Daily Archives: December 6, 2007

December 6, 2007 — Contents

WEDNESDAY DECEMBER 6 CONTENTS

(1) The Silent Coup

(2) Russia’s Real Enemies

(3) Annals of Putin’s Economic Propaganda

NOTE: Today is a tribute to the power of the blogosphere, all this content would not exist in the MSM and we see it only because of the heroic efforts of our proud community of bloggers in our pajamas.

The Silent Coup

Zaxi blog on Russia’s “Silent Coup”:

“Russian Vote Affirms Putin’s Path.” This piece of news comes to you not from the Kremlin press office but the headline writers of The Wall Street Journal.

The Washington Post called it “a convincing personal victory” and The New York Times “a triumph.” The Associated Press went with “overwhelms.” Reuters and The Christian Science Monitor – and the Journal again – all shared a “landslide.” Even The Economist headline agreed that “Vladimir Putin looks stronger.”

What a strange chorus of opinion. So confident. So off key.

And so closely resembling what the Kremlin is saying about the State Duma vote that the choir may want to pause for breath.

Sunday’s poll may in fact leave the Kremlin more than a touch nervous about initial cracks appearing in its monopolistic foundation. Putin’s party – simply put – fell short of expectations. At least six percent short.

This after months of television brainwashing and Putin’s divine intervention. After factories of workers were bused to voting booths to cast ballots for United Russia under penalty of job loss. After Ramzan Kadyrov produced 99 percent of the Chechen vote on 99 percent turnout – nearly identical to the result in neighboring Ingushetia. After senseless arrests of opposition figures and state-ordered national rallies. All the Orwellian transgressions are simply too numerous to name and have been thankfully well documented in the same Western press.

And yet – and yet – United Russia won just 64 percent of the vote. That is seven less than Putin himself did in 2004 and short of the Constitutional majority that was a Kremlin prerequisite for Sunday’s exercise. The party will still hold 70 percent of the Duma seats thanks to Putin’s new election rules and the Constitution remains at the Kremlin’s mercy. But the new Duma pretty much resembles the old one. No visible progress in the president’s favor was made – despite Putin repeatedly telling Russians that this vote was actually just about him.

One in three Russians officially told Putin to shove it. Probably half would have done so if their work was not in doubt. More votes would have been lost if a few alternative candidates were allowed to appear on the news.

No wonder Putin’s spokesman was on the phone to Reuters seconds after polls closed to explain that “the first partial results … show that the overwhelming majority of Russian voters spoke in favor of United Russia – thus supporting President Putin’s course and speaking in favor of it being continued after the current president’s second term ends.”

Quite a mouthful – and a goldmine for psychoanalysts. Swallow hard and repeat as often as possible: The Russians have spoken. They want all this to go on.

What this vote demonstrated quite graphically was just how much danger Putin & Co. really are in. Putin was only able to muster 64 percent support in a Soviet-style election while still serving as president. Remove him from power for six months and place another mug on television – they will have to. And take a look at how many votes Putin swings then.

Spare no doubt. The Kremlin has cheated its way to ensure that it can always refer back to this date and say that whatever it plans to do next is justified. A dominant Duma majority is still a dominant Duma majority. But the Kremlin may now have to do quite a lot to keep Putin’s people in power for the long haul – and that is worrying.

What comes next may be as difficult to answer here as in Putin’s chambers. There should now be no doubt for anyone brave enough to keep their own opinion in the administration that Putin will not be able to survive four years out of power and return. He will need to be handed a very strong interim post. And the next president will have to serve for only the briefest stint decency allows before developing pneumonia.

But the Kremlin has absolutely no time to plot – and this may either be to Russia’s benefit or demise. It could all go horribly wrong and lead to mass arrests rather than welcome incompetence. United Russia was set to nominate its presidential election candidate on December 17 – although a few days’ delay amid the confusion now seems likely. Russia’s real election is only about two weeks away.

The party has been pretty much denied the right to re-nominate Putin no matter how much the entire system wants to cling on. This means the position actually has to be filled – an odd feeling for a party that removed all names from leadership posts in Putin’s favor for Sunday’s vote. A name will be pressed upon it by the laws of time. So who will it be?

Probably Viktor Zubkov. The prime minister is just the right age to fall ill in inclement weather and goes way back in Putin’s biography. Zubkov will allow his old Saint Petersburg administration student to assume any new office he wants while dutifully fulfilling the role of meeting ministers in silent evening news footage. A Zubkov nomination would mean that Putin will probably be back heading the Kremlin by 2010 and that Constitutional changes extending the presidential term to six or eight years will start getting drafted this spring.

It is unlikely that Putin would tell Russians to vote for anyone else. But there are Kremlin forces that would like to exercise a bit more power from now on without all this sharing. Some may even be realistically thinking ahead to days when Russia is not pocketing 800 million dollars a day from oil and gas exports. A revolt is brewing in the ranks. It is evident from turmoil in the feuding security services and a bizarre Kommersant piece that levels charges against Putin’s pals that are not usually made by those who value life and limb.

Any candidate other than Zubkov would thus symbolize a Kremlin coup. A man like Sergei Ivanov – strong and certainly as telegenic as Putin – would mean an outright revolution: the president has already tried to bury him once. It would suggest that someone managed to outmuscle a Putin appointment. This scenario was outrageous before Sunday. It now seems a very remote possibility. But a possibility nonetheless. And that is the “landslide” vote’s real outcome.

Sunday was a pretty remarkable show of independence by Russians within the confines of a Soviet state. It is terrifying to think how Putin plans to nip this in the bud so that he genuinely “looks stronger.”

Russia’s Real Enemies

Paul Goble reports that some Russians understand who Russia’s real enemies really are:

Russian patriotism and Russian nationalism are generally treated as synonyms or at least as mutually reinforcing phenomena, both in nearly all cases equally at odds with political democracy and economic liberalism and thus anathema both to Russian reformers and to others who wish Russia and Russians well. But in fact, the two ideologies rest on completely different foundations, with Russian patriotism focusing primarily on the state and Russian nationalism on the Russian people as a community. And consequently, some of the variants of each often are very much at odds with those of the other.

A programmatic article by a Russian nationalist a month ago calling attention to this divide has reopened this debate. And it shows few signs of any quick resolution but nonetheless says a great deal not only about where Russians and the Russian state are now but also about where they could be and are likely to be in the future. In that essay, Aleksei Shiropayev argues that Russian nationalism properly understood will promote democracy, capitalism, and integration with Europe, thereby challenging a large number of the core beliefs of Russian patriots and of those Russian nationalists who follow them. Russian patriotism, he argues, presents itself as “the true service of the State” be it tsarist, Soviet or post-Soviet because “ontologically all these versions of the Empire are ontologically the same.” And consequently, it suggests that “the historic meaning of the existence of the Russian people” is sacrificial service to the Imperial Leviathan.”

