A grim but needed look at ‘90s Russia

As I’ve said over on my other blog, the film that made me into a critical Russophile – this was long before I became Orthodox – was the movie Brat, starring the late great Sergei Bodrov, Jr. One of the reasons that it made me sympathetic to Russia, or to be more precise the Russian people, is that it unapologetically portrayed what life was like for a certain class of Russians during the nineties. The cops were on the take. The government was nowhere. People were out of work. Those who relied on military benefits or pensions or any kind of social services were thrown to the wolves. Many became homeless, or turned to alcohol or drugs for escape. Crime became a way of life among Russia’s élite and middlemen, and the rest of Russian society had to live with that. Brat shows much of this en passant, but it effectively conveys a good deal of the hopelessness and hardscrabble reality of life for many people in urban Russia at the end of the twentieth century.

This fascination with a painful era in Russian history is one reason why I became interested in the figure of Sergei Glaz’ev: the co-founder of the pro-administration left-nationalist Rodina Party in Russia and recent aide to President Putin for Eurasian integration through the Customs Union, who has long been an outspoken critic of the liberal œconomic reforms that plunged Russia into chaos. I picked up the English translation of his essay Genocide: Russia and the New World Order. Don’t let the sensationalist title turn you off. Glaz’ev, a keenly sensitive œconomist with a good eye for big picture realities, was the only œconomist ever to resign his post in the Russian government, in protest at the harmful policies and outright theft that was going on all around him, and which his bosses were not only enabling but encouraging. In his view, the ‘shock therapy’ policies of the Russian nineties, and the concomitant demolition and outsourcing of most of Russia’s productive sectors, had an effect on Russian society that legally merits the descriptor of ‘genocide’. The statistics he puts forward on this are damning. He estimates the total number of excess deaths in Russia during the five years under shock therapy to be 3,890,000.

Glaz’ev – who had a front-row seat for much of this action – goes into considerable depth when describing each policy component and ‘phase’ in Russia’s structural adjustment. Price deregulation led to a wave of inflation that wiped out the value of most Russians’ bank savings. Privatisation of state-owned enterprises led to a wave of frantic speculation, producing spectacular wealth for the richest Russians and for foreign investors, but also creating a wave of unemployment and destitution. The speculation wave created pyramids and Ponzi schemes, which increasingly desperate Russians bought into and lost even more from. IMF-imposed deflationary ‘fiscal discipline’ led to social services being wiped out and the withering of Russia’s manufacturing and research sectors. And finally the government was called in to prop up, not the suffering population, but instead the investor class as the œconomic realities on the ground began to catch up to the frenzy of speculation and hyper-profit at the top. Glaz’ev also points out several ways these policies might have been structured differently: to bring about the desired reforms to a market-oriented œconomic structure without causing so much misery at the bottom of the social ladder, or so much built-in instability at the top.

In describing the ways in which these œconomic policies, taken together, utterly demolished the Russian social fabric and destroyed Russian lives, Glaz’ev is unsparing, albeit brisk and matter-of-fact. Again with admirably-sourced statistics, he highlights not only the death toll, but the sense of overall societal despair, the rise of alcoholism and drug abuse, the spread of sexually transmitted diseases, the propitious rises in divorces, abortions, infections and parasitic diseases, felonies, suicides and accidental deaths and injury. In order to keep the society complacent and demoralised, Glaz’ev suggests that family structures were deliberately attacked by the architects of ‘shock therapy’, and that there was an active propaganda policy of pornography and live-for-the-moment hedonism targeted specifically at Russian youth – specifically to keep them politically-quiescent. The picture he paints of how Russia changed between 1992 and 1998 is not at all pretty, but it is necessary to know if we want to understand how Russia has gotten to this point, or why their cultural priorities are where they are.

Where the book really got interesting – at least for me, the left-Eurasianist – is where he went into the question of ideology and the conception of Russia among the world œconomic élite. Here he borrows a good deal of language from Immanuel Wallerstein and the world-systems theorists. He is well aware, indeed, that the interests of the global financial jet-set are not the same as the national interests of the states they come from, and so he quite deftly sets himself apart from a paranoid nationalist discourse that posits either an international Jewish conspiracy or a cabal of Russia’s national enemies. In this way he also highlights a point of intersection between the conservative international-relations realists and the Marxists to whom he is indebted for his analysis:

Five hundred transnational corporations encompass more than one third of all manufacturing exports, three fourths of world raw materials trade, and four fifths of the trade in new technologies. They employ tens of millions of people and are active in virtually every country in the world. The genesis and base location of these transnational corporations are approximately evenly divided among the United States, the [EU] and Japan. They exert decisive influence on the foreign economic policy of these countries, as well as the international organisations they control, and they use this influence in their own interest on the world market. It is important, however, not to exaggerate the degree of consolidation within what, for convenience, may very conditionally be called the world oligarchy. This phenomenon does not fit the hackneyed models of world imperialism or a Masonic plot. It is a tendency, rather than a well-formed organisational structure. This tendency does, however, subsume the formation of certain institutions and organisational structures at the national and international levels, for purposes of shaping and realising the interests of major international capital.

