Russia: A Long View

Yegor Gaidar
translated by Antonina W. Bouis
Copyright Date: 2012
Published by: MIT Press
Pages: 568
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  • Book Info
    Book Description:

    It is not so easy to take the long view of socioeconomic history when you are participating in a revolution. For that reason, Russian economist Yegor Gaidar put aside an early version of this work to take up a series of government positions--as Minister of Finance and as Boris Yeltsin's acting Prime Minister--in the early 1990s. In government, Gaidar shepherded Russia through its transition to a market economy after years of socialism. Once out of government, Gaidar turned again to his consideration of Russia's economic history and long-term economic and political challenges. This book, revised and updated shortly before his death in 2009, is the result. Its transition complete, Russia is once again becoming part of the modern world. Gaidar's account of long-term socioeconomic trends puts his country in historical context and outlines problems faced by Russia (and other developing economies) that more developed countries have already encountered: aging populations, migration, evolution of the system of social protection, changes in the armed forces, and balancing stability and flexibility in democratic institutions. Topics of discussion in this astonishingly erudite work range from the phenomenon of modern economic growth to agrarian societies to Russia's development trajectory. The book features an epilogue written by Gaidar for this English-language edition. This is not a memoir, but, Gaidar points out, neither is it "written from the position of a man who spent his entire life in a research institute." Gaidar's "long view" is inevitably informed and enriched by his experience in government at a watershed moment in history.

    eISBN: 978-0-262-30530-3
    Subjects: Economics, History

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. Foreword
    (pp. vii-viii)
    Anders Åslund

    Yegor Gaidar was a unique and outstanding personality. In January 1992, at the age of thirty-five, he attempted a comprehensive and radical market economic reform in Russia. Gaidar was deputy prime minister of Russia from November 1991 and advanced to acting prime minister from June 1992, a post he held until December 1992. I had the honor of serving him as an economic advisor. In the course of one year, Gaidar managed to transform Russia into a market economy and launch an ambitious privatization program. His determination encountered great resistance, which harmed and delayed the Russian market reforms, but eventually...

  4. Preface
    (pp. ix-x)
  5. Acknowledgments
    (pp. xi-xii)
  6. Introduction
    (pp. xiii-xviii)

    The first sketches for this book were written in early August 1991. At the time, my scholarly goal and most pressing need was not so much to understand what the Soviet socialist experiment had been in the context of long-term tendencies in world socioeconomic development, but to figure out what key problems Russia would face in striving to integrate into the global system of market relations.

    Further developments—the August coup attempt and its failure, the collapse of the USSR and the socialist system, and the difficult start of market reform—forced me to set aside work on the topic...

  7. Part 1 Modern Economic Growth
    • 1 Modern Economic Growth
      (pp. 3-22)

      If you follow the contemporary world in the front pages of serious newspapers, it seems friable, constantly shifting. Conflict in Iraq, explosions in Israel, developments in the problems of Kurdistan, and contradictions in Iran’s nuclear program are the reality of today’s changing world. If you watch the world’s development at a remove, assessing it year by year, it seems stable, even static. An attentive observer will notice vacillations in the economic cycle, will discover that the growth in the world economy is around 2 to 4 percent annually, and will note the floating movement of the stock prices and political...

    • 2 Economic Determinism and the Twentieth-Century Experience
      (pp. 23-42)

      I suppose that no thinker dealing with questions of social development had a greater influence on world historical processes in the last century and a half than Karl Marx.¹ Today in scholarly literature there are five to ten times more references to him than to the most quoted liberal economist in history, Adam Smith. The combined printings of books by Marx and his followers are comparable to those of the Bible.

      For almost a century Marxism was the reigning ideology in Russia, used to explain the development of the country and the world.² It continues to influence public opinion even...

    • 3 The General and the Particular in Modern Economic Growth
      (pp. 43-66)

      In Karl Marx’s world, economic development looks simple: less developed countries follow the path of the more developed ones. Marx and Engels never meant this literally. Many places in their works show that they allow for deviations in national trajectories of development, but these are just details, albeit significant ones, within the theory. In fact, the transformation of countries that are part of the modern economic growth process is nonlinear and multidimensional.¹ Many parameters influence the trajectories of national development. For the sake of clarity, I am selecting four axes of coordinates that determine economic dynamics:

      1.Historical time. The...

