Kremlin's defined limits

One of the abiding mysteries of the post-1991 era is the economic failure of the successor states to the Soviet Union. Why didn't Russia, Ukraine, Azerbaijan, Kazakhstan, Belarus, Georgia, Armenia, and others become economic powerhouses?

At first glance, they possessed many of the required prerequisites. The apparent political constraints to entrepreneurship had been removed. Many of them had good industrial bases. They all had superior education systems, highly educated workforces with favourable labour arbitrage due to relatively low wages, and also ample mineral wealth distributed across many places.

They should have been well positioned to climb the ladder as India, Bangladesh, Vietnam, the Asian Tigers and, above all, China, registered unprecedented growth. On many other key indicators, the former Soviet republics scored higher than the Asians.  

While few if any of the Commonwealth of Independent States nations had, or have democracy, neither did many of the Asian nations mentioned above. While corruption and crony capitalism was rife in the former Soviets, it was also rife in the nations that did ride higher.

One possible reason for stagnation is the curse of mineral wealth – resource rich nations can have well-documented problems. The causes of the resource curse as it’s called, have been debated. If it’s easy to dig a hole in the ground and flog whatever comes out, there’s less incentive to invest in anything else.  In Russia and other successor states, the oligarchs also took over from the commissars – in many cases, they were former commissars. They just pocketed the proceeds under the new dispensation and wealth ended up concentrated in very few hands with no investments in new sectors.

Another problem is perhaps more deep rooted, and difficult to understand. The Soviet education system was splendid in many ways.  But it also had deep, grievous flaws. There was a strong focus on basic sciences, and mathematics and that is excellent. The system identified anybody, literally anybody, with a gift for science, and it ensured everybody, literally everybody, could read and write.

But the technology focus was purely in areas the state considered important and the humanities was seen purely as a means to push ideology down the population’s throats. The concept of letting industry fulfil consumer needs was alien.

The literature, music and movies were carefully curated to fit with Soviet principles (which changed every so often).  Ideologues also rewrote history every so often to ensure the past was “reliable”. Economic policy was driven by a combination of bizarre 19th century theory and fabricated data. Behavioural sciences like psychiatry were considered useful only in that psychiatrists could certify dissidents as delusional.

Plus, there was an amazing streak of superstition running through the Kremlin. This showed up in a strange focus on pseudoscience. Trofim Lysenko set the Soviet grasp of genetics back by multiple decades because it was literally a criminal offence to question his “theories” of how plant genetics worked. As a result, bright minds shunned the discipline.

There were “faith healers”, hypnotists, astrologers, numerologists and parapsychologists galore who were consulted by the Party bigwigs. They were taken more seriously than medical doctors, economists, statisticians and political scientists.  A genius like Andrei Sakharov was side-lined despite being the greatest Soviet expert on nuclear power because he had misgivings about its misuse. 

The Soviets never considered plugging that gap in their technological focus. The Soviet space programme and military technology matched that of the West. But unlike the West, it didn’t result in innumerable spinoffs that set up billion-dollar consumer-driven industries. Electronics mavens who didn’t want to work on improving avionics for MIG and Sukhoi weren’t encouraged to build personal computers, or design smart cars instead, or rooftop solar systems. Mathematicians and computer scientists weren’t expected to write software for anything other than military systems.

I can think of another country, which is wilfully headed in the same direction. It has an education system run by ideologues who see the humanities and the arts purely as tools for the delivery of ideology. Informal businesses have been wiped out by complex tax compliance requirements and the political system is run by men with blind faith in charlatans and pseudoscientists.