A libertarian Russia

On the side note, it looks like 3 contributors to this thread (Stalker, ac220v, yours truly) who really lived in Libertarian Russia of 1991-1995 (or any part of former USSR, for this matter) are not very fond of the idea.

:rolleyes:

Russia was as libertarian in the 90's as it was communist in the 80's. The reason is sucked so badly was because it ends up the economic infrastructure built up by the USSR was horribly inefficient and the newly freed markets revealed this.
 
:rolleyes:

Russia was as libertarian in the 90's as it was communist in the 80's. The reason is sucked so badly was because it ends up the economic infrastructure built up by the USSR was horribly inefficient and the newly freed markets revealed this.
Well, as Edit Gangland put it here: http://en.wikipedia.org/wiki/Washington_Consensus
" Rodrik pointed out a factual paradox: while China and India increased their economies' reliance on free market forces to some limited extent, their general economic policies remained the exact opposite to the Washington Consensus main recommendations. High levels of trade protection, absolute lack of privatization, extensive industrial policies planning, and lax fiscal and financial policies through the 1990s. Had they been dismal failures they would have presented strong evidence in support of the recommended Washington Consensus policies. However they turned out to be successes [6]."

In other words, it wasn't as much inefficiency of the pre-existing system as attempts to shape it according to neoliberal preconceived notions that made it a failure. You could do that right, but not the way generic linbertarian would think "is the proper way".
ADD:
Russia was as libertarian in the 90's as it was communist in the 80's.
Yes, there are no true Scotsmen, none at all. Russian reform architects both domestic and foreign were libertarians in your sense of the word, they meant it too, just read what they spoke and wrote at the time.

So, pardon me, if government consisting of libertarians, advised by libertarians, and getting money from institutuions promoting libertarianism, couldn't build "real" libertarianism, who can?
 
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'Success', is of course, temporary. The USSR lasted 80 years, too. China is doing so well right now because it's managed to create a system which allows both free market investment (the 'free trade zones' which have caused cities to pop up where there were none before) and socialist economics (the country-side, mostly...all this hard work the Chinese are doing right now is mostly for the benefit of the peasants). Someday, though, someone, somewhere in the Chinese bureaucracy will fuck up. Other people will start fucking up. And, instead of changing, they'll continue doing it because they have no reason to change.

Eventually this will pile up, and the forces of the market will tell.

You see, no liberal or libertarian worth his salt is going to say, "Socialism/communism does not work and is doomed to failure within a year". The command portions of Western economies have lasted for decades, or even centuries in some cases. But the bill must eventually be paid. The protectionism of the 19th century US and Germany eventually came to the fore in the Great Depression, as lowering trade barriers throughout the 20's revealed that some places where doing some things far better than others. Protectionism is, afterall, merely a way to artificially lower the price on exports or imports, 'protecting' inefficient native industries against more efficient foreign ones.

The USSR eventually had to face up to the failures of its system in the late 70's and early 80's, as grain and other foodstuff harvests started failing and they had to start importing from the West. The Keynesians had to face up to a failure of their system in the late 60's and 70's when inflation came a knocking and an unforeseen, adverse supply shock from OPEC's oil embargo sent the whole thing into a death spiral.

You see, the free market isn't superior because it never fails. It does. When placed in a situation with some sort of large, adverse shock (the panic of 1857 was largely caused by the re-entry of Russia into the grain market, causing wheat prices to plummet and severely effecting farmers in the US who had come to depend and bet on the higher prices, something similar happened in 1920 when Europe began producing again after WWI), things fall apart as the economic network built up based on certain assumptions no longer works when those assumptions fail to be true. One business failure can cause others as employees who are no longer being paid no longer buy from certain other businesses. Shocks reverberate around the system like waves in a pool.

What makes the free market superior is that it is both more sensitive to these systemic changes, so things will 'fall apart' first in a free economic, and it is more flexible so it is able to recover faster. So while Russia stagnated for all of the 70's and 80's, the West liberalized and began recovery earlier on. It's almost funny how easy it is to observe this effect. The Long Depression lasted in Europe from the early 1870's to the early 1890's, whereas the US recovered by the late 1870's.

Of course, the neoliberal Washington Consensus is just as much a model of command economy as Keynesianism is. The only actual liberal economists left are the Austrians, and none of them have any idea what they're talking about.
 
