Gorbachev: Perestroika Lost
nytimes.com
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In the former Soviet Union, though, 'shock therapy' turned into simple looting. The country was too big and the political system too rotten to actually carry out any program of reform.
So it was bad advice?
My point is that it was not obviously bad advice. For the countries that managed to push it through politically, it worked extremely well.
I was born in an eastern block country and still follow the news there, and let me tell you it did not work very well there. In fact it was very similar to a miniature version of what happened in Russia (except for the oil and gas money).
Your last sentence is the typical way the Chicago boys excuse themselves after their repeated failures -- just by using racism. "Our theories are sound but the locals are too rotten for our high minded theories" ...
// edit: Don't include Romania, actually. ATB pointed out, rightfully, that the Romanian revolution was among the more violent of the revolutions in 1989.
If you look at the Balkans (countries that used to make up Yugoslavia (sans Slovenia), Bulgaria, Albania, etc), the economic story is slightly different. In Bulgaria, for example, the economy only got back up to pre-1989 levels in mid-2004. The economies here were much more tied to the Soviet Union's and its collapse hit them much harder. Or, they just devolved into a series of ethnic battles, which doesn't go over well with the economy.
To me, it doesn't make much sense to examine these states the same way you would satellite states. They weren't in the same situation during the Cold War. Although, Estonia, Lithuania and Latvia did simply vote themselves out of the Russian Federation, rather then joining it after the Soviet Union collapsed, so, there's a common thread for success, I suppose.
Whether or not they were an integral part of the USSR or just a vassal state has no bearing on this, except to the extent that the ex-Soviet republics tended to be even more of an economic shambles.
After 1990, everyone was in the same boat, and the countries that were able to push through "shock therapy" reforms prospered, while the rest did not.
Exactly. Thats it. The economic position of the state prior to their transition away from communism absolutely has an effect on how they managed after the transition.
I'd be willing to guess that while part of the Soviet Union and under a planned economy, whatever the Estonian state was responsible for was closer to being services-based and processing raw materials after they were obtained. Not a lot of agriculture or mining.
After 1990, everyone was in the same boat, and the countries that were able to push through "shock therapy" reforms prospered, while the rest did not.
But, why did shock therapy fail in the countries that it didn't work in? I highly doubt it was as simple as "Ukraine wanted it while Croatia didn't."
Why did Estonia (a former Soviet state) not end up with looting as well?
The countries that had the political resources to stick with this harsh program, and ride out the first two years where none of the positive effects were felt, ended up much better off than the ones that didn't.
Everyone ended up with some degree of looting. It was a matter of which countries had political institutions strong enough to push through this transition, prevent the rise of an organized gangster economy like we saw in Russia, and face up to the magnitude of the challenge.
The Romanian revolution was extremely violent: over 1,000 people died and over 3,000 were wounded, and the former dictator and his wife were found guilty in a hasty show trial and executed on the spot. Their former allies then former a post-Communist clique that looted the country for most of the 90s and stole several elections. Romania continues to have one of the highest corruption rates in Eastern Europe.
But yes, aside from that, it went "remarkably well."
This isn't random conspiratorial nonsense, it's well-documented and NPOVed five ways from Sunday: http://en.wikipedia.org/wiki/Romanian_Revolution_of_1989#Aft...
Even still, it could have been much worse; the revolution could have failed. And it lead to a stable government that successfully transitioned between parties afterwards. And the Romanian economy is doing fairly well. I'd call that a pretty remarkable success, given how spectacular the failures in Eastern Europe are on the opposite end of the spectrum.
Their former allies then former a post-Communist clique that looted the country for most of the 90s and stole several elections.
I haven't really read much about this, Romanian elections being fraudulent. Don't suppose you could recommend a few good news articles or other data (books or papers, perhaps) on the subject (Romania after 1989, not just elections specifically)? The Wikipedia article doesn't have any citation for it either.
The fact that Romania made it out of the hellish Ceausescu regime with comparatively little violence, and is now a full-on EU member, is one of the great success stories of that time.
You can bemoan the people that died and the slowness of the eventual transition towards more open government, but you must keep a sense of perspective. Even a dysfunctional country like Romania has been able to claw itself to levels of prosperity no one dreamed about in 1989.
Compare it to the revolutions in the other Balkan states around 1988-1992. It was by far the most violent. How many died in Hungary? In Bulgaria? In Poland? In Czechoslovakia?
"there were great fears that the Yugoslavian debacle might repeat itself there"
There were? Interesting, given that the Yugoslavian Civil War happened several years AFTER those 1000+ Romanians died. How would that repetition have worked?
"You can bemoan the people that died"
Could there be a more callous response to thousands of casualties? As I've shown above, this didn't happen in ANY of the other countries making the same transition. It was only the multi-ethnic and barely-cohesive artificial country of Yugoslavia that did worse. Several years later.
