From ‘Shadow’ to ‘Illusionary’ Economy
21 July, 2011
From ‘Shadow’ to ‘Illusionary’ Economy

Shevardnadze abrogated the clandestine business in Georgia. The owners of underground businesses were all arrested and prosecuted. The private entrepreneurship disappeared and the products of private business were banished form the market. Doctoring of economic data became commonplace instead. Professor Simon Maskharashvili has more.

GJ – In the years between 1964 and 1972 the Soviet ideological machine was working hard to discredit national forces and patriotic sentiments in the Soviet republics, which the Soviet regime accomplished with great success . . .

SM – The masterfully planned Soviet propaganda gave birth to a society which took any expression of national-liberation movement as a weird act of idle loafers and insane lunatics. Even the idea of driving the Soviet troops out of the republics and the illusion of getting out of the Soviet Union had disappeared without any trace.

GJ – I can understand why the illusion of success was instilled in people’s minds, but why was deemed so abortive and not viable the dream of escaping the Soviet Union?

SM – On October the 30th of 1961, the USSR exploded the experimental 50 megaton hydrogen bomb, nicknamed as Tsar Bomba – the most powerful nuclear weapon ever. The Soviets had enough potential at that time to explode even a 150 megaton bomb. Americans did not have the bomb of the same power, which meant that the USSR was much ahead in the race because they possessed the super-weapon. The Soviets were first to put a man in space which they accomplished the same year. There were other successful scientific experiments in the USSR. This all meant that there was no mechanism in place which could have allowed the patriotic forces in the USSR, including Georgia, feel optimistic enough about the defeat of the Soviet Union.  If during World War II the patriotic groups hoped that the Fascist Germany would defeat the USSR, and America or Great Britain would as a result try to reinstate Georgia’s national independence, in the 1960’s there was not even a dream alive to do anything like that. There was practically no chance in the world to destroy the Soviet Union. Take for example the 1962 Cuban Missile Crisis which had not ended in the defeat of the USSR. In the best case scenario, it was a draw, as a result of which a socialist republic (the Soviet satellite) was created in the backyard of the United States, and has remained there up until now, ruled by the Castro family clan. Look at China – the country with one-billion people! It was and still remains communist. Who could have uttered a word of protest in the situation like this? Fighting a power like the Soviet Union of those times was like tilting at wind-mills, especially because the Soviet regime was no longer the one which used to kill people like cornered rats as it used to be in the Stalinist era.

GJ – This is all understood, but what happened after?

SM – The demand to break up the Soviet Union and to secede from it sounded quite faint and miserable in Georgia. Moreover, the Georgian people were indifferent towards this idea. They were rather inclined to let business develop in the country even if it were part of the shadow economy which made so powerful roots here that in the 1970’s the Soviet Socialist Republic of Georgia all of a sudden formed into a semi-capitalist country. Strange as it might sound, this was a fact. Thus Georgia was concerned not as much about the national independence but rather about the systemic changes in the country. Georgia became the fourth Soviet nation after the Baltic Sea republics where private capital existed. There were factories and various miner enterprises which were formally owned by the state but in reality everybody knew that their actual owners were the families of Babunashvili, Lazishvili or Chilashvili who never touched and wronged the state budget but made a huge amount of money for themselves. The developments like this started to scare Moscow. The process needed to be stopped as soon as possible. Restrictions became necessary to undertake because the socialist system itself was threatened as a result. The biggest concern in the entire situation was that the process was lobbied by Georgia’s political elite. They certainly had a finger in the pie too. There were probable thoughts among the Mzhavanadze administration staff that the Georgian people at least deserved to be given enough freedom to live a good life and be strong and successful in the situation Georgia’s national independence was not possible any time soon. At some point, first secretary Mzhavanadze was told that some people were building luxury private houses for themselves. ‘They are building – not destroying, aren’t they?’ – was the answer of the boss. When Mzhavandze was told that oil was hit in Sartichala near Tbilisi he ordered to suspend the oil-field for the future of Georgia. Moscow was getting irritated at hearing all those anti-socialist and anti-soviet comments. So the higher Soviet authorities handpicked a person for Georgia’s leadership who would not dare utter a word against the Kremlin’s orders and decisions, and unleash a relentless war against the new anti-socialist economic scheme formed in Georgia.

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