“According to the patriots,” he continues, the Russian people do not have their own fate: their fate is [linked to that] of the supra-national hyper-State, of the fate of the empire. Not to rule in the empire but to be its eternal servant, its faceless cement; bearing without complaint the burden of imperial ‘super tasks” rather than acting for itself.” That is the “imperial ‘liturgy’” of the Russian patriots, Shiropayev insists, a doctrine that reduces Russians to “eternal slaves,” permanent collective farmers,” and forever “proletarians” who must be herded forward by an all-powerful state entity that alone can decide where they should go. Russian nationalists, on the other hand, focus on the Russian people, their needs and aspirations, but because Russian patriots and not they have been in charge so long, Shiropayev continues, their approach is best presented in terms of how different it is from the latter. Because they focus on the people rather than the state, Shiropayev says, Russian nationalists – or at least the part of the Russian nationalist spectrum his “national democrats” represent – are “non-imperial” in principle. “Not through the restoration of the Empire lies the path to the Russian future, but across the corpse of the empire.”

“Thanks to the Empire, the Russian people has not become a nation,” he insists, and to change that, Shiropayev continues, it is vitally important to “open the sluice gates of regional development,” to promote “a bourgeois state,” and to integrate with Europe, must as the countries of Eastern Europe and the Baltic already have. The first task ahead of Russians, he argues, is “overcoming the fetishization of the state” by advancing the claims of the people over which the state has ruled. And the most effective way to do that is to promote the creation of regional governments that are closer to the people. These units could then perhaps form a Confederation, Shiropayev argues, and with that kind of a political arrangement, Russians would be in a position to develop the kind of economic and political system that would allow them to join Europe rather than stand in opposition to it as the Russian patriots always insist.
According to Shiropayev, Boris Yeltsin understood this point early on. In a speech to the Urals Polytechnic Institute in February 1990, the future president said that it should be possible to form within the Russian Federation “seven Russian republics: Central Russia, the North, the South, theVolga, the Urals, Siberia and the Far East.”

For Russian nationalists, Shiropayev argues, that action makes Yeltsin a hero, but for the Russian patriots, it makes him a destroyer of the state. And for them, Yeltsin is worthy of praise only for his willingness to launch of a war against the Chechen drive for independence. Indeed, Shiropayev continues, if Russian nationalists have any reason to dislike Yeltsin, it is this: “he preserved” the core part of the empire, “its initial place des armes, its bastion of revenge – the Russian Federation,” rather than allowing that entity to disintegrate and the Russian people to become true historical actors. Russian nationalists offer the Russian people the opportunity to “live and work for themselves and not for the imperial-bureaucratic ‘uncle,’ to be guided by their own real interests and not phantom ideological construction like the ‘Third Rome’ or the ‘Third International,’” to escape “the sacralized slavery of the empire and live in a bourgeois democratic state, “a Russian Europe.’” In short, Shiropayev says, Russian nationalists want Russians to practice “national egotism and self-respect instead of imperial internationalism and the belittling of themselves,” to escape from “the idea of Russia” and begin to live on their own, and thus to “begin at last” to make their own “Russian history.”

In the course of his long, two-part essay, Shiropayev discusses each of these points in detail as well as making a wide variety of comments on Russian history and the views of his ideological opponents, the Russian patriots. But his most controversial remarks concern his open support for the rise of a Russia of the regions. He surveys regionalist impulses in Siberia and other parts of the country, considers the movements that have already emerged to advance their ideas, and says he backs all of them even if that means that some of them might decide to pursue independence from the center. Shiropayev has received some support from these regionalists – for example, the equally detailed article of Mikhail Kulekhov on Siberian neo-oblastnichesto at which points out that Siberians “do not want the collapse of the Russian Federation but we do not fear it either.”

But his opponents, the Russian patriots, have attacked his ideas in a series of increasingly sharp, even vitriolic articles over the last month in the Russian “nationalist” – that is, “patriotic” – media. Typical of these is an essay by Vladimir Karpets that was posted online October 21st. He accuses Shiropayev personally and those who have published his writings of betraying the country, of promoting its disintegration, and of being hirelings of various international forces who see Russian regionalism as a weapon to destroy the Russian state, the only entity capable of defending the Russian people. To block the machinations of this group, he continues, Russia needs to establish “a genuine anti-separatist front,” on that will differ from the National Salvation Front only in that it will be directed not against the authorities but in support and under the guidance of them. And having created that front, Karpets continues, Moscow should move to create a “Yezhov-style Empire” – a reference to Stalin’s notorious secret police chief – to ensure that the Russian state that Shiropayev and his like want to put in the grave will in fact survive and prosper.

In terms of argument, Shiropayev certainly has the advantage, but in terms of Russian politics under Vladimir Putin, Karpets and those who continue to deify the state at the cost of keeping the Russians from a nation like any other would seem to have the greater influence.

The Streetwise Professor completes the thought:

This is one creepy statement from an interview with Oleg Shvarsman of Finansgroup:

This structure was created in 2004, after President [Vladimir] Putin said that big business should have a social responsibility to the state. At that time our colleagues from the FSB decided that an organization must appear that will incline, bend, torment, and lead the various and sundry Khordokovskies toward social activeness.”

This reminds me of the treatment of Winston Smith in 1984. Or perhaps better yet, it reminds me of The Captain in Cool Hand Luke:

You run one time, you got yourself a set of chains. You run twice, you got yourself two sets. You ain’t gonna need no third set ’cause you’re gonna get your mind right. And I mean RIGHT.

Shvartsman’s statement drips with irony–intentional or unintentional, I know not. For it is obvious that it was social activeness that was Khodorkovsky’s downfall. But not the right kind of social activeness. And just as The Captain was making an example of Luke (”(To the other inmates) Take a good look at Luke. Cool Hand Luke?”), Putin and the FSB were making an example of Khodorkovsky for others who might have thoughts of the wrong kind of social activeness. And from the looks of things, the example was well taken.

Russia’s Real Enemies

Paul Goble reports that some Russians understand who Russia’s real enemies really are:

Russian patriotism and Russian nationalism are generally treated as synonyms or at least as mutually reinforcing phenomena, both in nearly all cases equally at odds with political democracy and economic liberalism and thus anathema both to Russian reformers and to others who wish Russia and Russians well. But in fact, the two ideologies rest on completely different foundations, with Russian patriotism focusing primarily on the state and Russian nationalism on the Russian people as a community. And consequently, some of the variants of each often are very much at odds with those of the other.

A programmatic article by a Russian nationalist a month ago calling attention to this divide has reopened this debate. And it shows few signs of any quick resolution but nonetheless says a great deal not only about where Russians and the Russian state are now but also about where they could be and are likely to be in the future. In that essay, Aleksei Shiropayev argues that Russian nationalism properly understood will promote democracy, capitalism, and integration with Europe, thereby challenging a large number of the core beliefs of Russian patriots and of those Russian nationalists who follow them. Russian patriotism, he argues, presents itself as “the true service of the State” be it tsarist, Soviet or post-Soviet because “ontologically all these versions of the Empire are ontologically the same.” And consequently, it suggests that “the historic meaning of the existence of the Russian people” is sacrificial service to the Imperial Leviathan.”

