Review of Russia: A Long View written by late Russian PM Yegor Gaidar and published in English in 2012.
Bottom-line: Gaidar claims adoption of Orthodox Christianity and Mongol Yoke caused Russia to lag behind Western Europe, which transition from traditional agrarian society, while Russia’s attempt to follow was disrupted by the socialist experiment. The only way for Russia to catch up and become competitive in modern world is to liberalize governance and economy, according to Gaidar. The author doesn’t really add much value when he veers off from focusing on Russia to offer his thoughts on economic factors behind development of human civilization. Most of this book’s insights on reasons behind collapse of the Soviet Union were already outlined in in his 2007 book "Collapse of an Empire: Lessons for Modern Russia." However, the book does make a number of excellent points relevant for those interested in gauging not only Russia's past and present, but also its short-to-medium future. See them below with my comments in Italics.
I. Pre-revolutionary Russia
Reasons why pre-revolutionary Russia was lagging behind:
- By adopting Orthodox Christianity, Russia separated itself culturally, religiously, politically and ideologically from the center of innovation that Western Europe was rapidly becoming.”
- Mongol Yoke.
- In the 19th century serfdom was abolished, but land was transferred to communities and the government gave up mutual responsibility as a way of collecting taxes only in 1903 in what prevented agrarian sector from becoming effective.
Facts illustrating how pre-revolutionary Russia lagged behind:
- By the 15th century Russia turned into a traditional centralized agrarian state – which meant stability, but stagnation. At that time “The Russian political elite wanted to borrow military and production technology and not the European institutions upon which the achievements of Western Europe were based.” Great zinger that characterizes Russian elite today too. Western European innovations reached Russia but with a lag of several centuries. Russia had no navy or standing army. Not did it have any universities, newspapers, scientists or doctors with only pharmacy located in tsars’ quarters.
- Common Russians fled excessive taxation/serfdom. The census held in 16th century in cities of Kolomna and Mozhaisk showed that 90% of homes were empty while only 16% of land in the Moscow district was cultivated in Moscow. In Novgorod and Pskov only 7.5% of land was cultivated.
Bolshevik Revolution and Socialist Russia
The reaction of political elites and their response to revolutionary challenges are, to a great extent, determined by the ideology that reigns in the world at the time of a revolution. During the French Revolution, the liberal idea held sway, while in 1917-1922, during the Civil War in Russia that followed the revolutionary events, dirigisme ruled.
- The duality of Marxism as scientific theory and as secular religion has a major influence on its fate. The combined printings of Marx and his followers are comparable to those of the Bible.
Willingness to resort to violence important for survival of state
- The Previsionary Government lacked will to imprison and execute on a mass scale while Bolsheviks had such will and therefore their regime managed to cling to power and consolidate it.
- “The attitude of the ruling elite towards it own people resembled that of the foreign conquerors of agrarian states, where the hardness of the regime the local rural populace was not bound by traditional morals. The telling description of Stalin among Soviets in the late 1920s and early 1930s was “Genghiz Khan with a telephone.”
- Abnormally high level of appropriation of surplus product from populace fuelled Soviet economic growth.
Flaws of Soviet economy:
- The Bolshevik revolution essentially restored ineffective agrarian communities that Tsar Nicholas’ premier Stolypin attempted to break up to encourage private farming.
- Gap between development of industry and agriculture caused by decades of reallocation of resources from the latter to the former became the most serious anomaly of socialist growth.
- The crisis that the Soviet encountered in the early 1990s was the result of long-term problems born of the socialist model of industrialization in conjunction with a profound disorganized of state finances and related to the sharp decline in oil and fuel prices.
The composition of foreign trade of the USSR (share in volume of exports, %)
|Machines and equipment||22||19||16||14|
|Fuel and energy||16||21||47||54|
Russia continues to lag behind:
- U.S., Canada, Australia and other leading countries reached Russia’s current level of GDP per capita some 60 years ago
- If Russia grows at rate of 2%, it would reach France’s and Germany’s current level of GDP per capita in 50 years, but if it maintains the growth rate it enjoyed in 1999-2007, that gap can be closed in one generation.
To avoid falling behind further Russia will have to solve the following problems in the coming decades:
- demographic dynamics, including ageing;
- in order to maintain the population at the present level Russia will have to accept 700,000 migrants annually;
- stability of pension system;
- shifts in structure of production and consumption as result of transition to postindustrial stage of development.
Disadvantages of Russia’s managed democracy model: the model helps to prevent revolution by maintaining an appearance of democracy, but causes
- rampant corruption
- rigidity in governance, which blocks reforms.
Ability to adapt to changes is key to success:“Having undergone a stressful post-socialist transition, Russia found herself not in a stagnant traditional world, but in a dynamic changing world of modern economic growth. This is the process of moving from stable, long-term static agrarian societies to the new reality… . In this situation, the ability of national elites and societies to adapt to the changing conditions of development is a precondition for stability, allowing some to retain global leadership and others to reduce the gap separating them from the leader countries.”
2008 crisis will force Russia to make a choice: The world financial crisis that has begun in 2008 is the “most serious one since the Great Depression”, so if and when incomes stops growing and unemployment rises, the Russian government can either increase repression against opposition, which would be suicidal, or it can pursue regulated liberalization of the regime, as Spain did after Franco, Taiwan and Chile did. Gaidar’s classification of the past crisis as greatest since the Great Depression turned out to be wrong.
General observations of interest:
- The ability of developing countries to adapt to the challenges of modern economic growth depends directly on the length of time they have spent as an agrarian civilization.
- The main inheritance of the Western Roman Empire was the cultural tradition of classical antiquity, the socio-economic genotype of Greek and Roman concepts of an alternative state structure and legal relations. They affected the future evolution of Western European states and moved it away from the trajectory characteristic of stable, but stagnant agrarian states, allowing humanity to scape the institutional trap of agrarian civilization.
- In 11th century the GDP of China in 1980 prices and buying power was $1,200-1,400 per capita, which was almost double that of Europe. By the time of the second millenium Western Europe had reached only half of China’s per capita GDP.
- From the middle of the 2nd millenium, when the revolution in warfare occurred thanks to gunpowder and firearms the answer to the question of how much a country could mobilize financially made it possible to predict whether it could win a war and retain its independence.
- Poor countries are unstable not because they are poor, but because they are trying to become rich. The greatest level of violence is not in the poorest countries with income of less than $100 per person per year, but in the next group with income between $100 and $200 per person per year.