March 23, 2015

Group, then Threaten: How Bad Ideas Move Millions

Writing about web page http://dx.doi.org/10.1098/rsif.2014.0719

I've been thinking: What is it that enables a bad idea suddenly to spread across millions of people? Here are some of the things I have in mind:

  • In France the National Front is reported as leading all other parties in current opinion polls, having won barely 10 percent of the vote in the 2007 presidential election.
  • In January's general election, nearly 40 percent of Greek voters supported Syriza, compared wtih fewer than 5 percent as recently as 2009.
  • Since narrowly rejecting indendence in last year's referendum, Scotland's voters have rallied to the Scottish National Party, support for which is now reported at over than 40 percent compared with less than 20 percent at the last general election.
  • Most spectacularly, more than 80 per cent of Russians are regularly reported as thinking Vladimir Putin is doing a great job as their president, compared with around 60 percent two years ago.

I am hardly the first to ask this question. There is plenty of research (e.g. de Bromhead et al. 2013) on the economic conditions that foster political extremism, for example. But how do we get from economic conditions to wrong persuasion, exactly? There is the famous Goebbels quote about the "big lie," which is fine as far as it goes but always makes me think: surely there's more to it than this?

If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State.

But it can't be true of all lies. Don't some lies work better than others? What is it that defines the ones that work? My best answer so far to this question is an analogy, which I know is less than proof. But it's a thought-provoking analogy; see what you think.

Last year some behavioural scientists (Strõmbom et al. 2014) finally explained how to herd sheep. There is a sheepdog, instructed by a shepherd, that does the running around. It turns out that there are just two stages. First, the dog must gather the sheep in a single compact group. Once that is done, the second step is to threaten the group from one side; as a group, the sheep will move away from the threat in the opposite direction. That's all there is to it.

The reason why the first step must come first is also of interest: If the dog threatens the sheep without first gathering them in a group, they will scatter in all directions, and that's not what the shepherd wants.

Anyway, there's the answer: Group, then threaten.

People are not sheep, and this is only an analogy. Nonetheless you probably already worked out how I would read this. The shepherds are the political leaders. The dogs that run around for them are the campaign managers and activists. The human equivalent of gathering sheep in a group is to polarize people around an identity that defines an in-group and an out-group. So Scots (as opposed to the English), Greeks (as opposed to the Germans), Russian speakers (as opposed to the rest). Group them, then threaten them, and they will move.

To see how the threat sets the group in motion we need one more thing, an insight from Ed Glaeser. Glaeser (2005) wanted to explain the conditions under which politicians become merchants of hate. He began with a community that has suffered some kind of collective setback. When that happens, people demand an explanation: Who has done this to us? "Us" means the in-group. Political entrepreneurs, he argued, will compete to supply satisfying stories. Often the most satisfying account is one that blames the in-group's misfortune on the alleged past crimes of some out-group: the English, the bankers, the Muslims, the Jews, or the West.

Not only past crimes, however; Glaeser uses the phrase "past and future crimes." In other words, he maintains, politicians often transform these stories into powerful threats by giving them a predictive slant: This is what they, the enemy, have done to us in the past and this is what they will do again if we don't mobilize to stop them first.

Remember: Group, then threaten. The result is mobilization.

References


March 09, 2015

Monday Morning Muesli

On Friday I read yet another plaudit for Christopher Clark's The Sleepwalkers: How Europe Went to War in 1914. Sleepwalkers? To judge from the title the great powers went to war in their sleep, without a conscious decision to do so, an interpretation that should let everyone off the hook. At least, the sleepwalking defence has been known to work in a criminal court for defendants accused of murder and rape, so I guess it could also cover the initiation of aggressive wars.

The Sleepwalkers has been sold across the world -- most notably in Germany, where it has been a best seller -- on its title and its great reviews. But the title continues to mystify me, for Clark does not appear to believe it himself. In his introduction (p. xxvii) he writes:

The story this book tells is ... saturated with agency. The key decision makers -- kings, emperors, foreign ministers, ambassadors, military commanders, and a host of lesser officials -- walked towards danger in watchful, calculated steps.

So, not asleep at all. And he concludes his book (pp. 561-562):

Did the protagonists understand how high the stakes were? [Yes, at some length]. They knew it ...

Again: not asleep. What's going on? You can't help wondering if this is a case of an author trapped by a working title that was written into the contract with his publisher before he knew what he would say. Maybe Clark felt he could rescue himself at the last moment by adding the words I missed off the end of the sentence that I just quoted:

They knew it, but did they really feel it?

Then, a brief allusion to the horrors of modern warfare, which those protagonists apparently did not "feel"; and the final sentence of the book:

In this sense the protagonists of 1914 were sleepwalkers, watchful but unseeing, haunted by dreams, yet blind to the reality of the horror they were about to bring into the world.

But the way I read this, Clark's complaint is not that these guys were asleep! It is rather that in the majority they were soldiers, trained (as John Keegan once described in The Face of Battle) to respond to the emergency of combat with military professionalism, not unsoldierly panic. When they foresaw horror and extinction with one part of their brain, they were thinking with the other half about how to manage it. And in that spirit they went to war.

It's an interesting point, and an important one, too, if you want to ask why the professional soldiers had such influence in the secret councils of Berlin, Vienna, and St Petersburg in the summer of 1914. But it has absolutely nothing to do with sleepwalking.

***

Thursday this week will see the Warwick Summit on Protest, which follows some unfortunate events that took place on campus at the end of last term. I wasn't a witness and I don't claim any special insight. I did respond to the survey that followed, along with 578 other staff and students of the university. The survey and responses have now been dissiminated behind the university firewall; here's mine. I don't plan to attend the summit, so this will be the limit of my contribution.

  • Please tell us about any concerns you have in relation to protest on campus, including those relating to recent events?

There is a right to protest within the law. This right needs to be upheld. Protests on campus that go beyond that by involving trespass (occupations) or violence have been quite rare. The Warwick Summit should think carefully before basing general conclusions on things that happen infrequently.

  • Please tell us if there is anything you would like to see done differently in relation to protest in the future?

While occupations and violent protests on campus have been rare, they are also polarizing events. In that setting emotion can override calculation, so that over-reaction on either or both sides is predictable. Those who exercise their right to protest should carefully consider the potential for violence in their actions. An example is occupations, which are always forceful (because they forcefully deny other people legitimate access to a space). Moreover, occupations avoid interpersonal violence only by exploiting surprise.