“According to the patriots,” he continues, the Russian people do not have their own fate: their fate is [linked to that] of the supra-national hyper-State, of the fate of the empire. Not to rule in the empire but to be its eternal servant, its faceless cement; bearing without complaint the burden of imperial ‘super tasks” rather than acting for itself.” That is the “imperial ‘liturgy’” of the Russian patriots, Shiropayev insists, a doctrine that reduces Russians to “eternal slaves,” permanent collective farmers,” and forever “proletarians” who must be herded forward by an all-powerful state entity that alone can decide where they should go. Russian nationalists, on the other hand, focus on the Russian people, their needs and aspirations, but because Russian patriots and not they have been in charge so long, Shiropayev continues, their approach is best presented in terms of how different it is from the latter. Because they focus on the people rather than the state, Shiropayev says, Russian nationalists – or at least the part of the Russian nationalist spectrum his “national democrats” represent – are “non-imperial” in principle. “Not through the restoration of the Empire lies the path to the Russian future, but across the corpse of the empire.”

“Thanks to the Empire, the Russian people has not become a nation,” he insists, and to change that, Shiropayev continues, it is vitally important to “open the sluice gates of regional development,” to promote “a bourgeois state,” and to integrate with Europe, must as the countries of Eastern Europe and the Baltic already have. The first task ahead of Russians, he argues, is “overcoming the fetishization of the state” by advancing the claims of the people over which the state has ruled. And the most effective way to do that is to promote the creation of regional governments that are closer to the people. These units could then perhaps form a Confederation, Shiropayev argues, and with that kind of a political arrangement, Russians would be in a position to develop the kind of economic and political system that would allow them to join Europe rather than stand in opposition to it as the Russian patriots always insist.
According to Shiropayev, Boris Yeltsin understood this point early on. In a speech to the Urals Polytechnic Institute in February 1990, the future president said that it should be possible to form within the Russian Federation “seven Russian republics: Central Russia, the North, the South, theVolga, the Urals, Siberia and the Far East.”

For Russian nationalists, Shiropayev argues, that action makes Yeltsin a hero, but for the Russian patriots, it makes him a destroyer of the state. And for them, Yeltsin is worthy of praise only for his willingness to launch of a war against the Chechen drive for independence. Indeed, Shiropayev continues, if Russian nationalists have any reason to dislike Yeltsin, it is this: “he preserved” the core part of the empire, “its initial place des armes, its bastion of revenge – the Russian Federation,” rather than allowing that entity to disintegrate and the Russian people to become true historical actors. Russian nationalists offer the Russian people the opportunity to “live and work for themselves and not for the imperial-bureaucratic ‘uncle,’ to be guided by their own real interests and not phantom ideological construction like the ‘Third Rome’ or the ‘Third International,’” to escape “the sacralized slavery of the empire and live in a bourgeois democratic state, “a Russian Europe.’” In short, Shiropayev says, Russian nationalists want Russians to practice “national egotism and self-respect instead of imperial internationalism and the belittling of themselves,” to escape from “the idea of Russia” and begin to live on their own, and thus to “begin at last” to make their own “Russian history.”

In the course of his long, two-part essay, Shiropayev discusses each of these points in detail as well as making a wide variety of comments on Russian history and the views of his ideological opponents, the Russian patriots. But his most controversial remarks concern his open support for the rise of a Russia of the regions. He surveys regionalist impulses in Siberia and other parts of the country, considers the movements that have already emerged to advance their ideas, and says he backs all of them even if that means that some of them might decide to pursue independence from the center. Shiropayev has received some support from these regionalists – for example, the equally detailed article of Mikhail Kulekhov on Siberian neo-oblastnichesto at which points out that Siberians “do not want the collapse of the Russian Federation but we do not fear it either.”

But his opponents, the Russian patriots, have attacked his ideas in a series of increasingly sharp, even vitriolic articles over the last month in the Russian “nationalist” – that is, “patriotic” – media. Typical of these is an essay by Vladimir Karpets that was posted online October 21st. He accuses Shiropayev personally and those who have published his writings of betraying the country, of promoting its disintegration, and of being hirelings of various international forces who see Russian regionalism as a weapon to destroy the Russian state, the only entity capable of defending the Russian people. To block the machinations of this group, he continues, Russia needs to establish “a genuine anti-separatist front,” on that will differ from the National Salvation Front only in that it will be directed not against the authorities but in support and under the guidance of them. And having created that front, Karpets continues, Moscow should move to create a “Yezhov-style Empire” – a reference to Stalin’s notorious secret police chief – to ensure that the Russian state that Shiropayev and his like want to put in the grave will in fact survive and prosper.

In terms of argument, Shiropayev certainly has the advantage, but in terms of Russian politics under Vladimir Putin, Karpets and those who continue to deify the state at the cost of keeping the Russians from a nation like any other would seem to have the greater influence.

The Streetwise Professor completes the thought:

This is one creepy statement from an interview with Oleg Shvarsman of Finansgroup:

This structure was created in 2004, after President [Vladimir] Putin said that big business should have a social responsibility to the state. At that time our colleagues from the FSB decided that an organization must appear that will incline, bend, torment, and lead the various and sundry Khordokovskies toward social activeness.”

This reminds me of the treatment of Winston Smith in 1984. Or perhaps better yet, it reminds me of The Captain in Cool Hand Luke:

You run one time, you got yourself a set of chains. You run twice, you got yourself two sets. You ain’t gonna need no third set ’cause you’re gonna get your mind right. And I mean RIGHT.

Shvartsman’s statement drips with irony–intentional or unintentional, I know not. For it is obvious that it was social activeness that was Khodorkovsky’s downfall. But not the right kind of social activeness. And just as The Captain was making an example of Luke (”(To the other inmates) Take a good look at Luke. Cool Hand Luke?”), Putin and the FSB were making an example of Khodorkovsky for others who might have thoughts of the wrong kind of social activeness. And from the looks of things, the example was well taken.

Russia’s Real Enemies

Paul Goble reports that some Russians understand who Russia’s real enemies really are:

Russian patriotism and Russian nationalism are generally treated as synonyms or at least as mutually reinforcing phenomena, both in nearly all cases equally at odds with political democracy and economic liberalism and thus anathema both to Russian reformers and to others who wish Russia and Russians well. But in fact, the two ideologies rest on completely different foundations, with Russian patriotism focusing primarily on the state and Russian nationalism on the Russian people as a community. And consequently, some of the variants of each often are very much at odds with those of the other.

A programmatic article by a Russian nationalist a month ago calling attention to this divide has reopened this debate. And it shows few signs of any quick resolution but nonetheless says a great deal not only about where Russians and the Russian state are now but also about where they could be and are likely to be in the future. In that essay, Aleksei Shiropayev argues that Russian nationalism properly understood will promote democracy, capitalism, and integration with Europe, thereby challenging a large number of the core beliefs of Russian patriots and of those Russian nationalists who follow them. Russian patriotism, he argues, presents itself as “the true service of the State” be it tsarist, Soviet or post-Soviet because “ontologically all these versions of the Empire are ontologically the same.” And consequently, it suggests that “the historic meaning of the existence of the Russian people” is sacrificial service to the Imperial Leviathan.”

