Economic collapse
The first Five Year Economic plan was implemented
in Russia 1928, a major achievement of the October
Revolution of 1917 when the working class and
peasantry overthrew a semi-feudal state and
began the construction of a new society in opposition
to capitalism. This transitional society, between
socialism and capitalism, allowed Russia to
rise, in the space of only a few decades, from
a country with a mainly backward semi-feudal,
largely rural, economy into a major industrial
power.(3) The entire infrastructure of the country,
the location of its factories, its pipelines,
its energy supply system, the telegraph lines,
the highway system and rail lines, the location
of schools and medical facilities, the distribution
of the population throughout the country, were
organized according to the requirements of economic
“planning”(4) and this was carried
out under a powerful bureaucracy that grew to
dominate the society. Stalin headed up a brutal
dictatorship over the working class and maintained
his power by persecuting, jailing and killing
his opponents to. But primarily, the economy
had been organized to protect society against
the anarchy of the capitalist market and against
the very idea of “the market” as
a driver of the economy.
During Nikita Khruschev’s time in the
late 1950’s and early 1960’s, the
economy expanded at around 10% a year and in
the 1970’s began to falter under Brezhnev
to the point of stagnation as the country faced
widespread shortages of basic necessities. (5)
This crisis intensified under Mikhail Gorbachov
in the eighties and then under Yeltsin in the
nineties, at which point the bureaucracy turned
to a wholesale accommodation with imperialism
to solve the country’s economic problems,
abandoning planning and throwing the economy
open to the largest privatization process the
world has ever seen. Through naked self-interest
and with the active encouragement of the World
Bank and the IMF, the regime allowed some of
the most productive sectors of the economy –
such as energy and mineral extraction and processing
– to fall into private hands through outright
theft.(6)
The privatization drive stalled
as a result of the Asian financial crises of
1998 when Russia, ignoring the advice of the
American Treasury and the IMF, swiftly defaulted
on its international and domestic debt, an expression
at the time of its lack of integration into
the world imperialist system. In an economy
already severely depressed by the neo-liberal
“shock therapy” of discarding price
controls and with the mass of the population
impoverished by inflation rates which at times
went above 1000%, many state enterprises went
bankrupt and tens of millions of ordinary Russians
lost their life’s savings and were thrown
into poverty. Pensions went unpaid and social
programmes were terminated. The ruble was devalued
by 75% and the IMF threw its support behind
Yeltsin with a $22.5 billion loan.(7) It was
only last year that Russia received its first-ever
investment grade rating from a major credit
company.(8)
Limited economic “revival”
Since the year 2000, a limited economic revival
has begun and Russia has reduced its international
debt by $39.4 billion,(9) but according to a
group of economists and sociologists from the
Russian Academy of Sciences, much of the country
still remains in a severely depressed state.
Out of a total population of 145 million, 36
million live below the poverty line –
one quarter of the population – half of
whom are children. Thirty to forty percent of
all Russians can be classified as indigent,
they say. Incomes of the new poor are lower
than the living wage officially fixed by the
government, which is only 50% of that which
was established in 1991.
Official government spokespeople
talk about the 30% increase in average wages,
but this is a lie, the Russian economists and
sociologists say, and does not affect the bulk
of the population; it is the effect on the average
of the small group – 7% -- who are the
wealthy, who build the luxurious villas, who
buy expensive cars and who shop at expensive
boutiques where ordinary people do not venture.
Incomes of the majority of working people have
been reduced by a factor of two or three, a
marginalization of the poor which ranks Russia
alongside third world countries such as Chile,
Brazil and Mexico.(10) The average lifespan
of the Russian male has dropped to 58.6 years
for males and 72.1 years for females and the
population of the country is declining at a
rate of 750,000 per year. (11) And like many
of the countries of Western Europe, there is
a huge mass of illegal migrants in the country,
between 3.5 to 5.0 million, mainly from the
former nations of the USSR, the majority of
whom work in the privatized sector often in
appalling conditions and for low pay.(12) Jonathan
Steel in the British Guardian talks about a
“grotesquely widened inequality of incomes
since Soviet times. It is not just that the
top 10% have 23 times more than the bottom 10%
(the same rate in Britain is 12, in Poland seven.
With Internet access as low
as 5% of households, Russia is divided into
a tiny stratum of people who travel abroad and
are wired into global modernity and a huge mass
struggling to survive.” (13) Moscow News
says that the seventh article of the Russian
Constitution stipulates that “Russia is
a social-welfare state” but the share
of the GDP spent on social services “is
very little compared to other European countries
– much less than France or Norway…provision
of free health-care is no more than a myth”.(14)
High concentration of private ownership
A recent report by the World Bank provides important
insights into how far the dismantling of the
planned economy has progressed – in essence
a long economic counter-revolution -- and the
degree to which Russia’s new capitalists
– in the space of only a few years –
have risen from virtually nothing to getting
their hands on vast slabs of Russia’s
productive resources. (15) The report, it should
be noted, while remarking on the illegality
of what transpired during that time and the
resultant suffering of the Russian population,
hypocritically remains silent about the World
Bank’s part in that process when it mobilized
its support behind Yeltsin in helping him implement
his neo-liberal policies.
Among the countries of the Organization for
Economic Cooperation and Development (OECD),
private ownership concentration in the Russian
economy now compares only to Germany. “Financial
industrial groups are controlling the largest
firms,” says the World Bank, “Measured
by sales, the average firm identified as controlled
by a big business group or individuals, is 76%
larger that the average firm controlled by other
domestic owners in the data base…and the
disparity would be greater if smaller firms
were included...”
“At present,” the World Bank report
concludes, “the Russian economy is dominated
by a small group of powerful companies and because
of their high investment rates, their influence
is likely to increase.” The report also
shows the corrupt relationship between these
large companies and the government – what
they euphemistically term “state capture”
and urges the government to implement anti-cartel
measures to limit their influence.(16) The authors
of the report analyzed a large, statistically
representative sample of the Russian economy,
“covering about 1300 large firms, listed
and unlisted, in industry and services and employing
3.3 million people. The industry part of the
sample represents 17% of Russia’s industrial
employment and 57% of industrial output.”
Twenty three of the largest owners in the study
controlled 36% of sales and 38% of employment
in the country. In the industrial sub-sectors
of the sample, financial industrial groups (FIG’s)
controlled 35% of sales, whereas combined federal
and regional governments only control 25%.
