New School Politics

Milton Friedman, Nobel laureate in economics has said that, “History suggests only that capitalism is a necessary condition for political freedom.” However, individual and political freedoms are on the decline in Russia, even as Russia has been reaping the rewards of a capitalist market economy under the leadership of President Putin. This trend toward less political freedom in Russia, if left unchecked, may result in a return to the authoritarian rule Russia endured in the Soviet era. So, what can the United States and the international community do to stop this?

Before Putin became President, Russia had been subjected to drastic economic and political reforms under President Yeltsin. This shock therapy resulted in the Russian government defaulting on loans worth billions of dollars, the value of the ruble dropping precipitously, and unemployment becoming rampant. As a result of this turmoil, many Russians desired a stronger central government that could offer them stability. Stability was the stated goal of Yeltsin’s successor, Vladimir Putin, and he achieved this through the consolidation of state power on all levels. While the internal security and stability have markedly increased during Putin’s reign, personal freedoms, including both political and economic freedom, have been declining. Economic freedom is now dismal; Russia ranks 120th out of 157 in the Index of Economic Freedom, a product of the Heritage Foundation and The Wall Street Journal.

Prominent businessmen have been put in prison, journalists bullied and sometimes killed, and privately owned companies, including media outlets and energy conglomerates, are being gobbled up by the State. This lack of political freedom is directly related to Russia’s lack of economic freedom. Indeed, Milton Friedman has said, “Restrictions on economic freedom inevitably affect freedom in general, even such areas as freedom of speech and press.”

Fortunately, for Putin, there have been dramatic increases in oil and natural gas prices. Russia has the most proven reserves of natural gas in the world, and this has been the main driving force of Russia’s economy. The wealth pouring into Russia’s coffers through its energy industries have made it possible for Putin to distract the Russian populace from the lack of personal freedoms. As such, political and economic freedoms have been on the decline, despite economic prosperity.

Establishing economic freedom in Russia is the key to increasing political freedom. Rather than punitive economic or diplomatic sanctions, the United States and the international community should attempt to use the forces of the market to compel economic, and thus political freedoms on Russia. Reduced energy prices would make the economic shortcomings of Russia more apparent to its own people. There are two ways to reduce oil and gas prices in a market economy: increase energy supplies globally, or reduce gas and oil demand through development of alternate energy sources or through conservation. Utilizing these market forces would be a long-term endeavor, but in a climate of lower energy prices, Russia’s economic prosperity would then more accurately reflect its lack of economic freedom. There would then be a chance for internal pressures to force Russia to make true economic reforms, and, hopefully, to create the right environment for political freedoms to take hold and flourish.

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China, by focusing its economy on manufacturing, has been able to make itself an industrial powerhouse across the world. With its rapid industrial progression, there has been at times, a de-emphasis on the quality of its goods being produced. Pet food was found to be containing toxic material causing kidney failure, and just today the FDA curbed the sale of five seafoods farmed in China, also found to contain poison and cancer causing materials. This can have ill-effects on the United States, for the obvious reason that these foods are killing us, and the not so obvious reason that these imported foods make up a large part of our food market in the United States. These seafoods, for instance, account for 22 percent of our total imports of seafood from abroad, according to the New York Times. Food is not the only sector of concern: a Chinese made automobile recently receive a 1-star rating in European crash tests. The car basically collapsed in on itself, causing anyone inside to die. In June 2007, 450,000 steel-belted radial tires were realized to be defective because they lacked a key safety feature, likely causing many fatal accidents. Toy trains and toothpaste have also been realized to be poisonous.

But there are also consequences for China in all of this. With China rapidly progressing its reputation from a cheap supplier of goods to a deadly supplier of goods, less countries will accept China’s reasonably priced goods. China’s economy depends on its exporters more than its importers depend on China. If scandals such as this continue to develop, the Chinese government will ultimately be forced to intervene, establishing new quality controls. The United States depends on Chinese goods as a matter of economic convenience, however China depends on the United States and the rest of the industrialized world as a matter of economic survival. However, the United States and others should not patiently wait for this change to come about, but should instead put economic pressure on Chinese manufacturers and the Chinese government to quickly initiate reforms and minimum standards. This economic pressure can be accomplished by importing more goods from other countries, thereby forcing China to clean up its act before Chinese imports are allowed to go back to pre-scandal levels. In the meantime, who can tell me where I can find some rock-bottom prices?

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