Experiment after Experiment: Return of Capitalism into the Post-Soviet Countries

1. EXPERIMENT AFTER EXPERIMENT RETURN OF CAPITALISM INTO THE POST-SOVIET COUNTRIES Mykhailo Minakov Fulbright Kennan Scholar, University of Kiev-Mohyla Academy Department of Political Science, University of Puerto Rico February 5, 2013

2. RETURN OF HISTORY Francis Fukuyama: End of History? Late Soviet Intellectuals: Return of History?

3. LECTURE’S OUTLINE •  terms: capitalism, Modernity •  main features of the Soviet experiments •  how did Soviet Humans build Capitalist society •  assessment of post-Soviet capitalism so far •  Levels of review: institutional, human

4. TERMS: CAPITALISM Capitalism is an economic system that is based on private ownership of capital goods and the means of production, and the creation of goods and services for profit •  institutional set up: •  private property and free market •  political regime supporting the two above •  humans having capacity to make these institutes working •  Modernity: constitutional order of public and private dichotomy

5. TERMS: CAPITALISM AND MODERNITY Capitalism is an economic system that is based on private ownership of capital goods and the means of production, and the creation of goods and services for profit •  institutional set up: •  private property and free market •  political regime supporting the two above •  humans having capacity to make these institutes working •  Modernity: constitutional order of public and private dichotomy

6. TERMS: MODERNITY Public Sphere government judiciary parliament privacy of individual parties civil society family religious organizations business Private Sphere

7. TERMS: DEVIANT MODERNITY Public Sphere government judiciary parliament privacy of individual parties civil society family religious organizations business Private Sphere

8. TERMS: MODERNITY 0.65 + Capitalism is an economic system that is based on private 0.60 1961-70 1971-80 ownership of capital goods and the means of production, and the 0.55 afte r 1980 1951-60 creation of goods and services for profit 0.50 1941-50 Secular-Rational Values 1931-40 afte r 1980 •  institutional set up: 0.45 be fore 1921 afte r 1980 •  private property and free market 0.40 afte r 1980 1971-80 1961-70 0.35 be fore 1921 after 1980 1951-60 0.30 •  political regime supporting the two above afte r 1980 1941-50 1931-40 •  humans having capacity to make these institutes working 0.25 be fore 1921 1921-30 •  Modernity: constitutional order of public and private dichotomy 0.20 be fore 1921 be fore 1921 0.15 Africa _ 0.10 0.15 0.20 0.25 0.30 0.35 0.40 0.45 0.50 0.55 0.60 0.65 0.70 _ Self-Expression Values +

9. SOVIET EXPERIMENT •  leading principles: undivided public and private, political and economic •  social justice after elimination of classes •  Soviet modernization as annihilation of traditions and their bearers

10. RESULTS OF SOVIET EXPERIMENT IDENTITIES •  legacy of ethnocides •  emerging Soviet identity •  mixed identities

11. SOVIET HUMAN ideological expectations: •  new liberated individual, fighter for working class •  control of his/her mind, will, emotions and biology per se (L.Trotsky) •  selfless and immaterial orientation •  from sexual promiscuity to conservative purism

12. SOVIET CONDITION 1970 - 1985 RESULTS OF SOVIET EXPERIMENT cynical totalitarianism •  generation of leaders who survived totalitarian cleanses (good Lenin, different Stalin) •  Soviet ideology loosing to consumerism (double standards) •  failure of propagandist education vs temporary victory of technical modernization

13. SOVIET EXPERIMENT •  institutions: •  totalitarian institutional set-up (since 1930ies) •  public property with some sector of personal property: no privacy •  dominance of un-codified rules •  nomenclatura and one party-system •  humans: •  class identity vs ethnic identity (final solution of nationality question) •  educated obedience, ideology and cynicism •  doublethink: personal morality vs public indifference

14. SOVIET EXPERIMENT: ECONOMY •  economy of non-owners: nationalization of means of production •  command economy: centralized bureaucratic allocation replaced market allocation •  prescribed prices and deficient goods distribution •  strange money: hierarchy of currencies •  work as duty and resource terror •  investment in human capital •  autarchy of economic systems

15. PERESTROIKA 1986 - 1991 DISSOLVING THE ORDER •  growth of shadow economy •  entrepreneurs as criminals •  booming bazaar culture •  cooperative movement •  economic crisis

17. RESULTS OF SOVIET EXPERIMENT SOVIET HUMAN •  educated hatred to values grounding capitalism •  doublethink and dysfunction of official ideology

18. COLLAPSE OF USSR AND CREATION OF INDEPENDENT UKRAINE

19. RESULT: PASSIVE CITIZENS DID NOT STAND UP TO DEFEND THE UNION IN 1991

20. THE POST-SOVIET EXPERIMENTS ‘LIBERAL’ REVOLUTIONARIES •  return to Europe •  build ‘normal society’ •  transform state and economy into ‘Western’ ones

21. EXPERIMENT AFTER EXPERIMENT’S DIMENSIONS: •  quest for new grounds of legitimacy: reference to first half of XX century realties in spite of huge cultural changes of XX century •  quest for plenty and stability: privatization in societies where entrepreneurship was a criminal activity •  quest for optimal government: democratization without institutional support

22. NEW EXPERIMENTS AND PARTING WAYS •  Russia: moderate democratic and radical economic reforms •  the Baltic countries: radical democratic and economic reforms •  Belarus: Soviet regime reestablished •  Ukraine and Moldova: national-communist rule •  Caucasus: ethnic wars followed by façade-democratic regimes •  Central Asia: national communists lead re-feudalization/ tribalization