  • Do you have any questions that you would like to see addressed at the summit?

In response to the December events I have heard demands for a self-policing campus (or "police off campus"). This would be a mistake. When crimes are committed, the victims have a right of access to the law. University officials, academics, and students are not trained for crime prevention or investigation, nor should they be. There will always be a need for police on campus.


March 02, 2015

Monday Morning Muesli

Writing about web page Nemtsov Putin KGB

According to Putin's spokesman Dmitrii Peskov, the Russian President considers that the murder of opposition leader Boris Nemtsov was a contract killing with "all the signs of a provocation." This theory has been echoed faithfully by the chief of the investigative commission Vladimir Markin:

The murder could be a provocation to destabilize the political situation in the country, and the figure of Nemtsov could represent a kind of 'holy sacrifice' for those that don't shrink from any means to achieve their political goals.

(Remember that phrase: "holy sacrifice" (in Russian сакральная жертва).

These officials imply that Russian oppositionists murdered their own leader in order to cause chaos and create an opportunity to seize power. The investigators are also considering other motives, although none of them is the most obvious one, that someone had Nemtsov killed in order to remove the opposition's best known leader and intimidate those that remained.

That interpretation should not come as a surprise. Two years ago almost to the day, prime minister Putin was campaigning for election for Russia's president. At a meeting he addressed the context of public protests over the conduct of the election. Referring to the opposition, he said:

The ones that you mentioned, they want some clashes and are directing everything towards this goal. They are prepared even to put someone forward as a victim and blame the authorities for it ... They've been trying to do this for ten years, especially those that are sitting abroad. I'm telling you this exactly. This is what I know. They are even looking for a 'holy sacrifice' from among the prominent people. They themselves will go 'bang,' if you'll excuse me, and then they will blame the authorities.

And yes, Markin's words "holy sacrifice" are exactly the same as the words that his master used two years before. You have to wonder if they've been talking to each other.

***

The general effect is one more creepy echo from Russia's past. On 4 December 1934 a gunman entered the Leningrad communist party headquarters and assassinated Sergei Kirov, the Leningrad party chief. The circumstances strongly suggest some kind of official collusion: Someone above Kirov, which really means the NKVD or Stalin himself, either ordered the murder or knowingly allowed it to happen, but all those close to the deed were dead within a few days or months, and the documents in the archives have not settled the matter. Most likely we'll never know for sure.

We do know what happened next: Stalin immediately took personal charge of the investigation. Within days an official narrative began to emerge: the murderer was a terrorist acting on behalf of foreign powers and domestic traitors. The opposition had incited and organized the deed. Based on this conclusion, the Kirov murder became the pretext for ever-wdening circles of repression; many of the defendants in the show trials in Moscow and elsewhere in 1936 and 1937 were charged with complicity in Kirov's death, among many other fantastic crimes.

***

Recently I've been trying to learn about underground humour. In the process I came across a very nice paper by Elliott Oring, “Risky Business: Political Jokes under Repressive Regimes,” in Western Folklore 63(3) (2004), pp. 209-236. This paper has some wonderful material from a respondent called Klava, a Jewish woman from Odessa. Here's a story that I particularly liked:

Klava was born in 1948. She remembered growing up with political jokes. ‘It was a national past time.’ Odessans prided themselves on their jokes and on being good jokers, and this reputation was recognized by people from others parts of the country as well … But Klava was always aware that jokes and other kinds of discussions could not be freely shared. ‘It was a given ... You are not to repeat ... Only to your family members and your friends.’ Because there were very strict – though unofficial – quotas for Jews at the university, Klava, like many Jews seeking education and advancement, obtained her degree in engineering. She was employed at a large firm, but she eventually quit her job, and became a manicurist. She planned to apply for permission to emigrate, and she knew that once she applied, she would lose her engineering job. By obtaining a job as a manicurist before submitting her application, she could assure herself a source of income while awaiting permission. Nevertheless, she did not immediately apply as her family did not want her to leave.

In 1974, she was working in the shop and she had several clients who were waiting to have their nails done. One of her customers came in without an appointment. She needed to have her nails done because she was going on vacation. She had been Klava's customer for several years. Klava told her that she would do her nails if she would wait until she had finished with her scheduled customers. So while she worked on the other customers, the woman waited in the shop. 1974 was a celebratory year in the communist calendar – a Lenin anniversary – and Klava and her customers exchanged jokes and witticisms – many about Lenin …

Her unscheduled customer sat there the whole time that the jokes were being told. The rest is in Klava's words:

"After the two girls left and she was in the chair. And as I was working on her, she told me, ‘Klava, do you know who I am?’

"I said, ‘Of course, your name is Ludmilla Ivanovna.’ And she said, ‘Do you know where I work?’ ‘Of course, it's in the municipal hall.’ She said, ‘Do you know what department I work in?’ ‘I have no idea.’ ‘It's department number one,’ which was KGB. And the joke was said, it was Lenin's hundredth birthday, and so all the jokes were about it. [The customer then told the following joke.] ‘There was a competition for the best joke about Lenin. And the first prize is ten years to where Lenin used to go’ – jail, exile. And she looked at me and the smile disappeared from her face, and she told me, ‘If I did not value you as my manicurist, I would send you for ten years to where Lenin used to go.’ And that was a decisive moment, because I wanted to go [emigrate] like three years ago, and my family did not want me [to]. I was scared. I was very scared, more than in my whole life, before that or after that."

That night Klava called her family together and told them what had happened and that she was going to submit her application to emigrate. It only took her three months to get the permission, and then she had thirty days to leave the country. Her parents also applied to leave but they were refused, and she had to leave without them.


February 27, 2015

Russia Under Sanctions: It's Not Working

Writing about web page http://www.ft.com/cms/s/0/92c75076-b606-11e4-a577-00144feab7de.html

On the evening of Tuesday 24 February I joined a panel discussion on "Russia Now," organized by Warwick Arts Centre's Mead Gallery. My fellow panellists were Peter Ferdinand (Politics and International Studies) and Christoph Mick and Christopher Read (History). The discussion was chaired by Mead Gallery director Sarah Shalgosky, whom I thank for the invitation. Here's what I said, roughly speaking.

Sanctions in history

The Russian economy is subject to Western sanctions. These sanctions are of two kinds. There are "smart" sanctions that aim to limit the international travel and transactions of named persons and corporations. There are also broader sanctions that aim to limit the international trade and borrowing of Russia’s financial, energy, and defence sectors.

