False Economy - Alan Beattie [135]
Let's start by considering the contrasts between countries exiting from communism. Natural experiments are rare in economics and economic history. There are not many opportunities to make direct international comparisons, as in the study of foreign diplomats in New York City. But the global collapse (or reform) of most Communist regimes over the past twenty or thirty years has provided something within hailing distance of it. A large set of countries has gone through the process of transition from a command to a market economy. Most, but not all, have gone through the parallel process of becoming a democracy: China and Vietnam are the glaring exceptions. There are some interesting patterns in the evidence to suggest how their history helped determine their future, both in the decisions that they made, and in what happened as a result.
Looking first at Russia, we need to ask how it got to where it is. Politics and government in Russia have had two specific characteristics that go back to the medieval era and have endured throughout tsarism and the Soviet era into the present. First, it has had a dominant executive with not much in the way of checks and balances. Legislatures and the judiciary have been subservient to the central power. If they stuck their heads up, they tended to get them lopped off. Second, the dividing line between power and property has rarely been clearly defined. The executive has often claimed both the absolute right to rule and the authority to appropriate assets as needed—indeed, not even to recognize that anyone but the sovereign can fully own property.
Both features made Russia an ideal country for both monarchical autocracy and communism. These systems are, however, anathema to a market economy, where businesses want secure private property rights and the confidence that they are not going to be interfered with by an unaccountable and arbitrary government.
Now that their empire is safely gone, we can happily blame this on the Mongols, whom we met in the chapter on religion, and a wholly owned subsidiary of theirs, the Tatars. The "Mongol yoke" rested on Russia for around two and a half centuries after its creators swept in from the east in the first half of the thirteenth century. Interestingly, before the influence of the Mongols had shaped it, Russia's development of individual property rights and political pluralism was in some ways ahead of Western Europe's. A class of landowners, the boyars, had become the absolute owners of their properties, and political power was balanced among a set of ruling princes with principalities clustered around Moscow.
The Mongols themselves had little truck with anything but supreme centralized authority. To make it easier to rule, they gave Muscovy (a duchy centered on Moscow) taxation powers and authority over the other principalities in return for loyalty and cash payments to their empire.
Even after Mongol influence diminished, the centralizing tendency remained, as in the Islamic empires in the Middle East. Russia became an authoritarian monarchy and, as it absorbed surrounding territories, an empire. Ivan III (Ivan the Great) established a powerful state by breaking the power of his brothers and other princes, and Ivan IV (the Terrible) confirmed the trend by being crowned Tsar of Russia in 1547. (In translation, incidentally, Ivan IV's epithet loses some of its original sense: it was intended to convey power and majesty as well as simply scariness). He brought independent principalities under his control and ended the independence of the trading center of Novgorod. As we saw in the chapter on Africa and cocaine, Novgorod was part of the Hanseatic League and thus was plugged into a Western European network in which circulated dangerous ideas of commercial and political freedom.
The period of Mongol control disconnected Russia from Western Europe at