The collapse last August of Russian financial markets and the dismissal of the Kiriyenko government is seen in Russia as the end of an era. Radical market reform is over. In its place is emerging a new “Moscow consensus.” Now, adherents say, it is time to try a new course of government—directed industrial policy, including protecting domestic producers against foreign competition, and looser monetary policy.
According to the new consensus, not only did seven years of radical market reform fail to put Russia on the path to becoming a modern economy, it impoverished the country and left it defenseless. This harsh view is carried to extremes by radical elements who attribute Russia’s troubles to a conspiracy by adversaries in the West, abetted by certain circles at home. Just as German nationalists in the early 1920s helped propagate the idea that Germany lost World War I because a small group of traitorous politicians sold out the nation, Russian nationalists today are blaming a small group of pro-market reformers for adopting an economic program that destroyed a strong industrial and military power. In Russia today, as in Weimar Germany, the treachery is being attributed to the Jews.