"A step towards denationalization of the economy": Russian politicians and scientists on the adoption of the law "On Cooperation in the USSR"

On May 26, 1988, the law "On Cooperation in the USSR" was adopted in the Soviet Union. Politicians, public figures and scientists in an interview with RT assessed its historical role, talked about how it changed Soviet society, and revealed the pros and cons of its adoption for the country's economy.

Alexander Rutskoi, former Vice-President of the Russian Federation

- His influence on Soviet society was disgusting. The law on cooperation allowed the red directors, in fact, to appropriate enterprises for themselves. They sold products to "their" cooperatives at cost, and thereby destroyed the country's economy. Cooperatives could be created directly at enterprises. From whom were they formed? From the relatives of the director of the plant.

The products purchased from the plant at cost were subsequently sold at a margin of 50-60%, and in some cases even 100-200%. As a result, the company itself did not receive anything, spent its working capital and slowly died out. The country did not receive the taxes it needed. This led to a deterioration in the financing of the social sphere: hospitals, clinics, schools, kindergartens. The money went into the pockets of the director and his relatives. But what was to happen to the country's economy after that? It collapsed.

Vladimir Ovchinsky, adviser to the Minister of Internal Affairs of Russia, former head of the Russian Bureau of Interpol, in 1987 - head of the department of the All-Russian Research Institute of the Ministry of Internal Affairs

- The very opening of cooperatives was a fundamentally correct decision. Even China, which was more centralized than the USSR, came to the conclusion that it is impossible to keep everything in the economy in the hands of the state. Cooperators earned very good money in a variety of areas. However, soon there was a stratum of people who decided to redistribute these funds - gangs of racketeers who allegedly offered their protection to cooperatives, and demanded a share in the income for this. Those who disagreed were physically abused. This is how a layer of organized crime arose. In addition, some of the cooperators themselves worked in the shadow sector of the economy.

Gradually, the shadow cooperators began to grow together with the bandits. Organized crime groups arose on an economic basis. When they had the opportunity, they rushed into privatization, which was carried out by corrupt officials. Therefore, the law on cooperatives, from my point of view, as a criminologist, gave an important impetus to the development of Russian organized crime.

Dmitry Novikov, Deputy Chairman of the Central Committee of the Communist Party of the Russian Federation

- The cooperative movement in general was developed in the USSR long before Gorbachev's perestroika. A significant part of the products needed by the country and citizens was produced in the private sector. As for the decisions taken under Gorbachev, they had nothing to do with true cooperation. A system of parasitism on state property arose, when "zhivopyrki" (small premises used for non-transparent, illegal activities. - RT) arose at enterprises within the framework of corruption schemes. They became a breeding ground for the formation of the shadow economy and the initial accumulation of capital. As a result, there was an imbalance in the Soviet socio-economic system.

• The car of the cooperative "Caravan" on one of the streets of Vilnius, 1988
• RIA Novosti
• © Oleg Kulesh

The law of 1988, perhaps, would have had its positive side, if at the same time other decisions were made that led to the destruction of the planned system in the USSR. This wave under the auspices of freedom of enterprise was saddled by figures like Gaidar, Chubais and Yeltsin, who simply destroyed the economic potential of our country.

If Gorbachev had been a man who would have set himself the task of improving the system, then, of course, the idea of a cooperative movement in itself could have been very fruitful and would have served the development of private initiative not to the detriment of the socialist economy. But in practice, it turned out to be a crookedly implemented idea that did not bring anything positive to our country.

Sergei Filatov, former Chief of Staff of the Presidential Executive Office of the Russian Federation

- This was the first law adopted to create market relations. It played a colossal role, because it made it possible for a mass of people to enter the vastness of the market and break the monopoly of power in this regard. Since that time, we began to understand what market relations are and use them.

Thanks to the law on cooperation, the range of products on the market has expanded. People engaged in this field positioned themselves in the market as entrepreneurs. They worked for the state, as they paid taxes, but at the same time they already had a desire to receive more income, to expand their production.

• Cooperative café "Vltava" on Vasilyevskaya Street in Moscow, 1989
• RIA Novosti
• © Vitaliy Savelyev

Andrey Kabatskov, Associate Professor of the Department of Journalism and Mass Communications, Perm State University, historian and researcher of the culture of entrepreneurship and business in Russia

"At that time, it was a very bold step for the authorities to legalize small business practices at the grassroots level, allowing them to earn money on the basis of private initiative. Those who took advantage of this opportunity earned much more than those who were employed in factories and Soviet institutions.

