American Consequences - December 2020

that it could toss some dirt on the grave by creating stock markets. That way, employees – now brand-new shareholders – could trade their shares (which were called “privatization vouchers”). Boris and Natasha would buy and sell shares, make lots of money, and fall in love with capitalism – and Marx could safely rot away in the dustbin of history. The first step, though, was to convince senior management – who were the biggest shareholders of recently privatized firms – to list their company’s shares on the stock exchange. That’s where I came into the picture – as capitalism’s evangelist pitching the general directors of dozens of Kyrgyz companies on the virtues of a stock market listing. I’d sometimes wax poetic about the virtues of the stock market – It’s a rally! Buy the dips! It’s a long-term buy! это oчень xорошо ! (“This is great!”) – under the stern gaze of a portrait of Vladimir Lenin hanging on the wall in the executive office. Some of the company heads had caught on fast to the whole capitalism thing... and had already given it a big black eye. They’d made a straightforward proposal to their employees (who were of course also minority shareholders of the newly privatized firms): “Give me your shares or lose your job.” Those CEOs were the ones driving white Mercedes, and the last thing on their mind was listing the shares of their companies.

REAL SOCIALISM IS UGLY Before we get to the details... you should know I understand how disastrous Cold War-style socialism can be... I had a front-row seat to the economic absurdities it creates. In the mid-1990s, I lived in the former Soviet republic Kyrgyzstan as part of a U.S. government-funded project to build a stock market. From there, I had a front-row seat to the economic perversion and devastation that seven decades of Soviet-style socialism caused. The idea behind my Kyrgyzstan adventure was to give people there a forum to trade shares. To even think about a stock market – while the entire post-Soviet economy was suffering a devastating economic collapse (Kyrgyzstan’s GDP shrunk by half from 1990 to 1995) – might sound like using a Band- Aid for a gunshot wound... but it made some sense at the time. After the Soviet Union fell apart in the early 1990s, the 15 Soviet republics became independent. With the end of socialism, thousands of previously government-owned companies – there was no other type of enterprise – were privatized. In other words, control of the means of production was returned to the people. This meant that workers at these companies – from brick-making plants (more on them in a moment) to bakeries to jet-engine producers – were suddenly shareholders of the companies they worked for. Uncle Sam, terrified that socialism in the USSR was napping but not dead in the coffin, figured

American Consequences


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