The remainder is controlled
by smaller capitalists. Control by FIG’s
is highest in the oil, raw materials, automobile
and chemical sectors. .”(17)
By 2002, single shareholder
groups have come to control ninety-seven percent
of all the large privatized enterprises, says
David Mandel, in his recent book, “Labour
After Communism”. According to some estimates,
“twenty large conglomerates controlled
seventy percent of Russia’s GDP.”(18)
Since the 1998 financial crises, a wave of private
acquisitions has swept the auto and farm machine
sector of the economy as large capitalists increased
their control over manufacturing, he says. “With
the economic upturn and the windfall profits
from high oil and metal prices, and especially
after Putin’s election in 2000, the ‘oligarchs’,
who had made their fortunes in the resource
sectors, began buying factories in other manufacturing
sectors. These sold for a tiny fraction of their
real value because of their poor financial situation.
Moreover, ways were often found to further reduce
their attractiveness prior to the sale. As a
result, industrial ownership became increasingly
concentrated.”(19)
“Managed” privatization
On May 7th, 2004, Vladimir Putin
was inaugurated for his second term as President
of Russia, after a landslide victory, taking
71% of the vote, the third presidential election
since the fall of the USSR. One of the reasons
for the increase in his support is the reviving
economy which is benefiting from the current
high oil and commodity prices on the world market.
Even though there has been a slight increase
in unemployment (which is in reality, is much
greater than figures signify), the government
says the economy grew at an annual rate 9.1%
in the first quarter of 2003. (20)
Putin’s promises of “stability”,
and the jailing of a few major capitalists has
helped contribute to his popular support as
these actions speak to the concerns of the great
majority of ordinary Russians who remain hostile
to the massive theft of important parts of Russia’s
productive wealth by a few insiders,. This is
not to suggest that he is in any way an obstacle
to the deepening of the capitalist penetration
in the economy; in this respect, his policies
are not much different than that of his predecessor,
Boris Yeltsin or for that matter Mikhail Gorbachov,
who during his time, pursued a policy of the
USSR’s “organic integration with
the world economy” (21) and entered into
negotiations with the G7 powers on speeding
up the introduction of “market reforms”
which culminated in the “Washington consensus”
with the USSR achieving associate membership
in the G7 and “special relations”
with the World Bank without ever resolving the
matter of the imperialist countries discriminatory
anti-Soviet trade legislation. (22) Rather,
Putin’s objective is to see that the privatization
process is orderly and “managed”.
The state’s efforts to
prosecute Mikhail Khodorkovsky, exc-CEO of OAO
Yukos, a giant oil company which employs over
150,000 people, for tax evasion ( see below,
the issue of “transfer pricing”)
and privatization irregularities, has given
the impression that Putin is against “oligarchs”
and that he might be trying to bring OAO Yukos
under some measure of public control. He has
made clear, however, that the government has
no wish to drive OAS Yukos into bankruptcy nor
to revisit government’s privatization
policies. Also under threat of prosecution or
are already being prosecuted, are other major
capitalists, among them media mogul, Vladimir
Guisinsky and Platon Lebedev of the banking
and holding company, Menatap. Adam Abramovich,
now Britain’s richest man, fled the country
to escape arrest. (23) Vladimir Potanin , well
connected to government circles and a powerful
capitalist, was also under threat of arrest.(24)
But appearances to the contrary, Putin’s
relationship with the big capitalists is very
comfortable. It seems Khodorkovsky – who
owes the government several billion dollars
in taxes -- violated a gentleman’s agreement
between the government and the capitalists that
they could keep their assets, no matter how
they got them, as long as they paid their taxes
and didn’t meddle openly in politics.
Khodorkovsky had once formed and financed his
own political party.
Many leading capitalists are
serving or have served, in influential positions
in the bureaucracy and government. A political
associate of Putin’s, Alex Federov, a
key figure in Putin’s United Russia party,
who owns Irkut, a Siberia based aerospace company
which employs 15,000 workers (who make an average
wage of $200 a month), recently got his hands
on a $500 million contract to build wings for
BAE Systems – Britain’s largest
defense contractor. (25) Potanin, the most powerful
billionaire in the country was once a deputy
prime-minister. A protégé of Potanin’s,
Oleg Deripaska, who controls the Russian aluminum
industry and who was barred from entering the
United States because of allegations against
him of extortion and murder, is related by marriage
to Putin.(26) And these are only a few examples
of this intimate relationship.
Recovery From the 1998 Financial Crises
In 1998, unlike other economies in the world
which went through a similar kind of crisis,
the Russian economy began to recover relatively
quickly, mainly as a result of import substitutions
and the advantages for exporters of a severely
devalued ruble, but also as a result of the
economy not being fully privatized, which allowed
many workers to stay in the plants, even though
they were not receiving wages. (Under the old
Soviet system, most of these plants provided
social benefits such as housing, health-care,
vacation facilities and even food for the worker
and their family) “Years of output decline
before the crisis contributed to the role played
in the recovery by increased utilization of
physical capital (plant and equipment) and human
capital (labour), which had often been formally
employed but, in fact, neither paid nor working
in the pre-crisis period. Growth rates suggest
“utilization rates increased massively
until about mid-2002”, despite a low share
of investment. But “investment accelerated
substantially in 2003. (27)
Wage growth has also picked
up and has exceeded GDP growth, one of the few
places in the world where this appears to have
happened. But this may also be the result of
workers working longer hours, doing two jobs
or speed-up of production.(28) This improvement
, which does not compensate for the drastic
drop in living standards workers have suffered
since the fall of the USSR, along with a decrease
in unemployment and a feeling that things will
not get worse, have undoubtedly contributed
to Putin’s electoral success.
Russia’s chronic social
and economic woes are well documented. GDP has
shrunk to a third of what it was in the late
1980’s, and is now only one tenth the
size of Japan’s. (29) Kommersant , one
of the country’s main business newspapers
whose editor was fired recently because of his
criticism of the hostage taking and slaughter
at Beslan , claims industrial growth continues
to stagnate, despite boasts to the contrary
by the government. Kommersant quoted a leaked
monthly statistical report from the government’s
own Center for Business Environment to back-up
its claims. (30) Putin, in his recent state-of-the-nation
address, has projected doubling the GDP over
the next decade. GDP today, incredibly, is now
less than Costa Rica’s. (31)
Doubling GDP in that time span
will only be possible if Putin reduces public
expenditures and the economy grows at 7.2% a
year, an annual rate over the next ten years
which would be a record for Russia. Such has
been the decline, this rate of growth, if achieved,
will only bring Russia (population:145 million)
up to the present day level of Portugal (population:
23.6 million) or to catch up with Taiwan, (population:
38.6 million . (32)
Beginning in 1999, the Gross Domestic Product
(GDP), grew at an average annual rate of 5%
and has increased to 7.8% for the first seven
months of this year, and 9.2% year on year for
industrial production. (33) But increasingly,
the economy resembles that of a third world
country on the periphery of imperialism. In
2003, eighty percent of exports were made up
of natural resources and 55% of all exports
were from the oil and gas sector, which employs
approximately 1% of the Russian work force.
