788 SEER, 8i, 4, 2003 monopoly. More immediatelydesirablewould be the removal of gas pipelines from the clutches of Gazprom. Committed timetables are also needed to lift energy prices to economically defensible levels perhaps over ten years for households (with compensating increases in money incomes), sooner for industrialcustomers. The absence of honest and reliablemarketsfor the factorsof production labour, capital, land, industrial plant and buildings - is another critical weakness. Here, too, progress can only be gradual, more especially as the problemlong antedatesthe Communistera.The keybuyersand in some cases also sellers on these markets are risk-takingentrepreneurs, which in tsarist Russia meant almost exclusivelyforeignersand members of national minorities .Russia'seconomic modernityhashad othermainsprings,namelytechnological accomplishmentregardlessof commercialodds (aproduct, one feels,not only of Communist ideology but previously of the strugglewith climate and expanse) and political dictatorship filtered through Gaddy-and-Ickes-style relational capital and misuse of authority. For an historical overview see Thomas C. Owen, RussianCorporate Capitalism fromPetertheGreat toPerestroika (New York, I995), and for contemporary nineteenth-century portraits, the plays of Ostrovskiisuch as Dokhodnoe Myesto(A LucrativePosition)or Puchina (The Abyss).Today'spolicymakerscould usefullystartby consideringRussia's need for a bankingsystem.At presentthe State SavingsBank(Sberbank) is both the only remotely trustworthyfinancialinstitutionin the country and the only nationwide one. A large part of household savings (not to mention corporate cash reserves)is held as stated earlier in dollar bills. The Government should remove restrictions on non-Russian bank ownership, and consider persuading leading western banks to establish the beginnings of an ordinary branchnetworkinRussia. Some othertransitioneconomies (Hungary,Latvia) have benefitedgreatlyfrom such a policy. This review has given probably more prominence than is warranted to omissions and imperfections in Gaddy and Ickes's work. Let there be no misunderstanding. They have written a penetrating and thought-provoking book which no serious student of Russia's post-Communist economy can affordto neglect. Christ Church College, Oxford PETER OPPENHEIMER Considine, Jennifer I. and Kerr, William A. 7heRussianOilEconomy. Edward Elgar,Cheltenham, and Northampton, MA, 2002. xiii + 360 pp. Tables. Notes. Appendices. Bibliography.Index. $69.95. JENNIFER I. CONSIDINE and WilliamA. Kerrwisely base much of thisbook on the simple truth that oil and gas are not ordinary marketable commodities with a fairlyshort lead-time between demand and supply.Discovery, drilling and delivery are lengthy processes and require much riskcapital, up-to-theminute technology, skilled labour and good luck. This goes a long way to explain the episodic track-recordof Russia's oil and gas industry. The late nineteenth-, early twentieth-centurydevelopment around Baku was checked by the destruction of war and revolution and barely recovered its impetus during the brief years of the 'new economic policy'. Stalin's adoption of the REVIEWS 789 'command economy' both before and afterthe Second WorldWarresultedin remarkablyrapid increases in production and valuable exportable surpluses but left his successors an industry too low in investment and out-of-date in technology to meet rising demand at home and, above all, abroad. Consequently Khrushchev, Brezhnev, Gorbachev and El'tsinwere one after the otherfaced with tryingto catch up on lost time. New Siberianfindingshelped; but productivityremained low. The authors have a second theme that, particularly since Stalin, the management of the oil and gas industryhas been fatallyflawed. In the tsarist period there was an imperfect market. But instead of using prices to decide what to do Stalin abolished the market altogether and relied on total planning which wasrealisticallyimpossible andrigidcommand which killed individual initiative. Even Gorbachev retained centralisttraces. All of which is true. But the authorsalso appear to hold that the only context within which an energy industry can operate successfullyis a fully fledged market. However, thereisan alternativeview thatwhatisreallynecessaryisaregulated marketof the kindthatinstitutionssuch asthe EuropeanBankforReconstruction and Development is trying to strengthenin PresidentPutin's Russia. Of course,with the book completed in February2002, the coveragegiven to Putin is necessarily sketchy. But there have been potentially interesting developments . Putin'spressureon Gazprom, Lukoiland Jukos,for example, seems to be aimed less at gaining control than at pressing them to act like responsible companies in a regulated market. There is evidence that some of the oil 'oligarchs'have come to the conclusion that they can make more profitfrom closely imitating their Western counterpartsthan from local asset stripping. And for their part, Western companies have regained an...
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