Triumph Of The (Unfree) Market
We Americans like to think that much of our industrial and economic success is a result of a free market and private ownership. Russia's experience with unbridled capitalism has engendered more mixed feelings, and with them a Kremlin-centric approach to economic development. The Wall Street Journal documents the decline of Russian automaker AvtoVAZ into corruption, kleptomania and crime under free-market conditions in the 1990's, and the government intervention which attracted Renault's recent purchase of 25 percent of the company. These government takeovers not only tend to make Russian companies more efficient and less crime-ridden ( although this assertion may be suspect), they also serve the political ends of eliminating wealthy oligarchs who could pose a challenge to President Putin's growing authoritarianism. With "plans to float stakes in a raft of companies it has taken over," the Kremlin may just be headed toward yet another radical economic experiment for the country that has witnessed more than its fair share of experimental economics. But will western companies and authoritarian state-run companies mesh over the long-term?
More by Edward Niedermeyer