Stiglitz on Russia

Chris Doss itschris13 at hotmail.com
Fri Aug 16 10:27:38 PDT 2002



>Maybe it's old news, but Galbraith has an article at The American
>Prospect
>on "the economic wrecking of Russia"
>(http://www.epn.org/cgi-bin/epn_ads/ads-tap.pl?iframe ). I haven't read it
>all yet. How is his analysis?
>
>Brian

------

I would largely endorse it. Here are a few comments:

Galbraith: To be sure, health services in the USSR had been a low state priority: poorly paid, technologically and pharmacologically backward, ill-matched to the rising complexity of diseases in the later years. On the other hand, however, the system did provide care. As Davis writes: "The Soviet medical system provided curative services free of charge on a universal basis through a large network of polyclinics, hospitals, and other facilities." This accomplishment could not, of course, be sustained in the new Russia. And at the same time, the characteristic features of Western health care made their appearance promptly:

Me: Err, umm, err... The Russian medical system in fact still provides "curative services free of charge on a universal basis through a large network of polyclinics, hospitals, and other facilities." I have used them myself. You may be expected to leave a tip for the doctor, or one may try to extort a bribe out of youm but they are totally free.

Galbraith:

Talbott was inclined to trust the economic issues to the hard-charging Lawrence Summers, then deputy secretary at the Treasury Department. Summers was a fierce ally of the so-called reformers in Russia, and of the International Monetary Fund, which of course he controlled. On one occasion, he explained to then–Prime Minister Viktor Chernomyrdin that, as Talbott puts it, "The rules that governed IMF lending weren't arbitrary or intrusive -- they were a reflection of the immutable principles of economics, which operated in a way similar to the rules of physics."

Me: How can Summers, presumably an intelligent man, possibly sincerely believe such obvious bullshit? Economics is the product of human action. I have yet to see anyone, outside of Isaac Asimov in the Foundation series or Skinner, ever endorse such an absurd view.

Summers desrves to be kicked in the head, repeatedly. I volunteer to do it myself. Better yet, he should be made to be a coal miner in the Russian Far East, where he could use the market to stay alive by stealing coal from the mine and selling it at the village to feed his family. No, wait, after the other workers found out who he was, he wouldn't live very long.

Galbraith:

Once he achieved a position of power, Talbott shared with Clinton a tendency to view diplomacy in terms of contests and teams. Friends had to be supported, their adversaries opposed. This meant in practice that support for Boris Yeltsin took precedence over policy, time and again. (On one occasion, to make the metaphor explicit, Talbott finds Clinton watching a Yeltsin speech on one television and an Arkansas Razorbacks game on the other. "You know who I'm rooting for, in both cases," the president explains.) When an honest old Soviet, Georgi Arbatov, aligned with Yeltsin's opponent Ruslan Khasbulatov in 1992, "spewing accusations about how the government was bankrupting the state and beggaring the people," Talbott was "saddened." That the accusations had merit did not enter his mind, even though he could see for himself (and says so) that inflation was running 2,500 percent per year, with "devastating" effects on consumers and pensioners (that is, on all ordinary Russians).

Me: While we're at it, I volunteer my head-kicking skills for Talbott as well.

Galbraith: Nor did American observers fail to notice. In 1995, as Hoffman relates, diplomat Thomas E. Graham received permission to publish, in Russia, a full and perceptive account of the emerging clan structure. But Washington learned nothing. As Hoffman writes, "What Graham saw did not neatly fit into the Washington idea of brave reformers led by Yeltsin and Chubais fighting off the Communists."

Me: Variant of a previous question: Why on Earth would supposedly intelligent people subscribe to such a cartoonish version of events? Self-delusion? Complete ignorance of Russian reality?

One thing Galbraith leaves out, which was quite probably teh central reason for the collapse in the FSU, and which for some reason almost never gets mentioned in the West, is that the dissolution of the USSR ripped apart the economic ties between the various republics, which were tightly interlinked. Imagine what would happen if the US became 50 different countries.

Chris "Still With The Russia Journal" Doss

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