Collapse of an Empire: Lessons for Modern Russia

by Yegor Gaidar former prime minister of the Russian Federation

Overview

"My goal is to show the reader that the Soviet political and economic system was unstable by its very nature. It was just a question of when and how it would collapse...." —From the Introduction to Collapse of an Empire The Soviet Union was an empire in many senses of the word—a vast mix of far-flung regions and accidental citizens by way of conquest or annexation. Typical of such empires, it was built on shaky foundations. That instability made its demise inevitable, asserts Yegor Gaidar, former prime minister of Russia and architect of the "shock therapy" economic reforms of the 1990s. Yet a growing desire to return to the glory days of empire is pushing today's Russia backward into many of the same traps that made the Soviet Union untenable. In this important new book, Gaidar clearly illustrates why Russian nostalgia for empire is dangerous and ill-fated: "Dreams of returning to another era are illusory. Attempts to do so will lead to defeat." Gaidar uses world history, the Soviet experience, and economic analysis to demonstrate why swimming against this tide of history would be a huge mistake. The USSR sowed the seeds of its own economic destruction, and Gaidar worries that Russia is repeating some of those mistakes. Once again, for example, the nation is putting too many eggs into one basket, leaving the nation vulnerable to fluctuations in the energy market. The Soviets had used revenues from energy sales to prop up struggling sectors such as agriculture, which was so thoroughly ravaged by hyperindustrialization that the Soviet Union became a net importer of food. When oil prices dropped in the 1980s, that revenue stream diminished, and dependent sectors suffered heavily. Although strategies requiring austerity or sacrifice can be politically difficult, Russia needs to prepare for such downturns and restrain spending during prosperous times. Collapse of an Empire shows why it is imperative to fix the roof before it starts to rain, and why so

Product Details

ISBN-13:	9780815731153
Publisher:	Rowman & Littlefield Publishers, Inc.
Publication date:	01/01/2010
Sold by:	Barnes & Noble
Format:	eBook
Pages:	332
File size:	2 MB

About the Author

Yegor Gaidar, Boris Yeltsin's acting prime minister in 1992, was the architect of "shock therapy" reforms designed to hasten Russia's transition to capitalism in the 1990s. He is currently the director of the Institute for the Economy in Transition, a Moscow-based research organization.

On November 24, 2006,Yegor Gaidar fell seriously ill while presenting the Russian edition of this book in Ireland. Much speculation at the time, including Gaidar's own article in the Financial Times, attributed the illness to poisoning.

Table of Contents

Introduction     VII
The Grandeur and the Fall of Empires     1
Modern Economic Growth and the Era of Empires     1
Crisis and the Dismantling of Overseas Empires     5
Problems of Dissolving Territorially Integrated Empires     13
The Yugoslav Tragedy     19
Authoritarian Regimes: The Causes of Instability     26
Challenges in the Early Stages of Modern Economic Growth and Authoritarianism     27
The Instability of Authoritarian Regimes     30
Mechanisms of the Collapse of Authoritarianism     35
The Oil Curse     39
The Spanish Prologue     40
Resource Wealth and Economic Development     43
Specifics of the Oil Market     54
Regulating the Oil Market in the Twentieth Century     55
Challenges Related to Price Fluctuations of Commodities: Mexico and Venezuela     64
In Search of a Way Out: A Response to the Dangers of Unstable Commodity Pricing     67
Cracks in the Foundation: The Soviet Union in the Early 1980s     71
Growing Problems and Bad Decisions     74
Food Supply Problems     80
Food Shortages-A Strategic Challenge     84
The USSR as the Largest Importer of Food     89
Oilin Western Siberia: The Illusion of Salvation     100
A Drop in Oil Prices: The Final Blow     105
The Collapse of the USSR: The Unexpected Becomes the Rule     110
The Political Economy of External Shocks     115
Deteriorating Conditions for Foreign Trade: Political Alternatives     115
The USSR and the Drop in Oil Prices: The Essence of the Choice     122
A Series of Mistakes     132
Mounting Problems in the Soviet Economy     140
The Hard Currency Crisis     150
Economic and Political Liberalization against the Background of the Hard Currency and Financial Problems     155
Development of the Crisis in the Socialist System     162
Political Credits     167
The Price of Compromise     170
The Crisis of the Empire and the Nationality Question     172
Loss of Control over the Economic and Political Situation     176
The Currency Crisis     180
From Crisis to Catastrophe     184
"Extraordinary Efforts" instead of Reforms     185
On the Brink of Default     195
On the Path to State Bankruptcy     201
The Grain Problem     205
Prices Skyrocket     211
Money and the Fate of the Empire      213
The Fall     220
The Political Economy of the Failed Coup     222
Political Death Throes     226
Political Disintegration: Economic Consequences     228
A Civilized Divorce     242
Afterword     250
Notes     259
Index     317

What People are Saying About This

George Soros

"Yegor Gaidar, a hero of Russian reform, has provided a courageous and clear-headed wakeup call for his own people and the world. He argues persuasively that today's Kremlin leaders are heading down the same economic path that led their Communist predecessors to disaster. Combining personal experience, deep analysis and a rare grasp of facts-including from previously classified documents-Gaidar has produced a book of insight and importance. It is must-reading for anyone trying to comprehend what really happened to the Soviet Union, why its system was inherently instable, and why nostalgia for the 'days of empire'-fashionable at the highest levels in Russia today-is wrongheaded and dangerous."

Andrei Schleifer

"Yegor Gaidar will be known to history as the architect of Russia's transition to a market economy. But here he shows his other side, as a brilliant economist and historian presenting a compelling explanation of the Soviet Union's collapse: its financial bankruptcy."--(Andrei Schleifer, Harvard University and author of A Normal Country: Russia after Communism)

Anders Aslund

"Yegor Gaidar has written an outstanding book of great importance. With extraordinary erudition, he warns Russia against following the course of Nazi Germany, focusing on the double trap of post-imperial hangover and the oil curse. Professor Gaidar also shows how profound and manifold the Soviet collapse of 1991 really was."--(Anders Aslund, Senior Fellow, Peterson Institute for International Economics)

Editorial Reviews

" Collapse of an Empire is a warning to today's Russian leaders to avoid the disastrous mistakes of their Soviet predecessors." —Stefan Wagstyl, Financial Times

" Collapse of an Empire is about the disintegration of the USSR. It is one of the best accounts we have, and is likely to be referred to for a long time." —Philip Hanson, Chatham House, The Russian Review

"Gaidar wonders whether Russia's political and economic institutions will prove flexible enough to cope with another balance-of-payment crisis. If not, Russia may yet meet an end similar to the Soviet Union's. And on this critical point, Gaidar—no Cassandra, but rather a sober analyst of the half-baked illiberal democracy that is Russia today—has written a book far more instructive than most of the Western media's mass-produced anti-Putin pamphlets." —Guy Sorman, City Journal

From the Publisher