For the general public, this law at the initial level was not very clear and did not react to it much. The appearance of cooperative goods at high prices caused a deaf rejection among many. Initially, the law did not have a very strong impact on the economy. Cooperatives were aimed at filling the deficit, but they could not solve this problem. It was impossible to close a huge economic hole in one year.

• Moscow cooperative "Stained Glass", 1988
• RIA Novosti
• © Victor Chernov

However, it was a symbolic act, which meant that the government was ready for very serious changes in the economy, in ideology and in the system of management of society. People with acumen, with acquaintances, able to take risks, thanks to this law, got the opportunity to realize their aspirations.

The state tried to move from command-administrative socialism to mixed socialism, looking for options for its renewal. But the political processes of 1989-1990 were so intense that the law on cooperation quickly lost its practical significance. Soon it was a question of a complete rejection of the planned economy and the transition to market relations, not about the modernization of socialism, but about the elimination of its foundations.

Sergei Mironov, head of the faction "Fair Russia - For Truth" in the State Duma of the Russian Federation

- The law "On Cooperation in the USSR" was one of the first and most important steps towards the legalization of entrepreneurship, to the formation and rapid growth of the non-state sector of the economy. It is no coincidence that May 26 is celebrated today as the Day of Russian Entrepreneurship. Not every law of the Soviet era left such a long memory and had such long-term consequences. Here is the answer to the question about the historical significance of this act.

In Soviet times, cooperative ownership was formally recognized. For example, the rise of the domestic economy during the years of the New Economic Policy after the Civil War was largely due to the work of cooperatives. But gradually they were ousted from the economic life of the country.

• Announcement in one of the markets of Rostov-on-Don, 1989
• RIA Novosti

Only at the beginning of perestroika, in November 1986, the first timid step towards the economic emancipation of citizens was taken - the USSR law "On Individual Labor Activity" was adopted. The law on cooperation became its logical continuation and meant a real revolution in the economic life of the country. Like any revolution, it gave rise to many contradictory processes. With the advent of cooperatives in the then Soviet society, accustomed to approximate equality in income, there were people who were able to earn a lot.

Cooperatives helped to solve one of the most acute problems of Soviet society - the problem of commodity shortages and shortages of services. Cooperatives were able to carry out foreign trade operations, goods began to appear, the existence of which people sometimes did not even suspect. For example, it was the cooperators who brought the first computer equipment into the country. On the other hand, the growing social stratification has become extremely painful. Of course, it is unfair to associate this only with the development of the cooperative movement, but there is no getting away from the fact that the very word "cooperator" has long become a dirty word for many people.

The flip side of the emergence of a growing layer of wealthy people in society was the emergence of people using criminal methods to "restore justice". Crime grew by leaps and bounds. Law enforcement agencies were not ready for this.

A blow to the state economy was the ability to create cooperatives at state-owned enterprises. Through such cooperatives, material resources allocated by the state in accordance with production plans were redistributed. This created serious problems for the state economy as a whole. Plus, cooperatives had the opportunity to cash out large funds, that is, there was a basis for the spread of corruption.

The law "On Cooperation" shook the very foundations of Soviet society. But for all the costs, I still believe that it has done more good than harm. Most importantly, he liberated the energy and creative forces of millions of people who had the opportunity to work and earn for their own and public good.

• Trade cooperative "Credo" in Moscow, 1989
• RIA Novosti
• © Sergey Solovyov

Vladimir Dzhabarov, a member of the Federation Council, in 1987 - an employee of the central office of the KGB of the USSR

- I think the law "On Cooperation" was completely incorrectly implemented. Cooperatives have not solved the task that was assigned to them. Created at the end of perestroika, they, unfortunately, were engaged in pumping resources and raw materials from the public sector.

A narrow stratum of people earned money in the sphere of late Soviet cooperation, most of the population did not feel any positive effect from this. Unsuccessful economic experiments of the late Soviet era were one of the factors that led to the collapse of the country.

Galina Belyaeva, Doctor of Law, Head of the Department of Administrative Law and Procedure, BelSU

- The law "On Cooperation in the USSR" adopted on May 26, 1988 took an important step towards the denationalization of the economy. The law was actually the first act in the field of corporate law, since it contained a detailed description of the constituent documents, the procedure for creation, the structure and competence of the cooperative management bodies, the rights and obligations of members.

