesting was the tale of using the New Media which became a mouthpiece and strategic tool to get the Young Reformers out of trouble and extending the will upon the common Russian on the street. Vladimir "Gus" Gusinsky's "Segodnya" newspaper p150 and NTV p153 was strategic in a media campaign to avoid being arrested p161-67.

Going to Perm to see new brewing enterprises was interesting p84 especially against the conflicts with the Mongols and Tatars since the Middle Ages, Yakaterinburg p203 and other Siberian cities Akademgorodok and Krasnoyarsk p221.

In short, Freeland's book makes it easier to understand the Perestroika collapse of the USSR and the devaluation of the ruble p306 with US Treasury blessing Chap13. Only Friedman and Gusinsky emerged unscathed p334. It has names and stories that make it much easier to see the forest from the trees and is specific and detailed enough to be a launching pad for further research.