In history, advocates of economic sanctions against an adversary have usually claimed two advantages for them. One claimed advantage is speed of action: It has often been predicted that economic sanctions will quickly "starve out" an adversary (metaphorically or literally). The other claimed advantage is cost: By attacking the adversary’s economy we can achieve our goals without the heavy casualties to our own side that would result from a military confrontation.

Are these claims justified by experience? Based on the experience of modern warfare and economic sanctions from the Napoleonic Wars through the U.S. Civil War and the two World Wars of the twentieth century to the Cold War, Rhodesia, South Africa, and Cuba, the answer has typically been: "No."

How do sanctions work?

The effects of sanctions on national power have generally been slower and smaller than expected. First, they attack national power indirectly, through the economy, and the economy provides a very complicated and uncertain transmission mechanism. If a country is refused access to something for which it appears to have a vital need, such as oil or food, it generally turns out that there are plenty of alternatives and ways around; nothing is as essential as it seems at first sight. Secondly, external measures will be met by counter-measures. In a country that is blockaded or sanctioned, soldiers will look for ways to use military strength to break ouit and so offset economic weakness. Suffering hardship and feeling unfairly victimized, civilians will become more willing to tighten their belts and fight on.

It would be wrong to go to the other extreme and conclude that sanctions achieve nothing. What have sanctions actually achieved in historical experience? Sanctions do raise the cost of producing national power. They do so gradually, so that immediate effects may not be perceptible. Nonetheless they impose costs on the adversary, and eventually these costs will tell. It is hard to show, however, that sanctions have ever had a decisive effect on their own; at best, they have been shown to have their effect in combination with other factors, such as military force. In those cases, sanctions were a complement to military power, not a substitute or alternative.

Russia: How are Western sanctions supposed to work?

The purpose of Western sanctions is clear: It is to change President Putin’s behaviour, making him more cautious and more accommodating to the demands of Western powers.

What is the mechanism that is supposed to bring this about? Western observers generally see that President Putin's political base is built on the use of energy profits to buy political support. Russia's energy sector, much of it state-owned, has provided major revenues to the Russian government budget. The Russian government uses these revenues to buy support, partly by paying off key persons, partly by subsidizing employment in Russia's inefficient, uncompetitive domestic industries. The result is that many people feel obligated to Putin's regime because without it they would lose their privilege or position in society.

In that context, sanctions have been designed to target those industries and persons that supply resources to the government and those that depend on the government for financial support. By doing so, they aim to deprive President Putin of the resources he needs to retain loyalty.

How have sanctions actually worked? In Russia, real output is falling and inflation is rising. It is important to bear in mind, however, that in recent months sanctions have been only one of three external sources of pressure on the Russian economy.

Three pressures on Russia's economy

Three factors have been at work: sanctions, confidence in the ruble, and energy prices. These factors should be thought of as semi-independent: there are obvious connections among them, but in each case the agency is different.

  • Sanctions. Before the crisis over Crimea, Russian corporations had approximately $650 billion of short-term, low-interest debt denominated in foreign currency. International lenders have reluctant to lend to Russia long term because Russia's lack of protection of property rights leaves them uncertain about the security of their loans. Because this debt is short term, it requires regular refinancing. Russian firms, including organizations and sectors that have not been directly targeted by sanctions, are now unable to borrow abroad. Struggling to cover their credit needs, they have turned to the Russian government to make emergency loans or bail them out.
  • Confidence in the ruble. As lenders have lost confidence in Russia, capital flight has increased. The ruble has lost half its external value in the last year, and this has doubled the real burden of private foreign currency debts of Russian corporations and also wealthy families with housing debts in euros or dollars. This has intensified private sector pressure on the government for bail-outs.
  • Oil prices. The dollar price of oil has halved since this time last year, slashing Russia's energy revenues and plunging the state budget into deficit.

These three pressures all point in the same direction and complement each other. Their cumulative effect is to be seen in the deteriorating outlook for the economy as a whole and for public finance. The government has lost important revenues while spending pressures have multiplied. Arguably, therefore, sanctions have "worked," because they have squeezed the capacity of the Russian administration to satisfy the expectations of its supporters.

A learning opportunity

From a social-science perspective, we should think of this moment as a learning opportunity: How the Russian administration responds in these circumstances should reveal its type.

To benchmark the Russian response today, consider how two Soviet leaders responded to closely similar situations in the past.

  • One benchmark is offered by Mikhail Gorbachev in 1985. By the mid-1980s the global energy market had reached a situation not far removed from that of today. A decade of high oil prices was being brought to an end by new non-OPEC suppliers. This put the Soviet economy under a severe squeeze. Faced with this squeeze, Mikhail Gorbachev chose policies of demilitarization and relaxation abroad and at home.
  • Another benchmark is offered by Joseph Stalin in 1930. If anything, the predicament of the Soviet economy in 1930 was even closer to its situation today. Soviet exports were faced with collapsing prices as the world economy entered the Great Depression. The Soviet economy also had considerable short-term debts that suddenly could not be rolled over because international lending dried up. In response, Stalin demanded "the first five year plan in four years!" This involved accelerated mobilization and sacrifice, and ended in the famine deaths of millions of his own citizens (many of them in Ukraine).

These examples illustrate the alternative responses of a ruler under external pressure. When it becomes harder to buy loyalty the ruler can respond like Gorbachev, by moderating demands on supporters; or like Stalin, by cracking the whip over them. In 2015, faced with economic sanctions, falling oil prices, and a falling ruble, which choice has President Putin made? His words and deeds both deserve attention.

  • Before sanctions, President Putin's words were of a Russia encircled by enemies and penetrated by foreign agents. His policies involved accelerated rearmament and frozen conflicts with Moldova and Georgia, capped by the annexation of Crimea.
  • How did things change after Western sanctions were imposed? Putin's rhetoric shifted up a notch with talk of national traitors and a "fifth column" of enemies within. His economists began to discuss ways to shift from a market economy to a "mobilization economy." His foreign policy spokesmen incited tensions in the Baltic region and made nuclear threats against the West. The Russian military embarked on continuous large-scale exercises and increased the frequency of testing NATO defences in the Baltic and the North Sea. Russian forces and heavy weapons were infiltrated into Eastern Ukraine.

The lesson for social science is that under external economic pressure President Putin has revealed his type: He is a power-building authoritarian ruler.

