Kort Explores conundrums of the human condition

There were great expectations on both sides of the rusted wreckage of the once menacing iron curtain when the Soviet Union finally collapsed. Even with the flow of goods and services extracted from its former satellites cut off, Russia remained a large nation rich with natural resources, an educated population, an established industrial infrastructure, and millions of potential consumers hungry for modern consumer goods. Western businessmen practically drooled over the vast untapped opportunities for the creation of new markets and economic growth. The future looked bright.

After announcing their new found economic enlightenment and intention to establish a free market economy, the Russian leadership appeared at least at first to be fulfilling their promises. A number of inefficient state owned industries were privatized, military spending was reduced, and foreign investors were invited to join in the transformation of the Russian economy.

The Russian government has repeatedly announced and abandoned recovery plans, while its former adversaries in the cold war and the world banking system have poured in money to prop up the current regime. But none of these measures aimed at fixing Russia's problems from the top down have had a lasting effect because they're all focused on minor tinkering with the current power structure, not accomplishing the basic changes in Russian society that are needed.

The Russian economy has continued to deteriorate in spite of what appeared to be significant steps in the right direction. The stock market has lost 75% of its value since January and the ruble has been devalued again. The citizens have abandoned the mainstream economy, turning to the alternative barter economy for an estimated 70% of their transactions.

In spite of proven technical ability, the majority of Russian products remain of such inferior quality that they're unsuitable for the world market. Worst of all, the core of the Russian economy continues to produce products that are worth less than what went into them, making the nation progressively poorer the harder it works. As a measure of just how little confidence the Russians have in their own economy, $600 billion in Russian wealth has fled to foreign banks - money that could fund real economic recovery if Russians considered it safe to invest in their own country.

Still claiming to be the champion of free market reforms, President Yeltsin recently appointed Yuri Maslyukov, the former head of Soviet central planning, as first Deputy Premier in charge of economic policy. Perhaps the most disturbing recent development is that the Interior Ministry has mobilized its elite Derzhinski Division with instructions to prepare for joint operations with the Army to cope with civil disturbances. There are disquieting rumors of possible civil war.

Some of Russia's former satellites have already degenerated into well publicized self-destructive violence, their perverse obsessions with imagined ethnic differences overwhelming any trace of rationality. The world has sadly demonstrated its inability to deal with the terrible tragedies of even these small nations falling into chaos. The disaster that would result from a similar breakdown in a nation as large as Russia could well result in convulsions of historic proportions - even within the perspective of Russia's already long record of self-inflicted misery and privation. Russia's thousands of nuclear warheads make its slide into chaos a serious concern for the entire world.

How can such a potentially rich nation remain so mired in privation? Why haven't free market reforms worked in Russia the way they have elsewhere? Russian emigrants have become prosperous contributing citizens of the their adopted nations, so why can't they do the same in their own nation? The core of Russia's problems can be traced directly to a poisonous residue of its failed Communist system - the unwillingness of those in power to recognize the critical importance of private property and the right to bear arms in a free society.

For 80 years the Soviets worked to tear the soul out of the Russian people and suppress any thought among the masses that they could ever be anything more than mindless faceless servants of the Soviet state. The Gulag consumed those unfortunates who were unable to abandon their individuality and dreams for a better future. While it proved incapable of building a viable socioeconomic system, the grim violence of the Soviet secret police was very effective at eliminating from the survivors of the terror those attitudes and aspirations that are most important in building a modern free market economy.

The most difficult hurdle for Russia appears to be accepting that real wealth and prosperity flows up from the individual not down from an all powerful government. The majority of the Russian people continue to look to their government for solutions, while the government continues to believe that only it can bring about change.

The old guard power structure has been forced to step back from its former high visibility, but it has been predictably reluctant to relinquish meaningful control over the economy. Desperate to protect its remaining powers and prerogatives, the old guard has managed to subvert and distort every halting step toward economic salvation, turning what should have been solutions into even greater disasters. For example, while it's true that some huge state monopolies have been privatized, it's less well publicized that they were sold off intact, creating private monopolies whose continued ability to control their markets eliminates any incentive to improve their products and operations.

After officially welcoming foreign investments and business, the government has imposed tax and legislative policies that are overtly hostile to private enterprise. Many of those who were enticed by the initial promises of a truly free market have found their efforts frustrated by arbitrary interference by government officials. Many of those who managed to be successful in spite of all the obstacles found their businesses effectively stolen from them, with the fruits of their labors ending up in the hands of those favored by corrupt politicians or organized crime bosses.

The collapse of the Soviet state should have resulted in recognition of the rights and powers of the individual, but the old guard are terrified of what the people might do with real power. While the right to bear arms has been officially acknowledged, in reality it remains physically impossible for the average Russian citizen to legally possess a personal firearm. By denying the citizens the right to bear arms, the government also denies them the right and ability to defend their lives and property.

Of course, the prohibition against private citizens bearing arms has had no effect on the criminal element. Russia has today become a real world example of the folk wisdom that when guns are outlawed, only the outlaws will have guns. The reluctance to recognize the rights of individuals even where the official power structure has been forced to retreat has resulted in a power vacuum that has been filled by organized crime. The Russian citizenry, disarmed to keep them from resisting the institutionalized criminality of the Communist police state, now find themselves unable to resist the "privatized" organized crime that has taken its place. It's estimated that organized crime now controls over 40% of the economy.

The primary flaw shared by the Russian recovery plans as well as the aid and advice flowing in from the West is that all of it focuses on big government and big business solutions. What is overlooked in these efforts is the inconvenient fact that the primary source of employment and economic activity in the West is now and has always been small business, not big business or big government.

In a misguided effort to reduce unemployment, the Russian government continues to operate massive money losing industries which consume nearly half of its budget. However, unlike the Russian focus on big solutions, over 80% of Americans work for small businesses with less than 100 employees. General Motors may dominate the American headlines, but it's all the small privately owned stores and factories that are the source of the overwhelming majority of American paychecks. Small business is the real foundation of America's prosperity, and has always been the real source of the new wealth that powers our economic system.

Small business is critically dependent on respect for the private ownership of property. Only when individuals have a reasonable expectation of retaining the fruits of their labors are they willing to take the risk of starting new businesses and hiring employees. Small business can't survive when its property and proceeds are stolen with impunity - regardless of whether the thieves work for the government or the Mafia.

Small business can only thrive where property rights are respected. Respecting the rights of citizens to bear arms and protect their own lives and property is the single most effective way to establish respect for private property. It is also the single most effective means of establishing those other hallmarks of a civilized society that are so lacking in modern Russia - respect for the human and civil rights of the citizens.

The key to solving Russia's problems is not to pour more money into efforts to preserve the top down power structure of the past. The only real solution to Russia's economic and social crisis is both the cheapest and most difficult alternative available - establishing respect for the rights of all citizens to own property and bear arms. The best way to continue Russia's slide into chaos and misery is the continued suppression of these most critical rights.