23. INSTITUTIONAL CHANGE •  creation of private owners •  opening economies •  national statehood •  political pluralism and competition

24. POST-SOVIET HYBRID INSTITUTIONS •  creation of private owners : oligarchy •  open economies : export oriented economies •  national statehood : state-led invention of identities •  political competition : parties as business or fan-organizations

25. ECONOMIC ‘NORMALIZATION’ •  Governmental strategies: •  deregulated prices, prohibited subsidies and eliminated monopolies •  hyperinflation to be put under control of MinFin and independent CentroBank •  looking for owners of the public enterprises: large-scale privatization •  Rent seekers’ strategies: •  making money on transitional market distortions •  control over government •  Population’s strategy: •  survival in chaos, private entrepreneurs without skills •  new clientele networks

26. RETURN OF CAPITALISM : RE-INVENTING STATE AND MARKET •  economic crisis of 1990s

29. ECONOMIC ‘NORMALIZATION’ ECONOMIC CRISIS IN 1992-1997 •  Governmental strategies: •  deregulated prices, prohibited subsidies and eliminated monopolies •  hyperinflation to be put under control of MinFin and independent CentroBank •  looking for owners of the public enterprises: large-scale privatization •  Rent seekers’ strategies: •  making money on transitional market distortions •  control over government •  Population’s strategy: •  survival in chaos, private entrepreneurs without skills •  new clientele networks

31. ECONOMIC ‘NORMALIZATION’ SURVIVAL ECONOMY •  Governmental strategies: •  deregulated prices, prohibited subsidies and eliminated monopolies •  hyperinflation to be put under control of MinFin and independent CentroBank •  looking for owners of the public enterprises: large-scale privatization •  Rent seekers’ strategies: •  making money on transitional market distortions •  control over government •  Population’s strategy: •  survival in chaos, private entrepreneurs without skills •  new clientele networks

32. GREAT EXPECTATIONS •  external management of Modernization: former Communist block and the Baltic republics in EU and NATO •  Schengen Iron Curtain •  European integration and Russo-phobia

34. POLITICAL ‘NORMALIZATION’ •  ideological transition: ethnonationalism - social democracy - liberalism ethnonationalism •  demand for order and a need in new safety net within former Soviet administrative borders •  problematic separation of public and private spheres •  transformation of regimes into democracies (of different types) •  oligarchy and plutocracy: prolongation of transition •  deficit of citizens and dysfunctional civil society

36. RETURN OF CAPITALISM : NEW IDENTITIES •  invention of ethnic within the Soviet administrative borders •  prohibition of the Soviet identity •  ethnocracy projects •  the Baltic states: regimes for the non-citizens •  Belarusian reaction: Lukashenka regime •  slow invention of selves: Kazakhstan and Ukraine

37. RETURN OF CAPITALISM : NEW IDENTITIES •  invention of ethnic within the Soviet administrative borders •  prohibition of the Soviet identity •  ethnocracy projects •  the Baltic states: regimes for the non-citizens •  Belarusian reaction: Lukashenka regime •  slow invention of selves: Kazakhstan and Ukraine

39. PRIVATIZATION economic reforms: •  price liberalization, hyperinflation, arbitrage opportunities •  mass privatization •  voucher privatization •  local elites gains

44. DEMOCRACY VS AUTOCRACY •  democratic regimes with market economies: the Baltic countries •  façade democracies with remainings of political and economic pluralism: Armenia, Georgia, Moldova, and Kyrgyzstan •  mild authoritarian regimes with economies favoring rent-seekers: Kazakhstan, Russia, Tajikistan, and Ukraine •  authoritarian regimes: Azerbaijan, Belarus, Turkmenistan and Uzbekistan

45. DEMOCRACY VS AUTOCRACY •  democratic regimes with market economies: the Baltic countries •  façade democracies with remainings of political and economic pluralism: Armenia, Georgia, Moldova, and Kyrgyzstan •  mild authoritarian regimes with economies favoring rent-seekers: Kazakhstan, Russia, Tajikistan, and Ukraine •  authoritarian regimes: Azerbaijan, Belarus, Turkmenistan and Uzbekistan

48. POST-SOVIET HUMAN •  money value and consumer society •  distrust and social fragmentation •  conflicting individualism •  new interest in collectivism and irrationalism : radical nationalism and conservatism •  depopulation •  lost in transition

49. POST-SOVIET HUMAN •  money value and consumer society •  distrust and social fragmentation •  conflicting individualism •  new interest in collectivism and irrationalism : radical nationalism and conservatism •  depopulation •  lost in transition

50. INFLATION IN THE BALTIC COUNTRIES economic reforms: •  price liberalization, hyperinflation, arbitrage opportunities •  mass privatization •  voucher privatization •  local elites gains

52. WISDOM OF ‘WILD 1990-S’: KARL MARX WAS WRONG ABOUT SOCIALISM, BUT HE WAS DAMN RIGHT ABOUT CAPITALISM

53. POST-SOVIET HUMAN ON USSR COLLAPSE source: The Pulse of Europe 2009: 20 Years After the Fall of the Berlin Wall

54. POST-SOVIET HUMAN ON USSR COLLAPSE source: The Pulse of Europe 2009: 20 Years After the Fall of the Berlin Wall

55. INTERIM CONCLUSIONS •  History and its challenges are back in fSU countries •  Questionable legitimacies of political regimes •  Future as source of danger, territory as challenge •  Transition with no final point

56. THANK YOU FOR YOUR ATTENTION!

Experiment after Experiment: Return of Capitalism into the Post-Soviet Countries

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Experiment after Experiment: Return of Capitalism into the Post-Soviet Countries