“According to the patriots,” he continues, the Russian people do not have their own fate: their fate is [linked to that] of the supra-national hyper-State, of the fate of the empire. Not to rule in the empire but to be its eternal servant, its faceless cement; bearing without complaint the burden of imperial ‘super tasks” rather than acting for itself.” That is the “imperial ‘liturgy’” of the Russian patriots, Shiropayev insists, a doctrine that reduces Russians to “eternal slaves,” permanent collective farmers,” and forever “proletarians” who must be herded forward by an all-powerful state entity that alone can decide where they should go. Russian nationalists, on the other hand, focus on the Russian people, their needs and aspirations, but because Russian patriots and not they have been in charge so long, Shiropayev continues, their approach is best presented in terms of how different it is from the latter. Because they focus on the people rather than the state, Shiropayev says, Russian nationalists – or at least the part of the Russian nationalist spectrum his “national democrats” represent – are “non-imperial” in principle. “Not through the restoration of the Empire lies the path to the Russian future, but across the corpse of the empire.”

“Thanks to the Empire, the Russian people has not become a nation,” he insists, and to change that, Shiropayev continues, it is vitally important to “open the sluice gates of regional development,” to promote “a bourgeois state,” and to integrate with Europe, must as the countries of Eastern Europe and the Baltic already have. The first task ahead of Russians, he argues, is “overcoming the fetishization of the state” by advancing the claims of the people over which the state has ruled. And the most effective way to do that is to promote the creation of regional governments that are closer to the people. These units could then perhaps form a Confederation, Shiropayev argues, and with that kind of a political arrangement, Russians would be in a position to develop the kind of economic and political system that would allow them to join Europe rather than stand in opposition to it as the Russian patriots always insist.
According to Shiropayev, Boris Yeltsin understood this point early on. In a speech to the Urals Polytechnic Institute in February 1990, the future president said that it should be possible to form within the Russian Federation “seven Russian republics: Central Russia, the North, the South, theVolga, the Urals, Siberia and the Far East.”

For Russian nationalists, Shiropayev argues, that action makes Yeltsin a hero, but for the Russian patriots, it makes him a destroyer of the state. And for them, Yeltsin is worthy of praise only for his willingness to launch of a war against the Chechen drive for independence. Indeed, Shiropayev continues, if Russian nationalists have any reason to dislike Yeltsin, it is this: “he preserved” the core part of the empire, “its initial place des armes, its bastion of revenge – the Russian Federation,” rather than allowing that entity to disintegrate and the Russian people to become true historical actors. Russian nationalists offer the Russian people the opportunity to “live and work for themselves and not for the imperial-bureaucratic ‘uncle,’ to be guided by their own real interests and not phantom ideological construction like the ‘Third Rome’ or the ‘Third International,’” to escape “the sacralized slavery of the empire and live in a bourgeois democratic state, “a Russian Europe.’” In short, Shiropayev says, Russian nationalists want Russians to practice “national egotism and self-respect instead of imperial internationalism and the belittling of themselves,” to escape from “the idea of Russia” and begin to live on their own, and thus to “begin at last” to make their own “Russian history.”

In the course of his long, two-part essay, Shiropayev discusses each of these points in detail as well as making a wide variety of comments on Russian history and the views of his ideological opponents, the Russian patriots. But his most controversial remarks concern his open support for the rise of a Russia of the regions. He surveys regionalist impulses in Siberia and other parts of the country, considers the movements that have already emerged to advance their ideas, and says he backs all of them even if that means that some of them might decide to pursue independence from the center. Shiropayev has received some support from these regionalists – for example, the equally detailed article of Mikhail Kulekhov on Siberian neo-oblastnichesto at which points out that Siberians “do not want the collapse of the Russian Federation but we do not fear it either.”

But his opponents, the Russian patriots, have attacked his ideas in a series of increasingly sharp, even vitriolic articles over the last month in the Russian “nationalist” – that is, “patriotic” – media. Typical of these is an essay by Vladimir Karpets that was posted online October 21st. He accuses Shiropayev personally and those who have published his writings of betraying the country, of promoting its disintegration, and of being hirelings of various international forces who see Russian regionalism as a weapon to destroy the Russian state, the only entity capable of defending the Russian people. To block the machinations of this group, he continues, Russia needs to establish “a genuine anti-separatist front,” on that will differ from the National Salvation Front only in that it will be directed not against the authorities but in support and under the guidance of them. And having created that front, Karpets continues, Moscow should move to create a “Yezhov-style Empire” – a reference to Stalin’s notorious secret police chief – to ensure that the Russian state that Shiropayev and his like want to put in the grave will in fact survive and prosper.

In terms of argument, Shiropayev certainly has the advantage, but in terms of Russian politics under Vladimir Putin, Karpets and those who continue to deify the state at the cost of keeping the Russians from a nation like any other would seem to have the greater influence.

The Streetwise Professor completes the thought:

This is one creepy statement from an interview with Oleg Shvarsman of Finansgroup:

This structure was created in 2004, after President [Vladimir] Putin said that big business should have a social responsibility to the state. At that time our colleagues from the FSB decided that an organization must appear that will incline, bend, torment, and lead the various and sundry Khordokovskies toward social activeness.”

This reminds me of the treatment of Winston Smith in 1984. Or perhaps better yet, it reminds me of The Captain in Cool Hand Luke:

You run one time, you got yourself a set of chains. You run twice, you got yourself two sets. You ain’t gonna need no third set ’cause you’re gonna get your mind right. And I mean RIGHT.

Shvartsman’s statement drips with irony–intentional or unintentional, I know not. For it is obvious that it was social activeness that was Khodorkovsky’s downfall. But not the right kind of social activeness. And just as The Captain was making an example of Luke (”(To the other inmates) Take a good look at Luke. Cool Hand Luke?”), Putin and the FSB were making an example of Khodorkovsky for others who might have thoughts of the wrong kind of social activeness. And from the looks of things, the example was well taken.

Russia’s Real Enemies

Paul Goble reports that some Russians understand who Russia’s real enemies really are:

Russian patriotism and Russian nationalism are generally treated as synonyms or at least as mutually reinforcing phenomena, both in nearly all cases equally at odds with political democracy and economic liberalism and thus anathema both to Russian reformers and to others who wish Russia and Russians well. But in fact, the two ideologies rest on completely different foundations, with Russian patriotism focusing primarily on the state and Russian nationalism on the Russian people as a community. And consequently, some of the variants of each often are very much at odds with those of the other.

A programmatic article by a Russian nationalist a month ago calling attention to this divide has reopened this debate. And it shows few signs of any quick resolution but nonetheless says a great deal not only about where Russians and the Russian state are now but also about where they could be and are likely to be in the future. In that essay, Aleksei Shiropayev argues that Russian nationalism properly understood will promote democracy, capitalism, and integration with Europe, thereby challenging a large number of the core beliefs of Russian patriots and of those Russian nationalists who follow them. Russian patriotism, he argues, presents itself as “the true service of the State” be it tsarist, Soviet or post-Soviet because “ontologically all these versions of the Empire are ontologically the same.” And consequently, it suggests that “the historic meaning of the existence of the Russian people” is sacrificial service to the Imperial Leviathan.”