It isn't working

From a policy perspective, the effect of sanctions on the Russian economy is only the tactical outcome of sanctions. Their strategic purpose is to change Russia's behaviour for the better, and that is the only true test of whether they have worked. The lesson for policy is that, despite sanctions, President Putin remains prepared to take risks with peace and to commit aggression. Sanctions are not changing his behaviour.

Now we know this, what should we conclude? A clear implication is that things could get worse. Some worry (or threaten) that, if the pressure on him grows, President Putin might became more confrontational and take additional risks rather than back down and look for compromise. It has also been suggested that, if unseated, Putin might be replaced by someone worse -- a role for which there are several candidates.

Why isn't it working?

This leads to me to a sombre conclusion. It's not a conclusion that I much like; I have thought about it a lot and I wish I could see another way out of the situation. To sum it up, I'll quote in full a letter that I wrote to the Financial Times recently in response to an article by Gideon Rachman ("Russian hearts, minds, and refrigerators," February 16). My letter appeared on 19 February:

Gideon Rachman ... writes : “Rather than engage the Putin government where it is relatively strong, on the battlefield, it makes more sense to hit Russia at its weak point: the economy.” But this neglects the incentives that arise from the time factor.

If the West plays to its strength, which is economic, President Putin will play to Russia’s strength, which is military. But the action of Western financial and trade measures is slow and cannot be accelerated. Meanwhile, Russia can accelerate its military action at will.

In playing the sanctions card while neglecting defence, the West is encouraging President Putin to raise the tempo on the battlefield and change realities quickly and irrevocably through warfare, before the Russian economy can be weakened further.

For the West, therefore, economic sanctions are not an alternative to a military confrontation that is already under way. To avoid disaster, the West must support financial and trade measures with a credible defence.


February 23, 2015

Monday Morning Muesli

One of the first statements by Greece's new prime minister Alexis Tsipras called on Germany to pay more reparations to Greece for losses arising from the Nazi occupation in World War II. Some commentators added that, if Germany could have its debts and damages mostly forgiven after World War II, Greece could be forgiven its debts today. Back in June 2012 my LSE colleague Albrecht Ritschl had an interesting column on The Economist websiteabout the magnitudes. Anyway, the implication is that if Germany got away with it; why not Greece?

Maybe a few aspects of how the war ended have been forgotten. At the end of the war, Germany was placed under military occupation. Its territory was divided, and permanently stripped of East Prussia and Alsace-Lorraine in the West. The German leaders responsible for the damages caused in the war were killed or hanged, and punishment was meted out to many other Germans with lesser responsibility. Eastern Germany paid large reparations to the Soviet Union. In both East and West Germany the constitution and economic and social order were comprehensively refashioned by external powers. In both East and West Germany young people were systematically educated to feell shame about their country's recent past.

If you ignore all that, then yes, Germany got away with it. If Greek leaders want to argue for debt forgiveness on that precedent, then let them go for it. I'm not against an element of debt forgiveness for Greece, by the way. I'm just against misusing history and invoking the Nazis to get opinion on your side.

***

Is austerity self-defeating? Lots of people seem to think so, and many of these seem to hold that view with great certainty. Relevant to this is a column by Benjamin Born, Gernot Müller, and Johannes Pfeifer that appeared on VoxEU over the weekend. They study the effects of temporary budget austerity using data from 38 emerging and advanced economies from 1990 to 2014. They distinguish between a budget cut in normal times and in times of financial stress (when the default premium on public debt is initially high). For countries that are initially stressed they find that in the short term austerity is indeed self-defeating: in the first year, GDP falls and the default premium rises. But the adverse scenario does not persist. Within five or so years GDP recovers and fiscal adjustment opens the way to lower interest rates than before.

Of course, this is just one study among many that are under way or recently published. A measure of wait-and-see is usually recommended. But it does contribute one more piece to the case for spending less if it was a problem to spend more. It also suggests we should give some provisional credit to the politicians that adopt it. Maybe they're just taking a longer view, something we don't usually associate with politics.

***

As driverless cars come nearer, there's bound to be public debate on the safety issues. On BBC CWR the other day I heard an interviewee: "But how safe will they be? If something goes wrong, who can we hold to account? We can't have them on the road until they're perfect!" I thought to myself: "Nooooo!" We shouldn't have driverless cars on the roads until they are clearly better at getting passengers safely to their destinations than the typical human driver. Bearing in mind that at 3AM the typical driver is likely to be either a night clubber on the way home or a taxi driver, that standard could be variable and, at times, not very demanding.

I do see the problem though. When the average driverless car is safer than the average driver, so that the total number of traffic fatalities is reduced, the driverless cars will still kill some people, for which they will be blamed. Moreover, driverless cars will be made by a few easily identifiable large corporations, who will make clear targets for the anger of mourning friends and relatives. If a few thousand people are rightly angry with drunk drivers, that's a hopeless cause. If the same number are angry at Toyota, say, it's a campaign. The likely result: driverless cars will be slower to catch on, and the safety gains will be harder to realize. I don't see a solution.

***

You may have already guessed that the title of this column is a tribute to Zack Weiner's fantastic Saturday Morning Breakfast Cereal. I'll try to put some Monday Morning Muesli on the table once a week ... or once a month ... or whenever.


February 18, 2015

Russia's Improbable Futures and the Lure of the Past

Writing about web page http://rbctv.rbc.ru/polls/list

On 27 January I was asked to join a panel on Russia's Future within the University of Warwick One World Week. (The other panel members were Richard Connolly, co-director of the University of Birmingham Centre for Russian, European, and Eurasian Studies, and the journalist Oliver Bullough.) I decided to talk about how Russians are looking to the past in order to understand their uncertain future. Here, roughly, is what I said:

Russia has many possible futures; all of them are improbable. The economy must do better, stay the same, or do worse. Relations with the West must improve, remain as they are, or deteriorate further. Adding them up, there are nine possible combinations. The probability of any particular combination is small, so each is improbable. But one of them must happen because, taken together, the sum of the probabilities is one. One of them must happen, but we have no idea which one.

Faced with an uncertain future, we often look to the past for guidance and reassurance. What was the outcome when we were previously in a situation that felt the same? At New Year, many Russians were looking to the past. I found this out when I stumbled on the website of RBC-TV, a Russian business television channel. Every day the RBC website polls its fans on a different multiple-choice question. On 30 December, the question of the day, with answers (and votes in parentheses), was:

What should Father Frost bring for Russia?