'Success', is of course, temporary. The USSR lasted 80 years, too.
True. But then again, as you yourself said, it's true of ANY system.

What makes the free market superior is that it is both more sensitive to these systemic changes, so things will 'fall apart' first in a free economic, and it is more flexible so it is able to recover faster. What makes the free market superior is that it is both more sensitive to these systemic changes, so things will 'fall apart' first in a free economic, and it is more flexible so it is able to recover faster.
Why rebuild exact same system though? Actually that's my major gripe with liberalism of whatever sort. They try to build EVERYTHING from basic principles, as if society was geometrical theorem. Sure, some inviolable principles are needed, but so is certain flexibility. If some smart guy found a way to subvert, say, patent and legal systems to get money for doing nothing, he should be stopped somehow. Not in the Dirty Harry's way, but not in the way it's not done now either.

IIRC, you said that libertarianism is "updated" classicval liberalism. Why it needed an update though? Let the Carnegies and Morgans and unions kill each other then start over exact same system, no principles were harmed. :)

Of course, the neoliberal Washington Consensus is just as much a model of command economy as Keynesianism is. The only actual liberal economists left are the Austrians, and none of them have any idea what they're talking about.
You're kidding, right? No?
facepalm2.jpg

If libertarian economic theory does not exist too, what on the Earth we're talking about?
 
True. But then again, as you yourself said, it's true of ANY system.

Well, the beauty of liberalism that it's open ended. You are only in charge as long as you remain successful. The moment you start failing, you lose your business and someone else comes in and pick up your tab. It's flexibility through freedom. As long as there are people there's someone around to pick up the pieces.

With more centralized, command economic systems there are legions of bureaucrats whose interest is not change or replacement. Importantly, they have the power to merely change tax levels to make up for inefficiencies, instead of merely failing like a normal private firm would.

Why rebuild exact same system though? Actually that's my major gripe with liberalism of whatever sort. They try to build EVERYTHING from basic principles, as if society was geometrical theorem. Sure, some inviolable principles are needed, but so is certain flexibility. If some smart guy found a way to subvert, say, patent and legal systems to get money for doing nothing, he should be stopped somehow. Not in the Dirty Harry's way, but not in the way it's not done now either.

The whole point is that you're NOT rebuilding the old system: It failed and that's why it fell apart.

Economies are networks of exchange. Certain arrangements and connections are made because they are the most profitable (and, through this, the most efficient use of resources possible without the use of force to redistribute them). However, the actors making these connections make them based on expectation of future profit. When there's a change in the system somewhere that they are unaware of, they can and do bet wrongly. Their business venture then fails.

When you have something like a war or major earthquake, climate change or other natural disaster, the 'efficiency' of a particular group connection changes. So what was previously a good bet no longer is. When this happens on a large scale, this effects large parts of the economy and it reverberates throughout the whole thing. Connections are severed, old economic networks cease to be. Deus infernus.

Then, new connections begin to form. New business ventures are made. New networks of exchange begin growing. They're different than the old ones, but they're now better adjusted for prevailing conditions.

As the eminent Keynes pointed out, however, this process is not perfect. It's many times better than its competitors, however.

IIRC, you said that libertarianism is "updated" classicval liberalism. Why it needed an update though? Let the Carnegies and Morgans and unions kill each other then start over exact same system, no principles were harmed. :)

I get the feeling you're not understanding what I'm trying to say. Missing the forest for the trees, as it were.

You're kidding, right? No?
facepalm2.jpg

If libertarian economic theory does not exist too, what on the Earth we're talking about?

No, I'm not kidding. Neoliberalism is the supply-side answer to demand-side Keynesianism. Both are ultimately economic systems based around government control and direction of some part of the economy; in Keynesianism it's the consumers and in Neoliberalism its the cash flows of certain major suppliers. The Washington Consensus is an outgrowth of the neoliberal triumph in the 80's.

And a libertarian economic theory does not exist because economics is not political science. Economics studies the outcomes of economies. The only 'say' it has on political economy is observation of the effects of certain political alignments on the overall economy. If a particular economic theory is 'libertarian' because it says outcomes are less optimal in a command economy than in a market economy, than economics itself is a libertarian economic theory. However, because economics is a science and not a belief, I think mixing it with politics is a mistake.
 
