The Russian Model
Published on: July 20, 2007
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  • The really big gorilla sitting in the middle of this room is that as long as America and the West rationalize their own more repressive instincts in public policy, then Russia, China, and more illiberal countries will do the same.

    There are competing trends in the West and more liberalized notions will will out, of course, as they have since the beginning of civilization. But as long as more illiberal countries and groups – including terrorists -can look to more liberal countries and say, “We do what you do, just with more resolve because you are weak,” then the more repressive trends in Western and more liberal democracies give them license to march in more repressive, regressive directions.

    What liberal countries, like America, need to do is to shake off their insecurities about being too liberal and too weak and embrace the liberal values that make them so intelligent and strong and cease to give license to the repressive rationalizations of illiberal cultures and governments.

    As we do this, they will follow, over time, and, more importantly, their citizenry will be empowered to expect such changes from their governments and societies. But as long as we give cover to their repressive instincts, their citizens will be afraid to stand up to powerful, often brutal regimes without some hope from the West that a more liberal direction is the right direction to take.

    Many of those students and young people who lost their freedoms and their lives in China in 1989 and in Iran in 1999 and 2007 have got to be looking at the West and imagining what cowards we are that we cannot take seriously the more liberal values that offer hope to their causes.

    Repression breeds cowardice temporarily. And then liberalization brings better and clearer honesty and moral clarity, over time. That was the kind of honesty and moral clarity and confidence in liberal values that Ronald Reagan brought to these issues that helped to inspire the efforts of Eastern Europeans and Chinese in 1989. Today those trends are more decentralized. But it would help for Western and American leaders to speak kindly of genuinely liberal values every now and then.

    Ben Sutherland
    http://benfrankln.blogspot.com/

  • Anatoly Ostrovsky

    Mr. Fukuyama has to honestly ask himself the following question – does the West i.e. US want to see a strong, sovereign, nuclear-armed Russia with all of its international and economic implications or would it rather preside over a dozen tiny, impoverished, ethnic-based nation-states, each one contributing a dozen troops to the Iraqi experiment? You could call the latter a “Yugoslav model.” The answer seems obvious and has nothing to do with Russia’s liberalism, which by the way offers a much wider degree of personal and economic freedoms, if not protection, than American liberalism. On the contrary, the West wants Russia to be less liberal than it actually is. It wants a corrupt oil oligarchy which Mr. Khodorkovsky represented. It wants Shell and BP to bribe and plunder the land to the West’s advantage. It wants Russian gas subsidies to finance the Russophobic Orange regime and Ukraine’s entry into NATO. And it wants the likes of Mrs. Politkovskaya to ‘crusade’ for an Islamic Chechen Republic of Ichkeria. Maybe instead of watching Russia’s actual behavior, the West should watch its own and stop experimenting with the fates of other nations?

  • I would suggest, Dr. Fukuyama, that exactly the rationalization for Russia’s autocratic and illiberal tendencies, as of late, that Mr. Ostrovsy articulates beautifully, are what are at stake in what direction the West takes in its own liberal democratic future.

    He is right. Putin and most more illiberal states, right now, excuse their own illiberal actions for the same reasons that leaders in the West do the same.

    The question is, “Will be able to face that reality more honestly?”

    Ben Sutherland
    http://benfrankln.blogspot.com/

  • John

    Dear Fukujama,

    To put it simply, Russia wants to be itself. I don´t see the same dynamics in Russia as in China. China has the chance of being the leading country in the world. Russia doesn’t. Russia will inevitably be somewhere between China on the one side and Europe and the US on the other side, so who really cares about Russia (with a BNP pr. capita as that of The Netherlands).

    Sincerely,

    John

  • Comletely agree with A.
    Ostrovsky!

    But your editor Adam Garfinkle is an ass! A big ASS!

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  • Ben

    “China has the chance of being the leading country in the world”

    The idea that a totalitarian government that imprisons and kills students who protest its autocratic governance could be the leading country in the world is exactly what is wrong with the world and this whole godforesaken political era, right now.

    The idea is as repugnant as it is wrong as an empirical matter.

    Ben Sutherland
    http://benfrankln.blogspot.com/

  • Tim Lowry

    “…does the West i.e. US want to see a strong, sovereign, nuclear-armed Russia with all of its international and economic implications or would it rather preside over a dozen tiny, impoverished, ethnic-based nation-states, each one contributing a dozen troops to the Iraqi experiment?”

    So strength and sovereignty are mutually exclusive with freedom and democracy?
    Russia’s strength (and probably much of the lack of democracy) these days has more to do with high energy prices.

