Economic History in a Russian Mirror: The Gaidar Variations

La philosophie triomphe aisément des maux passés et des maux à venir. Mais les maux présents triomphent d’elle.

—La Rochefoucauld

Does History Matter, and How?

A parlor game played by economic historians, in which economists occasionally participate, is the “Does History Matter?” game. Somewhat like charades, it consists of describing an event or process as a riddle to which the answer is a principle of economic analysis; “history matters” when the event confirms the principle that explains it. An alternative form of the game poses a specific event—preferably random and intrinsically unimportant—and asks whether it changed the course of history by sending it down a path otherwise not traveled. History matters if that path is irreversible.¹ In contrast to the first game, which is analogous to testing theories by comparing simulated theoretical outcomes with actualized ones, many economists find it difficult to accept the idea that history in the second sense matters to the ultimate outcome, because if the anticipated benefit of returning to the fork in the path is large enough, someone will find a profitable way to do it; in that sense, if history matters enough, in the end it does not matter at all.² With notable exceptions, neither game engages with what most historians take to be historical explanation, which is showing how something happened in a particular way at a particular time and place as a consequence of a congeries of antecedent time- and place-specific events and conditions. Economics provides some of the machinery for such an account, but its level of abstraction is usually too high to be satisfactory.³

A more common response to the “does history matter?” question is that the historical record supplies an inventory of lessons that can inform us about what has worked and what has failed; what kind of social values and institutions have favored economic growth and what kind have impeded it; which policies to avoid and which policies might promote economic and social progress. For more than a century and a half, these lessons have largely been drawn from the economic history of northwest Europe and the United States, on the plausible grounds that they were the first societies successfully to achieve modern economic growth.⁴ Such lessons commonly assume the form of morality tales expounding the superiority of Western institutions in regard to economic performance. Perhaps the most celebrated example is Max Weber’s claim that Protestantism was exceptionally, perhaps uniquely, favorable to capitalistic development. Weber’s opinion that (from an economic perspective) Western bourgeois individualism was superior to the culture of other literate civilizations has been affirmed in different ways by David Landes, Deirdre McCloskey, Gregory Clark, and Douglass North.⁵ In a similar vein, Joel Mokyr attributes the great economic divergence of the 18th and 19th centuries to the European Enlightenment, which he takes as a particular manifestation of a culture predisposed to scientific investigation and freedom of thought.⁶ In one form or another, then, such accounts associate the spread of modern economic growth with diffusion of Western cultural norms, of which the alleged sanctity of contract is not least. The lesson is “be like us” or “follow these precepts,” and you will get rich. It is very much like the message of the self-help books that, together with religious tracts, have long been a mainstay of U.S. publishing.

The difficulty with such morality tales is that they are too general to be of much help in informing actual policy, since they generally amount to little more than injunctions to do good and avoid evil—sound advice, to be sure, but difficult to make operational in practical contexts.⁷ That security of property, reasonably free access to remunerative occupations and the ability to exit non-remunerative ones, rule of law administered by an independent judiciary limiting opportunistic predation by public and private agents, and social mores inhibiting such opportunism where the law cannot reach are undoubtedly good for economic growth, but it is hard to specify specific policies certain to produce them. Recent political and...