I wonder if they will accept donations denominated in Airmiles?

Nice fact-free assertion of antisemitism in there too: “This view has a particularly dark history. I’ll give you a hint: “Globalized capital” has names like Goldman and Sachs. “

“makes extravagant claims of success for neoliberal policies which on closer analysis are almost entirely dependent on economic growth in China”

Growth in world GDP per capita (minus China) from 1978 to 2003: 145%

“[China] hasn’t followed anything like the kind of policy agenda that’s described by neoliberalism”

China’s growth rate averaged 6% from 1953 (the year of the first 5 year plan) to 1977 (the year Deng Xiaoping delivered his speech on the Four Modernizations). This is large by comparison to the US today, but the relevant comparison is with Japan of the same era which saw 11% annual growth. From 1978 to 2003, after liberalization began, the growth rate in China averaged 12%.

The Four Modernizations and other early reforms consisted of removing price controls on agriculture, opening foreign capital flows, reinstating the University system and increased defense spending. The Washington Consensus policy recommendations included the elimination of price controls, public investment in growth promoting sectors like education, liberalization of capital flows, deregulation and privatization. These lists seem very similar to me (especially when one includes later episodes of privatization in China).

Is it your contention that China became more socialist after Mao’s death? My reading of the history is that “China has done very well out of managed opening of its markets and out of introducing capitalism into its domestic economy” because of its implementation of neoliberal policies.

Hear hear too, in the main… although Cochrane’s attempted pillory isn’t entirely unsuccessful, globollocks notwithstanding. As a would-be left-wing academic myself, I think that petition is an embarressment to left-wing academia, both because it’s badly written and because of the Naomi Klien world-view it displays. I can’t quite figure out from this post whether you do too… I mean, this is a philippic against a particular set of terrible left-wing academicessess with some justification, isn’t it?

(Not that you’re guilty of it, but there is a kind of mirror globollocks, which is when those who are anti-free markets to the same degree as Friedman was for’em try to use China as evidence for their position too. This is by the bye)

Whatever your economic politics, if you can see past your prejudice, pretty well everything Cochrane says is true. Of course, that’s not the whole story but the petition is awful. I particularly like the ‘virtually all of us’ in the final sentence, implying that some of us think something else but have signed anyway so as not to be left out. That’s really telling them!

And he admits he’s not a good writer.

Isn’t it time we stopped using ‘l’ words for rampant capitalism? A better term for what the ‘lebertarians’ are advocating would be ‘propertarian’ since their approach privileges the rights of property and its ‘owners’ (however they acquire it) above those of people qua people.

“As I say above, it is not as if the University of Chicago’s international reputation in economics is going to be based on this centre, and the suggestion of alternative cash elsewhere is a pretty blatant bit of cashing in.”

Agree, I think, on the alternative cash, though this may have been thought of as a bargaining chip (as in, look at what a can of worms you open up here…)

But the point of Chicago’s international reputation in economics is that it’s supposed to be won through good academic work, and the Hoover Institute -Midwest in planning may cash in on that reputation to hire ex-Republican administration hacks to write op-eds about how people who don’t support the extension of patent regimes in China are the real haters of the poor. (And, given mission statement etc., and Friedman’s public intellectual role, I think that’s a fair concern.)

So, it makes sense to not want the institute, even though everybody who’s signed knows about Chicago’s reputation in economics (Sahlins has written some of the best things about that reputation). The signers seem worried that the MFI will be even more hackish and counter-productive in the public sphere than the economics department.

The hand-wringing about poor writing and Kleinism reminds me of moderate (thinking of Tim Burke) rejections of a petition circulating against the Iraq War. “Sure, there’s problems with the war, but this petition smells of hippy, and it doesn’t spend the majority of its prose on explaining why Saddam Hussein is a really bad guy.” Petitions are rarely prose marvels. The point of the petition isn’t that hard to grasp: a well-funded institute of Friedmanite reactionary triumphalism isn’t a good thing. And it probably isn’t.

Daniel – OK, I didn’t see your earlier post and I can see that this could be a bit controversial – I did say ‘pretty well’. My point was that people are queueing up to knock the guy( Cochrane) because of what he represents when his criticisms of the petition are actually generally well-founded. You don’t like the guy – but in the main, on this issue, he’s right.

