The Future of Russian Capitalism
Article Summary and Author Biography
US entrepreneurs should look upon post-Soviet Russia "as a kind of new frontier", capable of being turned into a country whose wealth in the 21st century could be "the envy of the world".
Jude Wanniski is president of Polyconomics, Inc., an economic consulting firm in Morristown, New Jersey.
For years Western observers had assumed that as the transition from socialism to capitalism proceeded in the Soviet Union there would appear a gradual shift away from strict state control of production toward some form of market socialism. Some property and productive assets would move from collective to individual ownership, but not all that much. Market forces of supply and demand would take over some of the responsibilities of allocating resources, but the state would retain a dominant role in protecting the population from the excesses of capitalism. Russia would more or less fit itself into the Swedish model. The dynamic of capitalism would be safely subordinated to the imperatives of a welfare state. How could it be otherwise? After seven decades of collectivism, the people of Russia and the former Soviet republics must surely have lost all memory of commercial competitiveness.
In fact quite the opposite conclusion might be drawn. During the 70 years of the communist experiment the competitive impulse of Soviet man has not been extinguished at all, but rather has been channeled into the awkward mazes and blind alleys that ultimately led to abandonment of the Marxist-Leninist idea. Now freed of these constraints, it is easy to imagine these competitive impulses racing ahead of our Western form of corporate capitalism, which has grown flabby and slow. It is possible to imagine a future of Russian capitalism that asserts itself early in the 21st century as the envy of the world.
In this difficult time of Russia’s conversion from one system of political economy to another, it might seem sheer fantasy to present such a notion. The objective, as an alternative to the Swedish model, is worth considering, however. The Russian people are now engaged in nothing less than designing the basic architecture of a brand new country. Why not consider all possibilities? Why not design the Russian system of capitalism to be the best?
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