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BORIS KAGARLITSKY, MOSCOW
SOCIALISM FOR BOURGEOISIE
In contemporary Russia there is a popular fad to discuss economic crisis at different round tables and forums. At one of those meeting, I ran into a big bank representative who told the participants in a patriotic way that everything in Russia was going all right and that the ruble was stable (which had been shown by recent devaluation). That flow of optimistic words would not have surprised me if it had not been for his last statement that really amazed me. The banker said that “first and foremost, people themselves are guilty of the crisis. If people had not panicked and had not withdrawn their money from the bank accounts, there would be no financial problems. Thus, the depositors themselves got us into trouble. The consumers let us down when starting to buy fewer things. If they had not done that, the crisis would not have happened”.
The Yiddish language has the word “hutspah” that means a person who killed his parents and, during the trial, he asks the judge to make allowance for him as he is an orphan. I believe that this word is the best to depict the morality of Russian big businessmen and most officials.
However, the analysis level is of more importance than morality is. The worst thing is that high-ranking officials and businessmen really think so! In their opinion, the reason for the crisis is improper behavior of ordinary people and, above all, of the crisis victims. The struggle against the crisis boils down to protecting “friends” from “strangers”. “Friends” are bankers, heads of big corporations, high-ranking officials and top managers. “Strangers” are all other people.
This logic was the basis of the decisions made by G-20 at London summit, one of which was to allocate $5 trillion to finance rehabilitation of the world economy. One trillion will be spent immediately on the present-day needs – to help the companies and their bosses who have a difficult time.
Before admiring the amount of money that some countries are ready to allot, there is a need to bear in mind that all over the world the “problem assets”, which will be written off in the near future, cost much more than $1 trillion, according to experts. This way, the money of taxpayers from the whole world will be spent on making up overdue debts, obligations, which cannot be fulfilled, and devalued pledges rather than on rise in production and consumption stimulation. Of course, people are guilty that they buy fewer goods, have the insolence to lose jobs and withdraw their money from unreliable bank accounts. But businessmen get away with all mistakes including squandered money, irresponsible investment transactions and fraud. We will pay for their mistakes directly or indirectly, either paying taxes or when inflation accompanying mass pouring of the state money on the economy will devalue our savings.
We are consoled that the money given to save banks and companies will positively influence the economy. Corporations will be able to pay debts to each other and to make up mutual obligations, which will avert a new wave of bankruptcies. In terms of tactics, everything is right. The current partial stabilization resulted from pouring of $2 trillion on the world economy. However, the outcome of the first series of anti-crisis measures lets us realize to what their repetition can lead.
Decline in output will not cease, unemployment grows and enterprises close down. Assigning money to financial corporations will fail not only to remove the depression’s underlying reasons, but even to affect them. More than that, financing the corporations, which turned out inefficient, and supporting the institutions that are responsible for the crisis, the governments may worsen the situation. If those people failed to effectively use their own money, how can one be sure that they will use the government money properly?
The bottom line is what strategy the governments will choose unanimously rather than how much money the corporations have received. It is desirable that the governments take a clear stand. If the government officials are for free market, let those who made mistakes become bankrupt. The governments should support businessmen in no way. But if they are for the state intervention, they should stop talking about free trade, sacred private property and competition.
World leaders decided to support the strategy combining the worst traits of the market capitalism with the most inefficient forms of government regulation. This is a certain social, class choice and not just an eclectic unity of two approaches. Today competition and labor market exist for ordinary workers, but the state defense, protectionism and regulation – for big business. Socialism is coming, but this socialism is only for capitalists. Proletarians will have to live in the time of capitalism with all its horrors that look exactly as illustrations to old-style Soviet propaganda.
At a meting in Eastern Europe that took place fifteen years ago, a free market advocate, after having exhausted all his arguments, appealed to the government authority – if all the governments of the world came to pursue this policy, how can they be wrong? My English colleague, who had less respect for rank than East European liberals said “Of course, they can. Such things have happened in history time and again”.
If those issues were discussed today, I think my colleague would answer in a different way – they follow such a policy because all of them together are against us, against the majority.
Boris Kagarlitsky is Director of the Institute of Globalization and Social Movements
April 9, 2009
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