Sixty percent of all fixed capital investment
is going into the resource sector.(34) Up until
1998, that’s where most of private investment
went.
According to the World Bank, the advantage of
the 1998 devalued ruble has now come to an end.
Although in the last few years, there has been
a rise in non-raw-material exports, most of
the growth is resource based, coming primarily
from the energy sector and greatly augmented
by the high world energy prices. “Around
85% of all exports are natural resources, the
share of oil and gas is 60%”, said the
World Bank in an earlier report. It warns, however,
that “Policy makers need to be continually
aware of the risk facing all large natural-resource
producers, where a wealthy few acquire control
over resources and the remainder of the population
live in poverty.”(35)
“Window of opportunity”
During the Presidential election, Putin campaigned
very little – refusing to participate
in any television debates and not even running
on the ticket of his nationalist Motherland
party. In a landslide victory, he took 71% of
the vote. He marginalized the Communist Party
candidate, Nicolai Kharitonov, who only got
13.7% of the vote. Putin’s tactics were
the same as those used in the previous December’s
regional elections for the State Duma, when
the bureaucracy applied the powerful administrative
resources of the state apparatus and state monopolies,
to run a relentless cheerleading campaign for
Putin, especially in state-controlled television,
keeping critics out of camera range. A dominant
block of pro-Putin parties were elected and
support for the opposition Agrarian and the
Communist Parties was reduced to single-digit
numbers. The C.P. lost over half its seats,
and the openly pro-capitalist Liberal parties
such as Yabloka. were virtually wiped out There
are now few parliamentary checks on Putin’s
power and legislation moves through parliament
with barely any resistance. (36) Prior to the
Duma election last December, 2003, the Communist
and Agrarian parties’ opposition in the
Duma had frustrated the regime’s “structural”
reforms in the economy, and land “reform”.
For the C.P. the electoral failure was especially
catastrophic, resulting in a severe financial
and leadership crisis which now threatens its
very existence. Before the election it had “sold”
some “expected” seats to businessmen
but was unable to deliver on its deal and had
to return the money after the election. The
party in 1999 had committed itself to market
solutions for the economy, (37) has now split
into two factions over what kind of social democracy
is better for Russia. (38)
During the elections, Putin attacked his old
mentor, Yeltsin, giving the appearance of breaking
from the past. Putin, who had been Prime Minister
under Yeltsin, was hand-picked by him as his
replacement in 1999 when Yeltsin resigned. Putin’s
right-wing neo-liberal policies are the same
as Yeltsin’s. Such is the crisis Russia
is living through, prospective Presidents can
only look good by strongly disassociating themselves
from their predecessors. (39) Gorbachov in his
time savaged Brezhnev, and Yeltsin, Gorbachov.
Just like in any Western so-called democracy,
each “new” Russian regime must distance
itself from the foregoing administration to
give the illusion to the masses that it is “different”
and “better”, one of the advantages
for the bureaucracy in breaking the Communist
Party’s monopoly on political power in
the early 90’s.
The road ahead now seems clear for Putin to
accelerate the implementation of his pro-capitalist
policies. “(T)o ensure economic growth”,
he says, and the “restructuring of natural
monopolies” under “basic privatization
of industry, under “basic laws”
that have recently been passed dealing with
the railways and UES, the country’s electricity
system, both of which are “natural”
monopolies. Although “reform” of
UES, a joint stock company in which the government
is the major shareholder, has slowed, it is
proceeding to sell off eight of its generating
stations.(40) Many government services such
as procurement, notarization, technical inspection
of motor vehicles, licensing and registrations
are to be handed over to private interests.
Licensing of over fifty kinds of activity will
be abolished, including tourism. (41) Around
the time of the election, Putin promised modest
reforms to Gazprom, the state controlled joint-stock
company the country’s largest energy monopoly,
which often acts like an arm of the government,
but this promise was quickly modified during
Russia’s negotiations with the European
powers over entry into the (WTO).(42) Also in
the works is legislation, the “Law on
the Turn-over of Agricultural Land”, to
increase private ownership in agriculture and
to increase home ownership. But central to his
programme is the strengthening of the state
institutions and the enforcement of the tax
system, while at the same time maintaining “stability”
in Russia’s economic, social, and political
life.(43) Putin has promised to “develop”
the system of state pensions – which he
says are now being paid again after several
year of the government defaults – but
his major proposals on social policy have already
led to protests in the street. He is moving
to replace subsidized services such as “…
free public transportation, low-cost electricity,
free medicine for invalids and rent-free apartments
for many government workers – with a cash
stipend of $20 - $30 a month.” Thirty-two
million Russian – veterans, retirees,
invalids, civil servants, career soldiers, most
of the households in the country will be effected.(44)
Putin’s proposals on land-reform, further
privatizations, and improving the tax system
-- are not much different from those proposed
by his predecessors and are a strong echo of
the “seven tasks” of the government
proposed under BorisYeltsin by Anatoly Cubais
and his crew of pro-capitalist reformers in
1997, proposals which “encountered major
obstruction” because of opposition in
the State Duma where the Communist Party and
the Agrarian parties had a majority. (45)
That these remain outstanding “tasks”
for the government is testimony to the difficulties
the bureaucracy has faced for almost thirteen
years when it chose the “market”
and the dismantling of the planned economy as
a solution to the deep crisis which its rule
had engendered, a policy aggressively pursued
by Yeltin and now by Putin. Polling shows that
the great majority of the population is opposed
to the privatizations and is deeply resentful
of the theft of state property and the self-aggrandizement
by elements of the bureaucracy. “They
cheated 90%of the population”, says Mikhail
Khodorkovsky, the wealthiest capitalist in Russia
and owner of OAS Yukos, in a letter to Putin
from his prison cell. “We must consider
the results of the privatization to be unjust
and its beneficiaries not to be the legitimate
owners.” (46)
There is some apprehension in government circles
about how long this “window of opportunity”
will last. The World Bank warns about “reform
fatigue” but the regime is taking full
advantage of the Putin victory to speed up the
penetration of capitalism into the economy.