Cochrane: “If the government controls your job or your business, dissent is impossible.”

yeah, i guess that’s why you never see state employees on strike in places like france…

just one of the many brown nuggets with which this letter is strewn.

in the same way in which Hong Kong or Singapore are absolutely legitimate examples for Friedmanites.

Yes, a colony with no effective political representation whose government owned all the real estate, now controlled by Communist China, and a politically repressive welfare state, are both prime examples for Friedmanites. I’ll grant you that they are enthusiastic boosters of anti-democratic authoritarianism, but I must have missed the part where Friedman was a quasi-Georgist who endorsed a strong social safety net. Or was an actual libertarian, for that matter.

we need a great limerick about the two Friedmans—any thoughts?

It would take a year to write . . .

Whatever your politics, if you can see past your prejudice, you must agree with my politics.

Upon re-reading the letter announcing the MFI, I’m less sure I’m right that this is Hoover-Midwest, but I still think I am. Lot of talk about cutting edge research, but very suspicious, this paragraph:

“The goal of the Institute is to build on the University’s existing leadership position and make the Milton Friedman Institute a primary intellectual destination for economics by creating a robust forum for engagement of our faculty and students with scholars and policymakers from around the world,” said President Robert J. Zimmer. “The Milton Friedman Institute will continue Chicago’s extraordinary tradition of creating new ideas that stimulate the academic world and innovative approaches that influence policy.”

Along with the MF hagiography on freedom in Cochrane’s letter, I have to think their innovative approaches in policy will be really really irritating.

Also, the Milton Friedman Society of donors, with their scheduled seminars etc., is likely to be a reactionary public intellectual lovefest.

I remain with the petitioners, awkward passive voice and kneejerk leftism an all.

Well, China today would be much more to MF’s liking than China 30 years ago. So while it’s no great beacon of the neoliberal order, it has moved towards that light. Of course one could argue that the fact that they stopped short is part of what made them so successful. But in terms of Cochrane’s letter, that’s asking for nuance which you just not gonna get in, well, a letter.

Well, China today would be much more to MF’s liking than China 30 years ago.

China is trying to establish a society where economic freedom is disconnected from social freedom. By Cochrane’s own stated interpretation, that goes clearly against the Friedmanite tenet that social, political and economic freedoms are “inextricably linked”.

Neoliberal compared to what?

The whole debate is completely out of place and won’t be resolved within this dispute. It is also wholly irrelevant. When the petitioners argued, in their turgid prose, that they’re worried the MFI will turn into a conservative showcase Cochrane could’ve simply responded: “Exactly, that’s something we don’t want either. Our mission is academic excellence over partisan handwringing, that’s why we put the following safeguards in place to ensure intellectual diversity”, etc. Instead he’s pontificating and trying to patronize his peers, and falls flat in his face in the process.

Cochrane verbatim: “Friedman stood for freedom, social, political, and economic. He realized that they are inextricably linked. If the government controls your job or your business, dissent is impossible.”

Under this standard, China = FAIL.

@31: but as has been pointed out above already, that “standard” is based on a false dichotomy between private enterprise and totalitarian/repressive command economies, and is therefore a crock of sh1t anyway. I note that even in the USA it is not unknown for government employees to have minds of their own…

Actually more FAIL than 35 years ago, because an unsuccessful repressive China doesn’t challenge Friedman’s claim, but a successful China that is economically liberated but socially repressive poses a direct challenge to the “inextricably linked” claim.

They’re the first words of Cochrane’s “you ignoramuses don’t understand Friedman, here’s what he was really about!” paragraph, so I assume it’s a very central concept, at least to Cochrane.

When I said that what Cochrane says is true, what I was really getting at is that his criticisms of this ‘petition’ are, overall, valid. No one seems to want to address that – you’re hitting out at his choice of examples, questioning what MF actually stood for and generally knocking the guy but he wasn’t writing a paper on economics he was pointing out that the letter from these other guys is pretty stupid – which it is.

he was pointing out that the letter from these other guys is pretty stupid – which it is

The letter is a petition against the suppression of non-orthodox economic views in the university. I don’t see how it can be ‘pretty stupid’; it can be either justified or unjustified.

sg,

no, it’s all the other things you didn’t mention. Like, you know, capitalism. Japan is a capitalist country isn’t? If you don’t think so then we’re really just arguing semantics here.

