A lot of Russia's issues stem from the way the government sold off their state owned corporations, which created artificial monopoly/oligopoly owners overnight — often insiders/cronies to begin with. This can be contrasted with traditional market economies where large corporations start off as small companies and become dominant through innovation, growth, and generally meeting consumer demands.
>The transition to a market economy went very well for most of the former Soviet Republics except Russia
That might be what it writes in the link, it wasn't the case though, except if you mean after things stabilized 15 and 20 years later (and it's still bad in most places). Tons of conflict, forced migration, poverty, crime, sexual slavery, and so on...
Exactly. Countries like Poland and Hungary have huge social issues and struggle with corruption. A lot of political research points to the recent rise in fascist nationalism in these two countries as caused by being thrown from one political ideology to another (e.g. “communism” to ironfisted neoliberalism / Washington Consensus). It’s pretty evident none of them worked. If anything the country that was LEAST worse off following the fall of the iron curtain was DDR / East Germany simply because they were already miles ahead any other former Warsaw Pact country in terms of productivity. However, if you compare them to West Germany they were quite poor, with some differences in wealth and relative household income still evident at least 10 years ago.
How is that evident, though? It’s actually pretty clear that the quality of life has drastically improved in most of these countries. Of *course* you can always find some group who is suffering. But there is no way I would want to live in 1980s Poland, Estonia, etc vs 2020. For example:
It has improved significantly in the last 20 years. But the 90’s were as bad if not worse than in Russia in most places. And Russia was on an upwards trend until the 2010’s as well, e.g. if we look at average income levels the Baltic states only overtook Russia around ~2014.
And if we only focus ex-USSR countries, Lithuania, Latvia and Estonia seem more like the exceptions than the rule. Basically every single country besides them did much worse than Russia (unless like it they had a large amount of natural resources)
Well close to 300 million people lived in the USSR. Only 8 million of them lived in the Baltic states.
I still personally think the (mostly) peaceful dissolution of the USSR was probably one the best things that happened in the past 100 years. But transition to capitalism was extremely mismanaged, even in the “successful” countries.
Washington consensus-style capitalism / Reaganite neoliberalism was not good for most countries. A good example is how the Russian economy responded to excessive privatisation instead of building a strong public sector that builds and supports private enterprise (similar to the US, although neoliberal scholars don’t like admitting it). The track record is the same in a lot of Latin-American countries where IMF and WTO imposed similar doctrines. I’m mostly for free markets etc, but it wasn’t appropriate to expect countries such as Poland with a “plastic” economy (political economy as the communist like labelling it) to succeed with a neoliberal anti-government “libertarianism” ideology overnight. It just doesn’t work that way. Stiglitz even wrote a book on the topic.
The DDR/BDR wealth/income divide is still significant, even today and in spite of the government's fairly aggressive taxes explicitly earmarked to develop the former DDR.
And if you compare current eastern Germany as opposed to the DDR, current inhabitants have it so much better. Another group that did not improve are the stans (Kazakstan and related countries).
Poland, Latvia, Lithuania and Estonia are doing great really, even if the Polish government is anti-EU sometimes. According to latest statistics Estonia has better education system, economic growth and birth rate than Finland. The rate at which these countries have catch up is amazing.
What I'm most worried of now are old, historically rich countries in decline, like Italy and Spain.
I was in Poland in the late 90s and there were fairly large economic issues with a lack of job projects for many people. This in turn resulted in fairly high rates of crime as it was one of the more guaranteed ways to make a living if you were young. Many other people left the country to make money which in the long turn led to some of the Brexit issues. I literally didn't meet a single person, including myself, who wasn't burglarized or mugged at least once. Four point locks and steel doors were the norm for apartments and houses (and that didn't always help).
It's probably worth adding that this is no longer the case.
Live in Poland, muggings aren't really a thing, and according to the "what worries the world" monthly polls of ipsos[0], poles are the nation that least worries about violence and crime (it was surprising for me to see the effect is that strong), with only 5% worrying about it.
