Andrei Illarionov has been a busy bee since resigning from the Putin government two months ago. He seems to be running around giving speeches, interviews, and now writing op-ed columns propagating his thesis that Russia is a corporatist state. I have to say, I’m starting to find some of his ideas about the Russian state and economy rather interesting. A recent op-ed particularly stands out. It was first published in Kommersant and then picked up by the International Herald Tribune and the New York Times.
His mantra is simple: Russia has changed since Putin came to power six years ago. I doubt many would disagree. But what is interesting is how it changed. The economic and political stability that followed the disastrous Yeltsin years was a result of economic and political centralization. Russia, Illarionov argues, is now less economically and politically free as a result. What is alarming to him is that at least on the economic front, this is a short term solution that is doomed to failure in a global economy.
Illarionov argues that the Russian state and economy is now “corporatist.” “The state has become “corporatized”;” he writes, “it has become a corporate enterprise. What does this mean?”
Changes in legislation and limitations on political activity have effectively devalued the shares held by citizens in what might be described as a publicly held company called “Russian State.” This company has been transformed into a privately held company which the nominal owners – Russian citizens – no longer control.
State-owned companies have become the assault weapons of the corporate state. Having mastered the main principle of state-corporatism – “privatize profit, nationalize loss” – they have turned to massive intervention in the private sector. The victims of this corporate expansion include Yuganskneftegaz, Sibneft, Silovye Mashiny, Kamov, OMZ, AvtoVAZ, Eastline.
Companies that are still in private hands resemble ever more closely their state-owned siblings. Any request from the state – whether it’s a donation to a “necessary” project or the sale of the company itself to “correct” buyers – is fulfilled. Declining is not an option. The fate of Yukos is known to all.
But that isn’t all. It’s not simply that corporations have become “state owned siblings,” it’s the type corporate state it has become. It isn’t just centralized and willing to use its power against political rivals like Khordorkovsky. The Russian corporate state under Putin, according to Illarionov, is clannish. It is driven by the ideology of “nashism.”
Politically, the corporate ideology may seem unclear: it does not look communist, or liberal, or nationalistic, or imperial. Instead, it is an ideology of “nash-ism,” or in English, “ours-ism,” in which subsidies, credits and powers are handed out to those who are “nashy.”
This ours-ism does not know national or ethnic boundaries. The former chancellor of a foreign country is made a member of the corporation and becomes “our man in Europe.” Meanwhile, a Russian businessman who created a company that brought billions into the national treasury turns out to be an “other” and is exiled to the depths of Siberia.
The entire might of the Russian State is thrown behind “our” members of the corporation, whether this means refusing to allow Kazakhoil to travel to Lithuania via a Russian pipeline, switching off electricity to Moldova or waging a “gas war” against Ukraine. Russian imperialism has taken a distinctly corporate image.
The point of the new model is to redistribute resources to “our own.” The rule of law is only for civilized countries. Fair business practices are only for countries that want to catch up with the developed world. Good relations with foreign neighbors are necessary only if Russia is interested in long-term development. The corporation has other goals.
Illarionov rightly points out that this model isn’t unique or new. Many countries practice it—Libya, Venezuela, Angola, Chad, Iran Cuba, North Korea, and Saudi Arabia. And I would imagine you can throw China, and to an increasing extent, the United States. Russia has been practicing “nashism” for a while now. The Communist Party was based on this, and according to research on Stalin’s terror, breaking up nashism or its Soviet variants, semeistvennost (familyness) or khvostizm (tailism, that is people who followed you into positions on your coat tails) in the Party, and state and economic apparatuses was a main goal.
However, nashism in the 20th century might have detrimental effects for a nation in a global economy. Illarionov warns,
But choosing it today, at the outset of the 21st century, is nothing other than deliberately choosing the third-world model. More precisely, the model of a very specific group of countries in the third world whose long-term prospects are well known no matter how much money they get from oil, no matter how many pipelines they control at home and abroad, and no matter what saccharine stories they tell on TV.
It is a historical dead end. No country that has set off on this road has become richer or stronger or more developed. Nor will Russia. It will fall farther behind. And the price will be paid, as usual, by Russian citizens.
Sure Illarionov’s views are unabashedly pro-capitalist, if not neo-liberal, and one should question the “trickle-down” implications that inform his editorial. It seems that his binaried view that nashism is part and parcel to the Third World, and by implication not indicative of the West, is based on a idealized view of capital in Europe and the United States. Capital is based on nashism, no matter where you go. Is not the so-called “revolving door” or American CEOs and government office (Dick Cheney is only the best example) nothing short of nashism? Hasn’t the war in Iraq proven to be a prime example of Illarionov’s “privatize profit, nationalize loss” formula? I would say that the differences between Russia and the United States on this is one of degrees. Not to mention that the Russians are more honest and open about it. I wouldn’t go so far as to say as Illarionov has for Russia, that nashism structures the American state and economy. I don’t mean to draw similarities, only parallels.
If Illarionov is right, and I am thinking that based on the history of nashism in Russia, he is, then we might want to consider, as he himself suggests, whether the type of state Russia is or has become under Putin, and ask whether it is sustainable for the long term.