China is more to every political philosophy’s liking than 30 years ago (other than Maoism itself, I suppose). Does this mean that all political philosophies are true? That has to be good for everyone’s self-esteem.

A perhaps more accurate representation of Friedman here would be that you cannot have political freedom without economic freedom

The question is not whether there exists a definition under which Cochrane’s claim that China = neoliberal success story makes perfect sense, the question is whether the claim makes sense under the definition Cochrane himself provided. And the answer is, unambiguously, no.

so notsneaky, your definition of “neoliberal” is “capitalist”?

I think Cochrane has simply accept the claim that “in the recent decades, a neo-liberal global order has been put in place.” I guess he understood it as “in the recent decades the world has switched towards neo-liberalism”. And that’s sort of expected from a Friedman fan, isn’t it ?

And if you accept that the global order equals “moving in that direction”, then yes, China and India which both experienced growth by moving towards neo-liberalism are valid examples.

Otherwise, there’s no Friedman legacy because there’s no country even remotely close his ideals.

What matters is the movement.

The fact that those countries moved towards neo-liberalism.

Just like nowadays, you can claim that Venezuela has recently moved towards socialism or that most of the (Western) World moved away from classical liberalism after the Great Depression.

“so notsneaky, your definition of “neoliberal” is “capitalist”?”

No, but there is an association, yes? This again goes back to what you’re measuring post is.

“If you want to include China and Japan in the list, your definition automatically becomes so vacuous that in the end you’re pretty much saying that “neoliberalism = capitalism”, as notsneaky just did.”

Well, I didn’t. But anyway. The point about China is not that it is a “neoliberal” (or capitalist) country. It’s that it has become MORE neoliberal (and capitalist) in the past 30 yrs. And as it became more more neoliberal it has become riches and also, in many but not all ways, freer. And hence it fits well in Cochrane’s narrative in all but the most uncharitable readings. Which is the point you keep missing.

Hmm, the above does not sound like abb1 at all. Either Seth E. hijacked his account or the man’s drunk (or both). Where is that clarity of thought we’re so used to?

A harmless caricature; keeping up with the spirit of the post.

Late to the party, but few or none of the development success stories since 1950 have followed the path recommended by the WTO ?IMF / World Bank, and few or none of the countries which did follow that path were development success stories.

When I was in Taiwan in 1983 I was amazed at the size of some of the tariffs (200% for “luxuries”) and by the number of government monopolies (rice, energy, tobacco, alcohol, and much of transportation). But it worked.

Let’s try again.

The United Kingdom, at the height of Thatcherism or New Zealand after Rogernomics or Iceland after they feel in love in Friedman all kept a quit big public sector and a social-democratic welfare welfare state.

Does the fact they’re more socialist after “liberalization” than the US has ever been somehow implies that Thatcher’s, Rogers’s or Davíð Oddsson’s reforms were not neo-liberal ?

The climate is more congenial in Spain than it is in Mauritania. This provides support for my view that the ideal place to live is on the North Pole.

Just read through the comments and can’t believe no one has yet lauded Nick (#38) to the skies for his delicious limerick. Philistines!

Let’s talk about what is sniffed at in the petition: by the letter as conspiracy theory, though it doesn’t quite use the magic phrase, and by some in this thread as Kleinism, by which I take it they mean much the same thing. Cochrane accuses the petitioners of implying that neoliberalism has been deliberately imposed, but being vague as to by whom and dodging this with passive voice. He fills in this silence with a scurrilous charge of anti-Semitism, and some general conspiracy allegations, which are supposed to cause all right-thinking people to kneejerkedly recoil in horror.

But neoliberalism has been deliberately imposed. To say “by whom” with any precision would require examining individual cases: in Chile, it was by their own military with CIA help; in Eastern Europe, by local people organized to jump in the power vacuum and riding the backlash against communism, including many former communists, in the United States by the Republican party, which took power through the electoral process. The petition cannot possibly address “by whom” without either oversimplifying or turning into a multi-part historical treatise. But to imply that neoliberalism spontaneously emerged without anyone intending to impose it is simply false, and this is one of the basic myths that Cochrane wants to imply (though he won’t precisely say it). It is the usual preference of power: to have its operations seen not as choices, but as the inevitable consequences of the natural order, because the former can be opposed and the latter not. Usually, in history, religion does this, e.g., through the divine right of kings, but in a secular age, we must settle for the intellectual dishonesty of conspiracy-bashing.