I live in Lithuania and I guess it was the same here, as all apartments have thick steel doors with multiple locks, and ground floor apartments of older buildings often have bars.
Now though it's nothing like that. I'm originally from the UK and I feel much safer being here. Not only personal safety (I don't feel there's any 'bad parts' of the city you 'shouldn't go') but also private belongings. I've never heard of anyone in recent times being burgled or having their car broken into.
It wasn't only for the rich and wealthy (or those who had anything valuable at all) even in the slightest in some of the Eastern European countries at that time.
If you look at houses in Compton and see metal bars on the windows, you don't instantly think "man, they must have lots of expensive stuff to steal". Kind of the same deal here.
Do you genuinely believe that people in eastern europe at the time were so oblivious and naive? I can bet you that on average, they were way more cautious and aware of their surroundings than modern people living in the west are.
For once, I don't think that they would consider leaving all of their valuables in front of the front door where everything is visible. Unless installing the front door includes rummaging through the entire apartment, all while the person living there is just standing and smiling. Which, I assure you, isn't how it usually goes.
And I am not trying to make it as some attack on people living in the west, I am one of them now myself. It speaks more about how safe and comfortable the modern western life can be, compared to what it was in those eastern european countries back then, that we can afford to be so oblivious to our surroundings and so much less cautious.
I see oblivious and naive people everywhere all the time (eg phone scams)
> they were way more cautious and aware of their surroundings than modern people living in the west are
Thanks for assuming I'm just a stupid guy from the West.
> all of their valuables in front of the front door where everything is visible
Of course not, but there is a lot of things what can tell you there could be valuables there. Ruined flat in a commie block is one thing, but a freshly renovated flat in that commie block is another thing.
If you think a little you can, probably, understand why I know that.
the people you are incorrecting and are arguing with?real experience or living in a high crime environment.
Maybe it's worth taking their points seriously instead of arguing. Nobody has flimay wooden american-style doors in Russia, everyone installs steel doors, thats the norm.
This isn't the west where you worry about a small percentage of semi-professional burglars. This was a pretty massive number of fairly amateur burglars who did it simply because it was easy. If you did nothing then you'll get robbed by them due to sheer numbers. Guaranteed. If you do something then you'll face the much smaller percentage of more professional burglars. Then you're only somewhat likely to get robbed.
Yeltsin is very much to blame. Russia would have transitioned much better if Gorbachev had been the head of the post-USSR Russia instead of Yeltsin.
That said, the former Soviet Republics that transitioned well are those that were smaller, already edging their way towards a market economy before the USSR collapse, and received substantial help from (and eventually joined) the EU (Baltics, Hungary, Poland, Czech Rep., Slovenia), and in the case of E.Germany, unification.
I don't think most of the others have fared that well. GDP/Capita is not a good measure because it doesn't take inequality into account.
> much better if Gorbachev had been the head of the post-USSR Russia
Gorbachev wanted to keep USSR intact. He didn't want a post-USSR Russia. He initiated referendums to that end. But USSR was already on the train to dissolution and nothing was going to stop it.
He wanted to keep the USSR intact but also understood that was no longer an option. I'm sure he would have accepted to be PM of Russia but he was considered part of the "communist regime" and wasn't the one standing on the tanks (lets ignore the fact that Yeltin was also part of the communist regime), so that didn't happen.
Indeed. He didn't weigh in on the current debacle but he praised Putin's seizure of Crimea.
He was a product of his upbringing and honestly he always seemed like a weak player to me -- but really I have no idea how difficult it might have been to bring off the reforms he did under Andropov, Chernenko and then his own premiership.
The data doesn't support your point about inequality. The other former Communist eastern European countries generally don't have particularly high Gini index values. Other countries have much more income inequality.
