Monday, April 23, 2007
Off-topic: Boris Yeltsin
I have now read a few obituaries of Boris Yeltsin that report (as seeming fact) that per-capita income in Russia fell by 75% during the Yeltsin years. (Here's one such article, from Forbes.com.) I was in Russia for a month in 1991, at the beginning of the Yeltsin era, and I lived there in 1997-98, towards the end of the Yeltsin era, with many visits in between. The notion that per-capita income fell by 75% is simply absurd. Does anyone believe that Russians were consuming two or three or four times as much of any good in 1991 than they were in 1998? As co-blogger Michael and I used to say to each other when presented with such proclaimed "facts" concerning large income falls, Russia must have been extremely wealthy in 1991. If the 75% decline is correct, then after the high growth rates of the 2000s, Russia would have just about caught up by now to the glorious heights that its juggernaut of a planned economy achieved in 1991.
There are many reasons for the insane figures on changes in per-capita income or consumption in Russia in the 1990s, but the chief culprit is the employment of bad price indices under a situation of repressed inflation prior to price liberalization in early 1992. So economic conditions of the pre-Yeltsin years are artificially boosted, and much of the measured fall of the Yeltsin years is just a recognition of the actual, pre-Yeltsin, situation. Many people have pointed out this problem over the years -- see my 1995 book on Russian reforms, for instance -- but somehow it now can be published as established fact that Yeltsin oversaw an economic collapse unparalleled in history.
As for Yeltsin's legacy more generally, I don't pretend to any special insight. His actions on Chechnya were tragic and disastrous, and I was not much of a fan of his 1993 storming of Parliament, though that one is more ambiguous in my mind. He left Russia with Putin, a move which has harmed Russia significantly, and promises deeper and sustained harm for the foreseeable future. But I always sort of felt, Chechnya aside (a big aside), that when the really big choices had to be made, choices about whether Russia was going to head towards individual freedom or totalitarianism, that in those instances, Yeltsin was at his best.
Nevertheless, I also sort of think that it might have been best if Yeltsin had not been re-elected in 1996. The co-opting of the media and the embrace of the oligarchs that were probably required for his re-election were too costly. Had Yeltsin lost, Mr. Zyuganov would have reversed the economic course, but the results, I think, would have been bad enough to discredit Zyuganov's party and its policies permanently. And it is very likely that today we would have someone other than the power-obsessed Putin presiding over a Russia prospering through high world energy prices and a sensible exchange rate (which they only achieved after the 1998 financial crisis).