In Chile, which is most directly Friedman’s baby, neoliberalism “emerged” because the CIA, ITT, and others found and backed a faction in the military that would overthrow the democratically-elected government and pursue their desired policies. One could call this interpretation “conspiracy theory” in the sense that it sees human intention collusively enacted and covertly expressed as an effective force in history, and this interpretation was commonly ridiculed as such when the support for it was more inferential. But at this point, more direct evidence has emerged (oh, that cursed passive voice! I should be obligated to name every researcher who produced the evidence.), and the “conspiracy theory” is pretty hard to dispute, no?

Jacob, good point.

What particularly gets me though is the charge of anti-Semiticism. It’s like money is the new Israel; criticizing anything done by or for money is proof of anti-Semiticism.

I believe it is, in fact, the inevitable consequence of the natural order. The CIA and former communists and black market operators in Eastern Europe didn’t come up with the evil scheme to implement neoliberal policies, it was a natural thing to do. Capitalism matures, intertwines, expends; national capitals merge, become a part of the global capital, exploit the global labor, compete in the global marketplace. It’s a natural stage, inevitable in one form or another. One can try to soften the impact, like social-democratic and nationalist states do, but it is an uphill struggle and the prognosis doesn’t look good at this time.

Don’t forget what else is sniffed at in the letter, Martin: that anthropologists in the United States might actually want to spend time with their subjects, be respected by them, and be seen as respectful of them.

And who are those “subjects” who will stop respecting an anthropologist because he comes from the University of Chicago ?

“and others found and backed a faction in the military that would overthrow the democratically-elected government and pursue their desired policies”

What, the Catholic Party? Didn’t know they had a faction in the Chilean military.

Pinochet was a General, doncha’ know? And the coup was executed, and the subsequent government run, by the military. That aspect of it was quite open; I’m surprised I’m even having to state that.

You need to turn up the sarcasm detector a notch or two. Anyways, that argument’s played itself out on the internets so many times that it’s pointless having it again.

now you’re just playing at semantics notsneaky. But I am amused at the idea that West Virginia and Hollywood are “two points in space with nothing between them”. What about the Rocky Mountains?

You can’t claim that any system with any three of your neo-liberal defining characteristics is neo-liberal. I think you might find that your taxonomy falls apart a bit there. I should point out to you that logically my statement about social democracy and neo-liberalism is neither wrong nor crazy. It’s pretty obvious. If two words mean the same thing one of them is useless. There is a difference between Social Democratic Japan and the neo-liberal Japan of your imagination. Can we stop being silly now?

notsneaky, to say “I’m sure if you say ‘neoliberalism’ you really mean ‘capitalism’, hence I will treat your criticism of neoliberalism as a criticism of capitalism” is known as a straw man. To say “the group of petitioners surely must include some who hold crazy views about capitalism hence I can treat these views as representative of the group” is known as a guilt by association fallacy.

notsneaky, perhaps the point in the continuum you are looking for is the phrase “adopted some neo-liberal policies”. Of course, they did this in the 70s (privatising rail, reducing the power of the unions, etc) and then they had – surprise! – a property boom followed by the “lost decade”. I’m sure it was just coincidence though, and since they adopted some neo-liberal policies in the 70s, we can blame all their economic growth in the 50 s and 60s on it, and blame their stagnation of the 90s on “too much govt”. That would be the correct logic for neo-liberal boosterism, right?

While notsneaky is of course almost completely wrong here, a joke as geeky as the “convex curve with roots at the equator and the north pole” deserves better than to be compared to Laffer’s cocktail napkin.

Oh and I did see the other half of the ‘argument’ was to equivocate between the term ‘neo-liberal’ (a point in policy space, or at most a small set of such points) and ‘capitalist’ (a very large set of such points) but I thought that that part was so silly it would more polite to such ignore it…

Engels,

I guess it must be pointed out, but not every freaking parabola is a Laffer curve and you can’t tar them all by association.

