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Today´s Russia: The Consequences of an only Incompletely Realized Systemic Transformation

English Pages, 4. 6. 2019

Many thanks for bringing me here. I have to admit that for someone like me – from Central Europe, from a country without a direct contact with the sea – this is an extraordinary experience. In the past, in the communist era, I didn’t have a chance to sail on such a big ship. In the last thirty years, after the fall of communism, I have been so fully involved in politics that to afford such a long holiday would be just inconceivable. I was, of course, many times abroad but always working. Being asked to speak here today is an excellent excuse for me. I was not very popular among the citizens of the Czech Republic when I kept telling them that the notion of holidays is a barbaric relic from the past.

A few words about me. I believe they are relevant for the today´s topic.  I am an academic economist who already in the 1960s, while working in the Czechoslovak Academy of Sciences, participated in the Czechoslovak – relatively radical – economic reform which tried to do the impossible – to put together two incompatible economic systems – central planning and market economy. 

It was, regretfully, impossible to prove its feasibility or non-feasibility because this economic reform together with all the accompanying political developments was considered so dangerous by the Soviet communist leaders that in August 1968 they decided to send half a million soldiers from the Warsaw Pact countries to stop the developments there. They called our developments a counterrevolution. This era was known in the West as the Prague Spring. I was considered to be one of the anti-Communist and anti-Marxist academics and for that reason I was fired from the Academy of Sciences. The next 20 years I spent in some relatively unimportant jobs – till November 1989 when I became a member of the first non-communist government. This was already almost 30 years ago. 

In the last thirty years, I became Minister of Finance, founder of a political party, Prime Minister, Speaker of the Parliament, twice President of the Czech Republic, and – at the same time – a friend of Hillsdale College. It was so simple. 

I became the main author of the Czech economic transformation, which introduced market economy after almost half a century of central planning. I was – together with my Slovak colleague, Prime Minister Mečiar, one of the two main organizers of the friendly and peaceful split of Czechoslovakia. It was me who sent a letter to Brussels asking for our membership in the European Union (in 1996). I was also deeply involved in the negotiations concerning our NATO membership. I repeatedly met all your Presidents of that era (as well as all their predecessors). 

All that experience of mine was probably the main reason for being asked by the Hillsdale President Larry Arnn to speak here about Russia. Yet, I don’t pretend to be an expert on Russia. I was for many years considered an opponent of Russia (or better to say of the Soviet Union). After the fall of communism, I tried to help arranging normal, standard, mutually advantageous bilateral relations between our two countries regardless of the fact that the most productive years of my life (communism collapsed when I was almost 50 years old) were very negatively influenced by Soviet imperialism.

This experience of mine didn’t and doesn’t blind my eyes. I don’t demonize Russia or its current President. I respect (and I think we should all respect) that Russia has its own, authentic, national interests, which are undoubtedly different from the interests of my and your country. It is also without doubt that the Russian political, economic and social system has been built upon very different grounds than yours and ours. 

That is a reason why the Russian system is politically less democratic and more authoritarian than we would consider acceptable. Its economy is under a visible heavy hand of state interventionism much more than in our countries. The invisible hand of the market is more suppressed. Human freedom is more restricted than in our part of the world but – and that is important – communism is over. Russia´s system is more controlled than in our countries but the difference between Russia and us (and you) is in the scale and scope of the state interventionism, not in its substance. We should admit that our countries are characterized by large state interventionism as well. 

In spite of all its existing problems, Russian society is more free now than it has ever been in its history. I don’t accept the arguments that the Russian system was better in the 1990s than now – we shouldn’t confuse freedom with anarchy, chaos and lack of order. 

I know that my position in this respect differs from the mainstream view of today´s American Kremlologists. I daresay that they were wrong in the past and misunderstood and misinterpreted the Soviet communist system and its fate, and I am afraid they are wrong again. 

We should not have aprioristic prejudices. We shouldn’t live in the past, we shouldn’t confuse the present Russian Federation with the Soviet Union of the previous era, or its current political leaders with Leonid Brezhnev, as some people in the West and in the Central and East European post-communist countries do in an attempt to score cheap political points in their home countries. I have been following the developments in Russia in the last two decades with great interest and – I hope – with a sufficient modesty and respect. For that reason, I do not have the same patronizing attitude as some “experts” on Russia do. 

I consider the developments in Russia in the post-communist era to be a relative success – when we look at it with a proper and fair historical perspective. The alternative benchmark is for me Andrei Amalrik’s horrifying story described in his well-known book Will the Soviet Union Survive Until 1984? (New York: Harper & Row, 1970). I must confess that when I read this book almost 50 years ago, shortly after the Soviet Union armies invaded Czechoslovakia, I was afraid this was a very probable and in any case easily conceivable picture of this country after the end of communism. I was afraid of it and I am glad it did not happen. 

As I said at the beginning, I am not an expert on Russia, I am – perhaps – an expert on transition from communism to capitalism, from totalitarianism to pluralistic democracy, from central planning to the market economy. We did it very differently than Russia and the outcome is different as well. 

We – very rapidly – liberalized, deregulated and privatized the economy which was not the case in Russia. The crucial part of it was done in our country already in the first half of the nineties. Russia – a country much bigger and much more complicated than the Czech Republic, with different heritage and with a longer era of communism – didn’t do it. All the inevitable transformation steps and measures were done only halfway. The Russians totally failed to control the macroeconomy – monetary and fiscal policies were not cautious enough – and the inevitable hyperinflation which was a consequence of it destroyed everything, especially the credibility of Russians leaders of that time. (By the way, the Czech Republic was the only post-communist country which didn’t have to carry out a monetary reform.) 

Russia didn´t have a clear transformation vision, didn’t have politicians who could formulate it and explain it to the people of Russia. Neither Gorbatchev, nor Jelcin were able to do it. They were too much connected with the old communist regime. They didn’t try to create standard (ideologically well-defined) political parties. Without real political parties, Russian governments and Russian prime ministers were not able to start building their own constituencies. 

Putin is no exception. He succeeded in consolidating the state and significantly contributed to its elementary functioning. He attacked the system of politically and economically powerful oligarchs (who tragically rule the Ukraine to these days). He introduced some economic rationality, of course, at a non-zero price, especially as regards democracy.  His special trade-off between order and democracy is, of course, highly debatable. It is, definitely, not our choice but we should discuss it using such terms and notions. Not to speak about the empire of evil. It is not so simple. To create a new Cold War era would be of help neither to Russia, nor to us. 

I am convinced that without genuine political parties you can´t have a full-fledged parliamentary democracy. I used such phrases 20 -30 years ago, when I had the feeling that Russia – because of its past, both prior to communism (no democratic history) and the longest, the most oppressive and destructive era of communism – had an excuse for the time being. Now, almost three decades after the fall of communism, I am not sure about it.

Looking at it from the position of my country, today´s role of Russia in influencing our fate is close to zero. We shouldn’t fight the old battles. The real fight in our societies – both in Europe and in America – is between those who want freedom, liberty, and free markets and those who try to mastermind us using various illiberal manipulative isms as environmentalism, multiculturalism, humanrightism, feminism and genderism, transnationalism, etc. None of these isms originated in Russia or in the East. To our great regret, we are importing them from the West. It is the irony of history that this becomes the final consequence of the fall of communism thirty years ago.

Václav Klaus, Notes for Hillsdale Cruise Talk, Hillsdale Cruise, Great Britain, June, 2019.