Eagle, I don't want to form an alliance anymore.

This is the dual-track system reform.

Initially, state orders accounted for 30-40% of enterprise output, with the remainder being managed independently by the enterprises. In practice, in order to maintain their own existence, ministries increased the proportion of orders to 80-90% or even 100%. As a result, while enterprises had legal autonomy, they were still effectively executing directives, but the coercive power of the directive system itself was weakened by the reforms—ministries could no longer arbitrarily punish factory directors as before.

This led to the worst possible outcome: the discipline of the old system disappeared, and the incentives of the new system failed to be established. Companies began systematically transferring profits to worker bonuses (because collective labor councils had a say), while simultaneously cutting productive investment.

Thus, a strange phenomenon emerged in the Soviet Union between 1988 and 1990: wage growth far outpaced productivity growth, while the supply of goods on the market dwindled.

What else is there to say? Inflation is about to take off.

Historically, Gorbachev lacked the resolve to implement price reforms. His economic advisors repeatedly proposed price reforms starting in 1987, and various plans were drafted (the 500-day plan being the most famous).

But Gorbachev always backed down at the last minute!

The reason is not complicated: for a long time, consumer goods prices in the Soviet Union were politically determined, with bread, meat, housing, and public transportation all suppressed far below cost. Once deregulated, prices would at least double, and due to the long-term suppression of demand, there would be intense panic buying and panic.

The result is that businesses are told to operate according to market principles, but the market itself does not exist—prices are fake, supply is planned and allocated, and currency is soft (because of commodity shortages, rubles cannot buy anything).

Under such conditions, corporate autonomy will inevitably evolve into the free embezzlement of state-owned assets.

After encountering setbacks in the economy, Gorbachev launched political reforms: openness, the People's Congress, and multi-candidate elections. However, his approach was top-down representative democratization, rather than corporate governance reforms.

The result was the emergence of forces like Sakharov, Yeltsin, and the Baltic Popular Front that challenged the legitimacy of the Communist Party of the Soviet Union on the national political stage, while governance at the corporate level remained chaotic.

Political reforms depleted his political capital but failed to translate into effective economic reforms. By 1989-1990, Gorbachev faced attacks from democrats at the central level, spontaneous privatization by factory directors at the enterprise level, and centrifugal movements in the republics at the local level. He was fighting on three fronts, and every front was crumbling.

Even under these circumstances, he was still undecided about his stance on the Party's leadership.

He began advocating for the separation of party and government in 1988, and in 1990 abolished Article 6 of the Constitution concerning the leading role of the Communist Party of the Soviet Union. However, he did this by transferring party power to the newly established presidential position (himself) and the Congress of People's Deputies, rather than to enterprises, society, or the market.

The result was that party discipline collapsed, but the new institutions (the president and the Soviets) that took over the party's functions had not yet established their authority.

The power vacuum that existed in this area was precisely filled by Yeltsin and the leaders of the constituent republics.

The Gobi map is absolutely worthless.

He disliked price shocks, unemployment, party discipline, and harsh policies toward the constituent republics, but his proposed reforms needed a degree of coercion to succeed:

Forced ministries to relinquish power, forced zombie companies to go bankrupt, forced price reforms to bear short-term inflation, and forced the Party to withdraw from enterprises while maintaining the authority of the central government.

This moment tests the political will of the reformers—

Are you willing to accept short-term unpopularity, worker strikes, and backlash within the party for a goal, and are you determined to continue?

Gorbachev did not have that will.

When Humble Dog was pushed to the high ground crystal in 89, he was willing to send the Hand of Noxus to take the bloodshed to keep his reform track, while Gorbachev retreated after shedding some blood in Vilnius.

In 2000, after the collapse of the Soviet Union, Ryzhkov recalled something along these lines:

"Gorbachev wanted the fruits of a market economy, but was unwilling to pay the price; he wanted the legitimacy of democracy, but was unwilling to pay the price of its chaos."

In 1985, the Communist Party of the Soviet Union elected the most reformist person it could, and this person was completely unworthy.

Sigrún has taught at the Iceland University of the Arts as a part-time lecturer since and was Dean of the Department of Fine Art from -. In – she held a research position at Reykjavík Art Museum focusing on the role of women in Icelandic art. She studied fine art at the Icelandic College of Arts and Crafts and at Pratt Institute, New York, and holds BA and MA degrees in art history and philosophy from the University of Iceland. Sigrún lives and works in Iceland.

Meanwhile, in Moscow, Gorbachev's team of economic advisors was seeking legitimacy from Lenin's Collected Works.

This procedure is required for every major policy shift by the alliance.

Whatever you intend to do, you must first prove that Lenin said something similar, otherwise your policy is revisionism!

Stalin used this method to demonstrate the construction of socialism in a single country; Khrushchev used it to demonstrate a state of the whole people; Brezhnev used it to demonstrate advanced socialism...

Lenin's complete works, in 55 volumes, are like an inexhaustible arsenal; no matter which direction you want to fire, you can always find bullets of the right caliber.

Agambeyan and Petrakov spent a whole week in the reading room of the USSR Academy of Sciences.

