Is Russia a Kleptocracy?

Is Russia a Kleptocracy?

Thomas Riggins

A kleptocracy is defined in the Merriam-Webster dictionary as "government by those who seek chiefly status and personal gain at the expense of the governed." Many anti-Russian commentators today have no problem with classifying Vladamir Putin's government as kleptocratic but Richard Sakwa, a Russian expert at the University of Kent, is not one of them. He gives his reasons in "Grey - area Gold," an analysis of Putin's Keleptocracy: Who Owns Russia a book by Karen Dawisha, published in the TLS of February 6, 2015. What follows are some comments and observations on Sakwa's article. I have italicized my own views to avoid confusion.

Dawisha obviously thinks Russia is a kleptocracy. She paints a picture of rampant corruption and abuse of power by those involved in the overthrow of soviet power and the transfer of the collective wealth and property of the soviet people into the hands of private individuals. The security forces of the soviet state played a major role in this betrayal. Sakwa says her arguments are so "incendiary" that Cambridge University Press backed off from publishing the book and it cannot be bought in the UK. It is available in the US from Simon and Schuster.

"The fundamental picture that emerges," Sakwa writes, "is of a Russia that has been hijacked by an elite that quite consciously set out from the beginning of its rule to increase its wealth, and needed to take over full political control to safeguard this process." In Marxist terms this would have been a counter-revolution led by elements of the leadership in collusion with the state security apparatus. However, it does not account for the acquiescence of the Red Army nor the passivity of the soviet people.

Dawisha's picture shows that Putin and his circle have certainly taken advantage of the end of soviet power and have enriched themselves at the expense of the general population (''behaviour typical of nouveaux riches throughout the ages") and have supported acts of corruption but her analysis also results "in obscuring complexity and counter trends."

That is to say, Sakwa contends, there is more to Putin's Russia than just the kleptocractic features Dawisha highlights. When then bigger picture is taken into consideration Russia turns out to be, while having some of the kleptocratic features found in many other countries [including the United States ] "not a kleptocracy tout court."

This is because the Putin government plays a much bigger role than just the enrichment of its elite supporters. It maintains social peace at home and is active on the world stage supporting Russian interests and "meets the basic needs of the Russian people" by furthering a "dirigiste" model of capitalism. Instead of hiding its revenues overseas the Russian government invests its tax money and oil revenues in public works projects and investments "for a rainy day."

That day is here, Sakwa says. Since Russia is being run in the interests of the Russians rather than the Germans or Americans this has caused the "west" to over react and initiate policies against Russia with which the Russians cannot possibly  comply. One of these is the "sanctions" regime imposed on "Putin's cronies" (and now the threat of directinvolvement in the Ukrainian civil war by arming the Kiev regime). These will have no effect on the Putin leadership but are now "affecting the whole population in a form of collective punishment". As could have been expected (If Obama and the American leadership knew anything about the real history and sentiments of the Russians) these ham fisted reactions have only increased Putin's popularity at home and "the people have rallied around the flag." The US is on a collision course of its own choosing with Russia.

Sakwa lists four reasons why Dawsha’s book as well as the so-called liberal domestic opposition to Putin (and the Western supporters of anti-Putinism allied with them) should not be taken at face value. They are:

1.) The portrait of Putin presented “is often circumstantial, conjectural,

      and partial.” Do we really want to base our foreign policy on this

      kind of evidence?

2.) There is evidence of a “deep state” at work in Russia [we have one 

     too] made up of sections of the military and security operatives (the          

     “siloviki or (‘force-men’)” and “former Party resources” but the 

     evidence given does not prove that it functions simply as a force 

     for “kleptocracy.” It has been used against the Russian “mafia” and

     for the creation of state owned enterprises which “struggle to 

     achieve at least a modicum of good corporate governance.” 

     Western sanctions actually thwart the forces that are trying to

     integrate Russia into the international system.

3.) Unlike what is to be expected from kleptomaniacs, the Putin 

     government has “delivered significant public goods” and supported

     “neoclassical liberal nostrums.” Russia followed policies that allowed

      it to get through the  2008-09 world economic downturn and has 

      since begun “to invest in some major infrastructural projects". All

      in all we see “a developmental dynamic” which “does not look like 

      the policies of a kleptocracy” but, Sakwa says, the country might 

      have been in even better shape without the elite skimming off  

      social wealth for itself (this includes Putin) and “the misguided 

      dirigisme.” [Since the alternative to “dirigisme” is unregulated

      privatization I can’t agree with this last suggestion.]

4.) Russian foreign policy is not conducted on the basis of what is good 

      for kleptocrats but rather on the vision that Russia is a “great  

      “power and should be “an equal partner of the West.” Needless to   

       say “the West” [ i.e., basically the  US ] doesn’t want to accord  to

       Russia “equality.” [Russia is treated as a second rate power that

       must comply with US dictates. The Ukraine is a test case and the

       Russians must be seen to give in to American demands. This 

       fully accords with the dynamic of inter-imperialist rivalry  which has   

       come to the fore since the collapse of the Soviet Union and has 

       been so well described by Lenin in his work on “Imperialism the

       Highest Stage of Capitalism.” American “over-reach” here could 

       result in Obama’s policies leading to an unprecedented flare up of

       violence and destruction on a continental scale, or worse.]