Any system different from contemporary Western capitalism (which was not exactly labor-friendly, to put it mildly) would be viewed as potentially dangerous by Western elites and coalition would be as impossible as with commies.

Methink you're overestimate influence of Stalin's purges (not widely known to Western public by mid-1930s) on mindsets. Remember, we're talking about times when hungry masses roamed virtually all Western cities (even Canada, basically flowing in grain, had severe nutrition problem affecting large minority of population), Britons were happily starving millions of Indians to death (and "unwashed masses" were perfectly aware that there were millions of humans dying from hunger in this or that corner of Europe in any given time), French were squeezing their empire dry and USA waged half-dozen of dirty wars in the same time to protect right of United Fruit to bleed Central Americans dry.

Workers-owned factories were really big in x-Yugoslavia. However, this type of ownership had been proved to be even less effective than state ownership in the long run, as workers tend to delay changes (vital for copmany's survival) until it's too late. State owner at least have a stick to force changes. There're number of research on the subject.

1. "As impossible" is a very strong word. Would a "libertarian" or Syndicalist Russia sponsor subversion abroad and endlessly propagandize about the Inevitable Victory of Communism, scaring everyone else?

2. Even if Stalin's purges were not well-known to the public, there was also the terror-famine (Holodomor) and atrocity stories from the Revolution, like the Soviet somewhere in the Caucasus that nationalized women. Plus the German middle class feared Communism, not because of Russian Communism, but the Red revolts the Freikorps put down in the aftermath of WWI.

(You can cry "propaganda" if you want, but I read a book on the Russian Civil War that said one Soviet actually did that)

3. It doesn't have to be efficient or clever in the long run--it just has to be established.

4. And if you're actually from the former USSR, has it ever occurred to you that you dismiss many of the accusations against the USSR as "propaganda" because that is what exactly you've been taught to do?

I'm quite willing to admit the USSR's propaganda about how bad the racial situation was in the South was largely true; might it be true that a lot of the accusations against the evils of the USSR were true too?
 
4. And if you're actually from the former USSR, has it ever occurred to you that you dismiss many of the accusations against the USSR as "propaganda" because that is what exactly you've been taught to do?

Well, I don't know of the others... It did to me. And it might be true, but not in the way you think. Back in 80's, and even 70's (although I haven't seen them.) US and "the West" in general were perceived as rivals, you know, some guys in a house next to you whom you really don't like and whio've got a better car, but not more than that. In the late 80's West was admired, everyone believed americans can cross the Atlantic on foot and not get wet. THEN things abruptly changed. Now Americans are vitriolically hated and percieved as enemies by significant portion of the population, "liberalism" is a curse... Like those same guys from the next house, only you suspect they deal crack to your daughter.

I was too young and impressionable back then to not to be affected by both trends somewhat... And frankly, I don't know that much about cold War era american propagand for the domestic consumption. But it's quite well proven that many of the Gorbachov-era "revelations" about Stalinism weren't the whole truth. (or not truth at all as with, say, Victor Suvorov.)
 
About Cold War American propaganda, I remember seeing this scary "COMMUNISM IN GUATEMALA" newsreel that was probably used to justify the US toppling of the Arbenz government back in the 1950s.

(Arbenz had nationalized some property owned by United Fruit and they threw a hissy fit, claiming he was a Communist. Gaddis's "We Know Now" indicated that he had Communistic sympathies but I don't think he was an incipient despot)
 
First, Russia isn't in the crapper because of liberalism or capitalism. It's doing poorly because its white knight was Yeltsin, a drunk theifing putz. Combine that with a populace born and raised knowing only autocratic rule and a failing command economy, and you have a very poor chance for a national turn over occuring in the immediate post-Communist period. Add in Putin and his cronies and "liberalism" is the last thing Russia will acctually experience.

Second, I said that today's libertarianism is a redefinement of Classical Liberalism. I meant this in a modern political vernacular sort of way. In todays politics Liberals are the political left as defined by the Democrats. As the original post was regarding Russia in the early 20th century they almost certainly would not use the term libertarian.

As for the real world validity of Libertarianism, I can only say that it makes far more sense to let individuals make more of their own decisions without governments, corporations, churches or any other organization having a great deal of control over their actions. Organizations are composed of people and are no more or less evil than any individual but they are slow to change and often become insensitive and callous.