“You have u(A) > u(B). Also, d(B,C) < d(A,C). From this you infer”

You’re the one who started this off in one dimensional space with your Mauritania and Spain. Why am I getting crap for other people’s wacky analogies?

Neoliberalism is directly implicated in what was likely millions of excess deaths due to premature mortality in the former Soviet Union due to the 1990s privatizations and associated economic collapse (see: Steven Rosefielde’s article in the December, 2001 issue of the journal Europe-Asia Studies). Economist-types are always eager to pin all the deaths involved with the famines in Stalinist Russia and Maoist China on the evils of communist ideology, but it seems that the Russian deaths of the 1990s have disappeared down the memory hole (it takes 95 comments on a liberal blog for someone to even mention them!). They were the inevitable casualties of historical progress, I suppose.

Neoliberal triumphalism would be morally disgusting simply because of this, but it’s also intellectually unsupportable because it doesn’t fit the facts on development. China fixed its currency to provide a massive subsidy to exports, and the more it grew and developed the bigger this implicit subsidy became. Is this better explained by a deep affection for Milton Friedman, or by close attention to what China and South Korea demonstrated about export-led growth?

Really, what neoliberal triumphalists want to do is just chalk up all of global economic growth to neoliberalism, just because of a vague sense that our current economic order features lots of free market rhetoric. (Pushmedia sort of explicitly does this above, as does notsneaky when he equates neoliberalism to capitalism).

Great, the real crazies have shown up.

So what’s your definition of it, MQ: austerity, privatization and deregulation? In that case it really has nothing whatsoever to do with China and India. But how do you know your definition is the correct one, when people see so many different things in it?

But how do you know your definition is the correct one, when people see so many different things in it?

Uhh, the standard MO is to go with the initial definition and to test it for internal consistency with the conclusions. Cochrane, who should be trained better than to say “here’s my definition and according to that, you’re wrong”, engages in the same limp-dicked analysis he accuses his opponents of. There is a quite obvious disconnect between the charge in the petition, which claims that the “neoliberal world order” did not create a Pareto improvement and Cochrane’s rebuttal, which claims that it created a Benthamite improvement. You can perfectly well argue that the railroad was instrumental in bringing prosperity to the U.S., but you’ll be hard-pressed to get the buffaloes to sign off on it.

Great, the real crazies have shown up.

What happened in Russia in the 1990s is a matter of public record; denying reality is surely crazier than referring to it. The irony is that I’m sure someone like you quotes Rosefielde’s numbers on Stalin’s excess deaths (he is one of the major experts in that area), but now you’re apparently dismissing his methodologically identical scholarship on deaths under the Yeltsin regime as “crazy”. You can argue about the exact death toll, but it was considerable. The Russians themselves understand this quite well, that accounts for the difference in Yeltsin’s reputation there (categorically horrible) vs. here (drunk and incompetent, but heart in the right place because he followed the advice of Western neoliberal advisors).

I won’t post the link here because of the spam filter, but here’s the reference should you be disposed to stop the denial bit: “Rosefielde, Steven (2001), ‘Premature Deaths: Russia’s Radical Economic Transition in SovietPerspective’, Europe-Asia Studies, 53, 1159-117

But if neoliberalism is a doctrine of economic globalization, capital breaking thru the borders and barriers of nation-states and taking over, then I still think it’s a natural phenomenon, and China is a big part of it, indeed the showcase.

I actually agree completely with this, but I disagree that neoliberalism can simply be defined as capitalism or globalization. What is distinctive about neoliberalism is the “shock therapy” aspect, the refusal to admit that the ways in which the transition to globalization can and often should be buffered through social welfare institutions and through various forms of state management such as capital controls, export subsidies, etc. The neoliberals explicitly distanced themselves from such theories; they certainly weren’t looking to e.g. South Korea as a model.

So I’m closer to austerity/privatization/deregulation, but I would say that neoliberalism also cannot be separated from the general cheerleading for markets in the 80s-90s. And this may well have had a salutory influence in India/China (especially India), since those countries were strong enough to pick and choose their bits from the doctrine, be selective about deregulation and ignore the austerity.

“What happened in Russia in the 1990s is a matter of public record”

Sure. In 1992 it implemented Washington Consensus-like “shock therapy”. And between 1992 and 1993 output per capita (and other relevant statistics like mortality etc. pretty much follow it) shrunk by 3.5%. Of course between 1990 and 1991 output shrank by 13% and between 1991 and 1992 by almost 9%.