In concluding his review, Sakwa says Dawisha’s book “is one of many books that contribute to a misleading paradigm of how Russia actually works.” The reality is more complex. Dawisha’s book will give you a good insight into the elite and how their wealth was acquired but there is much more going on in Putin’s Russia than you will find in this book, so “when it comes to shaping policy towards Russia, it is a deeply deceptive guide.” Well, it seems this is not the book to read if you really want the dope on what’s going on in Russia. 

Piketty for Progressives (Part Six and Last)

Piketty for Progressives (Part Six  suite et fin)

Thomas Riggins

14. The Theoretical and Conceptual Framework of Piketty’s Book

In this next to last section of his Introduction Piketty presents some autobiographical information that he thinks will be helpful in seeing how his views developed. This information is about his subjective emotional experiences  and not at all on scientifically based views nevertheless,  the information is interesting and helps to explain many of his attitudes. It is a section more about what he calls his “intellectual itinerary” than about theory, as we shall see.

He tells us he turned 18 in 1989 when the Berlin Wall fell and was part of that generation who listened to the news of the fall of the Communist dictatorships and who had no affection or nostalgia for any of them including the Soviet Union.

An older generation who remembered it was the Communists who ran the underground against the Nazi occupation of his country and the Soviet Union which basically single handedly defeated Hitler’s Germany and liberated most of Europe from Nazi control might have had a different reaction. But it is a characteristic of callow youth to have no historical memory. He was, at 18, he says, “vaccinated for life against the conventional but lazy rhetoric of anticapitalism….” The disease infecting young minds in Paris at the time, however, was anticommunism not anticapitalism and it appears the young Piketty got the wrong inoculation.

Piketty is a firm believer in bourgeois democracy and supports a social order based on democratic debate which will provide equal justice to all under the rule of law. He appears innocent of the struggle based on class conflict aimed at ending the exploitation of working people resulting from the expropriation of their surplus labor power by a class of social parasites which has control over the means of production and distribution. This accounts for the popularity of his book.

At the age of 22 he had a decisive experience. Having just been awarded his PhD he got a job at MIT and, as he puts it ,“I experienced the American dream.” This was extremely fortunate for him because as an economist he must be aware  that the majority of Americans never get to experience the ‘’American dream’’ (except as a dream).

The dream, however, wore off and by age 25 he knew he wanted to go back to France. One of the reasons he left was he was not convinced by the work of US economists and he realized, despite his early successes that he “knew nothing at all about the world’s economic problems.” Economists didn’t seem to have much interest in history and turned out theories without realizing what facts had to be explained. 

Piketty thought that the field was still addicted to a childish fascination with mathematical models which created the illusion of science without its substance due to the lack of proper historical research and contextualization of factual material. Piketty decided he wanted to do research and discover the data that was necessary in order to do mature scientific work in economics.

It seems that American economists and French economists share a tendency to think they are being scientists while in fact “they know almost nothing about anything.” This doesn’t seem to bother American economists but it does the French and as a result they have made great efforts to communicate  and collaborate with other disciplines— sociology, anthropology, history, political science, perhaps even (shudder) philosophy.

The fact is that Piketty thinks economics “should never have sought to divorce itself from the other social sciences and can advance only in conjunction with them.” His book is an attempt to advance this cause and he considers it just as much a history book as one on economics. He tells us that anyone, with a little effort, will be able to understand his book (there is minimal jargon) and come away with a clear understanding of the historical developments that form the background to his theories on the growth of income and inequality in the modern world.

The last section of the Introduction deals with the 

Outline of the Book

Piketty’s book is organized as follows:

Introduction [covered by this series of articles]

Part One— two chapters  to go over basic ideas to be used later in the book.

Part Two— four  chapters  on the future of the capital/income ratio and the division between nations of the future income between labor and capital.

Part Three— six chapters on the structures of inequality both within and between nations and the future possibilities of wealth distribution internationally over the next few decades.

Part Four— four chapters on conclusions and policy suggestions on how to handle the problems of income inequality.

Piketty admits, and shows, that all the subjects that he is writing about are basically  "deeply unpredictable.”  Not a good inducement to spend a lot of time going over these four parts. He also tells us that “ history always invents its own pathways” and that the “usefulness” of the lessons he has drawn from his research  “remains to be seen.”

Finally there is a conclusion in which Piketty sums up his position, decides that Marxism is old hat, and advocates for a more robust democracy  “if we are ever to regain control over capitalism.”   

There is no doubt that inequality and exploitation is increasing. There is an historically, I believe, tried and true explanation of these phenomena and a solution to the the human misery they cause. It is be found in the works of Karl Marx and his followers who have studied the capitalism of the past and present and have demonstrated that the system cannot reform itself sufficiently to ward off existential disaster and must be replaced by a socialist order. 