  8. Part 2 Agrarian Societies and Capitalism
    • 4 Traditional Agrarian Society
      (pp. 69-92)

      The radical changes in the last two centuries heighten interest in the reasons for the stability and unchanging nature of life before that. Why had it not changed for millennia? Why had changes not come earlier? Why did they begin in Western Europe?

      Contemporary observers of the economic growth that began in Europe were interested in historical precedents as well—earlier periods of massive and interconnected economic and social changes. But in the nineteenth century, historians were blinded by Eurocentrism—the historical process was identified primarily with European events, such as the collapse of the Roman Empire. That is why...

    • 5 A Different Path
      (pp. 93-102)

      After the birth of settled agrarian civilizations in Mesopotamia and Egypt and then in India, China, and other parts of Eurasia, for millennia their way of organizing life prevailed in the world. The predominant activity in the world economy was agriculture, very productive for the day, which ensured high population density and population growth.

      However, in that period of history, which followed the Neolithic Revolution and preceded the start of economic growth, this was not the only form of social organization. I am referring not only to the societies of hunters, fishermen, and gatherers that remained on the periphery of...

    • 6 The Phenomenon of Antiquity
      (pp. 103-120)

      The massive anomaly of the agrarian world, better studied and documented than the history of mountain dwellers and steppe nomads, is the world of the ancient Mediterranean. Due to scholars’ Eurocentrism in the mid-nineteenth century, its history was often considered central to the study of precapitalist development. It is the source of perceptions about agrarian civilizations and turning points in their establishment and evolution.

      A fundamental aspect of ancient society was the ability to overcome a key problem for centuries: the incompatibility of peasant labor and warfare. To protect itself from the elite that specialized in force, the peasant community...

    • 7 Capitalism and the Rise of Europe
      (pp. 121-142)

      The Germanic peoples, Rome’s nearest neighbors and greatest threat in the last centuries of the empire, lacked writing and developed statehood, but took advantage of their proximity to a developed agrarian civilization. The first reliable source describing the Germanic tribes is Julius Caesar. His notes do not make clear, however, whether the tribes had moved to a settled way of life.¹ But 150 years later, they had settled agriculture, according to Tacitus.² The Roman borders and the legions posted on them pushed nomadic peoples to switch to settled agriculture. The settled life and agriculture led to accelerated population growth. The...

  9. Part 3 The Trajectory of Russia’s Development
    • 8 Particular Features of Russia’s Economic Development
      (pp. 145-180)

      Beginning in the eleventh century, a slow increase in economic growth occurred, with digressions, wars, and other catastrophes, but nevertheless substantial when compared to the preceding millennia and to most of the world.¹ The most developed European regions lay along a line that could be drawn from Venice and Milan to the mouth of the Rhine. To the west and east of that line, innovations (three-field cultivation, water mills and windmills, and so on) took hold more slowly than along it. Technological advances took much longer (in one case, by three hundred years) to reach European countries removed from that...

    • 9 The Collapse of an Empire
      (pp. 181-204)

      The cause of the collapse of the socialist experiment and of the Soviet Union itself was not military defeat but the fundamental problems of the Soviet economic and political system. The most important one was the inability to change quickly and react to new challenges. The economic and political construction formed in the 1920s and early 1930s, albeit by harsh methods and at the cost of millions of lives, was meant to achieve the goals that were the regime’s priorities: forced industrialization, the creation of a powerful military-industrial complex, victory in the war, and retention of political control. But under...

  10. Part 4 Major Issues of the Postindustrial World
    • 10 The Postsocialist Crisis and Recovery Growth
      (pp. 207-234)

      For obvious reasons this chapter is special. I took part in the events under discussion and I have no intention of responding to criticism, justifying or explaining specific decisions we made, listing our mistakes (of which there were plenty), or relieving myself of responsibility for what was done and what was not, and certainly I have no intention at all of repenting my sins. The goal of this chapter is to examine as objectively as possible the processes of the transitional period in Russia as compared to other postsocialist countries, find their commonalities, and explain any deviation from those rules,...

