Markets First, Elections Later

Why democratization fails from Russia to Iraq

Andranik Migranian

By MARTIN SIEFF

It was November 1989, and I was in Moscow accompanying a delegation of senior Washington Times editors. They were eager to gloat over the coming collapse of communism with their own eyes.

We were in the shabby, very much the worse for wear, unpretentious little office of the chief ideologist of the Institute for the Study of Systems of Socialism. His name was Andranik Migranian. Today he is a wealthy and successful man, running a think tank in New York, and has been consulted by Russian leaders for more than 20 years.

For all his stature in Russia and his practical professional success, Migranian remains almost unknown to the American media. His influence in the halls of Congress, the White House, and the State Department is zero. In those days he was an enthusiastic champion of democracy for Russia. But he believed that it would take at least 20 years, maybe more. A free market would have to be created first. Migranian argued passionately that the worst way to create democracy was to create it instantly from a standing start.

That’s the same mistake the United States has made in Iraq and Afghanistan. It’s the mistake we—following Thomas Friedman—are making in assuming that the Arab Spring will create any stable, Western-style democracies in the Middle East. It’s the mistake Friedman and the presidents naïve enough to believe him have made in sacrificing American jobs to build the Chinese economy. They all believe in Instant Democracy. Just add hot water, like instant coffee, and it will come.

Back in 1989, Migranian already knew that idea was rubbish. He had studied world history. He knew all about the birth of successful democracies and free markets across Europe, North America, and Asia going back hundreds of years. And his conclusions were simple:

First, you cannot create a successful democracy if a successful free market and a large middle class enjoying basic property rights and the rule of law do not already exist.

Second, the system of checks and balances in any democratic society allows existing interest groups to prevent a free market from emerging. So there is no free market to generate the overall rising levels of prosperity and optimism across society that any democracy needs to survive and flourish.

Third, it takes a tough, centralized authoritarian government or a strong, self-confident oligarchy to create the conditions for a free market to emerge. Only a strong central government can impose a free market and prevent the less efficient elements of society from blocking it.

However, once the free market is created and starts to function, a new, wider, stronger middle class will emerge. Over a period of one to three generations—from about 20 to 100 years—democracy will emerge. It won’t be easy, there may be years of frustration, of struggle and learning. But when democracy does come, as it has to nations from Poland to South Korea, it’s the real thing. It works.

Think about it: if Migranian is right, then Thomas Friedman, Charles Krauthammer, Peter Beinart, and the entire, endlessly chattering tribes of neoconservatives and neoliberals are all wrong. You cannot expect democracies to emerge fully formed whenever a repressive or even mildly authoritarian but just plain corrupt government falls to revolution and popular protests.

Back in Moscow in 1989, I already recognized the original, radical nature of what Migranian was saying. I often thought of his ideas during the next 20 years when I traveled widely across Europe, the Middle East, and Asia for the Washington Times and United Press International. I personally witnessed where new democratic societies were emerging and where they obviously were not.

I also recognized that Migranian’s model perfectly explained the conditions under which Britain emerged to global greatness as the first major industrialized nation in the 18th century. It explained the pattern of how successful democracies emerged in most other major countries as well.

Migranian’s model explained why democracy collapsed in Weimar Germany in the 1930s. For 15 years after World War I, the long-suffering German people were hit by one national calamity after another. An idealistic, weak, and ineffective democracy discredited the whole idea of democracy among the German people. Instead, the failed Weimar experiment prepared the way for them to accept the monstrous dictatorship of Adolf Hitler. Their parents would never have swallowed Hitler’s evil lies in the stable, tolerant, and largely democratic imperial Germany before 1914.

In the years that followed, Migranian incurred the rage of Russian liberal democrats. They accused him of being a secret fascist. But the course of Russian history in the 1990s and early 2000s proved him to be a prophet.

Under the hapless guidance of U.S. President Bill Clinton, Vice President Al Gore, and Secretary of the Treasury Lawrence Summers, Russia embarked on an enormous privatization program. It sounded great.

But in reality this meant that control of the vast resources of the Russian Federation—even without the other 14 former Soviet republics, still the largest country in the world—fell into the hands of enterprising buccaneers. They became known in the West as Russia’s new oligarchs.

Over the past decade some of those oligarchs have fallen. Quite a few have fled Russia. They have been replaced by new oligarchs known as the siloviki. These new guys have close ties to Vladimir Putin.

But Russia never developed a truly free market. And it didn’t develop a successful democracy either. Migranian expected this. Back in November 1989, he prophesied to me and to the visiting Washington Times editors that Russian democracy under Boris Yeltsin would fail. Yeltsin, he said, was going to create a weak liberal-democratic government. It would bungle the creation of a real free market. The new political system would be unsuccessful. It would throw Russia’s 150 million people into dire poverty. Its failure would discredit true democracy. Everything worked out exactly the way he said it would.