“According to the patriots,” he continues, the Russian people do not have their own fate: their fate is [linked to that] of the supra-national hyper-State, of the fate of the empire. Not to rule in the empire but to be its eternal servant, its faceless cement; bearing without complaint the burden of imperial ‘super tasks” rather than acting for itself.” That is the “imperial ‘liturgy’” of the Russian patriots, Shiropayev insists, a doctrine that reduces Russians to “eternal slaves,” permanent collective farmers,” and forever “proletarians” who must be herded forward by an all-powerful state entity that alone can decide where they should go. Russian nationalists, on the other hand, focus on the Russian people, their needs and aspirations, but because Russian patriots and not they have been in charge so long, Shiropayev continues, their approach is best presented in terms of how different it is from the latter. Because they focus on the people rather than the state, Shiropayev says, Russian nationalists – or at least the part of the Russian nationalist spectrum his “national democrats” represent – are “non-imperial” in principle. “Not through the restoration of the Empire lies the path to the Russian future, but across the corpse of the empire.”

“Thanks to the Empire, the Russian people has not become a nation,” he insists, and to change that, Shiropayev continues, it is vitally important to “open the sluice gates of regional development,” to promote “a bourgeois state,” and to integrate with Europe, must as the countries of Eastern Europe and the Baltic already have. The first task ahead of Russians, he argues, is “overcoming the fetishization of the state” by advancing the claims of the people over which the state has ruled. And the most effective way to do that is to promote the creation of regional governments that are closer to the people. These units could then perhaps form a Confederation, Shiropayev argues, and with that kind of a political arrangement, Russians would be in a position to develop the kind of economic and political system that would allow them to join Europe rather than stand in opposition to it as the Russian patriots always insist.
According to Shiropayev, Boris Yeltsin understood this point early on. In a speech to the Urals Polytechnic Institute in February 1990, the future president said that it should be possible to form within the Russian Federation “seven Russian republics: Central Russia, the North, the South, theVolga, the Urals, Siberia and the Far East.”

For Russian nationalists, Shiropayev argues, that action makes Yeltsin a hero, but for the Russian patriots, it makes him a destroyer of the state. And for them, Yeltsin is worthy of praise only for his willingness to launch of a war against the Chechen drive for independence. Indeed, Shiropayev continues, if Russian nationalists have any reason to dislike Yeltsin, it is this: “he preserved” the core part of the empire, “its initial place des armes, its bastion of revenge – the Russian Federation,” rather than allowing that entity to disintegrate and the Russian people to become true historical actors. Russian nationalists offer the Russian people the opportunity to “live and work for themselves and not for the imperial-bureaucratic ‘uncle,’ to be guided by their own real interests and not phantom ideological construction like the ‘Third Rome’ or the ‘Third International,’” to escape “the sacralized slavery of the empire and live in a bourgeois democratic state, “a Russian Europe.’” In short, Shiropayev says, Russian nationalists want Russians to practice “national egotism and self-respect instead of imperial internationalism and the belittling of themselves,” to escape from “the idea of Russia” and begin to live on their own, and thus to “begin at last” to make their own “Russian history.”

In the course of his long, two-part essay, Shiropayev discusses each of these points in detail as well as making a wide variety of comments on Russian history and the views of his ideological opponents, the Russian patriots. But his most controversial remarks concern his open support for the rise of a Russia of the regions. He surveys regionalist impulses in Siberia and other parts of the country, considers the movements that have already emerged to advance their ideas, and says he backs all of them even if that means that some of them might decide to pursue independence from the center. Shiropayev has received some support from these regionalists – for example, the equally detailed article of Mikhail Kulekhov on Siberian neo-oblastnichesto at which points out that Siberians “do not want the collapse of the Russian Federation but we do not fear it either.”

But his opponents, the Russian patriots, have attacked his ideas in a series of increasingly sharp, even vitriolic articles over the last month in the Russian “nationalist” – that is, “patriotic” – media. Typical of these is an essay by Vladimir Karpets that was posted online October 21st. He accuses Shiropayev personally and those who have published his writings of betraying the country, of promoting its disintegration, and of being hirelings of various international forces who see Russian regionalism as a weapon to destroy the Russian state, the only entity capable of defending the Russian people. To block the machinations of this group, he continues, Russia needs to establish “a genuine anti-separatist front,” on that will differ from the National Salvation Front only in that it will be directed not against the authorities but in support and under the guidance of them. And having created that front, Karpets continues, Moscow should move to create a “Yezhov-style Empire” – a reference to Stalin’s notorious secret police chief – to ensure that the Russian state that Shiropayev and his like want to put in the grave will in fact survive and prosper.

In terms of argument, Shiropayev certainly has the advantage, but in terms of Russian politics under Vladimir Putin, Karpets and those who continue to deify the state at the cost of keeping the Russians from a nation like any other would seem to have the greater influence.

The Streetwise Professor completes the thought:

This is one creepy statement from an interview with Oleg Shvarsman of Finansgroup:

This structure was created in 2004, after President [Vladimir] Putin said that big business should have a social responsibility to the state. At that time our colleagues from the FSB decided that an organization must appear that will incline, bend, torment, and lead the various and sundry Khordokovskies toward social activeness.”

This reminds me of the treatment of Winston Smith in 1984. Or perhaps better yet, it reminds me of The Captain in Cool Hand Luke:

You run one time, you got yourself a set of chains. You run twice, you got yourself two sets. You ain’t gonna need no third set ’cause you’re gonna get your mind right. And I mean RIGHT.

Shvartsman’s statement drips with irony–intentional or unintentional, I know not. For it is obvious that it was social activeness that was Khodorkovsky’s downfall. But not the right kind of social activeness. And just as The Captain was making an example of Luke (”(To the other inmates) Take a good look at Luke. Cool Hand Luke?”), Putin and the FSB were making an example of Khodorkovsky for others who might have thoughts of the wrong kind of social activeness. And from the looks of things, the example was well taken.

Russia’s Real Enemies

Paul Goble reports that some Russians understand who Russia’s real enemies really are:

Russian patriotism and Russian nationalism are generally treated as synonyms or at least as mutually reinforcing phenomena, both in nearly all cases equally at odds with political democracy and economic liberalism and thus anathema both to Russian reformers and to others who wish Russia and Russians well. But in fact, the two ideologies rest on completely different foundations, with Russian patriotism focusing primarily on the state and Russian nationalism on the Russian people as a community. And consequently, some of the variants of each often are very much at odds with those of the other.

