Part II: Putin’s Russia is Collapsing

Alexei Bayer, independent Russian economics analyst based in New York, writing in the Moscow Times:

In the mid-1960s, there were pundits on both sides of the Iron Curtain who predicted that the Soviet and U.S. systems would eventually become identical. The Soviet Union was then in a relatively liberal phase, whereas the United States, with President Lyndon Johnson’s Great Society program full speed ahead, seemed to be moving toward social democracy.

By the 1970s, such talk ceased when the Kremlin tightened the ideological reins. But economic similarities did emerge in one aspect: The formidable U.S. economy, stifled by government intervention and overly bureaucratic corporations, began to stagnate almost as badly as its Soviet counterpart. The 1980s then became a period of renewal for both countries, even though the responses — and results — were very different, underscoring the contrast between the two political systems.

U.S. President Ronald Reagan proved to be the right man for the times. The United States was able to generate new ideas and find new sources of growth, which resulted in a quarter century of robust economic gains, technological and industrial innovation and spreading prosperity.

In the Soviet Union, where reform-minded Mikhail Gorbachev became leader in 1985, change had been long overdue. The rest of the world — “a consumption society,” according to Soviet propaganda — produced goods of increasing variety and better quality, whereas the Soviet economy struggled to produce enough food, clothing and other staples. The sheer contrast between consumer choices abroad, even in poor countries, and empty shelves in Moscow was enough to refute any ideology of the Kremlin. The Soviet Union was bankrupt not only economically, but also morally and ideologically.

As soon as Gorbachev began altering the Communist system to make it more open and more efficient in providing consumer goods and services, it collapsed under itself. The Soviet Union was like a listing house where all the beams had rotted. Such houses can sometimes remain standing unless somebody tries to right them.

Today, the United States once again faces a major economic and political challenge. It is impossible to say whether President Barack Obama’s program, a combination of public spending on infrastructure and investment into new technologies, will succeed. But the odds are favorable.

Many people in Russia, having been raised on the few uncomplicated Marxist tenets, tend to dismiss U.S. democracy as an underhanded ploy to help the rich keep down the poor. They also paint the United States as a young, childish nation. Yet the U.S. political system — with its genuine, bottom-up self-rule and healthy system of checks and balances — has been remarkably resilient and has lasted for nearly 250 years. The United States is one of the oldest continuously functioning governments on Earth that most people around the world have tried to emulate.

It is also the exact opposite of the Russian political system. All the wars, revolutions and purges since World War I have benefited, expanded and enriched one class only in Russia: the bureaucracy. Russia remains an incorrigibly top-down society in which an enormous layer of unproductive, corrupt bureaucracy rules over the passive people.

Even though Prime Minister Vladimir Putin’s popularity in Russia rivals Obama’s approval ratings in the United States, the Russian system has none of the resiliency of America’s democracy. If the Kremlin introduces political or economic reforms in response to the economic crisis, the system may crumble — even if such reforms, on paper, should have benefited the country.

6 responses to “Part II: Putin’s Russia is Collapsing

  1. If the Kremlin introduces political or economic reforms in response to the economic crisis, the system may crumble

    If the Kremlin introduces reforms, or if the Kremlin doesn’t introduce reforms. The system may crumble, and it may not crumble. Let us see the evidence for each.

  2. “It is impossible to say whether President Barack Obama’s program, a combination of public spending on infrastructure and investment into new technologies, will succeed. But the odds are favorable.”
    I don’t think the odds are favourable at all. What is clear to me is that the US economy is now being driven downward by the Obama government (his spending is not so much on infrastructure and new technologies as it is on various pork projects and ideological theories). Obama will either be forced, by circumstance, to reverse spending and cut taxes, or the GOP will easily win the White House in 2012. Then America will again rebuild.

    • I disagree. I see no evidence the majority will be shifting to the GOP anytime soon. In fact if there is anything positive as a result of his policies he will be there 8 years. The greatest achievement in the USA is for 250 years, the first thing, regardless of anything, you have to have the most votes. And second is the peaceful transition of power. Never failing in 250 years. That is amazing. Now will Russians ever be willing to do the same is anyone’s guess. So far the answer is clearly no……..and the article tends to make me believe the russian society really has no idea how to accomplish democracy at its core.

    • Still at it, Gordon?
      After eight years of earthly delights?
      Agree with you completely. In just six weeks in office, Obama already managing to ruin the beautiful edifice Baby Bush has built. In the economy, in foreign policy, on the environment. Great fiscal policy, too.
      Funny how you guys call yourselves conservatives:
      Conservative:
      1. Favoring traditional views and values; tending to oppose change.
      Whereas in reality you’re a bunch of Lenin-type radicals. Of the kind that don’t allow facts stand in the way of dogma.
      And, by the way. The article is not about Obama at all, but I’m not sure you care.
      Hugs to Rush.

  3. Well, Paul, there is one rather glowing exception to the 250 year rule – 1860.

    As for AB’s view, I think Gordon knows that no recession or depression in history has ever been fixed with government spending. That actually goes double for the Great One of the 30’s – FDR’s policies actually extended the Depression but distracted the nation into thinking something was happening (who says history doesn’t repeat itself?). You say it’s about facts, but the facts have been very clear – just unpopular. As for now, it’s government spending and machinations that have put us in this rotten position in the first place. The last eight years have been anything but a shining example of conservative economic values in action – even if you cut Iraq and Afghanistan, domestic spending shot through the roof. Bush thought if he threw a lot of money at the left’s pet causes he’d keep them happy, but the media never whispered a word that he was upping the budgets on social programs, and the Dems never gave quarter for all his ass-kissing. Bush rightfully deserves to go the way of Hoover (who was also far from a laissez-faire conservative), but make no mistake, FDR’s policies left following generations with a fat check to pay off and nothing to show for it, and so will Obama’s.

  4. Obama is not the biggest problem, the US Congress is the biggest problem. By spending scarce capital on pork projects and earmarks, Congress guarantees failure in the US economy. Obama is essentially the substanceless onlooker with a nice voice via teleprompter who currently occupies the White House.

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