What our Fathers did not tell us about the Economy– Economic liberalism is post-Soviet Russia

above: 'progress' in the new Russia

In this submission by Russian political economist, Boris Anisimov (translated from Russian to English), the author considers the pitfalls of economically liberal capitalism as experienced in post-Soviet Russia. While command economies could be deeply flawed, it seems the indecent haste in adopting a Western economic model in Russia has involved an abandonment of those insights from the Marxist tradition which remain crucial. For our Western readers this contribution provides an appreciation of a perspective we are rarely exposed to…

by Boris Anisimov   (edited by Tristan Ewins)

In my previous articles, I have expressed quite unequivocally my indignation that market fundamentalism had been accepted by emerging economies as the official economic ideology. As years go by, it becomes evident that the reckless opening of developing, and thus still fragile economies was serving the purposes of countries which have many decades, if not centuries, of deliberate protectionism to their names.

For this post, I am going take Russia, my home country, as an example again, but what I am going to address now relates to many developing countries and even to some of the developed ones.

The younger post-Soviet generations raised by TV commercials and glossy magazines appear to be at a loss as to what is happening to the global economy. As they grow older, a large portion of them begins to realize that, with the way things are going economically, their adult life will be no picnic at all. The temporary euphoria of the boom years has faded, but no new hope has come. Most young people do not see any light at the end of the tunnel, and this hopelessness acts as nationalist street gangs' best recruiter.

The economic reality does not match the elegant theories meticulously translated from English-language economics books. Economists recognize the existence of the massive gap between the prosperity of the economically-advanced countries, and the utter devastation of their own economy. But as they attempt to identify the underlying causes, they fall back on the same theories that made that devastation possible in the first place. The years of new post-communist economic propaganda have certainly left a trace, but very few realize that this trace only leads to destitution.

The ironic thing is that some of the answers to today’s most fundamental economic questions these young people of my generation might have can be found in what our fathers eagerly put on the shelf of history: i.e. political economy. In Soviet times, political economy was sometimes compromised in supporting the government of the day - and, as a result, was unsuitable for meaningful economic analysis. The numerous economic crimes committed in its name have discredited political economy in Russia. The desire for material possessions and comfort combined with unceasing, aggressive advertisement of consumerism fostered a new culture unwilling to heed the lessons of the past.

In that frenzied strive to pull themselves out of poverty and despair, our fathers forgot to pass to us the knowledge that they did possess back then, but considered irrelevant because they did not know how to improve their lives with it.

So these are some of the things about the economy that our fathers did know but did not tell us:

1. Our fathers did not tell us that no market can be 100% free. Even though, with reservations, some markets back in the days were close to that ideal, most economies have never become free of any governmental influence. Look at 19th-century Britain, considered by some the “cradle of free-market capitalism”, where the government did not interfere with market forces directly, but was the generator of a significant portion of the solvent demand on local markets by means of spending up to a quarter of the country’s budget on the famous Royal Navy. I hope it is clear what financed numerous orders with local entrepreneurs and craftsmen and made up for embezzlements by navy and treasury officials – the plundering of colonies did.


2. Our fathers did not tell us that market is only a mechanism for distribution of material and financial resources within the economy, not a panacea for economic problems nor a condition for economic development. Markets work when there are resources to distribute, not when an economy is resource-barren.


3. Our fathers did not tell us that any development of a capitalist economy is only possible with massive concentration of capital. Only countries that see significant inflows of material and financial resources for an extended time can show ‘miracles’ of economic and social development. Technically, it does not matter where that capital should be coming from: foreign demand for local products, investment from other countries, an issue of money backed with national debt, foreign debt, the plundering of colonies, etc. No economy whose capital is being drained out has a chance of pulling itself out of the gutter. If the local solvent demand is low and does not generate sufficient profits, while access to foreign markets remains limited, such an economy is doomed to debt slavery and living from hand to mouth by selling raw materials.

4. Our fathers did not tell us that capitalism requires constant growth. If no further growth is possible for whatever reason, capitalism starts falling apart at the seams and looks for ways to expand by force regardless of how many thousands of human lives that expansion is going to ruin.

5. Our fathers did not tell us that a bourgeois democracy is a democracy of the rich only. Figuratively speaking, the poor are never invited to the party in the first place. It is fat cats that make decisions in corridors of power, in corporate offices of industrial giants as well as on trading floors of stock and commodity exchanges.


6. Our fathers did not tell us that social development is based on economic development and comes with a hefty price tag - which the impoverished masses cannot afford. Reforms get easily stalled when there is no one willing to foot the development bill. Besides, it turns out that mentality comes with a price tag too. It is not enough to adopt a new law or start one more bureaucratic initiative to effect positive changes in the way people think. Revolutionary ideas and innovative breakthroughs will require a substantial economic foundation and enormous expenditures. A civilized society with the rule of law and respect for a fellowman's property rights is never possible if it is only a minority that has any property and rights.