“We have a rare and positive moment in
Russia that will not last long …”,
stated Yury Isaev, top deputy to German Gref,
Russia’s Economics and Trade Minister,
to a conference of American investors in New
York. “This could be the last chance for
quite a while for us to move quickly to take
advantage of the possibilities.” And the
George W.Bush administration has been quick
to put its stamp of approval on the Putin team,
which was been specifically assembled with an
eye to reassuring imperialism that Russia will
be staying the course in implementing pro-capitalist
reforms. “Assistant Secretary for European
Affairs, Beth Jones, told a congressional hearing
this week that U.S. officials have been encouraged
by Mr Putin’s decision to stack his second-term
administration with prominent pro-market figures…With
a strong popular mandate and a sizable working
majority in the [Russian Parliament], President
Putin is well positioned to press a program
of substantial economic reforms, she said.”
(47)
Entry into W.T.O.
Russia has concluded its negotiations with the
European powers to allow it to enter the WTO,
a goal of every Russian government since Gorbachov.
Russia is the largest economy remaining outside
that body. It first applied to join the General
Agreement on Tariffs and Trade (GATT), the predecessor
of the WTO, in 1993 and the WTO in 1995. Increasingly
it has faced import quotas and anti-dumping
duties by European Union on its steel, chemicals
and grain. To facilitate its access, Russia
has updated some 100 laws and over 1000 ministerial
regulations.(48) Despite the seemingly cordial
relation between Washington and Moscow today,
and even though it is a member of the G8, Russia
is still prevented by world capitalism from
freely accessing world markets. Yeltsin, in
his “Midnight Dairies”, referring
to the anti-USSR, Jackson-Vanik amendment passed
by the US Congress in 1974, writes that “It’s
worthwhile for us (Russia) to sign a big contract
with a third country – one with aerospace
firms for example –as a way of circumventing
this problem. In this situation, however, the
Americans start quietly, sometimes openly, to
put pressure on that country’s government.
When we tried to penetrate Latin America’s
arms market to sell helicopters and airplanes,
the U.S. embassies began to hold briefings and
organize campaigns in the local press.”
(49) In April, 2002, the United States revoked
Russia’s “non-market economy”
status and the “EU initiated moves to
recognize Russia as a market economy that eventually
took effect on November 8, 2002. (Cynics consider
what the E.U. granted with one hand was withdrawn
by the other with the enactment of new anti-dumping
and anti-subsidy provisions)” (50)
The European powers placed many obstacles to
Russia’s entry into the WTO. Issues reported
in the Russian press were Russia’s acceptance
of the Kyoto Accords, or its new tarrifs on
imports (35%) to protect its automobile and
aircraft industries. The Europeans objected
especially to the low price of natural gas,
which Gazprom, Russia’s largest energy
utility, supplies to its domestic and commercial
customers at twenty-percent of the price charged
to its customers over the Russian border. (51)
They demanded that Russia privatize its gas
and oil distribution system. At times it looked
like the talks would fail and many Russian officials
say the requirement for Russia’s entry
has been raised higher than for previous applicants.
(52) The negotiations with the European Union
countries have concluded and the Russian press
says Russia will have full membership in 2007.
Russia has now agreed to allow domestic natural
gas prices to rise in stages over the next several
years to “market” levels.(53) It
will lower import tariffs on aircraft and automobiles
as well as allow foreign access to the Russian
telecom and insurance market.(54) Russia’s
drive to get into the WTO takes on added urgency
as the European Union has expanded to include
the former Warsaw Pact countries, shutting off
some Russian exports. At the last minute, Russia
lifted its objections to the Baltic countries
entering the E.U., but without getting any guarantees
about Russian entry into the WTO. (55)
Russian paradox
In foreign policy, Russia represents a paradox:
while it promotes the idea of a “multi-polar”
world counter-posed to the American strategic
drive for uni-polar domination, the Putin regime
has signed on – with reservations -- to
George Bush’s “war against terrorism”.
He has entered into a detente with imperialism
in exchange for an understanding from the imperialist
powers that Russia will be allowed a free hand
to crush Chechnya’s national struggle
for independence, in contrast to the USSR’s
occupation of Afghanistan, when the US, in an
illegal and undercover operation, supplied the
Afghanis with personnel and material assistance,
especially the highly effective Stinger missiles.
In return for imperialisms “understanding”,
Russia has acquiesced in the face of US aggression
against Iraq, once a long-time ally. And taking
advantage of American differences with the Europeans
over Iraq, it has backed Germany and France’s
opposition to the invasion. The regime’s
main concern seemed to be about how it could
collect the $9 billion owed to it by the Sadaam
Hussien regime. Russia has also been powerless
to resist its military and strategic encirclement
by the American empire. The U.S., now has military
bases in Tajickestan, Uzbeckestan and Krgyz,
bordering Russia and which were constructed
“for the war on terrorism”, but
which will not be dismantled anytime soon. It
has a friendly government in Ukraine and a pro-American
government in Georgia, countries that were once
part of the USSR, all in an area of the world
where there are vast reserves of energy, the
control of which is of strategic importance
to imperialism. The United States is currently
pressuring the Russian government to close its
two military bases in Georgia (56) The North
Atlantic Treaty Organization (NATO) has expanded
to include ten new members, seven of them former
members of the Warsaw Pact, to bring imperialism’s
main strategic military alliance right up to
the borders of Russia, with some NATO air-fields
only a few hundred miles from Moscow. The Putin
regime“… has allowed the West to
solve strategic tasks without spending an extra
penny”, says the Russian Communist Party.
(57)
For U.S. military planners, Russia is still
seen as a threat. Although there are a number
of treaties between Russia and the U.S. that
have led to a reduction in nuclear-armed intercontinental
ballistic missiles and nuclear testing, most
of America’s existing weapons systems
are still aimed at Russia (and China). Recently
Canada has agreed to allow NORAD to be part
of the U.S.’s Star Wars System which will
be operational this fall in Alaska. Australia
will also be part of the “missile defense
shield” system. NORAD was critical to
the war plans of the United States during the
Cold War and was initially built under the pretext
of “countering the Soviet threat “,
placing an enormous economic burden on the USSR.
