The following isn’t Russia related, at least not directly. I’m reading David Harvey’s A Companion to Marx’s Capital, which anyone interested in getting through Marx’s opus should pick up. Harvey has transformed his lectures on Capital into book form. Anyway, I’m going through the chapter on money and a question popped into my head regarding its dual nature as a measurement between things and its existence as a commodity. Harvey writes:
We would obviously prefer the quantitative representation of value to be a stable standard of measurement. Gold is a specific commodity, though; its value is given by the socially necessary labor-time embodied in it, and this is not, as we have seen, constant. Fluctuations in the concrete conditions of production affect the value of gold (or any other money commodity). Since, however, such changes affect “all commodities simultaneously,” then “other things being equal . . . the mutual relations between their values [are] unaltered, although those values are now all expressed in higher or lower gold-prices than before” (57)
Gold no longer plays the role as the universal equivalent between commodities. The power of money as a universal equivalent is based as much on faith as it is on the control of its quantity in circulation. However, money, either as paper or coin, is still a physical commodity produced somewhere out of something by someone. The material it’s made of, the machines that shape it, the ink used to imprint the faces of dead presidents, and the transportation systems that send it into its virginal circulation are part and parcel to any commodity. Human labor is behind all these processes used to create the money commodity.
Hence my question: If money is a commodity, does the cost of producing it factor into its value? Or, to put it in another way, what is the cost of money?
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By Sean — 7 years ago
In a Journey From St. Petersburg to Moscow (1790), Aleksander Radishchev referred to Russia’s autocratic system as a “hundred-headed monster that gulps down the food prepared for the people’s general sustenance.” For most Russians, whether under Tsarism or the Soviets, the heads of that monster were decorated with the stony face of the bureaucrat, or chinovnik. And be sure, a hundred heads is far too small of a number to capture the enormity of the Russian bureaucracy.
While Radishchev’s reference was to the ancient Greek monster of monsters, Typhon, the image is antiquated in capturing the present day Typhon inhabiting Russia. Indeed, Russia’s Typhon still has one body, but the heads number well over a million. According to Rosstat, the number of bureaucrats in 2010 at the federal and municipal levels was 1,648,400, or an average of 25 bureaucrats per 1000 people. In the belly of the beast, i.e. Moscow, there are over 78,000 alone, or 12 per 1000 people.
This wouldn’t be such a problem beyond the inevitable red tape if Russia’s chinovniki weren’t also known to be horribly corrupt. Here are some choice comments about Russians’ attitude toward chinovniki from interviews complied by Anne Hamiton for her article “Radishchev’s Hundred-Headed Monster Lives! The Role of the Bureaucrat Symbol in State-Society Relations in Russia“:
“[Bureaucrats] are people who start to gnaw at you for every little paper”; “they are also vulture-like, in the sense that they grab everything and pig out”; “Any leader is a hero in my eyes, but these [biurokrat, chinovnik, apparatchik] are reptiles, rats, nits—rotten”.
Even those who do their job are viewed as lacking any morality, and even a soul:
“You have good chinovniki, those who worked normally, fulfill their jobs, do everything quickly, but they are lacking soul, they are cold, chilly in general”; “I don’t know why [they treat people poorly]. Maybe they pay them poorly, most likely, it’s … immorality, lack of soul”
You get the point.
Granted, Russians’ poor regard for their civil service is entrenched in the culture. Just think of the enduring legacy of Gogol’s Akaky Akakievich. But this is not to say that Russian bureaucrats haven’t consistently provided kindling to keep such deleterious views burning bright. Two recent articles, one from Gazeta.ru and the other from Vedomosti, provide key reasons why.
The first article from Gazeta concerns Chief State Prosecutor Yuri Chaika’s annual report to President Medvedev. There was little in Chaika’s report to celebrate, and if its results don’t end his career as Russia guardian of the law, I don’t know what will. It certainly puts Medvedev’s campaign against corruption into perspective. Medvedev can raise the penalty for corruption as high has he wants. He can also point ad nauseum to the endemic problem of corruption. And even if the “real” Medvedev stands up, be sure the political reality that is Russia will strap him right down. After all, you can’t punish if the very organs of punishment are unwilling to. Here’s what Gazeta has to say to this effect in Chaika’s report:
There were 40,600 crimes “against the government, the interests of civil service, and the employees in local government offices.” That is 12.2% less than last year. In the past year the Investigative Committee initiated 13,500 criminal cases involving corruption and refused to carry out investigations in 21,500 cases. But in the last year and the number of investigations on bribe taking shrunk by 2%, on abuse of official authority by almost 6%. There was an insignificant growth in the number of investigations against commercial bribery.
In manufacturing, investigators had 18,000 criminal corruption cases, but investigations were completed in less than half of them. The courts tried 7,300 criminal cases, of which 2,400 were about giving bribes, 1,400 for taking bribes, and even 1,100 for fraud. The courts tried 2,200 cases under other “corruption” statues.
And when it came to the people who were prosecuted, they tended to be rather small fries: “doctors, teachers, and low ranking police.” “Cases involving sums more than a million rubles totaled around a hundred.”
So much for Medvedev’s campaign. Even if he was serious, and I think he is as serious as he can be without undermining his support among the elite, the hundred-headed monster has more domes than a mere gnome can lop off.
