Did capitalism kill millions at the end of communism?

Some people think so.

This is, in caricature, the controversial thesis offered by David Stuckler, Lawrence King and Martin McKee, in The Lancet recently. The scientists – Dr Stuckler and Dr King are sociologists at Oxford and Cambridge respectively, and McKee is Professor of European Public Health at the London School of Hygiene and Tropical Medicine – claim that hasty mass privatisation in several former Eastern bloc and Soviet states coincides convincingly with a spike in their death rates. They speculate the main link between the two is unemployment, a well established cause of ill health and stress, as well as a trigger for life-shortening behaviour, such as binge drinking.

Interesting theory….but wrong. Which is what you might expect when two sociologists and an epidemiologist try to discover an economic causation. The correlation is certainly there, but the causation, not so much.

But there is a very obvious question to do with causality: How could changing ownership from state to private have raised mortality? The authors of the Lancet article put forward the theory that privatised firms cut employment and then refer to the extensive evidence on the negative impact of unemployment on health to link job loss to mortality. This idea in turn raises the question: Did privatisation systematically lead to substantial job loss? If not, then the causal mechanism of the paper breaks down and the article\’s results are open to question. Note that the Lancet article provides no evidence on this question.

So did privatisation lead to substantial job loss? In a column at VoxEU.org John S. Earle says the answer is a clear "no". The column, "Mass privatisation and mortality: Is job loss the link?", looks at the results of a study forthcoming in the Economic Journal. This study is "Employment and Wage Effects of Privatisation: Evidence from Hungary, Romania, Russia, and Ukraine" by David J. Brown, John S. Earle and Almos Telegdy.

As, err, privatisation did not lead to massive job losses therefore privatisation cannot be blamed for the mass unemployment that it didn\’t cause nor the supposed effects of mass unemployment upon death rates.

13 comments on “Did capitalism kill millions at the end of communism?

  1. You don’t need *actual* mass job losses for the thesis to work, you just need the *fear* of mass job losses, loss of pensions, loss of healthcare, etc.

  2. Surely research always has to have an aim. If they find that the change from communism to capitalism killed lots of people, should we stop Cuba making the change at some point in the future? Or do they recommend a more humane way of making the change?

    That said, didn’t communism kill rather more millions? Or is that irrelevant because it happened earlier on, and now had become less of a health risk?

    Or perhaps they just did it to give ammunition for pub arguments.

  3. @Serf: yes, read the Times piece and the study – quite a few policy suggestions and areas for future research.

    @AC1: since the comparison was with the same countries immediately before the fall of communism, err, yes.

  4. john b:

    If you’re right, it simply adds more reason for those under relatively free regimes to resist, politically, and, perhaps, violently, any broadening of state control of market mechanism. The long and short of it is that socialism seems to promise a future of death and diminished future satisfaction , no matter how you manage–or slice–it.

  5. Strong stuff.

    Clearly what is needed is a return to the good old days of five year plans, mass starvation, military purges and the Gulag.

    You don’t know what you’ve got till it’s gone.

  6. But isn’t all that they are saying that the transition from communism to capitalism killed millions (they are referring to a spike which normally means a high point, i.e. that this was followed by a decrease). So in fact they are not saying anything about whether people are better off living in a capitalist society than in a commie one just that the transition from the latter to the former was tough. This is actually what more or less always happens when you try to hide problems – they just end up hitting you harder at a later point.

  7. @10: perhaps, but when it comes to mortality (rather than GDP) there’s no evidence that they did – those countries’ statistics agencies stand by the historical data.

  8. WTF?? I’m always prepared for apologetic drivel from john b; any evidence of damn near anything gets massaged to extoll collectivism and bondage of one form or another.

    What I wasn’t prepared for was just how thoroughly the complete falsity of the basic argument would glide past the (usually) keen discernment of other commentors here.

    Few of the conditions of life, especially of life at elevated levels (in both material and spiritual “goods”) come free of costs. One of these “goods,” and likely the very chiefest, is freedom itself; with this opinion, arising first to any great degree in what we call “Western civilization,” most in the present world agree or at least maintain some semblance of agreement.

    Transition from bond to free status is of such extraordinary, nearly inestimable value that few are there who would actually attach a price tag. Yet the actual evidence (in addition to the merely theoretical) is that the mere difference in status–being free–enables men of nearly all races, in nearly all places, and in nearly all life circumstances, to outstrip under the newer conditions, “on their own hook,” whatever had
    been their former allottment under tutelage.

    All transitions have costs, some high, some not so much. We can even “excuse” various ancient hegemonic forms, including the lord/serf, peonage, and even chattel slavery relationships on the grounds that these seemed, to people of their times, at least the successful and therefore acceptable residuum of the past, to which they could not offer convincing workable alternates
    capable of improving conditions for the overwhelming majority of men.

    It is undoubted that the transition from some of these former hegemonic-bond conditions cost many, many lives. In just the century past, many in formerly unfree conditions gained freedom at the expense of the lives of many of their compatriots as well as many of their opponents’. Freedom is amazing: to gain and protect it is worth enormous amounts in both blood and treasure; but, to the defeated, it may be given away, virtually free for the taking, and, when an accounting is made, it is clear that both the (former) victors and vanquished come out well ahead.

    But socialism is not the same type of case. Those societies in which socialism has been adopted and installed in the past 100-150 years had not ages of accepted socialistic experience on which to justify their expectations and promises; on the other hand, they did have the evidence compiled over the previous century or more to show the proven fruits of human freedom. That they chose the unproven and unpromising must be seen as their own fault, without regard to whether the wellsprings of their choice were in malice, power-hunger, or mere ignorance and foolishness. If, later, their choice is to adopt the arrangement–freedom– already available to them at the time they chose the bond relations of collectivism, the costs of the new choice cannot be accounted as due to the new choice: they are clearly costs connected with the original decision adopting socialism, no matter what the accurate numbers of dead happen to be.

    Fair is fair. Verstehen sie?

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