7. Our fathers did not tell us that political freedom does not guarantee prosperity It is one thing to have one's freedoms inscribed on an official piece of paper decorated with coats of arms and sprinkled with cheesy democratic slogans. But to exercise one's freedoms is quite another thing - especially when you are mired in abject poverty. The mighty golden calf opens up doors that will forever remain shut for the less fortunate. (Editor; I assume by this the author is suggesting some kind of corruption) Paying your way through red tape solves things faster, connections with the right crowd protect better than a court ruling, and expensive PR compaigns usually generate higher turnouts at polling stations.

8. Our fathers did not tell us that “business” and “economy” are not the same thing. The economy is a system developed by society to provide for their material and some spiritual needs, while business is merely the art of money-making and is only interested in financial returns at any cost. In prosperous times, businesses eagerly take what the economy can offer in order to thrive and proliferate. But when hard times come, businesses do not give a damn about the economy nor the society with its material and spiritual needs. They still care for returns, and that is true for both small and big businesses.


9. Our fathers did not tell us that debt can be an effective way of postponing crises of over-production by stimulating fictitious demand, which I define as solvent demand beyond the natural limit of consumption, i.e. beyond one’s means. As credit rates fall as a result of boosted money supply, the economy continues to grow and everybody is happy – until the next crisis breaks out.

Boris Anisimov

Boris Anisimov is a Russian political economist and writer

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Sport: The Last Refuge of Community in Our Society ?

above: Indigenous Australian football players

Firstly: Happy New Year both to regular and new readers. :)  The following article - our first for 2011 - is an exploration by past-contributor Geoff Drechsler - of the decline of community in modern society (especially Australian society)  - and of the potential place of sport in rectifying this.

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article by Geoff Drechsler

Revolutionary killjoy, Leon Trotsky believed that sport was an inappropriate diversion for the toiling masses from the erstwhile business of politics. Comrade Leon would be in a philosophical quandary if he ran his eye over 21st century Australian society. In our atomized society, we compete against our co-workers for the next step up the corporate ladder, then do a solitary Iphoned commute to get home. Under these circumstances - where we are more likely to live alone than ever before, organised sport may in fact be one of the last refuges of community in Australian society.

Now hold on - you’re thinking: 'what about the destructive front page rock star drug habits of professional football players?' What of the corporate machine that now ruthlessly markets sport ? And even the shameless genital exposure that seems a regular post match weekend event ? While all BBQ stoppers, they are far removed from the more 'middle of the road' Saturday afternoon reality for the suburbanites of the quarter acre block, where every weekend, people pull on a jersey, or guernsey, or goal attack bib together, whether slipping into full forward or goal defence. Think of another time when we work so tirelessly together, in unison, in an egalitarian way ? (And devote weeknights to it together so we get better at it as a team). Pretty much, we start participating as soon as we enter the school system too, whether we make the team or just have a kick around at play lunch, and the shared centrality of the clubrooms in our weekly ritual even offers a forum for community education.

In other aspects of our life, like the world of work, things have changed for most of us. Gone are the road crews and production lines that required us to work together as a team - with the need to get along over the long term in our “job for life”. "In" are the workstations where we work alone at our PC in a 9 to 5 world populated by individual performance assessments, individual work contracts - even eating lunch at our desk on our own…….

In parenting it is now rare to pass a crying infant around extended kin - who in the past all probably conveniently cohabitated under the same roof.  Instead we tough out the sleepless nights and greet the dawn on our own. To unwind, we retreat, alone, into the online world of the first-person shooter, PSP and online poker...  And yes - I know social networking is a form of interaction between people - but the intermediary is a soulless liquid crystal monitor.

While different sports certainly have an obvious social class bias (compare the down to earth 'Marngrook-ness' of AFL to the private school elitism of rugby union), all still encourage a togetherness that's quite alien to other aspects of our social life now.   (nb: 'Marngrook' was the name for the indigenous Australian game which many believe to have been the inspiration for Australian Rules Football)

Who would have thought that a whole lot of guys sitting around in the nude, drinking stubbies together on a Saturday afternoon, could be a social movement ?

The other aspect of sport that reinforces the togetherness is the phenomenon of mass spectating that occurs in Australia. The MCG is one of the largest sporting arenas in the world (Old Trafford, Manchester United’s home ground, the crème de la crème of English Premier League, the biggest league in the most popular sport on the planet, only holds 75,000). So this is the other dynamic of sport as community, spectating or “barracking”. (What other language has the equivalent expression to Australian English’s “footy mate” ?) You only have to spend any time in a country town to see organised sport also operates in this way, where sporting fixtures offer those members of the community who don't participate directly, an opportunity to come together nonetheless, watch and socialise. And our glorious weather encourages both.

So cast your mind back to last October, when you were throwing another banger on the barbie last at a Grand Final party, or more recently watching the seeming (seaming ?) demise of the Australian national test team with mates, and take a moment to ponder that that might be your community.

Geoff Drechsler is a veteran Australian labour movement activist