The anticipated cost of the Star Wars System
is $100 billion.(58) In addition, the U.S. is
taking steps to escalate the nuclear danger.
(58) “…Washington is reversing a
decades-old policy of “no production of
fissible material or weapon”, as it prepares
to create new capabilities of its own.”(59)
Correctly, both China and Russia see these moves
by the imperialist powers as a threat to their
security. This summer, the U.S. has been engaged
in massive naval exercises close to Taiwan.
Both Russia and China are in the process of
upgrading their military capabilities. Recently,
the Russian army has been engaged in large war
games in the Far East and in the latest Russian
budget, military spending was increased and
Russia has begun developing and testing a new
missile system to counter these new threats.(60)
This again imposes a huge burden on Russian
working people who will pay for all of this
through deferred improvements in their social
conditions. In 2002, the planned figure for
Russia total defense expenditure was just over
$9.5 billion, or 2.7% of GDP. (Some Western
estimate put it at around $50 billion.) But
no matter how it is calculated, this is tiny
compared to the massive U.S. military budget
of $385 billion, excluding the Homeland Defense
expenditures and the war with Iraq. (61) A prime
reason why Gorbachov made dramatic moves to
reach an accord with Thatcher and Reagan in
the 1980’s was to seek relief, during
the USSR’s social and economic crises
from the heavy burden of maintaining the large
military establishment Russia needed to defend
itself against the capitalist powers surrounding
it. Military expenditure was rising twice as
fast as the rate of growth of GDP, says Gorbachov.
“In virtually all branches of the national
economy, military expenditures sapped the vital
juices.” (62) Both Gorbachov and Yeltsin
saw accommodation with imperialism as a way
out of the crises and were prepared to pay a
high price to achieve it.
“Is the ‘transition’ reversible?”
This is another part of the Russian paradox.
If it has “gone capitalist”, as
is commonly expressed by some commentators,
why can’t imperialism seem to recognize
this? Could it be that the “the transition”
has not progressed far enough to be irreversible?
And is it possible that capitalism has not been
as successful in Russia as many in the West
believe, and they are keeping their options
open? Large sectors of the economy have yet
to be fully integrated into a fully-functioning
private property system. Even though capitalism
has made big strides in penetrating the economy
– with as much as much as 90% of its active
industrial production in private hands –
there is still some distance to go before it
totally dominates the economy. According to
some estimates, the Russian state still owns
approximately 10,000 companies and has stakes
in about 4500 joint-stock companies (63) “At
present more than one half of the economic entities
in the country are fully or partially owned
by the state’, said Putin in a speech
to a joint session of the economics, finance
and trade ministries.(64) The state holds a
dominant stake in Gazprom, a joint-stock company
natural gas monopoly, it owns 52% of the joint-stock
RAO-UES(the electricity generating and distribution
system) and 51% of the long-distance telecom
monopoly, Rostelcom. (65) It owns diamond production
and the state pipeline systems.
By 1998, before the advent of the August financial
crisis, the privatization drive had run into
a wall. “The wall was our Russian economy,”
says Boris Yeltsin, “with its ‘special
relations’. That unofficial gray sector
with its unwritten rules and laws, was several
times larger than the aboveboard ‘white
sector’. Like a steel hulk, it had resisted
all the efforts of the young reformers”
(67)
Even at this stage in the privatization process,
if we were to arrive at an estimate of the aggregate
wealth of the Russian economy – that includes
mines, land resources, factories, privately
held and publicly owned – probably most
of it would be under some type of social control
or ownership. This would include control of
those factories and enterprises transferred
to directors, who often in collaboration with
the workers and local political authorities
have kept the factories operating, even at a
minimal level of productivity, waiting until
such time as the economy recovered before fully
privatizing. Many of these enterprises, some
nominally privatized, and often in heavy industry
and referred to as “old economy”
type plants, limp along barely avoiding bankruptcy.
Many of them are under some form of public ownership,
kept alive by a system of barter and promissory
notes and hidden subsidies in the form of unpaid
taxes, energy bills and unpaid wages. There
is also deep suspicion in the general population
about the privatizations, as can be seen in
the lack of popular support for turning over
social property to private interests. But, primarily,
these plants lack investment and have obsolete
equipment. “The age of Russian manufacturing
plant and equipment, on average, is more than
three times higher than in the OECD.”
(68)
Most importantly for a would-be capitalist owner,
they are “unprofitable” and unable
to compete in the market economy without undergoing
serious “restructuring”, which would
entail mass lay-offs. The low wages are not
a sufficient factor to allow these plants to
be competitive.
Greed is a powerful dynamic
Under capitalism, one well-tried method to “restructure”
the economy is through enforced bankruptcies.
But in Russia, this has caused major difficulties
for the regime. “Bankruptcy proceedings
have been delayed or annulled because of the
political risk of closing hundreds, perhaps
thousands, of enterprises – without an
adequate social safety net in place –
in what are often one factory towns,”
says Center for Strategic and International
Studies.(69) “In October 1999, there were
said to be 940 single-factory towns, with some
24 million inhabitants. In most of these the
single factory provided not only employment
but also housing, schools, clinics, stores,
canteen, market gardens, and even free or heavily
subsidized vacation resorts.” The local
authorities were reluctant to press bankruptcy
proceedings, the report continues, and “Sverdlovsk
governor, Eduard Rossel vowed to prevent the
bankruptcy or privatization of the Uralvaronzavod
plant employing 25,000 workers. Chelyabisnk
governor, Petr Sumin announced on April 16,
1999, that he would grant 200 of the oblast’s
leading firms, political protection from bankruptcy…”
“Wholesale closure or restructuring of
loss-making firms has been hampered by the need
to have a court order before management can
be replaced and take up to 18 months to push
bankruptcy proceedings through the courts”(70)
In determining how far the old collectivized
economic system has been dismantled, it is not
a simple matter of a quantitatively summing
up in a formal way the various sectors that
are fully or partially under some kind of state
control. It is necessary to recognize the trajectory
of the state as it is transformed into an instrument
that will serve a new emerging bourgeois class
in its drive to create opportunities to expropriate
surplus value at the point of production and
allow greater capital formation in the economy.
