For anyone studying the post-Communist economies, the writings of Anders Åslund are impossible to ignore—even when it might be best to do so.footnote1 To work on this part of the world is to encounter at every turn Åslund’s forceful, categorical, and often angry pronouncements, apparently rooted in an unshakeable conviction that he always knows both who to blame and what to do. Born in 1952, Åslund studied economics at Oxford and then joined the Swedish foreign service, spending three years in perestroika-era Moscow. Abandoning diplomacy for economics, in 1989 he published Gorbachev’s Struggle for Economic Reform, a detailed account of factional duelling over policy within the Politburo. From 1991 until 1994, Åslund was part of the team of Western economists, led by Jeffrey Sachs, that advised Russia’s government on macroeconomics. Funded by the Ford Foundation and the Swedish government, the Sachs team aggressively advocated shock therapy, backing free-market liberals in the Yeltsin administration such as Yegor Gaidar and the late Boris Fyodorov. When both left the government in early 1994, Sachs and Åslund resigned their posts.
Ever since, Åslund has produced a steady stream of books and articles aimed at academic and policy audiences, and maintained an unchallenged position as the most prominent commentator on the region’s economy in the Western media. From his perch at Washington’s influential Peterson Institute for International Economics, Åslund weighs in on virtually all major issues related to Russian policy, lately filling op-ed pages with damning indictments of the Putin regime’s actions in Georgia and dark predictions that an economic come-uppance awaits it. His scalding prose is not of the sort belied by a mild presence: in person, Åslund has an impressive glower, looking as if he ought to carry a fan to dispel the steam rising from his ears.
Detractors have suggested that Åslund has business interests in Russia, but even if true, there can be no question that ideology is his primary motivation. Despite his Swedish background, Åslund’s economics have always been Anglo-Saxon rather than Scandinavian, and he appears to feel little but scorn for his homeland’s social-democratic system. Unshakeable market liberalism has consistently characterized his approach to the post-Communist transformation. Åslund holds that the path from socialism to capitalism lies through three key policies. Liberalization should end restrictions on domestic and foreign trade and price-setting; stabilization should bring inflation under control through monetary restriction and balanced budgets; and privatization—for Åslund, the most significant policy of all—is meant not only to align business incentives with the public good but also to create a political bulwark against any regression to Communism. In carrying out these policies, he has argued, speed and an uncompromising stance are virtues. For in addition to hastening the arrival of capitalism and the many benefits it offers, these qualities also make the persistence of change credible and thereby prompt quicker adaptation both by firms and the population as a whole.
How Capitalism Was Built is, in Åslund’s words, ‘partly a sequel, partly an updating and revision’ of his 2002 work Building Capitalism. The shift in tense signals Åslund’s confidence that history has now rendered a final, and resoundingly positive, judgement on the programme of ‘reform’. Opening with a brief triumphalist survey of the downfall of Communism, the book then turns to making the case that shock therapy is preferable to any and all forms of gradualism. A third chapter seeks to downplay the colossal slump in output after 1989—claiming that ‘a substantial part of the big recorded decline, probably about half, was not real’, and should instead be put down to ‘mismeasurement, an expansion of the unregistered economy, and the elimination of value detraction’. Separate chapters then deal, respectively, with liberalization, stabilization and privatization, recording satisfaction with governments that have deregulated their economies, curbed inflation and established private property rights—though Åslund does display some concern about the security of the latter, and consequently about the ‘political legitimacy of privatization’.
The rest of the book records Åslund’s views on a variety of areas where the implementation and outcomes of market reforms have been criticized. With regard to social welfare, he blithely asserts that ‘there was certainly trauma, but the initial perception of social disaster was exaggerated’, and that ‘the course of reforms did not have much impact’ on levels of inequality. On law and order, he notes the explosion of crime, but describes it as ‘a natural consequence of the breaking down of the old order’, bemoaning the fact that lawyers both in the region and abroad have not sought to mould a post-Soviet legal system ‘with the single-mindedness of the imf in its pursuit of macroeconomic stability’. Further topics covered include the compatibility of democracy with reform (total, according to Åslund), the ‘oligarchs’ (whom he lionizes), and the role of the international community (whose stinginess he bemoans).