If you don’t like the story the time series is telling – which is basically that it wasn’t neoliberal policies but just a general disentegration of the economy which began in the 1980’s Soviet Union under communism – you can take a look at the cross section, limited as it is. Some of the republics which seperated from Russia did not implement these type of “ne0liberal” reforms in the early 90’s. Nevertheless they experienced similar economic and social distress (possible exception here is Belarus which shows same trend but smaller magnitude. Possibly due to injection of Russian money).

So once again the evidence on the causes of the decline in Russian (and ex-SU) standards of living points to the general collapse of the Soviet Union with its origins in the communist era.

Since everyone’s running around offering crazy analogies, here’s mine. You come upon a house that’s on fire. You try to pour water on it but it burns down nonetheless. Then some people come around and say “you shouldn’t have poured water on that house. now it’s all destroyed”.

To reiterate, the collapse and the decline started before Sachs and co. got there, it was more severe before they got there, and it was the continuation and culimination of a process that started under communism in the 80’s (temporarily postponed by some of Gorbachev’s ‘neoliberal’ reforms)

AFAIK I’ve never quoted Rosefielde’s numbers on death under Stalin. There’s plenty of sources to choose from here. Also because I don’t have JSTOR access at home and because I’m leaving for Europe in six hours I can’t read his full article and check his methodology. However, even if HE is correct about the numbers, YOU’re quite incorrect in placing the blame.

And finally, it’s … I dunno, “In bad taste” (if not colossally stupid) to compare deaths under Stalin to “excess deaths” due to changes in life expectancy in 90’s Russia.

the neoliberal rhetoric of “shock treatment” gives the game away; it’s basically just the economic policy version of Tom Friedman’s fantasized “suck…on…this”…

You come upon a house that’s on fire. You try to pour water on it but it burns down nonetheless. Then some people come around and say “you shouldn’t have poured water on that house. now it’s all destroyed”.

Nice attempt to create a “bad cause” and a “misunderstood good response” there, but when badly applied, water can in fact a be very dangerous fire suppressant.

The calamity that occurred under Yeltsin was bad.

When dismantling socialism and moving to free markets, one needs to be careful.

We will need to remember this lesson when Cuba does it as well.

But it doesn’t mean that it is better to remain in a strongly socialist environment.

Regarding Mr. Friedman, let’s keep in mind that Chile now has the highest nominal GDP per capita in Latin America.

Wikipedia says it best about Friedman:

‘According to The Economist, Friedman “was the most influential economist of the second half of the 20th century…possibly of all of it”. Former Federal Reserve Board chairman Alan Greenspan stated, “There are very few people over the generations who have ideas that are sufficiently original to materially alter the direction of civilization. Milton is one of those very few people.”‘

Friedman won: Nobel Memorial Prize in Economic Sciences, National Medal of Science, and the Presidential Medal of Freedom.

In 1980, he had a series on PBS. How can you be right wing and do that? ;)

Chile was not Friedman’s best result, he influenced Iceland’s Independence Party and Prime Minister Davíð Oddsson who helped Iceland move from #53 to #5 most economically free country in the world from 1975-2008. Friedman also influenced Estonia’s prime minister Mart Laar to make the country a “Baltic Tiger”.

If the majority of the economic decline had occurred in 93, 94 or 95 – after the reforms – it’d be either relevant or revealing. Since most of it took place before the major reforms were put in place, it’s neither.

notsneaky, you flat out have no idea what you’re talking about. I don’t know where your numbers come from, but they are wildly at variance with the established, recognized time series I’m familiar with. I don’t know if you’re lying, just ignorant, or we have some kind of weird communications disconnect, but here are the facts.

Russia’s measured GDP fell by about 40 to 50 percent between 1991 and 1998. The 40 percent figure comes from Angus Maddison, “The World Economy: Historical Statistics” the 2003 edition, published by the OECD. The World Bank historical statistics show a drop of closer to 50 percent (47 percent). (These World Bank stats are available directly at the worldbank org web site, on the main site hit the “data and research” tab, then hit “data”, and on the data page hit “quick query” on the “Most Requested Data” menu on the right hand side of the page. Then you can download historical stats for Russian GDP).