A programmatic article by a Russian nationalist a month ago calling attention to this divide has reopened this debate. And it shows few signs of any quick resolution but nonetheless says a great deal not only about where Russians and the Russian state are now but also about where they could be and are likely to be in the future. In that essay, Aleksei Shiropayev argues that Russian nationalism properly understood will promote democracy, capitalism, and integration with Europe, thereby challenging a large number of the core beliefs of Russian patriots and of those Russian nationalists who follow them. Russian patriotism, he argues, presents itself as “the true service of the State” be it tsarist, Soviet or post-Soviet because “ontologically all these versions of the Empire are ontologically the same.” And consequently, it suggests that “the historic meaning of the existence of the Russian people” is sacrificial service to the Imperial Leviathan.”

“According to the patriots,” he continues, the Russian people do not have their own fate: their fate is [linked to that] of the supra-national hyper-State, of the fate of the empire. Not to rule in the empire but to be its eternal servant, its faceless cement; bearing without complaint the burden of imperial ‘super tasks” rather than acting for itself.” That is the “imperial ‘liturgy’” of the Russian patriots, Shiropayev insists, a doctrine that reduces Russians to “eternal slaves,” permanent collective farmers,” and forever “proletarians” who must be herded forward by an all-powerful state entity that alone can decide where they should go. Russian nationalists, on the other hand, focus on the Russian people, their needs and aspirations, but because Russian patriots and not they have been in charge so long, Shiropayev continues, their approach is best presented in terms of how different it is from the latter. Because they focus on the people rather than the state, Shiropayev says, Russian nationalists – or at least the part of the Russian nationalist spectrum his “national democrats” represent – are “non-imperial” in principle. “Not through the restoration of the Empire lies the path to the Russian future, but across the corpse of the empire.”

“Thanks to the Empire, the Russian people has not become a nation,” he insists, and to change that, Shiropayev continues, it is vitally important to “open the sluice gates of regional development,” to promote “a bourgeois state,” and to integrate with Europe, must as the countries of Eastern Europe and the Baltic already have. The first task ahead of Russians, he argues, is “overcoming the fetishization of the state” by advancing the claims of the people over which the state has ruled. And the most effective way to do that is to promote the creation of regional governments that are closer to the people. These units could then perhaps form a Confederation, Shiropayev argues, and with that kind of a political arrangement, Russians would be in a position to develop the kind of economic and political system that would allow them to join Europe rather than stand in opposition to it as the Russian patriots always insist.
According to Shiropayev, Boris Yeltsin understood this point early on. In a speech to the Urals Polytechnic Institute in February 1990, the future president said that it should be possible to form within the Russian Federation “seven Russian republics: Central Russia, the North, the South, theVolga, the Urals, Siberia and the Far East.”

For Russian nationalists, Shiropayev argues, that action makes Yeltsin a hero, but for the Russian patriots, it makes him a destroyer of the state. And for them, Yeltsin is worthy of praise only for his willingness to launch of a war against the Chechen drive for independence. Indeed, Shiropayev continues, if Russian nationalists have any reason to dislike Yeltsin, it is this: “he preserved” the core part of the empire, “its initial place des armes, its bastion of revenge – the Russian Federation,” rather than allowing that entity to disintegrate and the Russian people to become true historical actors. Russian nationalists offer the Russian people the opportunity to “live and work for themselves and not for the imperial-bureaucratic ‘uncle,’ to be guided by their own real interests and not phantom ideological construction like the ‘Third Rome’ or the ‘Third International,’” to escape “the sacralized slavery of the empire and live in a bourgeois democratic state, “a Russian Europe.’” In short, Shiropayev says, Russian nationalists want Russians to practice “national egotism and self-respect instead of imperial internationalism and the belittling of themselves,” to escape from “the idea of Russia” and begin to live on their own, and thus to “begin at last” to make their own “Russian history.”

In the course of his long, two-part essay, Shiropayev discusses each of these points in detail as well as making a wide variety of comments on Russian history and the views of his ideological opponents, the Russian patriots. But his most controversial remarks concern his open support for the rise of a Russia of the regions. He surveys regionalist impulses in Siberia and other parts of the country, considers the movements that have already emerged to advance their ideas, and says he backs all of them even if that means that some of them might decide to pursue independence from the center. Shiropayev has received some support from these regionalists – for example, the equally detailed article of Mikhail Kulekhov on Siberian neo-oblastnichesto at which points out that Siberians “do not want the collapse of the Russian Federation but we do not fear it either.”

But his opponents, the Russian patriots, have attacked his ideas in a series of increasingly sharp, even vitriolic articles over the last month in the Russian “nationalist” – that is, “patriotic” – media. Typical of these is an essay by Vladimir Karpets that was posted online October 21st. He accuses Shiropayev personally and those who have published his writings of betraying the country, of promoting its disintegration, and of being hirelings of various international forces who see Russian regionalism as a weapon to destroy the Russian state, the only entity capable of defending the Russian people. To block the machinations of this group, he continues, Russia needs to establish “a genuine anti-separatist front,” on that will differ from the National Salvation Front only in that it will be directed not against the authorities but in support and under the guidance of them. And having created that front, Karpets continues, Moscow should move to create a “Yezhov-style Empire” – a reference to Stalin’s notorious secret police chief – to ensure that the Russian state that Shiropayev and his like want to put in the grave will in fact survive and prosper.

In terms of argument, Shiropayev certainly has the advantage, but in terms of Russian politics under Vladimir Putin, Karpets and those who continue to deify the state at the cost of keeping the Russians from a nation like any other would seem to have the greater influence.

The Streetwise Professor completes the thought:

This is one creepy statement from an interview with Oleg Shvarsman of Finansgroup:

This structure was created in 2004, after President [Vladimir] Putin said that big business should have a social responsibility to the state. At that time our colleagues from the FSB decided that an organization must appear that will incline, bend, torment, and lead the various and sundry Khordokovskies toward social activeness.”

This reminds me of the treatment of Winston Smith in 1984. Or perhaps better yet, it reminds me of The Captain in Cool Hand Luke:

You run one time, you got yourself a set of chains. You run twice, you got yourself two sets. You ain’t gonna need no third set ’cause you’re gonna get your mind right. And I mean RIGHT.

Shvartsman’s statement drips with irony–intentional or unintentional, I know not. For it is obvious that it was social activeness that was Khodorkovsky’s downfall. But not the right kind of social activeness. And just as The Captain was making an example of Luke (”(To the other inmates) Take a good look at Luke. Cool Hand Luke?”), Putin and the FSB were making an example of Khodorkovsky for others who might have thoughts of the wrong kind of social activeness. And from the looks of things, the example was well taken.

Annals of Putin’s Economic Propaganda

The Streetwise Professor exposes Vladimir Putin’s economic and historical propaganda:

This article on Grigory Yavlinsky contains the following bit of conventional wisdom:

But Russians might be afraid of more change, and many people consider the word “democracy” to be a negative one. The “democracy” of the 1990s was difficult for most Russians. Privatization resulted in hyperinflation, unpaid wages and the disappearance of social security. Incomes and savings disappeared while, at the same time, a new class of wealthy Russians arose and profited from the sale of national companies. Expectations for democratic development were suffocated. “People do not think in terms of the future. They think in terms of yesterday’s fears,” Yavlinsky said to Novye Izvestia.