    “Putin and most more illiberal states, right now, excuse their own illiberal actions for the same reasons that leaders in the West do the same.”

    I agree. Just as there is some corruption and attempts of electoral fraud present in liberal democracies, there are illiberal tendencies. But in countries like Russia corruption, electoral fraud and illiberal tendencies are the norm. And that’s the difference.

  • Anatoly Ostrovsky

    Dear Tim Lowry

    “Russia’s strength (and probably much of the lack of democracy) these days has more to do with high energy prices.”

    Foreign currency accumulated from oil profits is held in a stability fund, which in turn is invested by the Central Bank in various foreign bonds. Consequently, energy profits have little affect on Russian economy since they end up as US or EU foreign debt.

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  • Tim Lowry

    I admit some of the energy profit ends up in the stability fund but a big part of it sure ends up in those Topol M missiles and similar prestige projects. We all know that Putin’s regime couldn’t afford all this if a barrel of oil cost $20.
    And maybe mr Ostrovsky could also give his view of Russia’s dramatic fall in all those democracy and freedom of press ratings during the Putin era. Is it because the ‘fascists’ have besieged Mother Russia and drastic times demand drastic measures?

  • Anatoly

    Dear Tim

    “but a big part of it sure ends up in those Topol M missiles and similar prestige projects.”

    This is true of Venezuela or Iran – countries that do not have native military technology or manufacturing. But Topol-M is 100% homegrown. It is paid for in rubles and ruble emission for dollar reserves is Yeltsin economics.

  • Consequently, energy profits have little affect on Russian economy since they end up as US or EU foreign debt.

    Really? I guess you haven’t heard of inflation in the Russian economy. It is a direct consequence of a resource based economy driving up the value of the ruble. Even at that, analysts feel the ruble is undervalued by about 40% at this time.

    Not all Russian energy profits are placed in the stabilization fund. That fund is a series of foreign investments, meant to stabilize (duh) the Russian economy in the case of a drop in oil and gas prices (which is inevitable).

    Recently the Stabilization Fund investments were split, creating a new fund that invests domestically. Typically this wouldn’t be recommended for such a fund, but the feeling is that Russian reserves are sufficiently large enough at this time and the country would benefit from reinvestment of some of the profits.

    Additional parts of the oil and gas profits do fund the Russian government and are used to help modernize the military, etc. Many parts of the Russian federal budget are being increased by 200% and 300% each year. It is actually anticipated that by 2009 or 2010 that the Russian government will be running at a slight deficit. It’s about time too. Russia’s infrastructure could use the money and resources. However, inflation is going to eat up a bigger and bigger chunk of that money and objectives will become increasingly difficult.

    And despite your objections to the contrary, this scenario is all due to the vast export of natural resources.

  • Anatoly

    Dear Shedd

    First off, inflation is a devaluation of the currency; not its rise.

    Secondly, current inflation levels are due to FDI and consumer credit on the demand side which the economy cannot absorb precisely because it requires massive investments (“national projects” if you may) into the supply side that are instead being used to finance American and European budget deficits. A drop in oil prices will only (duh) slow the growth rate of StabFund, while holding 45% percent of it in US T-Bills only exposes Russian savings to inflation risk in case US defaults (which is inevitable). In case I did not make myself clear in the previous post – Stabfund props up the US dollar and helps to finance F-22s, Iraq, and democracy, not the ruble, Topol-Ms, or the Eeevil Putin regime (emphasis added).
    In 2008 the Stab will be split in half but it is unclear exactly how it will be spent and I do not think there is a consensus on this issue yet. They say it will cover budget deficits but those are going to be ruble deficits, and as I said – nowadays rubles are not being printed with IMFs permission. In either case, petrodollars are not going to be spent on Russian-made weapons which will be mainly purchased by governments other than Russian.

  • blabbo

    There are three great experiments in authoritarian power, Japan, EU, and America. These are called managed democracies. Other forms of democracy, are piffled as populist, or chaotic. The elites in Washington-New York, Tokyo, and London-Paris-Brussels, are no different from the oleagenous slobs in Ryiad-Jedda, or Moscow-St. Petersburg. Except, that they run the world, while the latter, want to run it.

  • semiramis

    Read Amitai Etzioni, before you start your liberal-la-la engines. Most of the world is illiberal. People don’t or can’t tell the difference between “free societies” and authoritarian. But they do know the difference between a Buick and a Cadilac. Or is Fukayma one of those clowns who still clings to the notion that history ended due to the declaration of independence (by Russia from the USSR)? It ended due to Coca-Cola, not Madison and Comp. The american world view is warped, out of touch and out of stride with reality, producing nincompoops and oracles prouncing funnier prattle than Delphi or Delos. Only americans can go about thinking that foreign policy consists of values, not geostrategy. Yet, the very same ameriacns then bugger everyone about capital account liberalisation, structral adjustments, and access to hard, solid, miasmic hydrocarbons. Which one are you, Fuky?