Even if only a minority sector of the economy
is privatized – no matter its overall
weight in a strategic sense – the remaining
“collectivized” part of the economy
would be subordinate to that sector which is
organized for the formation of capital, especially
in the present political context and relationship
of class forces. Capitalist greed, re-enforced
with corruption in the state apparatus, provides
a powerful dynamic to assure this outcome, especially
under a government which is committed fully
to “market solutions.”
The Russian government has withdrawn from any
attempt at directing the economy and even plays
less of a role in this respect than many of
the governments in advanced capitalist countries.(71)
The size of the state has been greatly reduced
from what existed before the collapse and the
financial resources available to the government,
are now quite small, a hundred times less in
than that of the U.S., for example, around $17
billion compared to $1.7 trillion. There is
no state policy in regards to the production
sector of the economy and the government believes
it should not designate sector priorities. As
a result, priorities are designated by the representatives
from the regions where the sectors are located
and are dependant upon their political influence
with the state bureaucracy If we look at the
administrative reforms carried out in recent
years, especially since the 1998 financial collapse,
most of these were designed to facilitate the
growth of capitalism in the economy. All state
enterprises have been incorporated and have
a share ownership structure, a measure pushed
through in the early 90’s under Yeltsin.
Putin has implemented an extremely regressive
tax system, a flat tax of 13%, even for the
wealthiest individuals. Corporate taxes are
among the lowest in the world. Most of the reforms
at the level of the state – applied under
the guidance of specialists from the IMF-- take
the form of implementing new accounting and
so-called, “transparent” procedures
for private business transactions, allowing
the free movement of capital in and out of the
country. The government is now implementing
tighter disclosure standards for publicly traded
companies and has broadened the tax system.(72)
A couple of years ago, amidst a lot of publicity
by the government, two thousand new tax inspectors
were hired to enforce the new tax laws. Nevertheless,
tax collection from corporations is haphazard
with many using their connections to the regime
to pay nothing.(73) Still, in the eyes of the
pro-business forces these measures are haphazard.
The privatization process has not been smooth.
Its stops and starts are testimony to the inordinate
difficulties the pro-capitalist forces face
in rolling back the achievements of 1917, and
helps explain the length of time that will be
required to carry out the “transition”.
The task of making the economy conform to the
drive for profit is enormous and has caused
a massive social disruption and instability
everywhere in the country. Russia still lacks
a consolidated capitalist class.(74) There is
a lack of native capital and foreign investors
have been staying away. Putin in his recent
state of the nation speech, talked about trying
to stop the $20 billion annual capital flight.(75)
Total foreign accumulated capital in the economy
is only $57.1 Billion. (78) The Duma has been
debating measure to make it easier for foreigners
who might invest in the country to gain citizenship.
Russian Deputy Economy Minister, Andrey Sharonov,
says foreign investment is “ten time lower
than domestic investments.” (79) Foreign
direct investment this year is expected to rise
to $8 billion, and increase of 64% over the
2003.(80) Prior to this, the outflow of capital
has often been much greater than inflow, much
of which in the past two years has been returning
Russian capital which took massive flight during
the 1998 crisis. (81) Many Russian capitalists
are using their base in Russia to find more
profitable investment in the major capitalist
countries. Russian energy giant, Lukoil, for
example, recently bought 2,100 gas stations
in the U.S. (82) Alasher Usmanov, a wealthy
Russian businessman, is buying a 11% stake in
the Corus Group, Europe’s third largest
steelmaker.(83) They are also investing in countries
such as India and in Nigeria, for example, they
are in negotiations with the Nigerian government
to privatize ALSCON, the state run aluminum
smelting company. (84)
The capitalists need the bureaucrats
The growth of private wealth, especially since
the fall of Gorbachev, has not been sufficiently
large enough to allow the creation of a class
powerful enough to take power in its own name
, even though its growth has been amazingly
swift, according to Forbes magazine in Russia.
Its Russian editor, Paul Klebnikov, was murdered
in what appears to be a contract killing, shortly
after his Forbes article appeared. On the Forbes’
list of one hundred of Russia’s richest
businessmen, 36 are billionaires with a total
wealth of $110 billion, equal to one quarter
of Russia’s GDP.(85) Forbes makes a comparison
with the wealthy in other countries. Only four
Russian billionaires appeared on the list in
1997, but today, they say, there are more billionaires
in Russia than in Japan, which for example,
has 22, an advanced capitalist economy where
the GDP is $3.7 Trillion. Germany has 52 billionaires
and a GDP of $2.1 trillion. The U.S. has 277
billionaires and a GDP of $11 trillion.. A writer
for Pravda says figures from the government
back up Forbes’ estimates. “The
richest people in the country account for approximately
1.5% of the population…which adds up to
two million. With all types of property taken
into account, they are each worth at least $1,000,000.”
(86)
Compared to other capitalist countries of course,
this is a very narrow stratum. In Canada, for
example, with a population approximately one
fifth that of Russia, the top ten percent of
families – representing approximately
3,000,000 people –have an average wealth
of $1,100,000 Cdn. (87) But, if we take into
account the “informal economy” in
Russia, the so-called “grey market”,
which some Russian estimates put at between
22% - 50% of GDP or which some Western estimates
put as high as 40% , we can see that the number
of wealthy individuals in Russian society is
much higher than the above figures indicate.
(88) The significance of the “informal
economy”, can be seen in the recent public
discussion around proposals to make it easier
for citizens to obtain consumer mortgages when
Putin declared he wished to see home ownership
expanded so that one-third of Russians will
own their own home by 2010.(89) At the recent
National Real Estate Congress, the Guild of
Realtor statistics revealed that 75% of all
consumer mortgage applicants are unable to prove
their income because it is undeclared.(90)
Illegally acquired wealth is widespread in the
society. An earlier World Bank report commented
on “a puzzle in Russia’s national
accounts”, which also shows its extent.
Figures revealed that the production of services
exceeds the production of goods in the economy
by a wide margin, while the official share of
non-market services was very small. Moreover,
the trade sector in official accounts is huge
and profitable – accounting for about
one third of GDP and half of all profits generated
by trade (91) This “puzzle”, it
turns out, is a result of the practice of “transfer
pricing” and is very evident in the energy
sector. The government’s official figures
for the year 2000 state that oil and gas in
the economy represented only 8% of GDP, yet
the government also stated that oil and gas
exports alone were worth about 20% of GDP. Apparently,
it is a common practice for firms – in
all sectors – to set up trading subsidiaries,
sometimes off-shore, to receive favourable tax
treatment. (This is one of the charges against
Mikhail Khodorkovsky of OAO Yukos) “The
firm then uses transfer pricing to move profits
from the industrial subsidiary to the trading
arm; output of the industrial firm is sold at
an unrealistic low price to the trading subsidiary
which sells it at the higher market price, and
the mark-up accrues to the trading firm which
benefits from the lower effective tax rates.”