The statement that “privatization resulted in hyperinflation” is just plain wrong. Wrong, wrong, wrong. This plays into the Putin-era revisionism about post-Soviet Russia.

As Yegor Gaidar’s new book shows in detail, post-Soviet hyperinflation was a direct consequence of the myriad failures of late-Soviet economic policy. Facing dire economic circumstances, the Soviet government used the printing press to finance the government, and at the same time it maintained strict price controls. The result was acute shortages of everything. Unable to buy things at the official prices, people hoarded their rubles, and built up huge bank accounts. When prices were freed after the collapse of the USSR, the “ruble overhang” resulted in a huge spike in prices.

The inflation already existed in the USSR–it was just suppressed. There were massive quantities of rubles chasing few goods, but sellers couldn’t raise nominal prices accordingly due to draconian price controls. The shadow price of bread, soap, and everything else was far higher than the official price. The freeing of prices just caused the nominal prices to catch up with the shadow prices. People’s bank accounts weren’t wiped out–what good is money in the bank if there is nothing to buy? The real purchasing power of rubles in the dying days of the USSR was far smaller than the purchasing power measured at the official prices of goods–which no one could actually purchase, which sort of contradicts the whole idea of purchasing power. The rise in nominal prices post-USSR was a reflection of Soviet economic failure, not the failure of liberalization. It painfully disabused people of Ruble Illusion–the misguided belief that the rubles in their bank accounts were actually worth something. Unfortunately, the people actually responsible for debasing the ruble have largely escaped blame, while the liberalizers who forced people to face reality have been tarred instead.

So the privatization gets blamed for what was really the abject failure of Soviet economic policy. And privatization’s alleged failure, in turn, rationalizes current anti-market government policies. What a tragedy. Careless recycling of tired conventional wisdom about post-Soviet economic catastrophe, like the paragraph quoted above, is deeply pernicious. Journalists should be much more careful. Like Mark Twain said, it’s not what you don’t know that gets you in trouble, it’s what you know that just ain’t true.

By the way, I plan to write a brief review of Gaidar’s book in a future post. Basic verdict: good read, very informative, but a little repetitive.

And a hat-tip to SWP reader, commentator, and SWP Technorati “fan” (my OAO, in fact)–Dmitri–who, made me aware of Gaidar’s book. Thanks!

Annals of Putin’s Economic Propaganda

The Streetwise Professor exposes Vladimir Putin’s economic and historical propaganda:

This article on Grigory Yavlinsky contains the following bit of conventional wisdom:

But Russians might be afraid of more change, and many people consider the word “democracy” to be a negative one. The “democracy” of the 1990s was difficult for most Russians. Privatization resulted in hyperinflation, unpaid wages and the disappearance of social security. Incomes and savings disappeared while, at the same time, a new class of wealthy Russians arose and profited from the sale of national companies. Expectations for democratic development were suffocated. “People do not think in terms of the future. They think in terms of yesterday’s fears,” Yavlinsky said to Novye Izvestia.

The statement that “privatization resulted in hyperinflation” is just plain wrong. Wrong, wrong, wrong. This plays into the Putin-era revisionism about post-Soviet Russia.

As Yegor Gaidar’s new book shows in detail, post-Soviet hyperinflation was a direct consequence of the myriad failures of late-Soviet economic policy. Facing dire economic circumstances, the Soviet government used the printing press to finance the government, and at the same time it maintained strict price controls. The result was acute shortages of everything. Unable to buy things at the official prices, people hoarded their rubles, and built up huge bank accounts. When prices were freed after the collapse of the USSR, the “ruble overhang” resulted in a huge spike in prices.

The inflation already existed in the USSR–it was just suppressed. There were massive quantities of rubles chasing few goods, but sellers couldn’t raise nominal prices accordingly due to draconian price controls. The shadow price of bread, soap, and everything else was far higher than the official price. The freeing of prices just caused the nominal prices to catch up with the shadow prices. People’s bank accounts weren’t wiped out–what good is money in the bank if there is nothing to buy? The real purchasing power of rubles in the dying days of the USSR was far smaller than the purchasing power measured at the official prices of goods–which no one could actually purchase, which sort of contradicts the whole idea of purchasing power. The rise in nominal prices post-USSR was a reflection of Soviet economic failure, not the failure of liberalization. It painfully disabused people of Ruble Illusion–the misguided belief that the rubles in their bank accounts were actually worth something. Unfortunately, the people actually responsible for debasing the ruble have largely escaped blame, while the liberalizers who forced people to face reality have been tarred instead.

So the privatization gets blamed for what was really the abject failure of Soviet economic policy. And privatization’s alleged failure, in turn, rationalizes current anti-market government policies. What a tragedy. Careless recycling of tired conventional wisdom about post-Soviet economic catastrophe, like the paragraph quoted above, is deeply pernicious. Journalists should be much more careful. Like Mark Twain said, it’s not what you don’t know that gets you in trouble, it’s what you know that just ain’t true.

By the way, I plan to write a brief review of Gaidar’s book in a future post. Basic verdict: good read, very informative, but a little repetitive.

And a hat-tip to SWP reader, commentator, and SWP Technorati “fan” (my OAO, in fact)–Dmitri–who, made me aware of Gaidar’s book. Thanks!

Annals of Putin’s Economic Propaganda

The Streetwise Professor exposes Vladimir Putin’s economic and historical propaganda:

This article on Grigory Yavlinsky contains the following bit of conventional wisdom:

But Russians might be afraid of more change, and many people consider the word “democracy” to be a negative one. The “democracy” of the 1990s was difficult for most Russians. Privatization resulted in hyperinflation, unpaid wages and the disappearance of social security. Incomes and savings disappeared while, at the same time, a new class of wealthy Russians arose and profited from the sale of national companies. Expectations for democratic development were suffocated. “People do not think in terms of the future. They think in terms of yesterday’s fears,” Yavlinsky said to Novye Izvestia.

The statement that “privatization resulted in hyperinflation” is just plain wrong. Wrong, wrong, wrong. This plays into the Putin-era revisionism about post-Soviet Russia.

As Yegor Gaidar’s new book shows in detail, post-Soviet hyperinflation was a direct consequence of the myriad failures of late-Soviet economic policy. Facing dire economic circumstances, the Soviet government used the printing press to finance the government, and at the same time it maintained strict price controls. The result was acute shortages of everything. Unable to buy things at the official prices, people hoarded their rubles, and built up huge bank accounts. When prices were freed after the collapse of the USSR, the “ruble overhang” resulted in a huge spike in prices.

The inflation already existed in the USSR–it was just suppressed. There were massive quantities of rubles chasing few goods, but sellers couldn’t raise nominal prices accordingly due to draconian price controls. The shadow price of bread, soap, and everything else was far higher than the official price. The freeing of prices just caused the nominal prices to catch up with the shadow prices. People’s bank accounts weren’t wiped out–what good is money in the bank if there is nothing to buy? The real purchasing power of rubles in the dying days of the USSR was far smaller than the purchasing power measured at the official prices of goods–which no one could actually purchase, which sort of contradicts the whole idea of purchasing power. The rise in nominal prices post-USSR was a reflection of Soviet economic failure, not the failure of liberalization. It painfully disabused people of Ruble Illusion–the misguided belief that the rubles in their bank accounts were actually worth something. Unfortunately, the people actually responsible for debasing the ruble have largely escaped blame, while the liberalizers who forced people to face reality have been tarred instead.