Piketty, as well as other establishment economists who think capitalism can solve its own problems within the system, will continue to put forth alternative explanations opposed to those of the Marxist economists. Whether these alternatives are mere fads of the moment or useful counter-theories, indeed, remains to be seen.

Niall Ferguson on Kissinger's "World Order" (Part Five and Last)

Niall Ferguson on Kissinger’s World Order (Part Five)

Thomas Riggins

We conclude with Ferguson’s opinions considering Kissinger’s views on what the real lessons are concerning world order that we have learned from the practice of American foreign policy since 1945. Basically we learn that American idealism + traditional balance of power = world order (as far as possible). Kissinger writes:

“Calculations of power without a moral dimension will turn every disagreement into a test of strength; ambition will know no resting place; countries will be propelled into unsustainable tours de force of elusive calculations regarding the shifting configuration of power. Moral proscriptions without concern for equilibrium, on the other hand, tend towards either crusades or an impotent policy tempting challenges; either extreme risks endangering the coherence of the international order itself.”

This is a rather garbled mess and it is difficult to understand what Kissinger is trying to say.  Ferguson , explicating Kissinger, comments that America’s “bloodiest failures” [bloodiest for the victims not for us by the way] resulted from the US putting moral considerations “above the balance of power.”  The defeats he refers to are those of Korea, Vietnam, Iraq and Afghanistan. Can this be what Kissinger or Ferguson really believe?  If so they do not even have the simplest idea of what morality is. What was "moral" about dropping Napalm, Agent Orange and other chemicals on Vietnamese children?

I can believe that Kissinger is totally amoral and I hope Ferguson has a shred or two of the moral sense here and there.The mass slaughter of the civilian population in both Korea and Vietnam carried out by the US in truly Hitlerian proportions, the war of choice waged by Bush in Iraq and the current droning of women and children in the fields, at wedding parties and funeral processions, the obscene ratio of “collateral damage’’—i.e., murder of innocent civilians, perpetrated by the US in Afghanistan (and Pakistan and Yemen where children were deliberately targeted) is the morality of the SS and the Wehrmacht of WW II— it is not an example of “American idealism.”  

I can’t think of any instance in which, since 1945 (or even before)  the US has put moral considerations above realpolitik considerations concerning the “balance of power.” It’s not  just the US. I can’t think of any nation, with the exception of Cuba since 1959, that has done so.

To protect US interests Kissinger proposes a secret treaty with China and uses nineteenth century models (the Treaty of 1839 on the neutrality of Belgium) to put forth deals with all of Afghanistan’s neighbors to keep it it from being controlled by “jihadists.”

For someone influenced by Kant’s Perpetual Peace Kissinger seems to forget that Kant rejected secret treaties as a violation of the rights of the citizens of a state to have sufficient knowledge of their constitution to be able act as free citizens and participate in the social life of their country rather than be used as means instead of as ends by their rulers. No treaty that needs secrecy to succeed is moral for Kant.

Anyway, Ferguson points out these suggestions would only be workable in a broader context both realistic (a workable balance of power) and idealistic. The ideal of preventing a third world war may be more important than avoiding climate change, we are told. There are two things wrong with this. First, even contemplating the need to prevent a third world war is to reveal a subtext that sees China, and perhaps Russia as well, as existential threats to US interests and that the balance of power the US aims at will be weighted in its favor. This is the same old imperialist junk Kissinger has always pushed. Second, climate change poses an existential threat to the whole planet which is just as threatening as a third world war, maybe more so as climate change is happening now and a third world war is a future speculation based on viewing the world through nineteenth and twentieth century lenses by which we can only see the world as dark and blurred.

Kissinger advocates, as he says, “a modernization of the Westphalian system informed by contemporary reality.” But the contemporary reality is an über-powerful US which basically does what it wants and only gives lip service to the idea of a World Order in which it is not the dominant and all determining power. No “Westphalian” system can be so based. World Order is only possible by a strengthened United Nations in which the US is willing to share power with the rest of the world  and submit itself to universal rules to which all are subject. What could induce the US to do this— to actually put moral considerations on the same level as brute power considerations? 

Kissinger says the next president must answer this basic question; “What is the nature of the values that we seek to advance?”  But this is a question for the American people to answer. Right now they are so divided and kept ignorant of the realty of the world they live in (state secrets, rotten education, semi-literacy, news networks that only spew forth propaganda, crazy religious illusions, you name it) they are incapable of arriving at a consensus. In reality the 1% will continue to answer the question with a president that represents their interests primarily.

But this is the fundamental question. Until the American people unite around their interests, the interests of the 99% (metaphorically speaking) and arrive at a consensus about the sort of country and world they want to live in— one that fosters the well being of all working and laboring peoples and not just the tiny group at the top of society, until then the US will have a foreign policy geared towards war and domination as it has at least since 1945, and the Kissingers of the future  will ensure that there will be no chances of a world order based on human dignity and peace.