Benjamin
 
First, Russia isn't in the crapper because of liberalism or capitalism. It's doing poorly because its white knight was Yeltsin, a drunk theifing putz.
Well, not quite. Yeltsin of course was a slime, but.
1) It dors little to explain similar patterns in other post-communist countries.
2) Gorbachov was a honest teetotaler, yet I doubt he could change much. In fact, many of the problems, including August'91, and growth in corruption happened on HIS watch, and as direct result of his policies.
3) For all the power Yeltsin had, hew wasn't alone.

Combine that with a populace born and raised knowing only autocratic rule and a failing command economy,
Good point. So, does it make sense to not to use Washington Consensus, as it was, but a more careful approach? Again, it's all good and nice to talk how crises are good in the long run if you haen't lived through one. I assure you, it's damn scary, and what you eat is generally not that different from what you excrete, even though here things were relatively mild, we lived in a rustic area where you can grow a few potatoes or poach some Bambies (because no one did issue huunting licenses. all was still done in season and to the limit.), and my father (1 was 12-14 during the worst times) kept his job. Also, unlike Yeltsin's our privatisation wasn't total scam.

Things were much worse in other places. You now how it is like, to see fellow bright, full of hope, teenage kids turn into drunk never-do-wells (or worse) out of sheer hopelesness of the thing? How perfectly good, efficient, businesses close their doors? If you did, personally, (maybe you did), and can talk of long-term benefits of the crises, and how evil New Deal or similar attempts at forced turnaround are, I surely admire your spirit, but question your sanity.


And Putin, - well, he just capitalizes on aforementoioned adverse reaction to all the enthusiasm of the early 90s, and indeed has little to do with liberalism in any meaningful sense of the word, nor does he pretend otherwise.
 
Your points are well taken, and I agree with most of them. The rest of Eastern Europe has had mixed success, but by and large is much better off now than just 15 years prior. I visited Slovakia in 1996 and found that the opinion about liberalization/capitalism divided almost completely based on age. The older people wanted a return to the old way because that was all the knew. Like your grandmother trying to work a new DVD player, they just could not make the transition. On the other the younger people were embracing the new freedom. Night clubs, cafes and new shops abounded in downtown Nitra and Bratislava. There was no going back. Unfortunatly, the older adults generally have a greater voice in politics as they are more likely to vote or pester their government leaders. Thus, governments tend to be overly cautious and or unwilling to reform until that younger generation matures and gains power.

I agree that Gorby was not much better and he faced a lot of opposition. This meant that even if Yeltsin had been a great honest guy he still would have had a tough time. And I know he wasn't alone he had lots of help, from all the wrong people...the Russian Mob, ex-KGB, hard line Communists, up and coming oil barons and a slew of others out to get rich at the expense of the Russian people. They were no better than the Romanovs.

Also, I agree that the West's handling of post-Cold War Russia was poor. The US pushed for an American style liberal-democracy as soon as possible while Western Europe didn't care so long as they got their oil and natural gas. You also have to understand that push for such ideas as the Washington Consensus (the World Bank, World Trade Organization and International Monetary Fund) are not Libertarian structures. They are attempts by governments to control the global economy so that they still have a say in a global economic system that is growing ever more difficult for them to manipulate. Allowing Russia to reform at its own pace would have been a much better solution.

As for myself I have been lucky to have never lived during any crisis, excepting of course this current financial meltdown. I honestly wish you and your family the best.

Benjamin
 
Russia was as libertarian in the 90's as it was communist in the 80's.
You remind me of some Euro-Communists who argued that Soviet system wasn't true socialism and just tainted brilliant idea with bad implementation. Well, Soviet socialism was what could be realistically created then and there. Post-Soviet libertarianism was what could be realistically created then and there. I'm not sure that Russian libertarianism of 1920 vintage would have less warts than Russian libertarianism of 1991 vintage had.

The reason is sucked so badly was because it ends up the economic infrastructure built up by the USSR was horribly inefficient and the newly freed markets revealed this.
I'm not saying that libertarianism was the root cause of everything that screwed up post-communist Russia. It is just that majority of ones who lived then and there tend to think of libertarianism as being part of the problem, not part of the solution.

