The Pedant General makes an observation on my posting about the Four Attributes of Economic Success:

I think you have still missed one thing.

Whilst the rule of law is the essential underpinning without which none of the four political aspirations can take root, the rule of law will not allow for prosperity unless that system of law encompasses security of property rights.

I did not so much miss it but take it for granted. I assumed that it went without saying. But as I used to tell my Embassy team:

Never Assume! Assumption is the Mother of ****-up.

Why does the distinction in fact matter?

The other day I was at the House of Commons, giving some MPs the doubtful benefit of my views on Russian foreign policy.

I recalled those amazing days in 1991/1992 when as Deputy Head of the FCO’s Soviet Department I had to work up Western policies for the collapse of the Soviet Union.

The problem we faced, I told them, is now much clearer than it was then.

We in fact had two problems.

We did not understand Communism. And we did not understand Capitalism.

We clever officials never had had to think about either – both were just there, rather like the weather.

Which explains why, boosted by our then Thatcherite zeal, we pushed for mass privatisation, assuming that the only way to get things going across the Soviet space was to move as much activity as possible into value-adding private hands away from the value-subtracting state.

This was in fact a successful policy.

After some seven decades of Scientific Socialism Russians struggled to find food to eat. After all those vainglorious Gorbachev witchcraft policies, Moscow still had no bananas.

Within weeks and months of the introduction of Fairly Scientific Capitalism, market mechanisms were producing and distributing food across all those time zones.

Bananas arrived! And milk – thanks to McDonalds.

Yet it now is clear that the critics of Shock Therapy were right, albeit not for the reasons usually adduced.

There was not enough Shock, and not enough Therapy.

Above all we failed to see that without our throwing much more effort at helping Russian reformers set up independent courts and develop respect for private property, those new-found property relationships across Russia would be prey to collectivist comebacks, as now has happened to a depressing degree.

See eg this elegant analysis of how senior Russian officials ‘privatise revenues and nationalise losses’.

So, yes.

Capitalism equals the Rule of Law plus Private Property rights for the whole country.

What does that remind me of..?

Oh. This.