Interesting Perspective

Over at Jacobin, they have an interesting perspective on the Russian-Ukraine war.

Specifically, they assert that the Ukraine is unable to transition its economy and society to a war footing because Kiev's commitment to their particularly extreme and corrupt form of capitalism. 

So, in addition to being bad for the physical and mental health of most of us, and requiring a bailout from the rest of us every decade or so, it appears that Anglo-Saxon style hyper-capitalism is bad for making war.

There are historical precedents.  Nazi Germany had the most laissez-faire economy of any of the major combatants in WWII, and they did not reach a full war footing until less than 2 years before their surrender:

In a 2020 lecture, Canada’s former ambassador to Ukraine said that after Euromaidan the country had become a laboratory for ideal-world experimentation. In other words, the economic liberalization unacceptable at home could instead be tried out in Ukraine.

But how is this “experiment” dealing with conditions of total war? And if such a situation generally pushes states toward economic interventionism, is Ukraine following suit?

………

Since 2014 — but with renewed vigor in recent days — Ukraine’s Western partners have pushed Ukraine to “fight corruption.” This “struggle” has many important economic effects. Generally, states at war tend to nationalize key sectors of the economy to maximize armaments production and stabilize the civilian economy, both to prevent chaos in the rear and feed the army. Strangely, this has not taken place in Ukraine, despite what the government declares a “total war” situation. Remarkably, a law was even passed in late June that aims to “restart privatization of state assets on a new level.” Some politicians have critiqued this approach — Vadym Denysenko, assistant to the interior minister earlier in the war, urged a turn toward “direct state management of the economy.” But so far, his call has gone unheeded.

Calling for nationalization, Denysenko noted that “it is no longer time for the National Anti-Corruption Bureau of Ukraine (NABU).” He said this because over the past eight years, a flurry of “anti-corruption organs” — NGOs, state organs, and in-between — have focused on eliminating state intervention in the economy.

Set up by Ukraine’s liberal “civil society,” the United States Agency for International Development (USAID), and the Open Society Foundation, such organs have created websites such as Prozorro (“transparency”), which handles Ukrainian state purchases. The mayor of Dnipro has harshly criticized Prozorro in recent months, due to the government’s decision to require all purchases of military equipment to go through this program. He insists that such public transparency in military affairs and the bureaucratization of urgent military tenders is only helping the Russian army.

 ………

The requirement that state tenders be made with a minimum amount of domestic suppliers is common in most countries, and its absence in Prozorro was called “extremely strange” by the new economy minister in 2021. As a result of this neutralization of the “corruption risks” presented by the domestic localization of state purchases, around 40 percent of Ukrainian state purchases are from foreign producers. By comparison, the United States and European Union (EU) countries make around 5 and 8 percent of their state purchases abroad respectively. The imperatives of “stopping corruption” take priority over Ukraine’s economic development.

When Ukrainian legislators tried to pass a bill in 2020 ensuring localization of state purchases, the anti-corruption bureaus (as well as the EU and the United States) frantically tore it down, citing the “possibilities for the corrupt use” of this patently ordinary measure. The law was eventually passed — but amended, so that localization restrictions were only applied to non–EU or North American nations. In short, Ukraine’s vast anti-corruption ecosystem is a control mechanism that keeps its economy perpetually open to decimation by foreign exporters who often enjoy preferential treatment from their own governments. The idea that “corruption” is the greatest barrier to development is a fiction used to justify trade liberalization in which the stronger Western capitalists inevitably win, to the detriment of the Ukrainian economy.

So, the "anti-corruption" institutions demanded by the west have the effect of funneling more money out of the country.  Ka-ching.

It's a good read detailing how the juxtaposition of failed policy and looting by the western governments and the associated civil society groups have left the Ukraine in a uniquely poor position.