A portrait of Lenin hangs on the wall of the reading room.

The long table beneath the portrait was covered with open volumes of Lenin's Collected Works, with bookmarks of various colors tucked between the pages. Red indicated direct quotations, blue indicated appropriate editing, and yellow indicated that while the original text was favorable, the context was unfavorable and the text should be used outside of that context.

Petrakov flipped through Volume 43, a work from 1923, the last year of Lenin's life.

He had finally found the core ammunition they needed. He jumped up from his chair and held the page up in front of Agambegiyan:

"Look! This is exactly what I wanted!"

He held up the book, showing the cover to his colleagues in the reading room and to the image of Lenin on the wall.

"The Complete Works of Lenin!"

That passage is from Lenin's "On Cooperatives":

"...We have to admit that our entire view of socialism has fundamentally changed. This fundamental change is that, in the past, we focused on political struggle, revolution, seizing power, and so on, but now the focus has shifted to peaceful cultural and organizational work."

"See that? A complete change!" Petrakov exclaimed excitedly, tapping the pages of his book.

"Even Lenin himself admitted that his views on socialism needed to be fundamentally changed—our current reforms, opening up of cooperatives, and introduction of market factors are not a departure from Leninism, but rather the implementation of the cause that Lenin did not have time to complete!"

The statues on the wall silently watched all of this.

Agambekyan leaned forward from his chair and looked at the passage: "Not bad, so what's the next paragraph?"

Petrakov flipped through it, and the next paragraph Lenin had written:

"Since state power is in the hands of the working class, and since this power controls all the means of production, the task left to us is simply to organize the residents into cooperatives."

“This…” Petlakov’s excitement subsided a little. “The cooperative he’s talking about is an organizational form under the premise of public ownership, not the kind we’re trying to do now.”

“Then we should weaken the preconditions when citing it,” another young economist chimed in from the side.

His name is Shatalin, and he will one day appear in newspapers around the world because of the 500-day plan, but for now he is just a young researcher sitting in the corner of the reading room flipping through books.

"Just say 'under the socialist conditions that our Soviet Union already possesses,' and then emphasize the words 'fundamental change.'"

Agambegiyan glanced at him.

For decades, every policy document drafter has been doing the same thing—fishing out the fish you need from Lenin’s ocean, and then pretending the whole ocean is on your side.

They continued flipping through the pages.

Volume 41 is "On the Grain Tax" from 1921:

"State capitalism is many times more economically advanced than our current economy... With the support of the workers and poor peasants, we have nothing to fear from the Soviet regime."

“Look, perfect!” Petrakov wrote the quoted page number on the bookmark. “Lenin himself said that state capitalism is not terrible—the leasing system, joint ventures, and the liberalization of foreign trade—all of these can be used to endorse this.”

However, Lenin made these remarks in the context of the collapse of the Soviet economy in 1921, when it was necessary to utilize foreign capital and domestic private capital to restore production.

Lenin described state capitalism in very specific forms: concessions (where the state leases mines and oil fields to foreign capitalists, taking a fixed share), cooperatives, private leasing of state-owned enterprises, and commercial agency contracts. What these forms have in common is that capitalist elements are strictly confined to state-defined boundaries, and are subject to strategic concessions with a time limit.

Moreover, Lenin followed up in the same article by saying: "The New Economic Policy does not change the nature of the workers' state, but it fundamentally changes the methods and forms of carrying out the socialist revolution."

In other words, state capitalism is a tool, not an end; it is a strategy, not a path.

The reading room was quiet for a while, with only the sound of turning pages and pencils scratching on paper.

Lenin's portrait on the wall gazes at them, his eyes, frozen in eternity by the brush, seem to be lost in thought.

Perhaps he was thinking about the future of communism, perhaps he was thinking about how his words would be used more than sixty years from now, or perhaps he wasn't thinking about anything at all.

Because he is just a harmless idol.

Then Agambegiyan found a passage from Lenin's speech at the 11th Party Congress in 1922:

"The most dangerous thing is that Communist Party members who are factory directors or run large businesses can't even control ordinary capitalists!"

"We don't need this part."

"why?"

"Because it precisely points out the biggest risk of what we are doing: Party cadres who are transformed into business managers cannot manage the business well, and in the end they will either ruin it or embezzle the funds. Quoting this passage is not to find legitimacy for reform, but to find reasons to oppose reform."

Shatalin thought for a moment and nodded. Petrakov then flipped through his notebook and said:

"Interestingly, Lenin foresaw the pitfall we would fall into in 1985 as early as 1922."

No one spoke.

They also came across another passage they were hesitant to use, written by Lenin in 1921 in "The Tasks of the New Economic Policy and the Committee for Political Education":

"We haven't retreated enough; we must retreat further..."

This passage precisely describes what Gorbachev was doing—retreating from a planned economy to create market space.

However, the word "retreat" is inappropriate. You can use terms like "adjustment," "improvement," "development," or even "fundamental change," but you cannot use "retreat." This is because retreat implies admitting that the direction was wrong, while the legitimacy of the CPSU was based on the premise that "the party's line and policies were correct and without error."