The World Bank figures show the decline beginning sharply in 1991, with the 1991 GDP roughly similar to 1989; Maddison finds that the overall USSR economy begins to shrink in 1989 (perhaps with the breakup of the Soviet Union and the beginnings of privatization under late Gorbachev), but he has no figure for the Russian Federation alone in 1989. (Also, I would note here that your timing of privatization and “shock therapy” to 1991 only is way off — the sharpest was in Spring 1992, but there were lots of privatizations both before and after).

This economic catastrophe is consistent with Russian Census statistics, eyewitness accounts, and numerous other sources. There is no evidence of any economic contraction of anything like this size any time over post-WWII Soviet history; indeed there is no evidence of any economic contraction like this during any period after the Russian Civil War ended and the Bolsheviks took over.

There is an excellent argument that the 1991-1998 period in Russia was the largest, most devastating peacetime industrial depression in modern economic history — indeed a fitting comparison to the disastrous famines that accompanied agricultural collectivization. Yet here we have someone who presumably thinks he knows something about economics who seems to be completely ignorant of it. What does that tell you about how ideological and propagandistic the discussion around this subject is?

As for the rest of the Soviet Union, the entire Soviet system was dependent on centralized direction from Russia, one cannot separate out a small republic here or there.

Andrei Shleifer has of course tried hard to wish away these figures, arguing that everyone’s (Angus Maddison’s, the CIA, the World Bank) measures of Soviet production are too high because the Soviets produced a lot of worthless goods that should be valued at zero, while post-Soviet production is undermeasured. As someone heavily involved in the privatization debacle, he would say that. But none of the statistical estimates agree (and all of these estimates of Soviet production are already heavily discounted off the “official” Soviet numbers). For a discussion of this issue, check out another piece by Steven Rosefielde, “Russia: An Abnormal Country”, European Journal of Comparative Economics, 2005, Vol. 2, Number 1.

118 @ 115.

In simple terms, there are three answers to the question whether neoliberal (WTFTM) reforms have helped or delayed the Russian recovery: yes, no, and we don’t know yet. The correct answer is of course the last

This is just what a Stalinist would have said in 1939 about agricultural collectivization. Collectivization and famine was justified as necessary for industrialization. After 1939, we can see that Russian industry first outproduced Nazi Germany during WWII, and then from 1945-1970 produced rapid growth in living standards for the Russian people (this is supported not just by GDP figures but by biometric and other measures). So you know, maybe it sort of worked. But we don’t forget the cost.

Russia’s economic turnaround quite clearly begins in 1998-99, after the financial crisis, around the time that Primakov and Putin took power. Western reformers are now claiming all of the post-1998 economic growth as the result of “foundations laid” during the 1991-1998 period, followed up by “liberalizations” of the economy under Putin. A more skeptical observer could point out that the 1998-99 period was just when the influence of “shock therapy” advocates waned and Russia began to chart its own course. Now, it’s still true that post-1998 there have been plenty of economic reforms that a Western economist would approve of.

Well, Russia is different from China and Vietnam, because in Russia the political system collapsed in the early 1990s. There was indeed a mini civil war. In general, it’s not surprising to see more radical actions in a time of turmoil.

I think the question is something like this: to what extent the socio-economic calamity was a result of sudden collapse of the political system (ala notsneaky) and to what extent the whole thing was a result of deliberate cold-blooded experimentation.

The collapse of Gorbi’s government seems like a garden variety power struggle, but I think it’s pretty clear that the second political crisis there (Yeltsin shelling the parliament ) was already a consequence and manifestation of Yeltsin’s clique deliberately choosing the path of privatization. That’s what – 1993?

in Russia the political system collapsed in the early 1990s….I think the question is something like this: to what extent the socio-economic calamity was a result of sudden collapse of the political system

The whole point here is that the collapse of the political system was aided and abetted by neoliberal advisors, who were basically saying that the biggest priority was freeing up and privatizing the economy rather than maintaining the capacities of the central state. Once Putin/Primakov started reestablishing state authority and doing incremental economic reforms within the framework of a stronger centralized state then stuff rapidly started improving.

The difference is that the Stalinist has a ball in the game and I don’t.

