Over the past several months I’ve written a series of articles about the state of Russia’s economy. They did not leave me optimistic. Indeed, looking closely at the worsening financial health of Russia’s many state-owned firms has convinced me for the first time that some major changes to the way that the country is run are essentially inevitable. There’s just no other way to balance the books. Given Putin and co’s clearly demonstrated unwillingness to carry a large sovereign debt burden, minus an (extremely unlikely) run-up in the price of oil, the only other option on the table is cost cutting.
Whether these pending changes are for good or ill is a far different question, and it remains to be seen whether they will be more liberal or statist in nature. I’m hopeful that economic logic will prevail and that the escalating cost of the Kremlin’s recent policy choices (along with the elite’s desire to continue enjoying the various fruits of the West) will push Putin and co back towards pragmatism. But the political logic at play suggests a different dynamic, one that will push Russia ever further away from the rest of the world economy and closer to autarchy and decline.
But while I increasingly despair for Russia’s future and am increasingly pessimistic about its economic trajectory, I remain highly sceptical of the overarching notion that Russia is “returning to the past". There is no shortage of analysts who argue, in essence, that the Soviet Union was really bad, and today’s Russia is bad and getting worse, so today’s Russia is becoming more like the Soviet Union. QED. This dramatically oversimplifies the current situation and looks past a host of crucial, and I would argue fundamental, differences between what the Russian Federation is in 2016 and what the Soviet Union was in the 1970s and 80s. In essence “Soviet” is a word that has a real meaning, and it is very different from “undesirable".
First, a stipulation. Saying that the Soviet Union is not automatically comparable to contemporary Russia does not mean that there are no hangovers or that similarities are entirely absent. Does the Soviet legacy impact Russia’s politics, society, and economy? Yes, of course it does. Everywhere and at all times the past exerts influence on the present, and only the most dimwitted would attempt to argue otherwise. Russia’s 70-odd year flirtation with communism left deep social, political, and emotional scars, many of which will never heal.
But in several specific (and, I would argue, extremely important) instances, a focus on the Soviet past can obscure far more than it reveals. Let’s start with one of my favorite hobby horses, demography.
The demographic malaise of the Brezhnev years, a gradual decline in the fertility rate coupled with a large-scale deterioration of public health, was intimately linked with the stagnation in the Soviet economy. They appeared to be in a cycle of mutually reinforcing escalation. The worse public health got, the worse the economy performed (a not insignificant chunk of the Soviet workforce had a serious alcohol problem, with a predictably deleterious impact on its productivity). At the same time, the worse the economy performed the worst public health got (as wages stagnated and people hit the bottle to escape their troubles with ever greater frequency).
Writing from the period, such as the incredibly bleak Moscow-Petushki (which describes an atmosphere of profound physical, intellectual, and moral rot) and the observations of knowledgeable specialists were exactly in line with the relevant statistical evidence. Both showed a clear worsening of a broad variety of public health indicators. Even more troublingly, at the time this was a process essentially without historical precedent. Until some recent deterioration in the health status of lower and lower-middle class whites in the United States, the story throughout the developed and developing world was one of slow, but steady, improvement in life expectancy.
At a very fundamental level, then, there was not much of a “puzzle” to resolve during the zastoi: anecdotal evidence suggested that Soviet society was going off of the rails, and the demographic data (at least before the authorities classified it) entirely supported this theory.
Many of the people who are currently at the top of the Russian studies community received their academic training during the period of stagnation and it (quite understandably!) made a deep imprint on their understanding of Russia and Russians. The experience of the immediate post-Soviet period, when, alongside the collapse of the planned economy, public health plummeted to frightening new depths seemed to confirm the intrinsic linkage between economic performance and demography. In other words, if Russia’s economy started to suffer, the Russian population wouldn’t be very far behind. And given the rickety nature of public institutions and the poor health habits of Russians themselves, Russia seemed to be even more susceptible to sudden downturns in health than most other countries.
This narrative not only has historical experience backing it up, it has an intuitive plausibility and common-sense appeal to it. It’s hard to think of a reason why public health wouldn’t decline if the economy suddenly started to tank.
But life is complicated and it doesn’t always comport with our simplistic notions of “common sense.” As Russia’s economy has declined over the past two years, improvements to public health have not been reversed. Indeed, they have actually accelerated. Through the first six months of 2016 the crude death rate was down by 3.6%. If sustained for the entire year, that would place Russia’s death rate at is lowest level in a quarter century. But, as suggested by the use of the word “crude”, that death rate significantly understates the improvements to Russians’ health because it does not account for changes in population composition. In plain English, it doesn’t account for the fact that Russia’s population is significantly older now than it was in the early 1990s. Average life expectancy is less distorted by changes in population age, and it set a new record in 2015 of 71.4 years. When the 2016 figures are finally collected, it will have set another new record.
Difference doesn’t equal superiority. The fact that Russia’s demographic performance has improved while its economy has deteriorated doesn’t necessarily mean that the Kremlin is “better” this time around. But the difference in performance is important entirely on its own terms: if your template for understanding today’s Russia is the 1970s Soviet Union, then you need to get a new template, because we have hard evidence that today’s Russia is meaningfully different from the 1970’s Soviet Union.
While I can’t claim to have a perfect understanding of the above dynamics, to me Russia’s continued improvements in public health seem, to me, a testament to the far greater flexibility and adaptability of its (highly imperfect!) market institutions in comparison to the overbearing and stupendously inefficient methods of the Soviet Union. The Russian state still exercises far too great a role in economic life for my taste, but its touch is light in comparison with the virtually limitless penetration of economic life by the Soviet planning agencies. The Russian government, at least in terms of public health, also appears rather more enlightened than its Soviet counterpart, and has finally put into place a number of long-overdue measures to limit consumption of tobacco and alcohol.
Comparisons to the Soviet past can sometimes be helpful, but analysts should take care that these narratives are actually corroborated by the data. Otherwise they’ll obscure far more than they illuminate.
Mark Adomanis is a Wharton MBA student by day, Russian analyst by night. Follow him on @MarkAdomanis