  • End of sanctions (6%)
  • End of the war in Ukraine (27%)
  • A stable ruble (7%)
  • Return of the Soviet Union (59%)

It's disconcerting to be reminded of the strength of nostalgia among Russians for the time when their country was a global superpower. The Soviet Union united all the Russias -- if anyone's not sure what that means, that's Great Russia, Little Russia and New Russia (Ukraine), and White Russia (Belarus) -- with the countries of the Baltic, Transcaucasia, and Central Asia. The Soviet Union stood for strong centralized rule, with a powerful secret police and thermonuclear weapons. The nostalgia is shared by President Putin, who said (on 25 April 2005): “The collapse of the USSR was the greatest geopolitical disaster of the [twentieth] century.”

Here's a question that RBC asked its supporters on 25 December:

Can direct controls and a price freeze save Russia’s economy?

  • Yes, the free market is not up to the job (55%)
  • No, that would cause insecurity and panic (40%)
  • No need – no crisis (5%)

Again, the strength of support for the backward-looking answer is disconcerting. I tried to think of the last time the Russian economy was in a squeeze like today's. The last time the oil price price came down like this was the mid-1980s when North Sea and Alaskan oil broke the power of the OPEC cartel for a few years (that's the analysis of Anatole Kaletsky). The disappearance of oil rents probably contributed to the collapse of the Soviet economy.

But a closer parallel to today is 1930, when two things happened at once. The global market for Soviet exports shrank in the Great Depression. And international lending dried up, meaning that the Soviet economy could not roll over its debts. The Soviet import capacity collapsed almost overnight. Stalin responded by forcing the pace of import substitution through rapid industrialization. He demanded "The five plan in four years!" The result was a crisis of excessive mobilization that claimed millions of lives in the famine of 1932 and 1933.

Prominent in calling for an economic breakthrough today is President Putin, who responded to Western sanctions on 18 September 2014: “In the next 18 to 24 months we need to make a real breakthrough in making the Russian real sector more competitive, something that in the past would have taken us years.” Government-friendly Russian economists are talking about the need to go from a market economy back to a mobilization economy. In case the foreigners aren't getting the message, first deputy prime minister Shuvalov told those assembled in Davos on 23 January: “We will survive any hardship in the country – eat less food, use less electricity.”

A third question that RBC asked its viewers was on 19 December:

What matters most for the country right now?

  • The foreign exchange rate (33%)
  • Who is a true patriot and who is fifth column (56%)
  • “Vyatskii kvas” (11%)

(The English equivalent of "Vyatskii kvas" would probably be Devon cider. For the reasons why it was being talked up as a solution to Russia's problems last December, click here.)

Here the strength of support for the backward looking answer is shocking. What is the "fifth column" and how does it resonate in Russian history? In 1937, Stalin saw Moscow surrounded and penetrated by enemies. This coincided with the siege of Madrid in Spain’s Civil War. In 1936 the nationalist General Mola was asked which of his four columns would take Madrid. He replied, famously: “My fifth column” (of undercover nationalist agents already in the city). In Madrid the Republicans responded by executing 4,000 nationalist sympathisers. In the Soviet Union Stalin, who was also watching, ordered the execution of 700,000 “enemies of the people.”

In recent times, the spectre of a "fifth column" was first reawakened by President Putin on 18 March 2014, when he remarked: "Western politicians are already threatening us with not just sanctions but also the prospect of increasingly serious problems on the domestic front. I would like to know what it is they have in mind exactly: action by a fifth column, this disparate bunch of ‘national traitors’, or are they hoping to put us in a worsening social and economic situation so as to provoke public discontent?"

Putin took up this theme again on 18 December 2014: "The line that separates opposition activists from the fifth column is hard to see from the outside. What’s the difference? Opposition activists may be very harsh in their criticism, but at the end of the day they are defending the interests of the motherland. And the fifth column is those who serve the interests of other countries, and who are only tools for others’ political goals."

Here you can see that Putin did affirm the possibility that opposition can be loyal. But is it possible for Russia to have a loyal opposition today? The only example of loyal opposition that Putin could bring himself to mention was the poet Lermontov -- who died in 1841.

These echoes of the Soviet past in Russian opinion today are disconcerting and even frightening. At the same time it is important to remember that, even while Russians look to the past, Russia today is absolutely not the Soviet Union. From today's vantage point it is nearly impossible to imagine how closed, stifling, claustrophobic, and isolated was everyday life even in late Soviet times. Russians in 2015 lead very different lives from Soviet citizens in 1985. They are richer, live longer, are able to visit, study, phone, and write abroad. Even today they are relatively free to search for and find information and discuss it among themselves. In all these ways, the transition from communism has not been a failure.

As Andrei Shleifer and Daniel Treisman (2014) wrote recently: "Putin’s authoritarian turn clearly makes Russia more dangerous. But it does not, thus far, make the country politically abnormal. In fact, on a plot of different states’ Polity [i.e. democracy] scores against their incomes, Russia still deviates only slightly from the overall pattern. For a country with Russia’s national income, the predicted Polity score [a measure of democracy] in 2013 was 76 on the 100-point scale. Russia’s actual score was 70, on a par with Sri Lanka and Venezuela."

To see Russia as just another middle income country helps us to identify Russia's underlying problem. In Russia, just like in Sri Lanka, Venezuela, and most countries outside “the West,” wealth and power are fused in a small, closed elite, and that is how it has always been. The fusion of wealth and power was and remains normal. Before the revolution Russia was governed by a landowning Tsar, aristocracy, and church. After the revolution Russia was governed by a communist elite that monopolized all productive property plus media, science, and education. Today Russia is governed by an ex-communist, ex-KGB elite that has once again gathered control of energy resources and the media. This fusion of wealth and power is neither new nor is it unusual among middle and low income countries.

In societies where wealth and power are fused, particular people are powerful because they control wealth and the same people are wealthy if and only if they are powerful. This is what gives politics in such societies its life-and-death immediacy. To lose power means to lose everything; when power change hands there is often violence. “All politics is real politics," write Douglas North, John Wallis, and Barry Weingast (2009); "people risk death when they make political mistakes.”

