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Did Capitalism Fail Ukraine?



July 23, 2010 – Comments (9)

The First Lady of Ukraine tells it straight.  She also praises Hayek and Mises.  Sadly, she understands how a market economy works more than many Americans. 

From the Google translation of her debate: 

(The translation leaves a couple of difficult phrases and unrecognizable words - for English speakers - but that last one is probably something like kleptocracy.) 

From the first years of independence and a huge range omnipresent resorted to misleading populist argument that Ukraine does not need "capitalism" and should build a "strong state" with adjustable transition to social market economy ".  This has created an alliance between communists, corrupt apparatchiks, directors of public enterprises, commodity traders and shadow "new Ukrainian" - everyone who was interested in creatin psevdorynkovyh relations, such a klaptykovoho capitalism.

And here is the English speaking short version from a Ukraine paper

David in Qatar

9 Comments – Post Your Own

#1) On July 24, 2010 at 12:28 AM, starbucks4ever (97.60) wrote:

This is hardly surprising considering that she is a former Dept of State employee (and now a Ukrainian-American expat). There is a good joke about it: "Does (ex-president) Yushchenko call his wife  (in Ukrainian) Kateryna or (in English) Catherine?" -"Kateryna when he asks her for borsch, and Catherine when he asks her for money."

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#2) On July 24, 2010 at 12:32 AM, whereaminow (21.10) wrote:


I expect better from you than ad hominem attacks.

David in Qatar

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#3) On July 24, 2010 at 12:48 AM, starbucks4ever (97.60) wrote:

No offence meant. My point is, fascination with Hayek and Mises still remains very much a Western phenomenon. A Ukraine-born Ukrainian is looking toward the Scandinavian variant of "capitalism" - for better or worse. The idea of pure capitalism has a very bad rap in this part of the world.

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#4) On July 24, 2010 at 1:17 AM, whereaminow (21.10) wrote:


In two seconds, I can someone that disagrees with you. Please no ad hominems against him like last time:

From here:

FM: What about the state of economics in the U. S. S. R. ?

Maltsev: Most economiststhere are trained in practical, not theoretical, economics. But Mises is far more respected in the Soviet Union than Paul Samuelson or J,K. Galbraith. The government's official propaganda treats libertarians as Enemy Number One because they openly condemn the socialist system. But the more the government criticizes them, the more they appear interesting. Moreover, ideas condemning the Soviet authorities carry more weight than the official pronouncements themselves. That is why Boris Yeltsin is so popular. It is not his charm and charisma. He was singled out as an enemy by the official propaganda and it backfired. 

David in Qatar 

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#5) On July 24, 2010 at 8:31 AM, fransgeraedts (99.92) wrote:

Dear David,


i agree with you and MM Yushenko. The Ukraine needs desperately real capitalism and a free market. And a state with a lot less corruption. 





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#6) On July 24, 2010 at 12:01 PM, starbucks4ever (97.60) wrote:

No ad hominems against Maltsev. I am just not impressed by what he is saying.

Meanwhile, I have a specific question for you. What is the Libertarian view of the Scandinavian model? I am not saying it's earthly paradise, but from everything I read, they are not worse off than Germany or Austria or even that Libertarian-leaning state of Taxes. What went right?

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#7) On July 24, 2010 at 10:26 PM, whereaminow (21.10) wrote:


What is the Libertarian view of the Scandinavian model?

They have a mixed economy like the U.S.  In some ways, they have more economic freedom than Americans. In others, they have less.  Just like the U.S., the country was built through economic liberalization.  The last 50 years or so, however, just like the U.S, welfarism has grown.

One thing they've done well is they don't police (read: terrorize) the world costing their taxpayers $500B per year. They also don't incarcerate 15% or so of their adult population and fight a multi-billion dollar war on drugs.

If you think about that, you are no longer impressed by their standard of living.  It should be much higher.

Finally, my travels in Europe indicate that anyone who says Europeans have a higher standard of living is kidding themselves or trying to kid others.  When you have to pay $12 for a gallon of gas, and Americans pay $3-$4, unless the European is raking in 4 times the American, well.... Yeah, right.  And it's that way with a lot of things: makeup for example is very expensive in Europe - almsot 10 times what it costs in the USA for lipstick in Turkey (hat tip to my fiancee for pointing that out). 

My guess is that economists that want to perpetuate the welfare state myth make a lot of assumptions about the value of benefits Eurpeans receive (which again, from my experience, aren't any better than Americans to begin with).  In other words, what they say and what I see are vastly diffferent pictures. 

See here for more.

David in Qatar

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#8) On July 25, 2010 at 5:28 AM, expatuacom (< 20) wrote:

psevdorynkovyh relations, such a klaptykovoho capitalism - market-like relations, such a fragmented capitalism

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#9) On July 25, 2010 at 10:42 PM, starbucks4ever (97.60) wrote:


Both points are valid. But then, consider this: Panama and Equador don't police the world either, don't incarcerate 15% of adult population, and fight a war on drugs very timidly, if at all. Maybe there is more than that in the Scandinavian success story? Yes, it's a relative success, as everything in this world. In some respects the grass is greener there, and in some respects it's not. It's all debatable. But it's clear they are in the same weight category with the US, and not with Brazil or India.

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