1. "As impossible" is a very strong word. Would a "libertarian" or Syndicalist Russia sponsor subversion abroad and endlessly propagandize about the Inevitable Victory of Communism, scaring everyone else?
Yes, the word is strong, but West (well, half of it) eventually allied itself with USSR. I'm not sure it will ally itself with Syndicalist Russia earlier as this "syndicalism" will inevitably be steeped in very serious socialist rhethoric. It is hard to imagine today how far left Russian society of 1900-1917 was. Even parties we usually position as "anti-communist" (due to hindsight knowledge of their opposition to Bolsheviks post-1917) were very left and SRs were socialists, fer crying out loud. They would inevitably call their system "socialist" and, the more successfull and humane it would be the more danger it would be for ruling elites of Rest of the World (you himself wrote that elites did not fear Russian communism, it did fear socialist alternative). Sponsoring subversions? Entirely possible, IWW (anarcho-syndicalism) was very active in international mischief-making and Spanish syndicalist attracted fair number of foreign volunteers.

2. Even if Stalin's purges were not well-known to the public, there was also the terror-famine (Holodomor) and atrocity stories from the Revolution, like the Soviet somewhere in the Caucasus that nationalized women.
As far as Holodomor is concerned, don't try to project our today's reaction on what peoples thought (when they knew) of it then and there. Just 15 years pre-Holodomor hundreds of thousands of Germans died of hunger during WWI. Hunger was fact of life of significant minority (sources are very shy on numbers here, making do with modest "malnutrition became widespread", I do wonder why) simultaneously with Holodomor. It begs the question, was Holodomor powerful enough deterrent to kill thought of communism in the head of every Pierre, Peter and Piter who read accounts of it in rabid anti-labour newspaper while sitting next to his hungry kids and having no means to feed them through no fault of his own. Spooky stories about nationalization of women would, if anything, be much more widespread in syndicalist Russia as Bolsheviks, with their rigid party structure spreading from Kremlin all the way to tiny hamlets, were actually pretty good in weeding out "local enthusiasm" as far as implementation of socialism by overzealous and uneducated recent converts to socialist cause is concerned.

4. And if you're actually from the former USSR, has it ever occurred to you that you dismiss many of the accusations against the USSR as "propaganda" because that is what exactly you've been taught to do?
I can't claim with any degree of certainty that I'm immune to propaganda (beauty is in eye of beholder and humans are generally pretty bad in self-assessment) but I dare to say that my level of resistance is above average. It is not due to any superiority of my own, it is just consequence of soul-searching that thinking part of x-USSR's population (excluding Baltics) went through in 1985-1995. One who didn't live there and then can hardly imagine the amount of slaughter propagandistic holy cows went through. It creates certain cynical attitude and mistrust toward propaganda, believe me.

Well, I don't know of the others... It did to me. And it might be true, but not in the way you think. Back in 80's, and even 70's (although I haven't seen them.) US and "the West" in general were perceived as rivals, you know, some guys in a house next to you whom you really don't like and whio've got a better car, but not more than that.
I would say that you are quite wrong in assessing effectiveness of 1970s Soviet propaganda. It was dead by then, as far as educated part of population was concerned. Would "Pravda" write that sugar is sweet, majority of intelligentsia would automatically think that it is bitter. That "everyone believed americans can cross the Atlantic on foot and not get wet" attitude wasn't born in 1985 on a whim.

First, Russia isn't in the crapper because of liberalism or capitalism. It's doing poorly because its white knight was Yeltsin, a drunk theifing putz. Combine that with a populace born and raised knowing only autocratic rule and a failing command economy, and you have a very poor chance for a national turn over occuring in the immediate post-Communist period.
I quite agree with ac220v opposing yours painting Yeltsin as root cause of Russian problems. If anything, Russia was better off than anyone else (including poster success story Baltics) in 1991-1993, as far as living standards are concerned. At least, even in Komi x-GULAG factory towns what peoples ate was significantly different from what they crapped (although I owe to my buddy from those backwoods for brilliant joke "Crapper is the most expensive piece of furniture in my apartment. It consumes 80% of my salary.")

As for the real world validity of Libertarianism, I can only say that it makes far more sense to let individuals make more of their own decisions without governments, corporations, churches or any other organization having a great deal of control over their actions. Organizations are composed of people and are no more or less evil than any individual but they are slow to change and often become insensitive and callous.
I would say that answer is in the middle. Now, $1bln question is "how to find this optimum" :)
 
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