Several times in history, liberal reformers have tried to separate wealth and power in Russia and make space for public opinion. Here are some examples from the last 150 years:

  • In 1864 a reform brought elected local governments – but within an absolute monarchy.
  • Shaken by military defeats and popular insurrections, in 1906 the Russian monarchy introduced an elected parliament, although with few powers, and ndividual peasant landownership, although (as it turned out) with little time for implementation.
  • In 1992 and 1995 Russia saw voucher privatization and "loans-for-shares," creating a class of corporate shareholders – but the outcome was crony capitalism, not free enterprise.
  • In 2003, Mikhail Khodorkovskii tried to separate the governance of Yukos from the "power vertical," but he went to prison for it.

All these efforts have so far achieved only partial or temporary success. Russia has not yet found a solution to the problem of the fusion of wealth and power. Here, at last, is an aspect of Russia's future that is certain: If Russia is ever to find a solution to this problem, it will be there.

Note: I updated this column after publication to correct a date -- 2014, which appeared as 1914.

References

  • North, Douglas, John Wallis, and Barry Weingast. 2009. Violence and Social Orders A Conceptual Framework for Interpreting Recorded Human History. Cambridge: Cambridge University Press.
  • Shleifer, Andrei, and Daniel Triesman. 2014. "Normal Countries: The East 25 Years after Communism." Foreign Affairs, November-December.

January 19, 2015

Who Are the Neoliberals?

Writing about web page http://warwick.ac.uk/markharrison/comment/shockdoctrine.pdf

What do academic economists think about neoliberalism? I wanted to know because I was invited to take part in a private roundtable, held at Warwick on Wednesday afternoon, 14 January, 2015. The subject of the roundtable was Neoliberalism and Naomi Klein's (2007) book The Shock Doctrine. The roundtable was organized by the theatre company Dumbshow, which is currently producing a play based on some of the ideas and stories in The Shock Doctrine.

If you're not too sure what neoliberalism is, you will find below that you are not the only one. But this is how Klein (2007: 14) describes neoliberalism:

The ideology is a shape-shifter, forever changing its name and shifting identities. [Milton] Friedman called himself a 'liberal,' but his US followers, who associated liberals with high taxes and hippies, tended to identify as 'conservatives,' 'classical economists,' 'free marketers' and, later, as believers in 'Reaganomics' or 'laissez-faire.' In most of the world, their orthodoxy is known as 'neoliberalism', but it is often called 'free trade' or simply 'globalisation.'

What's the Warwick connection? In 2009 Klein's book was awarded the Warwick Prize for Writing. Some of those involved in Dumbshow are Warwick graduates. It turns out that The Shock Doctrine is recommended reading for a number of courses that are provided at Warwick, for example in the Departments of Politics and International Studies, Sociology, and English, although not, as far as I know, in Economics.

What's my connection? In 2009, not long after the Warwick Prize award, I wrote a comment on The Shock Doctrine's evidence base and scholarship (Harrison 2009). I think that's how my name came up.

Back to Wednesday's roundtable. Among several topics on the agenda were two in particular: "What different ideas does neoliberalism bring together?" and "If neoliberalism is so pervasive, why do so few people self-identify as neoliberal?" I had my own answers, but I wondered how typical I was among academic economists. To satisfy my curiosity, between 9 and 14 January I conducted a short survey of my colleagues -- the Warwick Economics faculty. I asked three questions:

  1. Does there exist a definite body of thought that you would willingly refer to as “neo-liberalism”?
  2. Would you willingly refer to your own way of thinking as “neo-liberalism”?
  3. Do you have the sense that a significant number of other people around the world would refer to your own way of thinking as “neo-liberalism”?

I told them: "I value instant responses more than considered ones. In other words, think fast, not slow." But I also allowed for more considered comments if my respondents wished. I received 16 replies, a response rate of around one quarter. (I did not take part myself, but I reveal my own answers below). Here are the results. Note that in presenting them I simplify each question compared with the wording I gave above.

Neoliberalism survey results

Here are my inferences:

  • Among these academic economists there is a range of views on whether or not neoliberalism exists.
  • Hardly any of my colleagues self-identify as neoliberal.
  • Motivations for rejecting the label vary; one possible factor is whether the respondent is a “believer” (answering Yes to Question 1) or a “sceptic” (answering No or Don’t Know to the same question).
  • A typical believer considers that “neoliberalism” can be a valid label, but rejects the label for themselves: They do not believe they are neoliberal.
  • A typical sceptic rejects the validity of the "neoliberalism" label in general, but expects some others to want to stick it on them anyway.

For what it's worth, I'm a sceptic. I would have voted No, No, and Yes. Why? To me the clue is in Klein's description of neoliberalism as a "shape-shifter": it's whatever you want it to be. Neoliberalism is a label that some people stick on other people when they don't like what they have to say. It's easier to stick a label on an argument and shout it down than to argue with it.

As I wrote earlier, I don't assume that my views are representative of my colleagues. On neoliberalism, it turns out, I am not alone, but neither am I typical (just three of the 16 voted exactly as I would have).

In case you wonder how a bunch of economists might line up on other issues, one respondent referred me to Klein and Stern (2006). (The first author is a completely different Klein, by the way -- Daniel, not Naomi.) Their paper reports a survey of members of the American Economic Association; this sounds as if it is about American economists but note that many European economists are also members (including me, for one). I quote from the abstract:

Most economists are supporters of safety regulations, gun control, redistribution, public schooling, and anti-discrimination laws. They are evenly mixed on personal choice issues, military action, and the minimum wage. Most economists oppose tighter immigration controls, government ownership of enterprise and tariffs. In voting, the Democratic-Republican ratio is 2.5:1.

Those who would like something more up-to-date could do worse than check out Daniel Klein's author page on RePEc.

References

Harrison, Mark. 2009. Credibility Crunch: A Comment on The Shock Doctrine. University of Warwick, working paper.

Klein, Daniel B.,and Charlotta Stern. 2006. Economists’ Policy Views and Voting. Public Choice 126: 331–342.

Klein, Naomi. 2007. The Shock Doctrine: The Rise of Disaster Capitalism. Metropolitan Books.


January 01, 2015

The Soviet Military–Industrial Complex: New Year Insights from Dexter and Rodionov

Writing about web page http://warwick.ac.uk/vpk/

Today sees a new version of the Dexter-Rodionov guide to The Factories, Research and Design Establishments of the Soviet Defence Industry. This is the sixteenth edition; the very first (in which I was co-author) appeared in January 1999. In that time the datset has grown from just over 2,000 entries to nearly 30,000, and the detail from around 100kb to more than 10Mb.

