Who Cares about the Bull & Bear in Georgia?


What do you call Georgia’s economic system today? Is it serfdom or slavery? Of course neither! Those might be observed only in sporadic criminal cases, if any at all, and in the movies. Is it feudalism, then? Certainly not, but one can find some residuals of it in rural areas of the country, especially in mountainous locations. Is it socialism? No, not anymore, although it has maintained certain socialist trends, gradually disappearing at an indefinite rate. Is it capitalism? Yes, it looks like it, but not completely. One can sooner identify the indigenous economic system in Georgia as the combination of all three: crony, patrimonial and wild capitalism.

By classic definition, in crony capitalism, it is not the supremacy of risk but the ties between businesses and political class that defines economic success as a result of amassing capital thanks to those contacts that are being propped up by various managing authorizations, tax breaks and state grants. In patrimonial capitalism, wealth is handed down from one generation to the next, which is like pure economic atavism, perpetuating a steady income for a bunch of chosen favorites of fortune. In wild capitalism, inventive and pioneering practices are usually subdued and muted, thus curbing the best economic, political, and social standards, serving the people, finally triggering numerous detrimental consequences for the entire nation.

Our species of capitalism has its own pretext, which has caused the present developmental picture: right at the dusk of socialism and at the dawn of capitalism, most of the formerly state-owned and now privatized enterprises were either out of commission or working by fits and starts with a minimum of business ethics, corroborating the irrefutable truth that the liberalization of labor and acquisition of the right of private ownership alone, right after the fall of communism, would not solve the national economic problem successfully and to the best benefit of the country.

Thus, we all know that we are living in capitalism but none of us has the explicit feeling that this was what we dreamt of when we were hurrying to take apart the soviet giant. The frustrating result of the weird finale of our fight against socialism in favor of capitalism could be adorned with a number of examples that are handy and vivid. In the countries of developed capitalism, like America and the European frontrunners, almost everybody is looking at the movement of stocks and securities on a daily basis because this is the main achievement of their type of capitalism – a regular guy in the street has a bigger or smaller investment in his or her country’s economy, thus he tries to be well versed in the market that gets bullish at times or bearish every now and then. Who cares in Georgia about those bulls and bears, except those lucky well-to-do ones who have certain financial interests either in local businesses or ones beyond the borders?

A rank-and-file in Georgia might not even know there is an economic recession happening, unless the economic experts or commentators, with their big mouths and heads, inform the public that it is. Who would give a dime here to the economic truth that the standard of living is guaranteed only by long-run economic growth, and if we are speaking about short-run growth, then we have to know that it depends on business cycles defining the possibility of economic expansion or economic recession.

On the other hand, is the economic logic of business cycles at work in our reality at all? “Business cycle” is not a funny word or strange economic phenomenon, but most of us wouldn’t care about its coming or going, whereas in the countries of real capitalism, the public wants to be in the swim of economic matters at all times. In Georgia, we only want to have politics for breakfast, lunch, dinner and supper. That’s the way it is here. Do we care what the cycles are driven by? Of course not! Business cycles depend on how much we the consumers and the businesses spend day in day out, and also, on the way we are looking at the future. Here is a plain formula: no spending, no cycles! No cycles, no growth! No growth, no life! It is as simple as that. How do I know? From bulky books on economics! Why am I interested? To find the key to my better standard of living!

By Nugzar B. Ruhadze

Photo by Bulat Silvia/Getty Images

24 February 2020 19:14