And the GDR still got the best deal of all of the ones you mentioned. But there's massive inequality, massive unemployment. (And as a result, extremism, political fatigue, corruption, etc)
pointing out problems that places have after they've experienced 45-70 years of domination by Soviet style authoritarian regimes (and before which they were neither democracies on a shining hill) is not at all making a case that the post soviet transitions were flawed, just that they were not miraculous.
to be convincing you have to point out things that the transitioners could have done that would have worked better, but even the best experts in the world did not know any better than what was tried, so that's going to be a tough case to make.
Nonsense. A lot of things sound nice in paper but - all the human data I’ve seen (enormous amounts of anecdotes and counter histories) the entire post soviet transition was recklessly managed by Master of the Universe / Friedman types who created one of the great economic catastrophes in human history.
One day the real history of those times will be written, but this is not it. Economism is faith based, not a science.
That article determines a "positive transition" based upon the raw percent growth in unadjusted GDP since 1995, which is dubious. The "value" of that metric is illustrated by referencing one of the 6 Soviet Republics that page "forgot" about: Moldova. Moldova is Europe's poorest country and suffers from widespread poverty, rampant corruption, and is a major source of things like human trafficking of which the government is involved. Yet it's seen an increase of said metric in 250%, so the article must conclude it's been one of the most successful transitions. Handy instance to suffer a bout of amnesia on.
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<tangent>
I've started to become increasingly jaded about economic indicators not only because of articles like this, but because of how they are used in general. We seek data on things like economies not because those numbers matter whatsoever, but because those numbers are supposed to reflect of an objective measurement of the quality of life of people living under that economy. In effect, it's an effort to create objective metrics to try to impartially answer subjective questions.
But it ultimately fails, because subjective determination is going to be based on a practically infinite number of metrics, many of which may be immeasurable. So why not simply ask the people? Should we not be aiming to maximize e.g. contentedness/capita instead of GDP/capita and just hoping it leads to the former, somehow? Of course that's a far harder metric to maximize, but that's the whole point. Just doing everything to maximize one metric's value and then waving a "Mission Accomplished" banner clearly is not getting the job done.
</tangent>
Tell that to people in Belarus or Ukraine (not talking about the situation since 2014), Kazakhstan etc. Not sure about the situation in the others. A post talking about "GDP per capita" rather than what people's lives are like is kind of a joke.
You can add Moldova to the list. Yes, now the people have well wealthier lifestyles than during he soviet period, and overall the direction seems optimist. But going from a postcard republic of sorts, to literally the poorest country in Europe, the transition has heavily bruised many people's faiths.
> This can be contrasted with traditional market economies where large corporations start off as small companies and become dominant through innovation, growth, and generally meeting consumer demands.
yeah I would say maybe the baltics had it good but the rest of former republics had a hard time. Armenia and Azerbaijan had a war, Tajikistan was engulfed in a civil war. Most countries didn't have any real gdp growth till mid 2000s.
Central Asia has the same oligarchy as you would picture in Russia and probably much worse. All dictators only changing after the previous dies.
Did you just explain to someone from a communist-bloc country, who had just said how badly the transition went in their country, that the transition had actually gone well?
This is a cousin to both mansplaining and gaslighting, and if we want good, lively discussion on HN we should try to be careful to avoid it. The gp comment gave some very specific and relevant comments about economic upheavals in the late Gorbachev period and deserves better than a well-actually.
"Did you just..." is the phrase to avoid when you want a good, lively discussion.
OP offered a link and an explanation for some of Russia's trouble: the formation of government-backed oligarchies that prevented a healthy market economy to develop. Not the entire picture, maybe a wrong conclusion, but a valid point nevertheless.
https://economistwritingeveryday.com/2022/03/16/the-transiti...
A lot of Russia's issues stem from the way the government sold off their state owned corporations, which created artificial monopoly/oligopoly owners overnight — often insiders/cronies to begin with. This can be contrasted with traditional market economies where large corporations start off as small companies and become dominant through innovation, growth, and generally meeting consumer demands.