8/31/19

The United States and 1990s Era Russian Economic Chaos

The reconstruction of the Russian political economy following the collapse of the Soviet Union has been a thing to marvel about. I read a book named An Economic History of the Soviet Union written by Alex Noyes long ago. Some day I would like to read another named An Economic History of Post-Soviet Russia.

I took a course on Russian governance from St. Petersburg University last year that had a good history of the 1990s to 2017 political changes in Russia- and there were a lot, yet the economic history is somewhat more vague. An American can compare it to the reconstruction of the South after the civil war, yet that was so long ago and in a very different historical era. For a modern nation to reconstruct an economic system from the ground up is something of a miracle in progress- and accomplished mostly without state violence (at a Stalin scale) or dictatorship.

The United States was concerned with international security and the problem of transition all of Europe too that had formerly been somewhat forcibly made part of the Soviet bloc. To get peace and prosperity for all while containing military conflicts in Serbia and Iraq-Kuwait while preventing nuclear weapons proliferation from old Soviet stockpiles (especially those in Kazakhstan) wasn’t simple.

Unfortunately some of the rough spots in present Russian-American and European relations were sewn in the Clinton administration era that did not comprehend the importance of the Ukraine and Crimea to Russians. While Russia was addressing some of its own problems with places like Chechnya the United States had issues with 9–11 and a war on terrorism. For some reason the U.S. Democratic Party developed a real antipathy to Russia and Vladimir Putin, and reasons for not developing closer relations were made to be more important than finding a way to go ahead and develop closer economic and social ties.

It is possible that bureaucracies and military industrial complexes are loathe to change old relationships such as old dogs can’t be taught new tricks (cliche).

Gregory Sachs is/was a good consulting economist, yet the huge problems of Russia changing to a privatized from a communist foundation were more than tweaking a few things like interest rates. It is hard to be a back seat driver for people with their own ideas. The entire structure required reconstruction and no one actually had any experience at that. Germany for example, after the Second World War, like the rest of Europe, had plenty of experience with western economic history, ideas and institutions. Russia was without most of those.

Democracy and capitalism allow competitive free markets, so it is difficult to find completely impartial, benevolent actors in macro-economics with the power to reform foreign economies- for that is beyond the interest or power of most corporations and governments, including the United States of America. Maybe the United States should have had a Marshall Plan for Russia, yet it seemed best to provide some assistance to Russia while allowing them to go ahead and organize themselves.

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