It is striking how similar are the political and economic choices presented to the people of Russia and the peoples of the EU and USA . Except that in Russia there is in Vladimir Putin a rational alternative to supranational corporatism, low wages, mass migrations and the end of democratic nations on the one hand and popular nationalistic protectionism on the other. At least in Russia there are Putin and Medvedev to hold the ring and prevent the policies of the two extremes asserting themselves. In Europe and the USA there are few signs of the sober, rational alternative which we at Freenations advocate (see also my book The Emancipated Society – on Amazon – about which I lectured recently in Russia)
It is 26 years since the Berlin Wall came down and the Communist Soviet Union ceased to exist. Russia has come a long way (see the article “Just Back from Russia” on this site) and has made remarkable progress in adopting the early stages of democratic capitalism, individual freedoms, local autonomy and parliamentary systems. Much needs to be done because the anti democratic corporatist philosophy sold to Putin’s predecessors, Gorbachev and Yeltsin, by the (by then no longer capitalist and no longer democratic) West was a poisoned chalice. Russia also had to contend with a NATO transformed from defence into attack to aid the Eastward expansion of German Europe. Despite explicit agreements with Russia, the corporatist EU and NATO bulldozed the Eastern European countries just as they had become sovereign and democratic, destroying their self governance and constitutions, breaking up Yugoslavia and Czechoslovakia, invading Ukraine and encouraging the re-incarnation of some of the most objectionable movements, States and philosophies from the Nazi and fascist periods.
These twin attacks – from Western corporatism on economic freedom and from the European Union and NATO on democratic sovereignty – have understandably produced a confused Russian political debate.
Vladimir Putin presides over a country which is torn not between socialism and capitalism but between, on the one hand EU and American corporatism with its leftist contempt for Christianity and family values and, on the other, Russian patriotic protectionism with its State interventions and attempts to construct a closed Eurasian Union to fight back against the EU.
A left wing nationalist is not a common animal in the West but a good example is the Russian economist Vasily Koltashov, director of the Centre for Economic Research at the Moscow-based Institute of Globalization and Social Movements (IGSO) and a lecturer at the Plekhanov Russian University of Economics. As with so many on both left and right in the West his analysis is good but his solutions are not! In his interview with a German journalist Ulrich Heyden published in Telepolis on 31st March he describes the new conflicting parties in Russia:
“Russian society is divided into two parts–the Belyje lenti (people who wear white ribbons), representing liberal positions, and the people wearing the orange and black St. George ribbon, who hold patriotic and protectionist attitudes and long for a post-Soviet integration.”
“Liberal” here – as it is also misused in the USA – is of course a complete misnomer, which is why those of us who might previously have used that word must refer to “classical liberalism” – the democracy of the market place, free inter-nation trade, an enabling, welfare providing State, private property constrained by competition and the rule of law and restricting the power of big business and the big State.
But in Russia this word “liberalism” or “neoliberalism’ has come to mean precisely what the Establishments have produced in the West – US and EU corporatism, the wealth of supranational business and the “Supra-State” capturing democratic institutions, overriding national jurisdictions, driving mass migrations to lower wage costs, impoverishing the people as consumers and ignoring them as voters.
Unfortunately the prescriptions of the patriotic Russian alternative are wrong – dangerously wrong. Koltashov says:
The main criticism by the patriotic opposition relates to social and economic issues and not issues of elections, human rights or foreign policy. The patriotic opposition arose because of the crisis …..over the commodity exports of Russian capitalism.
The final word shows how the patriotic Russian side has not grasped that what they (and we) are confronted with is not capitalism in Russia but corporatism and supranational powers like the EU and UN. Their promotion of protectionism – of markets or Russian commodities – would lead to trade wars, poverty and a dangerous economic dependence on the State – although that is precisely what the aggressive US/EU juggernaut is driving them towards.
Koltashov is right to say that any alternative :
..”must take into account the needs and concerns of the population. People are increasingly faced with hardship. Standards of living are falling. Real, monthly wages in the regions have fallen in the past year and a half, from an average of 20,000 rubles to 15,000 (£136). But in Moscow, you can still hear of salaries amounting to 20,000 rubles (£181).”
This is very similar to the cry in the West – taken up by a varied list of characters (Trump, UKIP, Podemus, Syriza, Front National, Alternative fuel Deutschland) expressing the anger of the people, knowing their enemies but unable to construct a rational and calm alternative.
Koltashov is completely right about the nonsense of the Establishment solutions:
“The people want an economic policy that increases their standard of living and protects them from unemployment and the loss of value of their money. But at the Moscow Economic Forum, one hears of measures to support industry, cheap loans for industry and more efforts to re-industrialize Russia.”