So the privatization gets blamed for what was really the abject failure of Soviet economic policy. And privatization’s alleged failure, in turn, rationalizes current anti-market government policies. What a tragedy. Careless recycling of tired conventional wisdom about post-Soviet economic catastrophe, like the paragraph quoted above, is deeply pernicious. Journalists should be much more careful. Like Mark Twain said, it’s not what you don’t know that gets you in trouble, it’s what you know that just ain’t true.

By the way, I plan to write a brief review of Gaidar’s book in a future post. Basic verdict: good read, very informative, but a little repetitive.

And a hat-tip to SWP reader, commentator, and SWP Technorati “fan” (my OAO, in fact)–Dmitri–who, made me aware of Gaidar’s book. Thanks!

Annals of Putin’s Economic Propaganda

The Streetwise Professor exposes Vladimir Putin’s economic and historical propaganda:

This article on Grigory Yavlinsky contains the following bit of conventional wisdom:

But Russians might be afraid of more change, and many people consider the word “democracy” to be a negative one. The “democracy” of the 1990s was difficult for most Russians. Privatization resulted in hyperinflation, unpaid wages and the disappearance of social security. Incomes and savings disappeared while, at the same time, a new class of wealthy Russians arose and profited from the sale of national companies. Expectations for democratic development were suffocated. “People do not think in terms of the future. They think in terms of yesterday’s fears,” Yavlinsky said to Novye Izvestia.

The statement that “privatization resulted in hyperinflation” is just plain wrong. Wrong, wrong, wrong. This plays into the Putin-era revisionism about post-Soviet Russia.

As Yegor Gaidar’s new book shows in detail, post-Soviet hyperinflation was a direct consequence of the myriad failures of late-Soviet economic policy. Facing dire economic circumstances, the Soviet government used the printing press to finance the government, and at the same time it maintained strict price controls. The result was acute shortages of everything. Unable to buy things at the official prices, people hoarded their rubles, and built up huge bank accounts. When prices were freed after the collapse of the USSR, the “ruble overhang” resulted in a huge spike in prices.

The inflation already existed in the USSR–it was just suppressed. There were massive quantities of rubles chasing few goods, but sellers couldn’t raise nominal prices accordingly due to draconian price controls. The shadow price of bread, soap, and everything else was far higher than the official price. The freeing of prices just caused the nominal prices to catch up with the shadow prices. People’s bank accounts weren’t wiped out–what good is money in the bank if there is nothing to buy? The real purchasing power of rubles in the dying days of the USSR was far smaller than the purchasing power measured at the official prices of goods–which no one could actually purchase, which sort of contradicts the whole idea of purchasing power. The rise in nominal prices post-USSR was a reflection of Soviet economic failure, not the failure of liberalization. It painfully disabused people of Ruble Illusion–the misguided belief that the rubles in their bank accounts were actually worth something. Unfortunately, the people actually responsible for debasing the ruble have largely escaped blame, while the liberalizers who forced people to face reality have been tarred instead.

So the privatization gets blamed for what was really the abject failure of Soviet economic policy. And privatization’s alleged failure, in turn, rationalizes current anti-market government policies. What a tragedy. Careless recycling of tired conventional wisdom about post-Soviet economic catastrophe, like the paragraph quoted above, is deeply pernicious. Journalists should be much more careful. Like Mark Twain said, it’s not what you don’t know that gets you in trouble, it’s what you know that just ain’t true.

By the way, I plan to write a brief review of Gaidar’s book in a future post. Basic verdict: good read, very informative, but a little repetitive.

And a hat-tip to SWP reader, commentator, and SWP Technorati “fan” (my OAO, in fact)–Dmitri–who, made me aware of Gaidar’s book. Thanks!

Annals of Putin’s Economic Propaganda

The Streetwise Professor exposes Vladimir Putin’s economic and historical propaganda:

This article on Grigory Yavlinsky contains the following bit of conventional wisdom:

But Russians might be afraid of more change, and many people consider the word “democracy” to be a negative one. The “democracy” of the 1990s was difficult for most Russians. Privatization resulted in hyperinflation, unpaid wages and the disappearance of social security. Incomes and savings disappeared while, at the same time, a new class of wealthy Russians arose and profited from the sale of national companies. Expectations for democratic development were suffocated. “People do not think in terms of the future. They think in terms of yesterday’s fears,” Yavlinsky said to Novye Izvestia.

The statement that “privatization resulted in hyperinflation” is just plain wrong. Wrong, wrong, wrong. This plays into the Putin-era revisionism about post-Soviet Russia.

As Yegor Gaidar’s new book shows in detail, post-Soviet hyperinflation was a direct consequence of the myriad failures of late-Soviet economic policy. Facing dire economic circumstances, the Soviet government used the printing press to finance the government, and at the same time it maintained strict price controls. The result was acute shortages of everything. Unable to buy things at the official prices, people hoarded their rubles, and built up huge bank accounts. When prices were freed after the collapse of the USSR, the “ruble overhang” resulted in a huge spike in prices.

The inflation already existed in the USSR–it was just suppressed. There were massive quantities of rubles chasing few goods, but sellers couldn’t raise nominal prices accordingly due to draconian price controls. The shadow price of bread, soap, and everything else was far higher than the official price. The freeing of prices just caused the nominal prices to catch up with the shadow prices. People’s bank accounts weren’t wiped out–what good is money in the bank if there is nothing to buy? The real purchasing power of rubles in the dying days of the USSR was far smaller than the purchasing power measured at the official prices of goods–which no one could actually purchase, which sort of contradicts the whole idea of purchasing power. The rise in nominal prices post-USSR was a reflection of Soviet economic failure, not the failure of liberalization. It painfully disabused people of Ruble Illusion–the misguided belief that the rubles in their bank accounts were actually worth something. Unfortunately, the people actually responsible for debasing the ruble have largely escaped blame, while the liberalizers who forced people to face reality have been tarred instead.

So the privatization gets blamed for what was really the abject failure of Soviet economic policy. And privatization’s alleged failure, in turn, rationalizes current anti-market government policies. What a tragedy. Careless recycling of tired conventional wisdom about post-Soviet economic catastrophe, like the paragraph quoted above, is deeply pernicious. Journalists should be much more careful. Like Mark Twain said, it’s not what you don’t know that gets you in trouble, it’s what you know that just ain’t true.

By the way, I plan to write a brief review of Gaidar’s book in a future post. Basic verdict: good read, very informative, but a little repetitive.

And a hat-tip to SWP reader, commentator, and SWP Technorati “fan” (my OAO, in fact)–Dmitri–who, made me aware of Gaidar’s book. Thanks!