    • 11 The Dynamics of Population and International Migration
      (pp. 235-268)

      Usually demographers speak of three stationary regimens for reproducing population—those characteristic of nomadic gatherers, settled agrarian, and urbanized industrial and postindustrial societies—as well as two transitional demographic processes,¹ from nomadic to settled and from settled to industrial. This would be so if we accept the fact that the second transitional process is completed and that the characteristics of population replacement present today in the countries that are leaders of economic growth are stable in the long term and will not undergo any serious change in the future. However, modern economic growth continues, and therefore radical changes in stable...

    • 12 The State Burden on the Economy
      (pp. 269-286)

      At present, one of the most popular topics among Russian economists and politicians is the question of the state burden on the economy—that is, the part of the gross domestic product taken on by the state. This is the key issue in the social reforms that encountered such resistance among the country’s political factions. To understand the issue, it helps to listen to what history has to say on the subject.

      At the turn of the nineteenth century in England, where modern economic growth first began, the predominant idea was that state expenditures had to be constrained: people were...

    • 13 The Formation and Crisis of Systems of Social Safeguards
      (pp. 287-310)

      The elites of traditional agrarian societies considered the poverty of the lower classes to be a normal state of affairs, and indeed a desirable one. If peasants were rich, the reasoning went, they were paying too little in taxes. In 1771, Arthur Young wrote, “Everyone but an idiot knows that the lower classes must be kept in poverty, lest they become less industrious.”¹ In the opinion of Voltaire, “Not all peasants will become rich, nor is it necessary that they do; there is a need for people who have only their hands and goodwill.”²

      From time to time, such as...

    • 14 The Evolution of Education and Healthcare Systems
      (pp. 311-336)

      In the traditional agrarian society, educating the people was not a priority for the authorities. As Lao-tzu, the ancient Chinese philosopher, wrote, “In the old days, the followers of Tao did not enlighten the people, but made them ignorant. It is difficult to rule people when they have much knowledge. Therefore ruling a country with the help of knowledge brings misfortune to the country, and without it, brings the country to fortune. Whoever knows these two things becomes an example for others.”¹

      As a result of the specifics of the evolution of Western Europe, the level of education even before...

    • 15 The Transformation of the System for Manning the Armed Forces
      (pp. 337-352)

      The demographic and social changes associated with modern economic growth inevitably require a transformation in the methods of manning the armed forces. In the postindustrial stage the draft system becomes inefficient and is replaced with a contract army. But drafting did not occur out of thin air—it has a long history, stemming from agrarian societies that needed to mobilize human resources for war. Therefore, before analyzing the draft system itself, let me remind you that for centuries before modern economic growth, military organization had been transformed step by step.

      Before the fourth century CE, Roman legions were the most...

    • 16 On the Stability and Flexibility of Political Systems
      (pp. 353-366)

      The establishment of a democracy of taxpayers, a system of rights and freedoms, and protection of private property created the preconditions for modern economic growth in Europe. In some countries (England, Holland) these institutions emerged while they were still agrarian societies, in others in the early stages of industrialization. Democratic customs took hold with varying stability. Sometimes (in Germany, Italy, Japan), the institutions were dismantled. However, at the postindustrial stage of development, a consensus forms that representative democracy based on universal suffrage is the only rational form of political organization.

      Seymour Lipset pointed out in 1959 that there was a...

  11. Epilogue
    (pp. 367-378)

    It can be attested: Russia has moved out of the period of socioeconomic changes related to the collapse of the socialist system and emergence of market institutions. One would think this should be a moment to relax, enjoy the new stability, and forget reforms. After all, reforms are changes and even if they do improve life, it will take time. They are rarely implemented for fun. First, there is the stress of changing the usual order of things. As a rule, reforms are begun only when the old order either collapses or becomes incompatible with the new reality.

    Unfortunately, it...

  12. Notes
    (pp. 379-526)
  13. Index
    (pp. 527-544)