The report indicates that this tax loop-hole
was closed this year, but there are also illegal
variants on this scheme where trading companies
disappear after a number of transactions and
pay no taxes at all. (92) The practice also
helps keep wages low because the firm will always
be on the verge of bankruptcy, with the bosses
asking the workers to make concessions.
“Unofficial” wealth
“Unofficial” wealth is not a recent
phenomena in Russia and existed under Stalin
and its growth even prepared the ground for
the eventual collapse of the economy.(93) In
the late 70’s and early 80’s, as
the crises of the bureaucratic regime intensified,
corruption deepened under Brezhnev, even reaching
into his family, as more and more sectors of
the population sought “personal”
solutions to their problems. After the discovery
of oil, oil-well development was substituted
for the modernization of industry. (94) However,
the Stalinist system was fundamentally unstable.
In its relations with the workers, the bureaucracy,
because of the limitation of its coercive powers
at the point of production – primarily,
and ironically, because it was at the same time,
part of the working class -- faced extreme difficulty
in intensifying production and driving efficiency,
causing under-production and the production
of “defective use values.” (95)
One consequence of this was for the administration
to tell the workers “You will not have
to work too hard and we won’t pay you
much.” This resulted in extremely destructive
practices in the workplace, and in reality,
a form of privatization. Workers sought their
own private solutions to the lack of income
which led to an increase in growth of the black
market and reliance on private plots for the
growing of food. Important sectors of the bureaucracy
directly participated in corrupt practices,
accenting the crises and benefiting from it.
Yuri Andropov, who took over when Brezhnev died,
“carried through the exemplary dismissal
of a number of ministers who were charged with
protecting or even virtually running a hugely
profitable underground manufacturers and commercial
concerns.”(96) According to Gorbachov,
Andropov “had repeatedly stated that the
Ministry of Internal Affairs was corrupt, that
there were signs that it had links with mafia
structures, and that in its present form, it
was unable to combat rising crime.” N.S.
Shchelokov, the Minister, had enjoyed the protection
of Brezhnev. Throughout the republics of the
USSR, corruption was rampant as they were often
run as personal fiefdoms of local Communist
Party leaders. The bureaucracy under Andropov
was incapable of remedying the situation, often
appointing replacements who were often just
as corrupt.(97)
The new capitalist class that has arisen out
of the crises of the last two decades is very
weak, and not only in terms of its aggregate
wealth. The capitalization of the stock market
is tiny and all of Russia’s 1500 private
banks have total assets of under $100 billion,
less than some individual American banks.(98)
The Russian wealthy lack moral legitimacy because
they looted the economy. They are reviled, but
they have learned “not to be loved”
and are even prepared at this stage to be political
footballs for the regime. “President Putin,
“says Vladimir Potanin, “may know
the true worth of the wealth creators, but the
majority of the people do not like us, then
he has to be with the majority. I must understand
why people don’t like me…I must
learn not to be loved…” (99) Although
somewhat feeble, Russia’s wealthy class
has a power many times greater than its actual
social weight in the society because it has
the the support of a government aligned with
its interests and the unswerving solidarity
of a cohesive world imperialist system backed
up by a system of powerful global financial
institutions. These Russian capitalists frequently
put their differences aside and intervene financially
and politically at decisive moments to ensure
a government, aligned with their interests,
remains in power. They were extremely brazen
in their support of Boris Yeltsin, intervening
in elections when he had lost popular support
to throw their organizational and financial
resources behind him.(100) Because of the influence
of the Russian capitalists when Western backed
legislation was being proposed to allow the
government to make deals with foreign oil multi-nationals
such as Exxon, and bypass OAO Yukos, to allow
it to lock up reserves and give the government
some measure of control over the upstream oil
business, the legislation was eviscerated..
In a display of his influence over the Russian
government, Khodorkovsky, in a February 2002
meeting with George W. Bush, predicted this
would happen. (101)
The capitalists need a social base
A pre-requisite for the success of capitalism
in Russia is the existence of a sufficiently
large enough social base for a private property
system in the society. This took thousands of
years to develop in the advanced capitalist
countries. In Russia, the social base for capitalism
was obliterated by revolution and the long years
of imperialist intervention. To privatize successfully
requires that there be a sufficiently large
wealthy class in the society to drive the process
through and incorporate the newly privatized
productive resources into an existing private-property
system. Otherwise, there is a danger the country
can be colonized by the imperialist powers.
This explains some of the compromises made by
Anatoly Dubais and his “reformers”
when they began to dismantle the collective
economy in the 1992 – 1995 period. At
that time, if they had put the factories on
the auction block for immediate disposal, they
would have been taken over by foreign capitalists.
There was simply insufficient private capital
in Russia to accomplish the privatization task.
They would have been forced to sell important
parts of the economy at absurdly low prices.
Moreover, the government had a political problem
because of the deep suspicion in the population
about their “reform” programme,
so “ownership” of the factories
was turned over to the workers in the form of
vouchers. This temporarily helped solve the
problem of a lack of popular support for the
“reformers” efforts and it also
prepared for the privatization we see taking
place in the manufacturing sector today. The
regime under Yeltsin was unable to go all the
way in selling off state assets. In some critical
key sectors, the state maintained a controlling
interest and there are still thousands of factories
where the state has a minority interest.
Changes in agriculture
Changing the agriculture sector is an entirely
different matter and has proven more difficult
for the regime to carry out. This is probably
due to a combination of the historic crises
in agriculture remaining from the forced collectivization
under Stalin and the new deep poverty level
of the mass of the population resulting from
the economic collapse. There is simply no money
to buy anything. Life in the countryside remains
much the same as it was prior to the collapse,
if not worse although “capitalist in structure
but still socialist in spirit“.(102)
Russian agriculture has been in crisis since
Stalin’s brutal forced collectivization
was imposed upon the Russian peasantry. In 1990,
before the collapse of the USSR, the agriculture
sector produced 15.4% of GDP. (103) It now produces
only 5.5% of GDP. Agriculture suffered catastrophically
from the removal of price controls in 1992.