However, he does indeed use Wallerstein’s concepts of core, semi-periphery and periphery to describe the relation of the G7 nations to the rest of the world, and to describe the differentiated interest that the financial élite take in each stratum of nation-state / œconomic complexes. Furthermore, he shows a finessed and sympathetic understanding of the dynamic that relates national governments to international finance capital. In the developed countries of the core, Glaz’ev notes that the realist interests of the national governments are often treated as identical with those of the élite, even though that isn’t necessarily truly the case. In the truly peripheral countries, the local managerial class is made thoroughly dependent on investment and capital from the core, and therefore adopts a comprador character in which they service not their nation’s interests, but the interests of this international capital. In the semi-periphery, precisely where Glaz’ev positions Russia, the contradictions in interest between international finance capital and national interests are made most visible.

Even though Glaz’ev does have a certain mild inflection indicating the messianic tendency in Russian thought, it does not appear at this point in his analysis. He is well aware that the world œconomic élite, despite being given to hateful paroxysms of russophobia, in fact have no special interest in Russia outside the aforementioned tendency to œconomic self-interest. In Glaz’ev’s analysis, Russia is primarily important to the élite first as a ‘milk cow’ to be strip-mined for its natural resources, and finally as a sacrificial animal to be split up and rendered politically-impotent. In Glaz’ev’s telling, the true challenger to world élite interests in Asia is not Russia, but China – even so, Russia’s own interests demand that it resist and disrupt the pressure of international finance capital on its own markets, and marshal the power of the state to rebuild Russia’s infrastructure, social safety net, indigenous productive capacities, scientific and technological research capabilities, and spiritual capacities. Even though this is almost a footnote for Genocide, the stress on Russia’s religious traditions and social-spiritual genius is necessary for understanding Glaz’ev’s project in full.

Having detailed the rapid, systemic and deliberate destruction and bankruptcy of Russia’s productive capacities, state structure and social fabric, Glaz’ev goes into detail to discuss how Russia might be brought back from the brink. His œconomic approach may be considered broadly ‘post-Keynesian’. He proposes that Russia undertake a whole-system approach, marshalling all state capacities and non-tax revenues to de-dollarise the Russian banking system, centralise foreign currency reserves and expand the money supply to expand the horizon for productive growth. He advocates hard price controls on necessities like fuel, food and electricity. He advocates a sustained programme of attacking organised crime and corruption, and purging state structures of all white-collar criminal influences. He also sets forward a plan for renationalising and recapitalising bankrupt businesses and instituting a selectively-protectionist policy for Russian manufactured goods. And finally he recommends deliberate, robust and aggressive industrial, R&D and infrastructure policies on the national level.

In the end, Glaz’ev also remarks on the unique ‘comparative advantages’ that Russia possesses and can build on: a vast territory, an abundance of natural resources, a highly-educated populace, a wealth of theoretical knowledge and technical know-how that can be marshalled into the sphere of advanced technologies, miniaturisation and biotech. But he also remarks in a way echoing Nikolai Berdyaev on Russia’s unique spiritual heritage:

The Russian character and Russian spirituality can play a decisive role in Russia’s natural progress into the future world civilisation, as one of its leading countries. The traditional Russian qualities of collectivism, unselfishness, striving to help others, ‘universal sympathy’ and self-sacrifice are key elements for a new organisation of social production, devoid of ‘œconomic egoism’, and based on the principles of mutual help, cooperation and trust… Reliance on traditional values in Russian spiritual culture, such as patriotism and self-sacrifice for the common good, creative labour, and the primacy of the spiritual over the material, will be necessary to overcome the systemic crisis in Russia and bring about its rapid rebirth as a great power, which unites the values of œconomic and spiritual-intellectual progress, sustaining high rates and quality of growth, and combines harmonious social relations with responsibility for supporting global stability and the sustained development of human civilisation.

I admit to being thoroughly fascinated by Sergei Glaz’ev. His admittedly sketchy synthesis of world-systems theory and gæopolitical realism, animated by a hard analytical distinction between the interests of international finance capital and national capital, is nonetheless fascinating. Though he is clearly aware of the dynamics of Eurasian integration, and the potentialities of cooperation with China – otherwise he would not be in the position he is now – I would have liked to read his further thoughts on the subject, though I’m aware they will be in Russian! And although his emphasis on building a muscular, interventionist and welfare-oriented state belongs very firmly on the left, as well as his unabashedly heterodox monetary policies and his international analysis, Glaz’ev combines these with a concern for the stability of Russia’s families and the genius of Russia’s traditional religious expressions – Orthodox Christianity in particular. Glaz’ev’s unique blend of Marxist analysis, post-Keynesian policy recommendations and Orthodox spiritual values aims precisely at the sort of left-conservatism I’ve tried to give voice and expression to on my blogs.