AEI - Short Publications
Yegor Gaidar is director of the Institute for Economies in Transition in Moscow. Between 1991 and 1994, he was acting prime minister of Russia, minister of economy, and first deputy prime minister. Between 1993 and 2003, Gaidar was a founder and a co-chairman of the Russia's Choice and the Union of Rightist Forces Parties, and a deputy of the State Duma. His most recent book, Gibel' Imperii: Uroki dlya sovremennoi Rossii [The Collapse of an Empire: Lessons for Modern Russia], was published in 2006. The English translation of the book will be published by the Brookings Institution Press on July 30, 2007.
In the summer of 2002, after the Russian government introduced the flat income tax, completed fiscal reforms, created the Stabilization Fund, and introduced land reform in Russia, I had a premonition that the window of opportunity for further reforms would be closing for a number of years. I was correct in my prediction.
As a result, I decided to turn to more academic pursuits. The title of my latest book, which I would like to discuss today, can be translated as The Collapse of an Empire: Lessons for Modern Russia.[1] It relates the story of the last few years of the Soviet Union. But when I wrote about the collapse of the Soviet Union, I also had in mind dilemmas of contemporary Russia.
There were several factors which pushed me to write this book. The first was the rise in oil prices, which in real terms have started to approach the level of the late Brezhnev period. The second was the disturbing tendency to mythologize the late Soviet period in current Russian society and popular culture. These myths include the belief that, despite its problems, the Soviet Union was a dynamically developing world superpower until usurpers initiated disastrous reforms. At least 80 percent of Russians are convinced of this flawed interpretation of history.
Historically, such myths have a dangerous precedent--namely, Germany between World War I and World War II. Then, the legend went that Germany was never defeated in the war, but "stabbed in the back" by the Jews and the Socialists. To some degree, the responsible party was the democratic German government, as it was unprepared to publish materials about what really happened before and after World War I.
Similarly, access to documents about the Soviet collapse is becoming increasingly restricted, but we were still able to make public a number of them that can properly explain what happened to our country.
To be frank, I never thought that the book--half of which is tables, graphs, or official materials of the Soviet government--could be a bestseller in my country. Yet it is, a fact which provides a glimmer of hope.
The Story of Grain
In a simplified way, the story of the collapse of the Soviet Union could be told as a story about grain and oil. As for the grain, the turning point that decided the fate of the Soviet Union began with the economic debate of 1928-29, when the discussion centered on what would later be called the "Chinese path" of development. (By several important economic and social indicators, the Soviet Union of that period and China in the late 1970s took similar approaches to reform. See figure 1.) At the time, the head of the Soviet government, Aleksei Rykov, and the chief ideologist of the Communist Party, Nikolai Bukharin, earnestly defended the idea of a path which included preserving private agriculture and the market, and ensuring financial stability--but holding onto the party's political control.
Really interesting. Basically the soviet system sucked, and couldn't produce anything. They used to have a ton of grain, but collective agriculture ruined that, so they had to sell oil to pay the bills. When they invaded Afghanistan, the middle east and Saudi Arabia saw that as a threat, and lowered the price of oil, so the soviet union ran out of money and collapsed. Russia is riding high right now on oil money, but if that collapses again so can their economy. The only hope is democracy and capitalism to produce a truly diverse economy.
Yegor Gaidar is director of the Institute for Economies in Transition in Moscow. Between 1991 and 1994, he was acting prime minister of Russia, minister of economy, and first deputy prime minister. Between 1993 and 2003, Gaidar was a founder and a co-chairman of the Russia's Choice and the Union of Rightist Forces Parties, and a deputy of the State Duma. His most recent book, Gibel' Imperii: Uroki dlya sovremennoi Rossii [The Collapse of an Empire: Lessons for Modern Russia], was published in 2006. The English translation of the book will be published by the Brookings Institution Press on July 30, 2007.
In the summer of 2002, after the Russian government introduced the flat income tax, completed fiscal reforms, created the Stabilization Fund, and introduced land reform in Russia, I had a premonition that the window of opportunity for further reforms would be closing for a number of years. I was correct in my prediction.
As a result, I decided to turn to more academic pursuits. The title of my latest book, which I would like to discuss today, can be translated as The Collapse of an Empire: Lessons for Modern Russia.[1] It relates the story of the last few years of the Soviet Union. But when I wrote about the collapse of the Soviet Union, I also had in mind dilemmas of contemporary Russia.
There were several factors which pushed me to write this book. The first was the rise in oil prices, which in real terms have started to approach the level of the late Brezhnev period. The second was the disturbing tendency to mythologize the late Soviet period in current Russian society and popular culture. These myths include the belief that, despite its problems, the Soviet Union was a dynamically developing world superpower until usurpers initiated disastrous reforms. At least 80 percent of Russians are convinced of this flawed interpretation of history.
Historically, such myths have a dangerous precedent--namely, Germany between World War I and World War II. Then, the legend went that Germany was never defeated in the war, but "stabbed in the back" by the Jews and the Socialists. To some degree, the responsible party was the democratic German government, as it was unprepared to publish materials about what really happened before and after World War I.
Similarly, access to documents about the Soviet collapse is becoming increasingly restricted, but we were still able to make public a number of them that can properly explain what happened to our country.
To be frank, I never thought that the book--half of which is tables, graphs, or official materials of the Soviet government--could be a bestseller in my country. Yet it is, a fact which provides a glimmer of hope.
The Story of Grain
In a simplified way, the story of the collapse of the Soviet Union could be told as a story about grain and oil. As for the grain, the turning point that decided the fate of the Soviet Union began with the economic debate of 1928-29, when the discussion centered on what would later be called the "Chinese path" of development. (By several important economic and social indicators, the Soviet Union of that period and China in the late 1970s took similar approaches to reform. See figure 1.) At the time, the head of the Soviet government, Aleksei Rykov, and the chief ideologist of the Communist Party, Nikolai Bukharin, earnestly defended the idea of a path which included preserving private agriculture and the market, and ensuring financial stability--but holding onto the party's political control.
Really interesting. Basically the soviet system sucked, and couldn't produce anything. They used to have a ton of grain, but collective agriculture ruined that, so they had to sell oil to pay the bills. When they invaded Afghanistan, the middle east and Saudi Arabia saw that as a threat, and lowered the price of oil, so the soviet union ran out of money and collapsed. Russia is riding high right now on oil money, but if that collapses again so can their economy. The only hope is democracy and capitalism to produce a truly diverse economy.
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