Capitalism in Russia: Not quite the right fit

By R.G.I.V.

Though there was arguably more to the Cold War, no one can deny the fact that economic systems were a focal point. With the United States on the side of capitalism and Russia leading the Soviet Union on the communist side, these two were in a battle to see who would be on the winning end of an economic endurance test. The United States labored to contain communism in countries where it dominated while the U.S.S.R. assisted countries in revolt in order to draw in more members. In the end, the U.S. 'won' and capitalism was crowned the economic system of the free world. Today the U.S. still promotes capitalism and provides more help to capitalistic countries, Russia now being one of them. Capitalism reform in Russian has been described as “shock therapy”, but is it really the right answer for Russia? Is capitalism supposed to be a one size fits all system? The consensus is that no one wants the U.S.S.R. back but that does not mean they necessarily want capitalism.




Still can't fill the gaps




The main pushers for revolution are the poor, lower class. Communism was supported to help these people, and free them from their upper class oppressors. There was virtually no change when communism was implemented , and if anything, the government just exploited and oppressed the lower class. With capitalism now in place, still nothing has changed. The wealth distribution is still a pyramid, with the concentration of wealth being at the top, belonging to somewhere between 15 to 45 billionaires. Moving down the levels, less and less wealth is distributed thinly between more and more people. In Russia, the largest oil and metal companies belong to about 3 people, which some have compared to western experience 100 years ago. The disparity arises because of a division between two types of people. It has been described as “two countries in one, two people, market and non-market”. With three revolutions, two world wars, two empires, a full cutting of elite in 1917 and 1937, little has changed. Now with the dramatic “shock” of capitalism, we expected progress, but disappointingly, the gap between classes remains wide.

If it works for us it should work for everyone, right?

With the recent sub prime mortgage crises, and the many crise that preceded it, the U.S. people have begun to look at our system and cry foul. We are not the only ones. A hot topic at this years World Economic Forum in Davos, Switzerland was the future of capitalism. With the slogan 'to rethink, transform and reconstruct', the forum brought to light the weaknesses of capitalism, namely the finance sector. The majority proposed for reconstruction of capitalism, with stricter regulation, in order to restore confidence in a system that has “discredited itself time and time again.” The question can be asked, why do we impose a system that we ourselves don't truly understand? A system that has been described as broken, problematic and discredited? Currently, the Russian people are asking for tighter regulation to stop the U.S. crisis from occurring in Russia. Maybe they will be more successful than we were at obtaining stability.

Do they want it?

It is obvious that capitalism is not perfect. It is loved by some and accepted by most in the U.S., but that is our choice. We also support capitalism, singing its praises to other countries, going as far as to say everyone should be capitalistic. But who knows what works best for a nation than its people? Russia does not completely despise capitalism. When asked if they considered capitalism incurably sick, needing replacement, only 23% said yes. Compared to other countries such as France(43%), Mexico(38%) and Brazil(35%) Russia seems pretty capitalist friendly. They did however have an overwhelming majority (77%) say government should nationalize branches of industry or play an active role of managing them. 76% of Russians also felt that economic prosperity should be more equally distributed and move from class to class. The last two questions show that a large majority of at least 75% of the population want something different. Though they don't specifically want the end of capitalism, their wants are a step in that direction.

Is there is a solution?

Russia is a unique country with a history of struggle for change. We would all like to believe that their prayers were answered by the emplacement of capitalism, but that is not the case. We ourselves are sometimes not satisfied with our system, so why would they be? Some would think that this means a return to the communist experiment, but I don't think that is the answer. It would seem that the answer is not so easy as one over the other. Though none exists now that is feasible or popular enough, a new system might be the answer. I think that sometime in the future, a new idea will arise that will not only work for Russia, but maybe for other countries that are not satisfied with today's answer. Don't get me wrong, capitalism works for now, but there is always room for improvement.