There was a collapse of prices simultaneously
with a sharp rise in the cost of inputs as they
quickly rose to world market levels. Workers
in the sector, which employs 7.7 million, have
the highest age-levels and the lowest wages,
$66.00 a month, in the country. Agriculture,
of all sectors of the economy, has the highest
backlog of unpaid wages. State subsidies to
farmers are greater than the total taxes paid
by them. The sector is also comprised of 34.9
million privately-owned household plots and
gardens which while making up just over 6% of
the total area of farmland, produces over half
of all the country’s agricultural products.
Total area of land available for cultivation
is 221 million hectares (acres), 13% of the
total area of the country. Only 80% of available
land is cultivated and agricultural land is
declining. Livestock numbers are constantly
decreasing as the beef industry uneconomic and
suffering losses of around 30%. The production
of dairy products and eggs is also in decline.
(104) Yeltsin says that the 1998 financial crisis
“barely impacted the countryside”
because conditions were already severely depressed.
Rural people did not have any bank deposits
to lose. (105) The problems in agriculture have
become so grave, Russia has had to ask for assistance
from the Western powers. In 1998-99, the U.S.
shipped $500 million in food aid and the European
Union provided similar amounts. In 2000-2001,
the U.S. shipped more aid in the form of animal
feed because of the crisis. Last October, the
Vice Premier and Agricultural Minister admitted
publicly that Russian agriculture was “in
critical condition”, with debts at $9
billion.
Many of the crises in the regime over the years
can be traced back to agriculture. Gorbachov,
a Party Secretary for the agricultural region
of Stavropol was chosen by Brezhnev in the early
1970’s to come onto the powerful Central
Committee to deal specifically with this problem.
(106) One of Gorbachov’s major reforms
in the 1989-90 period was legislation which
created the legal basis for family farming and
which provided for the creation of non-state
enterprises such as cooperatives, the de-nationalization
of land and non-land assets by transferring
them legally to cooperatives and state farms.
(107) There were also several attempts by Yeltsin
– and now Putin – to break the hold
of the collective traditions on the rural economy
by introducing legislation in the Duma, to make
it legal for individuals to buy and sell land.
However, most of these attempts have stalled.
With the many new laws and decrees in place,
redefining the legal forms of large agricultural
enterprises and land ownership and certifying
existing ownership rights, it was expected that
the large collective and state farms would be
restructured. “But as it turned out, few
peasants were interested in establishing individual
farms and management and operating practices
inside large agricultural enterprises remain
largely unchanged.”, says the OECD. “Most
of the 62% of the so-called privately-held agricultural
land is still under collective shareholding,
mainly as re-registered large-scale farms. Even
family farms and household plots, which make
up 10% of agricultural land, are constrained
from exercising full ownership rights.”
(108)
Agriculture and the WTO
Putin, during the recent election, said he will
introduce legislation to deal with the chronic
problem of agriculture. New legislation on land
reform before the Duma is designed to make agriculture
conform to the needs of the international market.
With Russia’s entry into the WTO, the
problems may become greater. Russia consumes
up to 40% of all U.S. imports. It recently banned
the import of frozen chicken from the U.S.,
imposing tariffs of 30% to protect its own under-capitalized
poultry producers and it has a 20% tariff on
other agricultural products. Under WTO rules,
such measures may be impossible to maintain
and it may be forced to cut back its subsidies.(109)
But it seems that the policies chosen to deal
with agriculture may be those adopted by many
third world countries, such as Brazil and Argentina,
when in the early 1970’s they threw the
doors wide open to large-scale integrated agro-businesses.
The consequent development of mono-culture drove
tens of thousands of peasants off the land and
into the shanty towns surrounding major cities.
The Russian government is now in talks with
several large capitalist holding companies about
the “opportunities” in agriculture,
according toViktor Semyonov, deputy chairman
of the Duma’s “committee for economic
policy and entrepreneurship”. In the Belgorad
region (Western Russia), two large agro-industrial
holding companies are cultivating large tracts
of land and the government is now in negotiations
with Internos, a holding company owned by Vladimir
Potanin, to turn over to it a vast area, almost
2,5,000,000 acres for “development”.
(110)
The restructuring of agriculture will not be
an easy task for the regime. In early 2001,
we got an insight into the difficulties in making
such changes. When the then new Putin government
was striving to maneuvre legislation through
the Duma to increase private land sales, a report
in the The Times of London , January 23, 2001,
gave a picture of the difficulties. The paper
reported on the situation of a farmer, Alexsander
Zhukov and his family, who bought land in the
early 1990’s when government ownership
of land was temporarily rescinded to allow small-scale
farming. The family owned 650 acres and were
quite prosperous, according to The Times, but
because this is so rare in this part of Russia,
“they ‘dress down’ to avoid
the envy of their neighbours and guard their
barn with dogs and a gun.” Of the nearly
fifty small farms set up on the collective farm
in the early 1990’s, “the Zhukov’s
is the only one still in business, part of pattern
that has seen private farming in Russia, far
from expanding to supply domestic demand, shrink
drastically over the past two years.”
The Zhukovs earn about $1300 a month, “a
vast sum by local standards, The Times said,
“ and are in a position to double the
size of their holding. The law rules that out,
however. ” Even though, on that occasion,
a new land law was being debated in Russia’s
parliament which would have allowed “extensive
private land ownership for the first time since
the Russian Revolution”, the paper reported
that the Zhukhovs’ desire to expand their
holding would remain frustrated, because the
new law “will keep a ban on agricultural
land sales.”
“Transition” is not stable
The foregoing is an example of the contradictory
nature of Russia’s transition to a system
of private property relations throughout the
economy. The transition can undergo modification
at any time, a consequence of either economic
or financial crisis such as the virtual state
of bankruptcy in August , 1998, or because of
opposition political forces compelling the government
to modify or pull back from pro-capitalist policies.
TheTimes reporter, in the article quoted above,
stated that Putin hinted, around the middle
of January that year, he would back down on
an election promise to speed-up privatization
of the “largest mass of farmland on the
planet. His concession showed the limits of
his power over the Duma where the Communists
constituted the largest single faction.”
This will change now that those political obstacles
have been reduced.
It would be a mistake to interpret some of the
half-way measures and the contradictions, the
“barter” character that may persist
in some parts of the economy, as a kind of guarantor
of the existence of some elements of a collective
economy or even its revival under the present
regime. This would ignore the objective processes
at work in Russia and the deep crises in the
economic and political system and the extent