In 1988 alone, the number of operating cooperatives increased almost sixfold and as of January 1, 1989 amounted to 77.5 thousand. The volume of goods and services sold by them increased 17 times and amounted to more than 6 billion rubles. The cooperative sector employed 1.9 million people. But there were also problems associated with the poor elaboration of legal norms on state control over the activities of cooperatives, leading to large-scale embezzlement, inflation, corruption and other negative phenomena.

Vitaly Tretyakov, Dean of the Higher School of Television of Lomonosov Moscow State University, in 1988 he was a columnist for the newspaper Moskovskiye Novosti

- The adoption of the law on cooperation had, of course, a strong public impact. People with the appropriate grip have the opportunity to earn big money. There has been some economic recovery at the grassroots level. This is a positive side, but the negative aspects were also soon felt by everyone.

This is the destruction of the classical, fundamental economy on which the life of the country rested. Cooperatives were created, in particular, at state-owned enterprises. They displayed raw materials obtained at state prices. I don't know if it was invented on purpose or not. But this earned gigantic money at that time. In fact, it was theft.

Then came the market element. Through cooperatives, the gigantic shadow money of criminal groups was legalized. Racketeering, murders, kidnappings and everything else of the same kind began. The foundations of the then existing state were destroyed. Strong inflation began, a huge deficit arose, and the economy died. Market mechanisms had to be introduced, but not in this way.

• Sign of the cooperative "Noosphere"
• RIA Novosti
• © Sergey Subbotin

Sergei Stankevich, a member of the Federal Political Council of the Party of Growth, in 1988 - one of the leaders of the Moscow Popular Front

- The law was very important and correct. In the Soviet Union, entrepreneurship was treated as a criminal offense. There was Article 153 of the Criminal Code of the RSFSR, according to which private entrepreneurial activity was punishable by a five-year term with confiscation of property. The law of 1988, which actually legalized entrepreneurship, became a real breakthrough in Soviet reality. There was a psychological turning point. Before the adoption of the law, many talented people with an entrepreneurial streak were considered outcasts and persecuted, and after that they felt like full members of society.

The law, unfortunately, was three years late. It had to be adopted at the beginning of perestroika, in 1985. In addition, it was impossible to simply accept it and wait for positive changes. It was necessary to manage the situation to promote it in life. But this, unfortunately, was not done. The huge administrative apparatus perceived the emergence of cooperatives as a kind of temporary campaign, as a strange whim coming from above. The lack of a policy to entrench cooperation was a mistake.

Another mistake was the creation of cooperatives at state-owned enterprises. As a result, everything of high quality and liquid was transferred to cooperatives and resold at inflated prices. And state-owned enterprises were left with losses. Profits, on the other hand, went into the shadow zone. This gave cooperatives a bad reputation and at the same time dealt a blow to the public sector of the economy. As a result, these miscalculations hit the undoubtedly correct idea.

• Shot from the film "Private Detective, or Operation "Cooperation"
• Legion-Media
• © Photographers

Andrey Isaev, Deputy of the State Duma of the Russian Federation, Deputy Head of the United Russia faction

- The law ideologically set itself the task of reviving what existed under Lenin and was called the NEP, when large state-owned enterprises, transport and energy remain in the hands of the state, but at the same time private production and trade are allowed. The market economy begins to operate mainly in the sphere of public services, the production of consumer goods, and the fulfillment of small orders of state-owned enterprises.

If this law had been passed ten years earlier, and Soviet agriculture had followed the path of turning collective farms into cooperatives, we might have lived in a completely different country, and we would have been able to produce what is now called the Chinese economic miracle. But the law was adopted when the steepest economic crisis of the Soviet system was already in full swing. The key word of this crisis was scarcity.

In this situation, the criminal Soviet bourgeoisie, which grew up on the theft of state property and the sale of scarce goods, immediately poured into the cooperatives. Therefore, the main thing that most cooperatives did was not the production of something new, but the resale to the population of the deficit produced by the state economy. Of course, the mass emergence of cooperatives improved the supply of goods to citizens at a particular point in time, but, on the other hand, the problem only worsened in the future, as cooperatives bought scarce goods from state-owned enterprises and sold them at inflated prices.

Cooperatives could not prevent the growing economic crisis. The positive aspects of the cooperative movement of the late 1980s include the fact that a number of people acquired the skills of entrepreneurship, working in a market economy. But there weren't too many of them. The aggravation of the crisis in the public life of the USSR crushed the program of gradual reform of the Soviet economy. All this turned into shock reforms of the early 1990s.