  • Vitaly

    Russophobia.

    The reason Americans can get away with picking on Russia, and not China, is the same reason you can criticize your wife but not your neighbours wife. Criticizing China is cultural-imperialism, scolding Russia is like scolding a wayward concubine. Its politically correct, and acceptable. In a perfect world, it would be called Russophobia, and stand somewhere between racism and anti-semitism.

  • jose oscategui

    Fukuyamea, certainly does not understand that in this world of so rich and powerful multinational enterprises the only counterbalancing force is the national state.
    It is true that the West wished to see Russia not only submitted but also partitioned, and its riches at the disposal of western powers.

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  • Emin

    I’m Russian and I’m 26. I want to be rich and secure. I’m not care about all the rest countries in a world, democratice they are or not. I’m not care about US and EU, as they have short mind and do not understand what peaple in Russia thinking and what they wanting. US now have the same problem as USSR 30 years ago, they pay more attention what happing outside of the world than inside of the US.

    I’m as a lot of young Russians care only about me, my family and my country, that is it.

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  • Lukas Zagnojus

    I’d dear to state that Russia’s recent success has done more harm to the rampant ideology of liberal democracy than the collapse of USSR has
    helped to fostered its sanctity. The simulacrum of liberal democracy is being revealed not so by
    the shame of Iraq, doubtful success of Chinese pseudo-communism, new eastern European illiberal
    democracies as by the qualitatively “new” way of Putin’s Russia. It is certainly not authoritarianism or totalitarianism. It is something that can only be found in the Xenophon’s “Cyropedia” and certainly not Machiavellian “Prince” or Hobbs’s “Leviathan” . The very idea that something that foramlly
    looks as authoritarianism but is actually more democratic than liberal democracy is an
    embarrassing as it can be to West in general
    and something that has to be discredited by
    the strongholds of democracy (U.S. and E.U.)
    by any cost. It would declare the death of the so called values of democracy if international community and more to that the
    struggling third world itself would finally
    recognize that liberal democracy is not the
    cause but certainly the effect if not only the by-product of the state’s economic wealth .

  • Alexander

    Dear Anatoly Ostrovsky,

    It is naive to think that all profits from sales of energy resources end up in the foreign bonds. Russian, so called, economic success is determined by high oil and gas prices – nothing more (the percentage of export of grain and chemical components is quite mediocre to stimulate a significant booming of the economy). Russia doesn’t produce and doesn’t sell anything competitive in the world’s market (well, except for oil, gas, and weapons).

    American strategy of the world’s political and economic instability has been gladly supported by Putin and Co. Why? Because such plan maintains high prices on oil and gas. When, approximately a year and a half ago, oil prices in the world market dropped, Putin and Co. increased them in the domestic market of Russia to satisfy the difference in their incomes.

    Ordinary people have never profited from that scheme – the temporary well-being of the non-existent middle class (yes, there’s none, Mr. Fukuyama) was a product of the snowball effect of extensive spending by the rich in the local market. The majority of the population has lived, and still lives, in poverty.

    By the way, Anatoly, the current assets of the Stabfund are invested solely under second scheme (allocation to the Federal Treasury’s accounts with the Bank of Russia):
    http://www.minfin.ru/en/stabfund/about/

    To Mr. Fukuyama

    I wonder how you have come up with an idea of foreign investors rushing to Russia with their money? :))) As far as I know, they have been fleeing from it, terrified by the absense of law and abundance of corruption. The latest example is IKEA (look it up).

    And besides, the foreign companies in the Russian market produce their goods only for the Russian inner consumption, because it is non-profitable to export the product to other countries from Russia. It is simply too expensive to produce there for export!However, the local market can be filled with that stuff at an acceptable price! I can hardly call such tactics an investment.

    And how come will the foreigners invest in Russia, if the Russian government has no interest in investing it its own country?!!! Ex.: only $1 billion per year is spent on Russian agriculture, but $30 billion per year goes toward importing food from other countries.

    Also, Mr. Fukuyama – when and where did you hear about decent collection of taxes by the Russian government? Not long ago, Putin was complaining about the fiscal impotence of the State in collecting taxes, saying it affected the deficit of the budget. I would show you links to this information, but it the once I have I only in Russian. I think you won’t have much problem finding English equivalents…

    Therefore, I’d think twice before praising the Russian economic model. It is quite parasitic and pittiful.

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