There is also much talk – as in the West – of more money printing (the EU is engaged in more at the moment and the economic adviser to Vladimir Putin, Sergei Glasew, supports increases in the money supply) but none of these approaches – as one would expect from those who created the crisis originally – are seen as helping those who bore the consequences of that crisis – the voter/consumer. Because
- corporatism is the problem not the solution
- and poverty is individual not corporate
- poverty is not central but regional,
- mere money creation is not leading to more bank lending
- it is not lack of capital but the concentration of capital in corporations
- collective funds have cash but the entrepreneurs and families have none
Unfortunately the solution of the “patriotic protectionists” (the “anti liberals”) is to ape both the corporatists (in their “management” of trade) and the EU (in promoting “Eurasion integration” to form a rival block).
Koltashov opposes money creation – and he is right (except in the case of a collapse of the banking system which is not the case in Russia although the continuing ludicrous US/UK/EU sanctions could bring that about). The result is either an increase in inflation or – as in the West more subsidy for Government, more concentration of capital in big business, more aid at the centre at the cost of the regions and more cash for the producer/investor collectives at the cost of the average consumer.
Koltashov is right to doubt the “Moscow middle class and government functionaries” who “hope that Russia will get along with the West. Then the economy will develop well.” but then resorts not to taking power from the State, the bureaucracy and the corporatist establishment and reducing the burden on the individual, the entrepreneurs and the localities but rather seeking to:
“..convince the people that the economic situation would be improved by supporting the industrialists with greater state support.”
Soon the borrow (or print) and spend programme is in overdrive:
“We propose a state program providing for the construction of housing for the citizens at affordable mortgage loans of one to three per cent. This housing program is to be carried out with Russian materials, Russian construction and Russian workers. We propose to build new roads and railways and to renew public transport.”
A well funded and sober infrastructure plan specifically tailored to private sector growth could be defended – but not as a “source of cash for all ideas”!
The patriotic protectionists also want “controlled” money printing – but that is more likely, as in the West – to ossify old inefficient industrial structures and shore up the inequalities which have reduced prosperity in the past.
In fact the Russian economy is not doing too badly with low unemployment (half that of the European Union), low taxes, incentives to build property and businesses. Much of the problems are temporary and arise out of the Russian historical condition – a country, impoverished by decades of communism, recovering, taking time to diversify from oil and gas, building manufacturing and agriculture sectors to supply a growing home market but then suffering from aggressive western sanctions and a (temporarily) collapsing oil price.
But the “patriotic” movement promotes a protectionist version of a “Eurasian Union” which:
“…only makes sense as an organization if it is competing for influence against the EU because the EU is pursuing an active policy of expansion towards the east.”
The left/right patriots would have as their policies:
- A clear commitment to a protectionist policy.
– Russia must withdraw from the World Trade Organization (WTO).
- more steps are required to strengthen the Eurasian Economic Union before it could aspire to be an alternative to the European Union.
- But the Eurasian Union cannot develop according to the EU model, which is a hierarchy headed by Germany
“The Eurasian Union will function according to a different form of integration. No integration can succeed based on a free market and free foreign trade. A common, protected market supporting domestic demand is needed. Such a project would be an alternative to the EU and would entice some states to leave the latter.” says Koltashov thus describing the kind of power which, by aping the EU as an even more protectionist version of the same, would inevitably lead to the very “hierarchy” he rejects in German Europe.
At the moment the Eurasian Union (Russia, Belarus, Armenia, Kyrgyzstan, Kazakhstan) thanks to Putin, does not have these characteristics but the West is pushing it towards such a position.
We see here in Russia (as politicians respond to western aggression and internal economic problems) two unpalatable extremes:
- surrender to the US/EU supranational corporatist hegemon or
- adopt a nationalistic, protectionist supranational “Eurasian” alternative
Vladimir Putin has a lot on his plate and with no help from the West must plot a course between these two alternatives. There is an alternative and the Freenations site promotes it – sovereign democratic nations, trading freely, enterprise capitalism, anti corporatist, minimal, emancipating State, power to the voter/consumer etc……
But the more he is attacked from the West by Germany moving east, by the EU expanding its power, by the neocons in Washington and their puppets in London, by an aggressive NATO and a European fascist left, the more difficult he finds it to offer an alternative of free trading sovereign countries trading fairly with the West with legitimate defence interests.
In those circumstances Putin could well be unable to stop the rise of an aggressive alternative in the East – ironically built on the NATO/EU model – with far more objectionable leaders. We should be grateful for the moderation of Medvedev and Putin.
