Showing posts with label crony capitalism. Show all posts
Showing posts with label crony capitalism. Show all posts

Thursday, July 4, 2019

My Amazon Review of Fiona Hill and Clifford Gaddy's " Mr. Putin: Operative in the Kremlin"


Putin: The New Tsar

Former National Security Council staffer Fiona Hill and Brookings foreign policy fellow Clifford Grady have written a deeply researched very important and very dense book profiling Russian President Vladimir Putin. It is America’s loss that Fiona Hill left the National Security Council only a few weeks ago. The one very critical lesson to be learned from this book is that Donald Trump should not be allowed to be alone in a room with Putin. Simply put, Trump is short-term and transactional while Putin is long-term and strategic.

The authors trace Putin’s life from growing up in the deprivation of postwar Leningrad to his rise to power in Moscow via his work as a KGB operative in East Germany. Putin comes into his own working for Anatoly Sobchak, a reform minded mayor of now Saint Petersburg in the early 1990s. From there he goes to Moscow where he has a ringside seat into the disintegration of the Yeltsin government and the economic failure of post-Soviet Russia. In succeeding Yeltsin Putin’s mandate is to restore order and to restore the economy.

Putin sees himself as the CEO of Russia and as an heir to the early 20th Century Russian reformer Prime Minister Pyotr Stolypin. What they have in common is that they both viewed themselves as modernizers within the context of authoritarian capitalism. Although Putin may view himself as a free marketer, he really runs a crony capitalist society where he has leverage over the oligarchs by having the ability to throw them in jail for tax law violations.

Above all else Putin is a statist. Everything has to be done in service of the state. He is critical of the Bolsheviks in that they betrayed the Russian state by fomenting revolution while its soldiers were dying in World War I. As an heir to the Tsars Putin sees Russia as a bulwark against western liberalism and he has allied himself with the Russian Orthodox Church against the perceived licentiousness of the West.

In thinking strategically Putin first had to put Russia’s fiscal house in order. In doing that he was aided by one of his Leningrad buddies, Alexie Kudrin who served as his finance minister. Widely respected in the West, Kudrin paid off Russia’s foreign debt and thereby removed a major leverage point the West had over Russia. Putin learned that from the forced withdrawal of Russian troops from the Baltic States in 1994 when the West threatened to withhold funding for Yeltsin’s government. He learns from history.

With respect to foreign policy Putin’s goal is to restore Russian greatness and to gradually prevail in the independent states that were formed after the breakup of the Soviet Union. Hence that annexation of Crimea and the war in eastern Ukraine.

The book ends in 2014 so there is no discussion of Russian involvement in our 2016 presidential election.  But is seems to me that involvement is part in parcel to the very patient long game that Putin is playing against the West and thus far he appears to be winning.

As I said at the outset this book is a hard read, but if you want to get great insights into how Putin thinks and Russia’s role in the world it is well worth the slog.







Saturday, September 16, 2017

My Amazon Review of Richard White's "The Republic for Which it Stands: The United States During Reconstruction and the Gilded Age, 1865-1896"

History with a 21st Century Liberal Bias

Stanford professor Richard White is a distinguished historian; I only have amateur status. While reading White’s encyclopedic history of post-civil war America you get the impression that he is looking to shock the sensibilities of 21st Century liberals by highlighting racism, the plight of laborers and farmers, the corruption of government and the greed of the emerging capitalist class.

To be sure the post-civil war era was no bed of roses, but if Lincoln came back from the dead and looked upon the America of 1896 he would have been largely pleased. The Whig in Lincoln, after all he was an admirer of Henry Clay’s American  System,  would have been pleased to see the success of the Pacific Railway Act, the Homestead Act and the Morrill Act (land grant colleges). America truly became a country from sea to shining sea, surpassed Britain as an industrial power and was about to take its place on the world stage. Of course as White rightfully notes the Native Americans were far from being partners in this process. Nation building is messy.

The free labor Lincoln might have been a bit disappointed in that industrial workers instead of being free were in fact “slaves” to the industrialists. This last point White makes over and over. However industrial workers were far from being slaves and far from being a majority of the workforce and even with the urbanization that took place in the 30 years after the civil war, America was still an agricultural country with a small town economy. And as bad as factory conditions were, immigrants from Europe continued to pile in. Simply put higher real wages and freedom remained a big draw.  Moreover, White ignores the rise of the middle class who would read the muckraking journals that were just beginning to make their appearance in the 1890s.  

The idea that White doesn’t seem to get is that the America of the 1870s was an “emerging market.” Where he is shocked about the governmental corruption that took place, I view it as a stage in the growth of the economy. Industrialization is messy and that is why crony capitalism and emerging markets go hand in hand. He also makes a side comment that American growth was slow compared to some of the faster growing economies of the 20th century. Of course it was because America was inventing the stuff that the 20th century economies had the benefit of copying.

Although White cites the excellent work in Robert Gordon’s “The Rise and Fall of American Growth,” he doesn’t take it to heart. (See https://shulmaven.blogspot.com/2016/02/my-amazon-review-of-robert-j-gordons.html )   Productivity growth was strong and real wages were rising. The U.S. was experiencing a “good” deflation, not a bad one as gains in productivity were translated into lower prices. Indeed the return to the gold standard, which White is critical of and it had a lot to do with the deflation, but it laid the basis of America becoming a global economic power at the dawn of the next century. The late 1800s truly were truly an age on invention and the locus of invention was largely in America.

All of the class issues that White discusses were fought out in the election of 1896. William McKinley’s defeat of William Jennings Bryan was a resounding vote for the gold standard and against the class-based reforms proposed by Bryan. Highlighting the rise of the new middle class is the fact that 750,000 people visited McKinley’s home to hear him give campaign speeches. These folks weren’t the tribunes of capitalism or White’s downtrodden workers and farmers, but rather they were of the rising middle class.

The one area where I know Lincoln would have been disappointed is the failure of reconstruction. Here the Republicans punted and turned the south over to the Ku Klux Klan, the armed wing of the Democratic Party. As White notes, the Republican traded the south for the west. I wish he would have spent more time on President James Garfield, whose was shot at the beginning of his term. If there was anyone who could have halted Jim Crow, it would have been him. We will never know.


I am sure White’s book will win its share of awards, but for me it was a disappointment. He should take off his liberal blinders and look at the world as it was.