Many left-wing commentators are saying that the Russian experience proves the inadequacies of the free market. But as Stephen Moore, of the libertarian Cato Institute, and James Carter, a former economist for the Republican National Committee, point out in an article in Human Events, Russia's problems should not be blamed on capitalism. Russia has not had a free market economy at all. Capitalism cannot flourish unless there is a rule of law. Contracts have to mean something.
Private property has to be respected.
In Russia, organized crime extorts fees from businesses, confiscating profits even more thoroughly than government taxes do. Theft, bribery, and murder have a way of putting a damper on the business climate. Corruption in the government, the bureaucracy, and the workplace stymie productive economic activity. Add the problems of alcoholism, vice, and the lack of a work ethic among employees, and no wonder the Russian economy is a basket case. In other words, Russia does not enjoy the benefits of capitalism because it lacks the moral infrastructure required by a free economy.