"Even a dysfunctional country like Romania has been able to claw itself to levels of prosperity no one dreamed about in 1989."
Sure, and this is a great thing. However, as my reply quoted, it was in response to "lacked any sort of violence." 1000+ dead and many more injured is a poor definition of "any sort of violence."
And I admitted that I was wrong, right away. You're beating a dead horse to death if this is your main reason behind your statements.
Not lacking any violence at all doesn't mean that Romania had an incredibly violent revolution. Its not that black and white.
1,000 people dying is incredibly sad, yes. But, the death toll could have been much, much worse. The military could have sided with the government, not the people. There could have been an ethnic division within the country. The Soviet Union could have reversed the Sinatra Doctrine and stepped in.
Those that suffered most from the pill were countries with the more agricaltural backgrounds.
Maybe even better than the examples you listed.
This isn't racism, this is realism. To use a simple example, America is full of all-you-can-eat buffets, but if you tried to pull a business like this off immediately after the fall of the soviet union, your restaurant would crash and burn. As a novelty, everyone in town would try to "game" it in Russia, until you adjust the written rules to the point where it isn't an all-you-can-eat anymore. I don't even think people would do it because they're particularly hungry, but because they're used to gaming the system every chance they get.
Russia has a multigenerational culture of bribes and gaming the system. You can never root that out in a few years - it takes many decades of very carefully constructed policies to root that out. Just look up the history of early Russian immigration waves to the U.S., and see the kind of scams the Russians pulled here that Americans would never consider pulling en masse (adding water to gas in the gas stations, car and health insurance scams, etc.)
Communism degrades social trust, in Poland before the WWII we had very cultured and organised population, people were helping each other, etc. We had regained independence after over 100 years.
Even 5 years into the WWII, there were uprising in Warsaw, many young people died for Poland, others were fighting in the England, Italy, on the far east.
In the first 10 years of communism everybody that were active as partisant during the war were either in the jail, killed, has escaped from the country, or vere hiding in the forests. Then, communistic gov said if the remains of Armia Krajowa uncover, there will be now more killing. And of course they lied, like many times before and after that.
After 45 years of communism people in Poland still don't trust each other. People are still gaming the system, current gov aren't helping, at least they are elected in honest elections. Regaining the trust of the people is work for many years, and without the trust gov can do anything with the people.
I think in Russia it has to be even worse - they had communism for much longer, and before that they had just as corrupt system, only less deadly.
Poland before WWII was an ethnically fractured state whose population consisted mainly of impoverished peasants. The political system had collapsed into a rightist dictatorship only a few years after independence.
Only the horrific subsequent history of the country makes it possible to look back on this period with any kind of nostalgia.
But my point was - social trust level was very high - in 1920 we have won war with ussr, we have had almost 1 million army made mainly from volunteers, there were many socal iniciatives helping people, etc.
That athmosphere was lost during communism.
PS I agree that Piłsudski regime that come later was bad for Poland.
Blaming Tsar's influence and Communism is perfectly reasonable, just as blaming HDR or McCarthy's heritage in the US.
In other words it was bad advise for the situation in Russia. If it is not one size fits all then it is not good advise. Also I don't think this Friedman economics worked out so well in Chile either. The industries that work in the U.S. are government subsidized ones like agriculture, pharmaceuticals, and military technology spending. The bank bailouts also do not lead me to believe the U.S. follows its own advise.
If you don't count those who died of starvation because savings were burned in hyperinflation and pensions were (and still are) _tiny_, those who were killed during inevitable criminalization of society, Russians who were killed because of nationalizm in USSR republics, _millions_ of unborn children because of economical and political instabilities, then, yes, it wasn't bad advice.
This clown made amazing decisions like taking Bush et al words_ that NATO won't spread to the East, sincerely thinking that West is here to help and so on.
> that the second election of Yeltsin and the first election of Putin were fraudulent.
It was fraudulent since 75% voted for preserving USSR at 1991.
EDIT: Dug up a couple from Google, although they weren't the ones I was referring to.
http://www.foreignpolicy.com/articles/2009/08/13/a_diplomati...
One day, Vladimir Putin and Dmitry Medvedev went out to a restaurant for a fancy dinner. Putin, naturally, ordered first.
"I'll have the steak."
The waiter replied, "Very good, sir. Now, what about the vegetable?"
To which Putin answered, "He'll have the steak too."
http://www.youtube.com/watch?v=4agXi15LfS0#t=2m03s (via Spitting Image)
Which came first?
http://en.wikipedia.org/wiki/Walter_Duranty http://en.wikipedia.org/wiki/Herbert_Matthews
I think any major English language periodical would publish his editorial, which generates more high-brow interest in the English speaking world than in his own country. He has absolutely no influence in Russia today, or for quite some time.
