Streetwise Professor

February 10, 2010

I Know Where You’re Going, But I’m Not Sure You Can Get There From Here

Filed under: Economics,Politics,Russia — The Professor @ 10:57 pm

In today’s Moscow Times, Vladimir Ryhzkov writes about the Institute of Contemporary Development’s report “21st Century Russia”.  The report’s basic conclusion echoes a long-standing SWP theme: Russia’s fundamental problem is institutional, most notably the absence of any institutional checks on the predations of the state, and the predations of private interests under the protection of important elements of the state.  In other words, the natural state is antithetical to Russia’s development.

Ryzhkov repeats some pretty stunning statistics about the “accomplishments” of Putinism:

In the latest Global Competitiveness Report 2009-10, Russia dropped 12 spots in the ranking from the previous year — to No. 63 out of 137 countries. The reasons for Russia’s fall were: a shortage of effective state institutions (ranked 110th in the world), an insufficiently independent judicial system (ranked 116th), a lack of protection of ownership rights (ranked 119th) and government favoritism toward individual companies. In 2001, when Putin promised to strengthen the state and lead Russia to prosperity, the country’s overall competitiveness ranking was actually higher (ranked 58th), and the rankings for the quality of its institutions and protection of ownership rights were twice what they are today. So much for Putin’s promise to “strengthen the state.”

I’m with Ryhzkov until the last sentence.  He suggests that the statistics he cites reflect a weakness of the state.  No, no, no.  They are in fact a very predictable consequence of the increase in state power.  It is well known that a state that is powerful enough to protect property is powerful enough to take it, unless it is somehow constrained from doing so.  Putinism means an expansion of the discretionary powers of the state, the ability of it and its agents to intervene selectively, and a decay in the institutional checks on this power.  The swelling of unchecked and arbitrary discretionary authority is a threat to liberty and property, and an anathema to modern development.  The decline in freedom and the security of property is a feature, not a bug, in Putinism.

Ironically, by identifying the economic, political, and civic progress of a country with the authority and reach of the state, Ryhzkov falls prey to a characteristically Russian error.  It is that very state-centric attitude that has been Russia’s curse since the days of Muscovy.

Ryhzkov describes the all too predictable response of the statists to the ICD’s report, namely, to posit a false choice: if you oppose Putinism, you must favor the anarchy of the 90s:

As expected, United Russia and propagandists loyal to Prime Minister Vladimir Putin viciously attacked the report, accusing its authors of trying to return the country to the “wild ’90s” and even of thirsting to dismember Russia, a scenario that former U.S. National Security Adviser Zbigniew Brzezinski famously described in his 1997 book “The Grand Chessboard.”

(This style of argument is not unheard of in the comments section, BTW.)

But this socio-politico-economic dualism is false.  There are alternatives other than anarchy and dominance.  Russia’s problem, and the challenge facing the ICD authors and their supporters, is how to get to one of these more humane alternatives.  The statists have advantages and exploit them ruthlessly; it keeps the citizenry atomized and apathetic through dominance of the media, propaganda, and ruthless suppression of any semblance of organized protest.  An atomized and apathetic populace is incapable of mounting serious opposition, and if history provides any guide, when the Russian populace ceases to be atomized and apathetic, it turns anarchic and violent.  Hardly an environment conducive to the development of the institutions that the ICD report identifies as essential to Russia’s development beyond Nigeria with snow, however attractive as those institutions are to a classical liberal like me.

In other words, the ICD has chosen a great destination, but getting there from Putinland will take a miracle.

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  1. “It is that very state-centric attitude that has been Russia’s curse since the days of Muscovy.”

    Curse, I’m not so sure about. Compare the Soviet performance in the first weeks of Barbarossa with that of the Western societies with all of their protections for private property. Clearly, if “they” had been more like “us” at the time, they too would have folded up in 6-8 weeks and would have wound up exterminated. That was the point of Barbarossa after all, unlike Germany’s campaign in the West.

    Fact is, “their” way got them to the here and now, when it is unclear whether any other way would have done the job.

    Comment by rkka — February 10, 2010 @ 11:39 pm

  2. Nigeria with snow is what Russia would have become if the trend of the 90s was not discontinued. It would also be Nigeria with nuclear weapons and a lot of angry people, a frighteningly efd-up scenario.

    Structural and ethical changes are nevertheless needed.

    Comment by Leos Tomicek — February 11, 2010 @ 11:30 am

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