I was just pointing out antecedents to the “hey, maybe a million people died, but we don’t know if it worked yet — you can’t make an omelet, etc.” type of argument. Also, I wasn’t taking the Stalinist’s word for it, we now know that objectively Russian industry did great from 1940-1970 (maybe not in comparison with more recent rapid industrializers like China, but certainly great by comparison with Russia’s past history).

The whole point here is that the collapse of the political system was aided and abetted by neoliberal advisors

I think we’re mostly in agreement but I don’t believe that the advisors played any major role in the collapse of the SU. Was it Soros who said that Gorbachev made the mistake of trying to open the door just a little after it was tightly shut for 70+ years? The fundamental notion that if you just create the markets the democratic institutions that support it will emerge automatically (the “natural phenomenon” theory if you will) took a big hit in post-SU Russia, with grave consequences. But I’m not all too convinced that, starting after the collapse, we’re not comparing the events against an idealized counterfactual. Iow, I find the “we had the right answer” triumphalism both annoying and unsupportable, but I also find the response that “you had the wrong answer when there was a right answer out there” weak as well. (China might prove me wrong, but in large part they’re only postponing the hard decisions.) Once the SU had collapsed, the only available choices were bad ones.

ummm, see, this is not luck.

Possibly, but with low world prices for their natural resources they couldn’t even do that.

“you flat out have no idea what you’re talking about. I don’t know where your numbers come from, but they are wildly at variance with the established, recognized time series I’m familiar with. I don’t know if you’re lying, just ignorant, or we have some kind of weird communications disconnect, but here are the facts”

And screw you too buddy. I’m using PWT data which is very respectable. The 40% to 50% drop is consistent with what I said when added up over all the relevant years. But the majority of the decline takes place 1990-1993.

Here’s Russian GDP per capita data:

1990 12314.6898
1991 10731.44122
1992 9822.60983
1993 9489.138766
1994 8893.726814
1995 8461.583773
1996 7934.389688
1997 8339.782697
1998 8130.870191
1999 8532.885342
2000 9263.459629
2001 10048.81328
2002 10877.14261
2003 11794.72644

And the corresponding growth rates:

-0.137614978
-0.088491011
-0.034538997
-0.064801681
-0.049809812
-0.064329926
0.049830723
-0.025369208
0.04825961
0.082150026
0.081376957
0.079209033
0.08098894

(since we can’t preview our comments anymore I dont know if the formatting isn’t gonna get screwed up).

“There is an excellent argument that the 1991-1998 period in Russia was the largest, most devastating peacetime industrial depression in modern economic history”

“This economic catastrophe is consistent with Russian Census statistics, eyewitness accounts, and numerous other sources. There is no evidence of any economic contraction of anything like this size any time over post-WWII Soviet history”

No one’s disputing this. That’s what happens when a rotten system collapses.

“Yet here we have someone who presumably thinks he knows something about economics who seems to be completely ignorant of it”

If you can show where I deny that the period 91-98 was a catastrophe in Russia then show it. If not, well, then, screw you too buddy. Obviously the argument is about the causes.

“As for the rest of the Soviet Union, the entire Soviet system was dependent on centralized direction from Russia, one cannot separate out a small republic here or there.”

…which suggests that it wasn’t the neoliberal reforms but the political collapse of the system, yes?

“But Gorbachev also was getting terrible transition advice from Western economists, which he was acting on. ”

Oh yeah? And what was that? Come on the whole thing was coming down on its own regardless of what Gorby did. If anything his actions postponed the inevitable for a few years.

“But as abb1 points out, the bulk of the killings ascribed to Stalin are excess deaths due to changes in life expectancy resulting from agricultural collectivization and the subsequent famines.”

First, the “bulk of killings” – there was so much killing that shifting a couple million deaths from intentional to by-product doesn’t change the balance much. Second, under Stalin the policy was DESIGNED to cause massive famine as part of a political strategy to suppress certain anti-soviet groups (nationalist Ukrainians, kulaks, independent peasants etc.).

“The whole point here is that the collapse of the political system was aided and abetted by neoliberal advisors”

See, this is where the crazy talk comes in. Sure, the whole collapse of communism was a nefarious neoliberal plot. Right.

Dudes, who’s the crazy one?

Probably the one who thinks someone else’s mind is going to be changed here…