From the start this was a curiosity-driven project. The Soviet military-industrial complex was veiled in secrecy for decades. In 1992 the former Soviet archives were opened up for independent research. Google's Ngram viewer lets you see how the subject broke out into the light of day. The chart shows the relative frequency of the phrase "советский военно-промышленный комплекс" (Soviet military-industrial complex) in Russian-language publications from 1917 to 2010. A few of these would have occurred in items published in Russian outside the Soviet Union; I suspect that explains the first observations from the 1970s and early 1980s.

What were the factories that made Soviet weapons and military equipment? How many and how important were they? Where were they? When were they built? How specialized were they, and how self-sufficient? We just wanted to know.

My co-author of the time, Nikolai Simonov, was showing me some of the lists of secret ("numbered") defence factories in the 1920s and 1930s that he had found in the archives. I knew that Julian Cooper at Birmingham had his own files. We were soon joined by Keith Dexter, an authority on Soviet aviation. We put together what we had and the result was the first edition of the present guide. If you are at all interested in the history of exactly how and when the Soviet defence industry was made secret, I still recommend that you read Julian Cooper's introduction to this first edition.

Soon after that, Keith drew in Ivan Rodionov, another aviation expert, and so it became the Dexter-Rodionov guide.

What's new in version 16, apart from additional detail? The cover page carries the chart below, which shows the growing number of Soviet enterprises engaged in defence production from 1917 through 1991, distributed among the major production branches.

The number of Soviet defence plants, 1917-1991

Here are my takeaways (thanks to Dexter and Rodionov for drawing my attention to some of these):

  • The breakneck pace of Stalin's rearmament from the mid-1930s is clearly visible. It culminated in the war, and the first spike which is recorded in 1944).
  • Also visible is the more moderate but sustained growth of defence plants after the war, including the rapid surpassing of the wartime peak.
  • There is a second spike in the number of defence plants in 1964. This was the year in which Khrushchev was outmanoeuvred and replaced by Brezhnev. It suggests an economic issue in the power struggle: was Khrushchev trying to build up defence production at a pace that others considered to be infeasible?
  • The changing composition of the defence sector has two striking aspects. One is the vast growth of radioelectronic establishments. By the end, this sector alone accounted for half of the entire Soviet defence industry.
  • The other aspect is the tremendous stability of the traditional sectors: armament, armour, and shipbuilding. It would not come as any surprise to a student of the Soviet economy to learn that they could create new sectors (like the nuclear industry or radioelectronics) but even if they wanted they couldn't close the old ones down.

Finally, the chart shows us that by the end there were just over 5,000 plants engaged in defence production. How many is that? In 1987 (according to the Soviet statistical handbook of that year) there were more than half a million state-owned establishments of all kinds in the Soviet economy. So, we are looking at no more than one per cent of the total, and one per cent does not seem like a lot. The explanation is that most defence plants were relatively large. Their share in the whole economy, measured by capital assets or production, was many times greater than their share in the number of plants.

As for the share of defence production in the whole Soviet economy, we are still a long way from being able to pin that down. For any other country the most obvious way to do it would be to work from the expenditure side, by comparing the size of the Soviet military budget with the size of the economy, as opposed to working from the production side, which raises a lot of complicated issues about plant specialization and intermediate production. Alas, in the Soviet case it is no less of a problem to work from the expenditure side, because Soviet defence expenditures were also highly secret. Here I mean true military expenditures, not the officially published figures which were as phoney as a three-dollar bill. In fact, the real figures were so secret that by the end nobody knew what they were! And i mean nobody, literally; I wrote about it here.

The Soviet military-industrial complex continues to throw up many challenges for historical research. The Dexter-Rodionov guide is a terrific place to start looking for both questions and answers.


December 22, 2014

The Meaning of Christmas, 1914: When Peace Broke Out

Writing about web page http://www.wsj.com/articles/the-spirit-of-the-1914-christmas-truce-1419006906

At Christmas 1914 up to 100,000 troops on the Western front took part in unofficial truces. They left the opposing trenches and exchanged greetings, cigarettes, food, and drink. Most famously, some of them may have played football.

Christmas Truce 1914

The moment was captured by Bruce Bairnsfather (1917); thanks to Major and Mrs Holt, Bairnsfather's biographers, for permission to reproduce this image.

The Christmas truce of 1915 is often considered to be something rather unique. In fact, as the sociologist Tony Ashworth (1980) showed, it was a special case of a wider pattern. The Christmas truce was special because there was open fraternization. The wider phenomenon was simply a tendency for the soldiers on both sides, left to themselves, to bring down the level of conflict and hostility. They did this spontaneously, without calculation, using coded signals that did not need to be translated into words or confirmed by shaking hands. The signals were the dawn volley, aimed far above the enemy's heads, or the tea-time shell that always fell wide of the mark. These were signals of a lack of hostility that the receiving soldiers could easily come to recognize, predict, and reciprocate.

In this way the soldiers on each side would learn to collude with the enemy to avoid direct clashes and minimize the danger on both sides.

Ashworth called this pattern of behaviour "live-and-let-live." Live-and-let-live was observed in all periods of the war; the Christmas truce of 1914 was unusual only in that the men's desire to avoid outright hostilities was expressed openly. But it did not need to be expressed openly to persist. Live-and-let-live could develop without any explicit communication.

The crucial condition for live-and-let-live to develop was that the men were left alone for long enough to learn its language. But military commanders learned not to leave their men alone. They learned to intervene in the game of live-and-let-live and to disrupt it by teaching their men another language, the language of hostility. In between the great offensives, the soldiers learned the language of hostility in night raids. Night raiding involved crossing to the enemy trenches under cover of darkness to surprise, kill, destroy, steal, and kidnap. Night raids were dangerous, caused losses to both sides, stimulated the desire for revenge, and engendered persistent mutual hostility.

For all the same reasons, night raids were universally detested. The British and French officers approached this problem differently. The result was a kind of field experiment in different types of motivation. The French officers asked for volunteers and used positive incentives and rewards to encourage participation. In contrast, the British officers used direct orders that required all troops to take part in rotation.

The result, according to Ashworth, was that in the French army night raiding was generally regarded as exceptional service, demanding special recognition. In the British army, on the other hand, night raiding was seen as one of the regular duties of front line service. Because of this, the British were able to carry out the policy of night raiding at a higher level than the French in 1915 and subsequent years. In the British sector there was more hostility and live-and-let-live was cut off at the root. Armed with superior motivation, the British troops then showed greater commitment in both minor and major offensives.

