Russian Economics

1. Russian Economics Mistakes in the Post-Soviet Transition to a Free-Market Economy and Suggested Reforms Seulgi Kwon Wesley Oliver

2. Seulgi & Wesley Presentation

3. Contents Ⅰ. Neoliberalism by Oleg Bogomolov Ⅱ. A balanced approach by Leonid Abalkin Ⅲ. False Expectaions by James Tobin Ⅳ. Conclusions Ⅴ. Our opinion Ⅵ. Reference Ⅶ. Questions

4. Ⅰ. Neoliberalism by Oleg Bogomolov

5. In Keynesian economics the government has a strong role - Keynesian economics were used post WWII in Europe after successes in the US (Kangas) The author says that Neoliberalism - through “deregulation” and “denationalization” - was the “order of the day” (The New Russia, 54) What is Neoliberalism? Neoliberalism is a backlash against the interference of government Neoliberalism vs. Keynesianism Neoliberalism in the West around 1990 Definition of Neoliberalism Basically… “Economic liberalism... the belief that states ought to abstain from intervening in the economy, and instead leave as much as possible up to individuals participating in free and self regulating markets.” (Thorsen and Lie, 2)

6. The Situation in Russia • Soviet / Russian actors’ enthusiasm • and “shock therapy” • 2. The influence of the G7, • World Bank, IMF, OECD, and others • 3. Western advisers inside influence • 4. Irreversibility and quick reforms • 5. “stabilization”, “liberalization”, • “privatization” - via Neoliberalism

7. The author's 1994 response to the changes “The slightest rejection of the ideals of U.S. liberalism is deplored with undisguised bitterness...” (The New Russia, 55) Past successes of economic recovery were due to government intervention Russia has gone much farther than other capitalist countries by removing the state’s role It is now difficult to recreate a new state administration to build “a civilized and socially oriented market”- i.e. the state is not a “counterweight” to the market. (The New Russia, 55)

8. Bogomolov’s ideas for reform Bogomolov is for the reforms of the ETG, a group that suggests stronger macroeconomic policy and the “formation” of a “socially oriented economy” (The New Russia, 56) He says that “a functional system” of banks and “market-compatible accounting and law” are needed. (The New Russia, 56)

9. Ⅱ. A Balanced Approach by Leonid Abalkin

10. Abalkin is justifying the government's role after the Russian state was “pushed... out of the economy” by the events of the early 1990's Starts off by saying that the government is literally “more fundamental” than the market through the maintenance of social order but also acknowledges how impressive the market is Blames “neoliberal performers” such as the IMF (The New Russia, 61)

11. Abalkin’s opinion of the government's role • Cannot be determined through economic statistics alone • The government: • “Regulates” the economy • “Promotes” the economy • Protects new industries and the environment • Must consider “traditions”, “culture”, and “geography”(The New Russia, 63) • Ensures redistribution of wealth • Helps to invest in human capital through a. Health care b. Education c. Managing unions and the minimum wage

12. The search for a rational balance between the market and government Mentions “those who overstate the role of the market and underestimate the role of government” (like Neoliberals) and those who “exaggerate what the state can do” (who is he referring to?) Seeks a “rational, appropriate balance” Suggests that “Russia must set its priorities and clearly specify the goals and instruments of government policy” (The New Russia, 64)

13. Ⅲ. False Expectations by James Tobin

14. Did Adam Smith really win against Karl Marx? For example: How can the free market function without governmentintervention? Just because the Cold War was over - did this mean that the West’snew deregulatory policies were justified?

15. You need an infrastructure in order for the Invisible Hand to work Can the Invisible Hand work without security and laws?The author thinks not. Also, he emphasizes the importance of education.

16. Reallocation of resources can take time withoutaction The government may need to step in Past successes in the West actually required government intervention - James Tobin mentions Jean Monnet’s Coal and Steel community But post-Soviet Russian reforms left the problem for the free market to fix

17. Western “euphoria” Economic reforms and policies in the West, coincidentally at the time of the end of the Soviet Union and early post-Soviet period, created a situation where goods and services that are actually needed aren’t always important to economic policy as invisible financial interests like derivatives There was a euphoric atmosphere of anti-regulation This didn’t help in Russia, a country that adopted similar reforms and policies but wasn’t prepared for them and didn’t possess the same infrastructure as Western countries Therefore expectations weren’t met...

18. IV. Conclusions • The West's institutions and players as well as Soviet/Russian compliance damaged Russia's economy • The government needs to have a role in the market • Reforms need to avoid either neoliberal radicalism or overregulation • Economic success requires security, laws, government intervention in the reallocation of resources, and the creation of goods and services that are of use, not just invisible financial instruments

19. Our Opinions Seul gi The importance of a balance between government and market Wesley How Neoliberalism led to the recent economic collapse in2008

20. References Works Cited Digital image. Rolling stone. MATT TAIBBI, 23 Apr. 2007. Web. Digital image. Tech Support Guy. Volan, 27 Feb. 2007. Web. Kangas, Steve. "Causes of the Great Depression: A Review of Keynesian Theory." Causes of the Great Depression. Web. 23 Nov. 2009. <http://www.huppi.com/kangaroo/Keynesianism.htm>. The New Russia: Transition Gone Awry. New York: Stanford UP, 2001 Thorsen, Dag E., and Amund Lie. "What is Neoliberalism?” University of Oslo. Department of Political Science, University of Oslo. Web. 22 Nov. 2009.

21. Questions

22. 2. 현상분석 및 시행과제 도출 문제점 파악 Thank you ♡