Sarah Paine: evaluation

Transcript context

…Speaking of the empire, Russia’s economy just had this terrible period after the collapse of the Soviet Union. A lot of the Eastern European satellites seem to recover in this gangbusters way. Obviously, East Germany. But even Poland today is such a big success story. What’s going wrong with the mainland itself that these other countries are able to recover from communism much better? Well, they had always been much more connected to Western Europe. Czechoslovakia before the war was a full-up highly developed country absolutely tied to the West. Poland, I believe, Copernicus is from a place like Poland, right? It’s a center of the Enlightenment. But when I was using the George Bush Sr. archives, it’s fascinating. So it’s ‘88, ‘89 when the Soviet Union’s imploding. There’s a lot of correspondence between Eastern European, particularly Polish, leaders coming to the Bush administration saying, “Hey, our banking system, we know it’s a mess. Our financial system’s a mess. We know we need expertise to help us figure out what our legal system is going to look like.” And Bush is all over that. I’m sure he farmed them out to the private sector who would also be all over that, like giving them free consulting. So as a result, you do have them really taking advantage of this 20 years. At the same time when Bush would have loved to have given some of the same advice… There were people like Jeffrey Sachs and others who went to the Soviet Union, but it was not remotely the same thing. This is people throughout Polish society requesting this advice, not like one guy with an office in Moscow. Basically, the Russians thought they knew it all and they thought they understood. This is all the unknown unknowns, the things you don’t understand, your blind spots. Truly, economics is a blind spot for the Soviets. Because think about it, when the tsars ran the show, it’s like a riff off the Mongol Empire. You take cuts from people’s businesses, from trade that comes through. Then it’s also about selling basic commodities. You’re not thinking, under the tsars, of Russia doing high-end manufacturing. I mean, I guess Fabergé and some jewelry if you want to do that. But really that’s not it. It doesn’t have this commercial tradition, being tied into this commercial tradition of Western Europe and all the sea routes for trade. Then when you get the communists, they aren’t about that at all. So there’s really a dearth of knowledge. Think about this country with all the little kids selling lemonade, right? You see them on the streets. They’re already learning. The kids who are doing newspaper routes, they’re already learning about buying things, selling things at a very young age. We just take this knowledge for granted. It was just absent in the Soviet Union and not as much absent in Eastern Europe that had been more connected in. Before we get to the period of Russian collapse, let’s go back to the end of the Soviet period. Gorbachev starts instituting these economic reforms along with glasnost and perestroika. But what I find mysterious is that those economic reforms not only fail to prevent the stagnation that the Soviet Union is experiencing, but they in fact make things worse. You would think that reform, even if it’s handled badly, would have some sort of positive impact. If you do it badly, then it’ll have a smaller positive impact. But here it just causes this huge hyperinflation, causes all these big problems. So why did reform have this backwards impact?…

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