I once had a Ukrainian immigrant barber, who maintained Gorbachev's Russian was very pedestrian, but he had a great English interpretor who could translate on the spot into prosaic English. He (the barber) was very opinionated, and I have never seen anyone make this claim in print.
The implication that it is fear that's keeping a more modern, complex and innovative economy from a evolving is more nuanced.
I think dictatorships like Singapore are not necessary bad for a strong and diverse economy. I think a true democracy is better, but not by much pure in economic terms. I think it's much better for your humanity.
What really plagues Russia is chaos, corruption and lawlessness. That's what's keeping the small and mid sized business down, they are the ones that could diversify the economy.
Being a dictatorship magnifies the impact of the quality of the leadership/rulers. In most western democracies our governments are relatively weak. Their ability to help or hinder the economy is somewhat limited as they generally don't directly control the organizations that make up the economy. On the other hand in a country where the government wields absolute power the government's impact is enormous.
Historically most governments around in the world haven't been great so the countries that have done consistently well are those whose governments have limited influence over the economy ie democracies.
Its not that democracy helps your economy. It just dilutes the governments ability to fvck it up.
Democracy is actually a pretty terrible way to run things; as Churchill said, it is the worst form of government, except for all the others that have been tried so far.
This bit made me laugh for some reason. Using "scuttle" makes it seems like a rather whimsical take on one of the more important events of the 1990's. If anyone doesn't know what he's referring to, its the KGB and other branches of the Soviet government taking himself (Gorbachev) hostage and throwing a coup. In turn, Boris Yeltsin led protests to restore Gorbachev to power.
Due to his actions, Yeltsin gained popular support and was, in effect, the leader of the Soviet Union as the president of Russia; Gorbachev had resigned a few days after the coup. And the Soviet Union was nearing its end as well; it ceased to exist just over four months later.
Main Entry: 3scuttle Function: transitive verb Inflected Form(s): scut·tled; scut·tling \ˈskət-liŋ, ˈskə-təl-iŋ\ Date: 1642
1 : to cut a hole through the bottom, deck, or side of (a ship); specifically : to sink or attempt to sink by making holes through the bottom 2 : destroy, wreck; also : scrap 2
We're at a similar brink, though via dissimilar circumstances. While we properly are looking for ways to repair and improve, I hope that there is a strong resurgence of both Democratic and Capitalist principles. The alternative, as some are leaning towards, has a well-documented trajectory. It would condemn us to inferiority.
So, to you, Capitalism is nothing other than military spending??? Read some history.
It is pretty accepted that one of the major reasons for Soviet collapse was massive military spending (unsustainable...). You are suggesting that the way the US is moving recently will make us collapse just like the Soviets. You fail to mention the periodic and massive increase in military spending, which is not recent. This spending now constitutes a very very large portion of the US budget. I worry far more about the constant growth of that spending than about some new programs that cost and order of magnitude less.
A world I was referring to is a so called Second World, that was a Soviet block. Being second here does not mean to be somewhere between the first and the third, it means standing on par with (self-proclaimed) First World. And Soviet Union really was a developed, technologically and culturally advanced world. Now we see degradation everywhere, we are on a clear path to the Third World, and we need this modernization. Well, Russia has undergone some successful modernizations in the past, all of them were quite painful. Last one was led by Stalin so you can get an idea of what I mean by "painful", and failed modernizations were even worse. So, it is arguable that Gorbachev made more evil for his people than Stalin did.
It was not sustainable, without Gorbachev it would have ended the same, only later and probably more violent.
When you build your civilization on power and military strength and keep people on your side without their consensus, it isn't surprising that you have to spend on military a lot. And when you add inefficient economy to the mix, it's obvious it will fail.
Less wealthy, yes, but not many times less wealthy, provided that all basic (and many not so basic) living needs were covered virtually for free, including guaranteed employment, free medicine, free education and so on. Also, it's easy to be wealthy with a 14-digit national debt.
...were less free, couldn't even choose the gov
That's propaganda. Soviet Union was a pretty democratic state at all levels, and anyyone could choose to go with a party career if he liked to.
It was not sustainable, without Gorbachev it would have ended the same, only later and probably more violent.
How do you know?
About going with party career - yes, to have good job people even had to be in the party. What I mean by "less free" is - there was one real party, you had to accept party line to be politician, people couldn't choose other party. People couldn't go out of country without permission, and it was strictly controlled, who are allowed to travel where. Simply put it was totalitarian state.
About the fall of the USSR: because in 1989 and later transferrable rubels were worth almost nothing, there were big inflation, satelitte countries were freeing themselves, and atomic war wasn't an option to anybody sane. It had to end that way.