Interviewed 6 October 1990 in Moscow
Interviewer: Gwynne Dyer

MS: Shmelyov was mentioned at the York Conference on Feb 20,1991 by Sergei Plekhanov as the leading thinker on how to change to a market economy, and a year ago he knew nothing about and didn’t want to think about economic democracy, but a couple of months ago, he offered the opinion that now the only practical way to change to a market economy is to change ownership to some kind of self-management scheme.

He is not as worried about the nationalities question as about the economic problem. They are going to need to import a lot of consumer goods. They should use, not to sell, but as security, their gold reserve. The CIA estimates that they have about $30 billion in gold reserves and it would allow them to borrow money to import consumer goods for 3-5 years. For 2-3 years the industrial consumer goods should be increased by at least 10 times. They have a huge mount of currency, and to have the ruble have any value they need to buy it back. The best way to buy it back is by selling these expensive consumer goods from abroad. For every doller spent in computers, you’d get back about 30 rubles. This would take money out of people’s hands so they would have an incentive to work.

Dyer: Abel Aganbegyan says that he thinks there will be no results from perestroika on consumption goods for 6 years.

Shmelyov says 2-3 years. The Chinese spent 8-10 years with only one purpose before they did anything else — to saturate the market. Only then did they very cautiously begin changing the prices. , and look what it did — they got Tiananmen Square, and they are related. So USSR can’t change prices yet. Wholesale goods, yes, but not in the areas where prices have been most distorted for a long time.