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KAPITALIZM by Rose Brady


Russia's Struggle to Free Its Economy

by Rose Brady

Pub Date: Feb. 1st, 1999
ISBN: 0-300-07793-9
Publisher: Yale Univ.

Under no five-year plan, Russia’s journey to capitalism is a unique occurrence. Brady, Business Week bureau chief in Moscow when the Soviet Union disintegrated, was a witness to the ongoing struggle. The Russian economy has been in severe recession for most of the 1990s (and, according to the Finance Ministry’s latest report, will continue to shrink a lot more). Funds for education, health care, and science have evaporated. The path to the free market has been rough, indeed. Vouchers, issued to all Russians, were to be used to buy shares in state-owned businesses at privatization auctions. They could be sold for cash, too. Not worth much, the vouchers were traded, arbitraged, or placed in dubious investment funds. But the idea of private ownership hasn’t been generally understood. Many barely subsist, trading on street corners and waiting for the state to help while some —new Russians”—often former apparatchiks or insider nomenklatura—have become instant plutocrats. Indigenous mafias and gangsters have joined the party, seizing power by force or fanciful schemes and scams. The most promising cases are dogged by adversity. Brady describes the Vladimir Tractor Factory and interviews its management as an example. She interviews citizens in the street (literally) who cope with hyperinflation and she talks with the privatization czar. The rough politics of the last presidential election and the current economic policy are parsed impartially. Through much of the time since the fall of the Soviet regime the author seemed to think that it might all come together somehow. Yet the national fisc is still no healthier than Boris Yeltsin. In a postscript, she acknowledges the default in Russian debt, the bare spots on store shelves, and the exhaustion of policy. The aspect is Chekhovian, indeed. The sorrowful story could cause a seismic perturbation in the neighborhood of London’s Highgate Cemetery (where Karl Marx lies buried). But in Russia a story is never ended. “Pozhivyom uvidem,” says the author. “We will live and see.” (30 photos)