In contrast, Ashworth argued, French morale declined to the point where, in 1917, faced with orders to go once more into battle, half the regiments in the French army experienced mutinies. Ashworth supported his argument with a striking fact: On the German side of the French sector in 1917 there was no awareness that the troops in the opposing trenches were refusing orders to attack. This can only mean that the German soldiers had become completely habituated to the French passivity and so saw no change in the behaviour of the French soldiers.

Could the Christmas truce have ended the war before it had barely begun? Was it a lost chance to avert the premature deaths of tens of millions of people? It is a tempting thought, but we are bound to conclude that there are several reasons why this could not have been the outcome.

Live-and-let-live was surely facilitated by trench warfare, when large numbers of soldiers faced each other for long periods across static lines, and could learn to reciprocate each others' behaviour. But static warfare was temporary. The war began with movement, and by the time it ended the ability of the troops to move had been restored by new weapons and technologies.

If the war had ended on the Western front in December 1914, it would have left Germany in possession of a large slide of eastern France. The French leaders would surely have resumed the war at some point for this reason.

If the war was not quickly restarted in the West, Germany's leaders had another war to fight in the East, a war on Russia that in their strategic vision was more vital to Germany's interests than the war on France. The Germans would surely have exploited a truce in the West to pursued the war in the East with redoubled energy.

In fact the political leaders and military commanders were able quickly to overcome the natural tendency to live and let live and so return to the war. They were learning rapidly how to mobilize their nations around national identity, how to use their economies to deploy and arm millions of young men for combat, and how to organize those young men into fighting organizations that would attack and defend in together in large-scale operations, regardless of victory and defeat.

The Christmas truce of 1914 is testimony to the intense desire of most young men not to die and not to kill. It is also evidence of the growing aversion to extreme violence that writers such as Steven Pinker (2011) have identified over thousands of years of human history. It reproaches the rulers of 1914 that condemned Europe to thirty years of mass warfare. But it did not and could not overcome the political calculations that led to war at that time.

In 2014 the Kremlin's political calculations have led to war in Ukraine. Russian leaders seem to have no qualms when they threaten to widen the use of force in Europe by means of rapid rearmament, large-scale miltary exercises, and continuous probing of NATO air and sea defences, and by talking up the use of nuclear weapons.

From one end of Europe to the other today there is ample evidence of the innate desire of ordinary people to live and let live. But live-and-let-live does not offer a solution to the problem of authoritarian rulers that make their war plans in secret, free of moral and political restraints.

References

  • Ashworth, Tony. 1980. Trench Warfare, 1914-1918: The Live and Let Live system. London: Macmillan.
  • Bairnsfather, Bruce. 1917. Fragments from France. New York and London: The Knickerbocker Press.
  • Pinker, Steven. 2011. The Better Angels of our Nature: The Decline of Violence in History and its Causes. London: Allen Lane.

Back to the USSR: National Security in the Soviet Economy

Writing about web page http://postnauka.ru/video/30259

In Moscow 18 months ago, I made some short videos for Postnauka, a Russian science and social-science video magazine. One of the videos I made was about the security dimension of the Soviet economy. Under the heading of "security" I had in mind both external (mainly military) security and internal political security. The Postnauka people published it on line in August this summer and I think they forgot to tell me so I noticed it only recently. Anyway here is the interview(in English, just over 16 minutes).

Here's a translation of the Russian-language introduction on the Postnauka web page:

What approaches have been used to study the history of the Soviet economy? Why is it difficult to investigate the various influences on the Soviet economy? University of Warwick Professor Mark Harrison explains how to uncover the hidden connections between the agencies of government in the "Serious Science" project established by the Postnauka team.

At first [after the opening of the archives] researchers looked into just two aspects. One was the actual scale of the Soviet military-industrial complex, which was not the whole economy but still a very important part of it and it affected the whole economy, for example, through mobilization planning. So understanding the scale of Soviet rearmament and the military-industrial complex was one aspect, and the other was the effort to better understand the general context of the "great breakthrough" of the first five year plan of the 1920s and the transformation of the Bolshevik party into Stalin's personal power.

I want to mention here another researcher, Vladimir Kontorovich. He drew attention to the need to listen to what the Bolsheviks actually said. In Western economics there is often neglect of what politicians say because we think of our own politicians and their broken promises; we know that politicians lie, so why read what they write as opposed to looking at the outcomes? Kontorovichhas argued that we ought to take seriously what Lenin and Stalin said about their economic goals. In my view if you consider carefully what they wrote about economics you can see some things that emerged from the Bolshevik strategy and the Soviet system of power.

It's difficult for historians to evaluate the role of the security services in economic policy and decision making partly because we have access to the security archives only for the 1930s. Now this situation is changing because a group of independent states that were Soviet republics have chosen a different political path and some of them have opened thei security archives. These are primarily the Baltic countries — Latvia, Lithuania, and Estonia; Ukraine (to some extent) and Georgia have also opened their archives, so now we can find out how the Soviet security service operated in the [Soviet] borderlands. Based on this, we can try to infer how they worked in the Soviet Union as a whole.

To give an example of the kind of research that is now possible, over the last couple of years Inga Zaksauskiene of the History Faculty of Vilnius University and I have been writing a paper entitled "Counter-Intelligence in a Command Economy." Our paper, bassed on research in the documents of the Lithuania KGB held on microfilm at the Hoover Archive, has just been acceped for publication by the Economic History Review. Here's the abstract:

We provide the first thick description of the counter-intelligence function in a command economy of the Soviet type. Based on documentation from Soviet Lithuania, the paper considers the KGB (secret police) as a market regulator, commissioned to prevent the disclosure of secret government business and forestall the disruption of government plans. Where market regulation in open societies is commonly intended to improve market transparency, competition, and fair treatment of consumers and employees, KGB regulation was designed to enforce secrecy, monopoly, and discrimination. One consequence of KGB regulation of the labour market may have been adverse selection for talent. We argue that the Soviet economy was designed to minimize the costs.

And here is a preprint.


Mark Harrison writes about economics, public policy, and international affairs. He is a Professor of Economics at the University of Warwick. He is also a research fellow of Warwick’s Centre on Competitive Advantage in the Global Economy, the Centre for Russian and East European Studies at the University of Birmingham, and the Hoover Institution on War, Revolution, and Peace at Stanford University.



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