The first Revolution recognized how difficult the task of transformation was, and the revolutionaries believed that it could not be accomplished by democratic means; it had to be led by the "dictatorship of the proletariat." Some of the leaders of the second revolution in the 1990s at first thought that, freed from the shackles of communism, the Russian people would quickly appreciate the benefits of the market. But some of the Russian market reformers (as well as their Western supporters and advisers) had very little faith or interest in democracy, fearing that if the Russian people were allowed to choose, they would not choose the "correct" (that is their) economic model. In Eastern Europe and the former Soviet Union, when the promised benefits of "market reform" failed to materialize in country after country, democratic elections rejected the extremes of market reform, and put social democratic parties or even "reformed" Communist parties, many with former Communists at the helm, into power. It is not surprising that many of the market reformers showed a remarkable affinity to the old ways of doing business: in Russia, President Yeltsin, with enormously greater powers than his counterparts in any Western democracy, was encouraged to circumvent the democratically elected Duma (parliament) and to enact market reforms by decree. It is as if the market Bolsheviks, native true believers, as well as the Western experts and evangelists of the new economic religion who flew into the post-Socialist countries, attempted to use a benign version of Lenin's methods to steer the post-communism, "democratic" transition.

The move from communism to capitalism in Russia after 1991 was supposed to bring unprecedented prosperity. It did not. By the time of the rouble crisis of August 1998, output had fallen by almost half and poverty had increased from 2% of the population to over 40%.

Russia's performance since then has been impressive, yet its gross domestic product remains almost 30% below what it was in 1990. At 4% growth per annum, it will take Russia's economy another decade to get back to where it was when communism collapsed.

A transition that lasts two decades, during which poverty and inequality increase enormously as a few become wealthy, cannot be called a victory for capitalism or democracy. Moreover, the longer-run prospects are far from rosy: with investment a mere 10% of what it was in 1990, even if that investment is better allocated, how can growth be sustained?

IMF-style neo-liberals are now trotting out an interpretation that amounts to a belated declaration of victory. The pre-1998 period of economic decline, on their view, reflected a stalled transition process, whereas the rouble crisis finally jolted the authorities into action, with recovery following implementation of far-reaching reforms.