Bribes do pay. Quite well. And their costing the vast majority of Russia a whole lot of cash. The costs, however, are not just from individuals paying bribes, but in the price of doing business. These costs were the subject a recent article in Vedomosti on the impact of ineffective and corrupt bureaucrats on the cost of commercial property, goods and services. Among many things, the business daily reported:
Poor institutions are responsible for 25-30% of the cost of residential and commercial property (in Moscow up to 60%), a 15% extra markup in retail goods, and 10% in telecommunications service.
Bribes to get the necessary permits for construction amount to 5-15% of the cost of the project, and 7-10% for hooking up utilities. All of this at the end of the day gets passed on to the consumer.
Then there is this:
The cost for permits from various government levels can consist of 30 to 60% of the cost of construction of buildings depending on the region and difficulty of the project,” says Dimitry Potapenko. Permits can drag for years, like for example, it’s turned out for IKEA in Samara. The Swedish retail store began its construction in 2006 and has yet to get the permission to open. In addition to the planned 4 billion ruble investment in the project, IKEA is forced to put in twice more.
Not the best way to court foreign investment.
With findings like these, each head of Radishchev’s monsters is living quite well on the food prepared by the Russian people.Post Views: 992
By Sean — 5 years ago
In a recent column, “Incarceration Nation, Fareed Zakaria claimed that number of people in the United States under “correctional supervision” exceeded that of Stalinist Russia. The assertion comes via Adam Gopnik, who wrote an extensive article on the US prison system in January. “Over all, there are now more people under ‘correctional supervision’ in America–more than 6 million–,” writes Gopnik, “than were in the Gulag Archipelago under Stalin at its height.” Correctional supervision means adults on probation, in jail or prison, and on parole. Zakaria follows Gopnik’s incantation of Stalinism with some horrifying figures:
Is this hyperbole? Here are the facts. The U.S. has 760 prisoners per 100,000 citizens. That’s not just many more than in most other developed countries but seven to 10 times as many. Japan has 63 per 100,000, Germany has 90, France has 96, South Korea has 97, and Britain–with a rate among the highest–has 153. Even developing countries that are well known for their crime problems have a third of U.S. numbers. Mexico has 208 prisoners per 100,000 citizens, and Brazil has 242. As Robertson pointed out on his TV show, The 700 Club, “We here in America make up 5% of the world’s population but we make up 25% of the [world’s] jailed prisoners.”
It is no hyperbole to say that the US prison industrial complex is unacceptable, especially for a country that purports itself the world’s preeminent democracy. But it is hyperbole because placing the US next to Stalinism (and Nazism for that matter) is inherently hyperbolic. The rhetorical move is supposed to provoke an emotional reaction not stimulate critical awareness. And as much as American liberals would like to think that the numbers of bodies ensnared in the US prison industrial complex is as bad, if not worse, than Stalinist Russia, the situation is far more complicated.
Here I don’t mean the quality of the Stalinist system No one is claiming that the US system is worse than Stalin’s forced labor camps. I only mean the quantity of humans in both systems.
The Stalinist penal system was a complex network of punishments and detentions: prisons, noncustodial forced labor, corrective labor camps, forced labor detention (katorga) special settlements, and corrective labor colonies. I won’t go into the meanings and various differences between these. Though experts make clear distinctions between these various units, to the popular mind, they all fall under the general name of gulag. The numbers of people, which also included children, in this penal machine at any given period remains partial. Up 20 percent of the gulag population was released every year, new inmates went in, corpses went out, some even managed to escape. But exactly how many people under Stalin’s correctional supervision is unknown.
Here’s the population of some of these institutions between 1935 and 1940:
According to the straight numbers, the Stalinist system did not exceed the US’ six million during the years of the Great Terror. In 1938, there were 2.7 million people in the “gulag.” But this doesn’t include everyone under Stalinist “correctional supervision.” Therefore it doesn’t take account of prisons and released gulag prisoners who were forced to carry “Form A” which detailed their past crime, prison term, the deprivation of civil rights up to five years, and restricted where they could settle. There were roughly 2 million people released from the gulag between 1934 and 1940 which etches the Stalinist number closer to the United States.
Things change in 1953, the height of the Stalinist gulag. Here are the numbers:
This means an estimated 7.4 million people were under Stalinist correctional supervision 1953, exceeding Zakaria’s and Gopnik’s 6 million for the United States. Again the numbers are probably higher since these numbers don’t include everyone in the Stalinist penal system.
Things get even more complicated when you consider the gulag population per 100,000 citizens. According to Eugenia Belova and Paul Gregory, the Soviet institutionalized population in 1953 was 2,621,000 or 1,558 per 100.000. When you include special settlements, the numbers jump to 4,301,000 or 2,605 per 100,000. This puts the 760 per 100,000 in the United States into perspective.
The numbers in the United States should produce outcry. No argument there. But caution is required when Stalinist Russia is thrown into the mix, that is, if you want to go beyond rhetoric and emotion.
Eugenia Belova and Paul Gregory, “Political Economic of Crime and Punishment Under Stalin,” Public Choice, 140, 2009.
Steven A. Barnes, Death and Redemption: The Gulag and the Shaping of Soviet Society, Princeton, 2011.Post Views: 4,466
By Sean — 2 years ago
Peter Rutland is a professor of government at Wesleyan University. He writes widely on Russian political economy and politics and is author of two books The Politics of Economic Stagnation in the Soviet Union and The Myth of the Plan: Lessons of Soviet Planning Experience. His most recent article is “Petronation? Oil, Gas and National Identity in Russia,” published in the journal Post-Soviet Affairs.
Killing Joke, “Money is Not Our God,” Extremities, Dirt, and Various Repressed Emotions, 1990.Post Views: 770