For the first decade of my career, all of my applied work related to the Soviet economy, and in particular the problems of transitional political economy. At the most basic level, my perspective was influenced greatly by Murray Rothbard's discussion in America's Great Depression about how to recover from the "bust" without generating a new cycle of "boom/bust". That Rothbardian recommendation was then augmented in my work with a discussion of institutional design and evolution in a post-communist world. Cannot have free pricing without private property rights, and cannot have private property rights without the broader institutional ecology (formal and informal) that supports the clarification and enforcement of those property rights, etc., etc. How exactly do we engage in institutional design in a world defined by its history and culture? How can we establish credible institutions in a world where the past 70 years was defined by dysfunction and distrust?
Over that first decade of my career (lets say 1990-2000), I wrote 3 books: The Political Economy of Soviet Socialism (1990); Why Perestroika Failed (1993); and Calculation and Coordination (2000). I also edited The Collapse of Development Planning (1994) and Socialism and the Market (2000). But as the 90s turned to the 2000s, covering post-Soviet affairs seemed more like journalism than academic research, so my attention drifted elsewhere --- to development economics, to disaster economics, and to crisis economics. But if you look beneath the specific country context, the questions are still the same --- how can you engage in institutional design in a world where the previous institutional environment while dysfunctional and distrusted neverheless has an impact. As James Buchanan always stressed to us in his classes --- we must begin with the here and now, and not an imaginary start state that would make our task simplier. How do you negotiate away from the here and now to establish a new institutional regime? How do you examine in (to borrow a title from my brilliant colleague Richard Wagner) "the romance and realism in the politics of economic reform"?
As I get ready to teach economic transitions to undergraduates starting next week, I am reminded of the PBS series 'The Commanding Heights'. There are tons of hidden treasures at the website that are not highlighted in the actually show. I was actually interviewed for over 5 hours during the filming of the show (at the Masonic Temple in Alexandria, VA), but I ended up on the editing room floor (I was given a free copy of the DVD set for my troubles). But I would like to point to an interview from the show with Anatoly Chubais. In the late 1980s, while I was teaching at Oakland University in Michigan and was using a version of e-mail for the first time, Chubais is actually someone I corresponded with about the Soviet economy -- its history and the treadmill of reforms. Chubais went on to hold a signficant positions of power during the transition period after the collapse of the Soviet system in the early 1990s. Anyway, during this interview he mentions Vitaly Naishul. Naishul was one of the Russian economists who I learned a great deal from, and his work on spontaneous privatization was very important.
Bottom line: I will encourage my students this summer to dig around The Commanding Heights website and read the interviews rather than just watch the main story-line.
What lessons have we learned in the 25+ years since the collapse of communism?