That record contains Lenin's repeated concessions and withdrawals on the issue of trade monopoly during his last few Politburo meetings.

These records show that Lenin himself had clear limits on his tolerance for market factors, and that these limits tightened as he grew older (his most intense intra-party conflict before his death was with Bukharin and Sokolnikov about whether to abolish the state monopoly on foreign trade).

These historical materials are unfavorable to Gorbachev's team, so they have been largely ignored.

A week later, the economic advisory team submitted to Gorbachev a report demonstrating the legitimacy of the policy, complete with an index of Lenin's quotations, and made revisions according to Gorbachev's wishes.

Now, the reform plan "fully conforms to Lenin's basic principles of socialist economic management" and can be gradually promoted based on pilot projects.

Gorbachev nodded with satisfaction when he saw the carefully selected quotations, and then sent them to the Politburo for review.

He didn't check the original context of the quote, because checking might have revealed that the gap between what he wanted to do and what Lenin wanted to do was much larger than he was willing to admit.

On the wall, the silent statue of Lenin watches all this, unable to stop anything.

Sigrún has taught at the Iceland University of the Arts as a part-time lecturer since and was Dean of the Department of Fine Art from -. In – she held a research position at Reykjavík Art Museum focusing on the role of women in Icelandic art. She studied fine art at the Icelandic College of Arts and Crafts and at Pratt Institute, New York, and holds BA and MA degrees in art history and philosophy from the University of Iceland. Sigrún lives and works in Iceland.

In early September, textile and sugar factories in Vinnytsia region officially launched pilot reforms.

Krasovsky entered the two factories as a pilot reform coordinator, bringing with him the plan that Slava had given him.

During his breaks, he chatted with the workers, discussed with the cooks in the canteen why the food was so bad, and during his lunch break, he called the key workers from several workshops into an empty meeting room and asked them, "If you were to participate in deciding how to run this factory, what would you do?"

At the first workers' forum, a textile worker said:

"You want us to participate in management? Really? Then let me ask you a question first—how much bonus did the factory manager actually give out last month? Nobody has ever told me that."

Information transparency is the starting point for everything.

Krasovsky then connected the OGAS terminals of the two factories to the data network, allowing worker representatives to access core financial and operational data.

The statistics show that the factory has a large number of bad debts and bad debts. The previous ledgers are simply unreadable, but at least everyone can see the funding gap for this month:

Thanks to the map, the textile factory manager's total bonus this month is twenty times that of an ordinary worker's monthly salary!

The workers stood in front of the terminal, silently staring at the numbers, then turned to Krasovsky and said:

"Fuck him."

The reforms began in a textile factory in Ukraine, in a language Lenin would probably not have approved of.

Chapter 52 The Soviet Union cannot fall, so only Young Master Ou can foot the bill (9K)

Meanwhile, Director Nian is planning something that seems like a pipe dream—

They persuaded the Politburo to allow the Soviet Union, which had no foreign debt, to voluntarily incur nearly 10 billion US dollars in US debt.

June 11, Moscow

June in Moscow is experiencing an unusually hot and humid early summer. The thick walls of the Kremlin office buildings, designed to withstand the harsh winter, become giant heat tanks in this weather, with the temperature inside the corridors higher than outside.

In his new office at the Ministry of Foreign Affairs, Director Nian took off his coat and worked in just a white shirt and shorts, with slippers hanging on his feet. Next to him stood an electric fan imported from West Germany.

This was considered quite informal attire within a ministry, but she didn't care; after all, her sunglasses were informal enough.

There were three things on her desk:

An English copy of the CIA's publicly released "Annual Assessment of the Soviet Economy," obtained through the Ministry of Foreign Affairs' open intelligence channels.

A report on the foreign exchange reserve structure of the Soviet Foreign Trade Bank.

And a bag of glutinous rice strips that I had someone buy from the Khorgos border crossing on the Sino-Soviet border.

"Comrade Nadezhda Ivanovna Ivanova, your milk tea is ready—Prime Minister Ryzhkov has received your proposal and said he will give you a reply this afternoon."

Her secretary opened the door, placed the freshly brewed milk tea on the table, and also put some documents on her desk.

"Yes, young comrade, you've worked hard. Remember to close the door when you leave."

Director Nian pulled his sunglasses down a little, greeted his secretary, and then pushed them back up.

She has been studying this issue for the past week, even though it is not within the scope of her official duties as “Undersecretary for International Cooperation Affairs” at the Ministry of Foreign Affairs, its importance far exceeds the diplomatic notes and consular agreements awaiting signature on her desk.

The question is: how long can the Soviet economy last?

Sigrún has taught at the Iceland University of the Arts as a part-time lecturer since and was Dean of the Department of Fine Art from -. In – she held a research position at Reykjavík Art Museum focusing on the role of women in Icelandic art. She studied fine art at the Icelandic College of Arts and Crafts and at Pratt Institute, New York, and holds BA and MA degrees in art history and philosophy from the University of Iceland. Sigrún lives and works in Iceland.

Numbers don't lie.

A few days ago, when our leader laid out the CIA report and the Foreign Trade Bank report side by side on the table, the figures in the two reports surprisingly matched at certain key points—