Demolishing and Rebuilding

Revolutions destroy; the rebuilding phase comes after

The main idea in my previous post was that revolutions don’t create; they destroy. Rebuilding (if any) comes later. Historical analysis suggests that the destructive phase can be quite variable, with the modal length of around ten years. Sometimes it is shorter, but more often it is longer and the ensuing civil wars can last for decades. And sometimes, especially in early civilizations, the rebuilding phase never comes (think the Indus Civilization, or Cahokia).

That we are in a destructive phase seems to be obvious both to Trump supporters and detractors. Thus, David Sacks, speaking on the All-In-Podcast, argued that the previous US trade policy with respect to China was a “catastrophic mistake” and that Trump’s tariffs are a necessary shock. Most Trump followers are willing to accept short-term pain in return for long-term gain.

Trump detractors, on the other hand, focus on the destructive aspects, which, in their opinion, will permanently damage America. An example is a recent post by Noah Smith, MAGA Doesn’t Build. In the post he brings up two historical precedents: Nazi Germany and Putin’s Russia. Rather bizarrely, he argues that the first “actually tried to build a new fascist civilization” (in Note 1), while the second “did little to build up the Russian nation.” I’ll leave the German example to those who know that historical period better, but Noah is utterly wrong about modern Russia. As an aside, I enjoy reading his economic posts, but his geopolitical thinking follows so closely on the New York Times and the rest of the mainstream media (including the trope of Russia as “a giant gas station”) that one might instead get it directly from the source.

Because Russia is a most recent example of a country that went through a revolution and the ensuing rebuilding phase, it’s worth taking a quick look at its “destructive creation” dynamics during this period.

The destructive phase gathered steam gradually during Mikhail Gorbachev’s reign. The Soviet Empire began dissolving in 1989 and by early 1991 the Warsaw Pact ceased to exist. Later that year Gorbachev was briefly overthrown by a coup, then returned to office, but with greatly diminished power. The USSR itself was dissolved in December 1991. Under the reign of Boris Yeltsin Russia continued on a disintegrative trajectory: the storming of the parliament in 1993; the disastrous First Chechen War; shock therapy, hyperinflation, and economic collapse; and financial crisis of 1998. After leaving the USSR in 1977, I first visited Russia in 1992 and I saw what state collapse looks like with my own eyes. It wasn’t pretty.

The destructive phase, thus, can be dated to as either the Yeltsin period (1991–1999), or, as I would favor, adding the last two years of Gorbachev, to 1989–1999. Interestingly, this is the same length as that of the French Revolution (1789–1799), but as I said earlier, destructive phases are characterized by highly variable lengths.

The Putin Period (1999–present), contrary to Noah, was the period of rebuilding. During the first decade of 2000s I visited Russia every year, and the increase in popular well-being was palpable. Very visible (and emblematic) was the gradual replacement of the ugly and decaying apartment buildings from the Khrushchev era with modern buildings, but signs of reconstruction were everywhere. For example, modern highways appeared, first, around Moscow and, a few years later, in other provinces. Another highly visible evidence of rebuilding was the expansion of the Moscow metro. See, for example, this article 10 new Moscow Metro stations open in ONE day!

The Moscow Subway Station Michurinskiy Prospect, one of 10 metro stations that started operating on Dec. 7, 2021. Source

This is not to say Putin did the best possible job. For example, he did little to control the kleptocracy, which had taken root in the 1990s. Also, his economic ideas, and those of his economic team, have been solidly neoliberal, which in the view of many economists I listen to, slowed down Russia’s economic development. Still, despite this, Russia did quite well since 1999. Economic data traces the initially destructive, then rebuilding dynamic quite well:

Russia's GDP by purchasing power parity (PPP) from 1991 to 2019. Source

Even better indicators are those for biological well-being, such as average life expectancy:

Period life expectancy at birth (data source)

Between 1987 and 1994, life expectancy declined by more than six years. Sustained growth began only after 2003, with setbacks due to the Covid Pandemic and, most recently due to the war in Ukraine (beyond the time range in the graph).\

The take-home message here is not that America is going to have the same dynamic. Our historical analysis indicates that all crises are unhappy in their own way (this is also known as the Anna Karenina Principle). We have, actually, recently published an article with this analysis. Perhaps the only generalization possible at this time is a gloomy one—usually it takes many years to get to the rebuilding phase.