Ed Dolan's Econ Blog

What Do the Russian Protesters Want? One Observer’s View of Problems and Needed Reforms

Commentators have compared the recent Russian protests to those of Tahrir Square and Occupy Wall Street. There are differences, of course, but certain similarities stand out. For one thing, these recent movements differ from, say, Ukraine’s Orange Revolution, in that none of them has a clear leader. Instead, they have coalesced around negatives: Egypt without Mubarek, Russian without Putin, America without Wall Street. They all see the existing political system as corrupt, but they are much less specific about what should replace it.

Although these movements may lack leaders, they do not lack thinkers and opinion makers whose writings provide useful insights into what the protesters want. This post looks at the views of one Russian opposition figure, the journalist and writer Yulia Latynina, as expressed in a recent essay titled “Russian Baker, or Ownerocracy.” It originally came out in Novaya Gazeta not long before the December election. An English translation is available on line courtesy of Johnson’s Russia List.

Pillars of the Putin regime: corruption and lumpenization

According to Latynina, Putin’s regime rests on two pillars, one familiar to Western readers and the other, perhaps, less so. The familiar pillar is the impunity of government officials. “The right to commit crimes has become the official’s privilege. The crime’s victim, if he survives and tries to complain, is to be deemed a rebel,” she writes. Russia’s growing oil wealth has fueled steady growth of the official class: “During the time of Putin’s rule, the total number of state employees has risen by 41.9% (if you include federal agencies, 66.8%). In that time, Russia’s population has decreased by 2.5%.”

The less familiar pillar is lumpenization. This hard-to-translate concept is derived from Marx’s derisive term lumpenproletariat, which he used to describe the lowest, most degraded element of the working class. According to Latynina, the lumpenization of a significant segment of Russian society began in Soviet times. “The Khrushchev and Brezhnev years completely perverted the Russian population. Russia exported oil and imported grain. People began to live according to the following principle: You pretend you’re paying us, and we’ll pretend we’re working. We did not emerge from our poverty, but we did get used to depending on the state.”

In Putin’s Russia, lumpenization is “neither accidental nor spontaneous.” According to a report Latynina cites, Russia has 6 million grown men who do not want to work and who have shaped their own, specific subculture of poverty. Beyond these, Latynina thinks there are millions of hidden lumpens: The traffic cop who extorts money on the roads; the government driver who doesn’t get paid very much, but maddened by the smell of power, starts fights with other drivers; the underpaid hospital orderly who refuses to change a bedpan. “Not one of them could do a normal job if he were fired from the job where he cripples people’s souls and bodies. It is naive to think that the traffic cop used to impunity would step up to the lathe.”

What creates these lumpens? Not, in Latynina’s view, a lack of European-style social guarantees. “Modern Russia has too many social guarantees,” she writes. “The fact that people receive much less money for their free ride than in Europe should not bother us; the amount of money on which a lumpen is willing to exist is incredibly little.”

Failure of the first round of reforms

Russia needs reforms, but, in Latynina’s view, not the kind attempted in the 1990s. Like nearly all Russians, she holds that first round of reforms in contempt. They failed because the reformers did not understand that an equal standing and a level playing field for market participants do not come about by some natural process. “Market subjects do not have an interest in ensuring equal rules of play. They do have an interest in their own success at any price.” The first Russian president, Boris Yeltsin, and his reformist prime minister, Yegor Gaidar, could not cope with the basic tasks of a modern state, which are to serve the population and ensure equal rules of play for business. As a result, “reform” became a swear word in Russia.

(Disclosure: I myself spent much of the 1990s in Moscow, playing a bit part in the reforms as a business educator and occasional adviser to reformers. Not just my own views at the time, but also those of others who were giving advice many levels higher than I was, were appallingly naïve, especially in the early days. Privatization without a functional legal system to protect property rights was a disaster. I’m not sure anyone could have stopped it, but I would feel better if I could at least say I had foreseen what it would lead to and spoken out against it.)

What reforms are needed now?

In place of failed reforms imported from the West, without understanding of Russian conditions, Latynina advocates a new set of reforms structured around concepts of ownership and responsibility. Some examples:

  • Russia is an oil country. Right now a big part of the oil revenue goes to consumption by the elite and a smaller part to creating lumpens. Instead, Latynina proposes “a single means by which oil money could encourage the working person rather than the idler.” That would be to create a pension system following the Singapore model. Every taxpayer would have the right to pay some of his or her money into a savings account. The government would use oil revenues to match those private savings. Those funds could ultimately be used to purchase real estate, creating a true class of owners.
  • Another step toward creating a sense of ownership and responsibility would be to make the tax system more transparent. Latynina laments the fact that Russians do not explicitly see what is deducted from their salaries to pay income tax. Employers pay the tax directly, so that the employee has no sense that the money has been earned and then taken by the state. If people are to vote responsibly, the first requirement is that they need a sense that it is they who are funding the state.
  • Russia also needs education reform. Latynina sees a need for a system of elite institutions and elite schools—elite not because rich kids study there for money, but because the elite teachers in them are paid elite salaries. Qualified children from wealthy families would have the right to be admitted for a fee, but a talented child from a poor family could study on scholarship. Right now, Latynina says, that child has no such opportunity: There is no way to receive a scholarship without paying a bribe.

The Russian Baker

Latynina argues that while “there is no main problem among Russia’s problems but rather a net of problems in which Russia is struggling, suffocating, so too among reforms there is no one main reform that would be enough to carry out and then everything would be all right.” Still, there is one idea that crops up often enough that it might be fair to consider it the key to reform, even if no single law or decree could fix it. That is the idea that “everything that has no price has no value.” That theme is the basis for the phrase “The Russian Baker” in the title of her essay.

Europe, she says, professes social democratic, left-wing values of universal suffrage and social guarantees. That is all well and good, but to work, there must be a baker to bake the pie before it can be divided up. In Russia, slogans like “free education for every child” or “a subsidy for every mother” are as unfeasible as a program of “let’s grow pies on trees.” “In a poor country, this kind of political program always ends in economic disaster and dictatorship.”

What then does Russia need? Latynina would like to see a statesman, a sort of master baker, who would learn to bake pies and teach others to do so, not just hand out the slices. She admits, though, that it is not obvious where that person would come from. Somehow, though, with or without such a leader, Russia needs to become a country where the ruling class consists of taxpayers, owners, and bakers, not drones and lumpens. “If we call this arrangement  the ‘rule of the property owner’ rather than the ‘rule of the people,’ that would probably be more accurate,” she says.

How to understand it?

How should we read Latynina’s essay on Russia and its problems? Certainly not as a comprehensive outline of reform, nor as the agreed program of a broad movement. It is best understood for what it is—a well-written rant, and certainly not her first. Although not all of the tens of thousands of who were out on Moscow’s streets last Saturday would necessarily endorse Latynina’s ideas in detail, her essay highlights some broad themes that are widely shared by the Russian opposition.

The first theme is that the Soviet experience was deeply and lastingly harmful to Russia. Above all, it undermined the values of its citizens. Latynina’s central idea is that without values of accountability and personal responsibility, Russia will never find its way out of the swamp. Unfortunately, since the fall of Communism, things have gotten worse, not better. Under Communism, the Party was accountable to no one, but government officials were, at least in concept, accountable to the Party. Now there is no Party and no one is accountable at all. Similarly, in the West, big business is, at least in principle, accountable before the law. In today’s Russia, courts, judges, and even juries have become instruments to shield the powerful from accountability.

Corruption is a second theme. Corruption is not an incidental flaw of the post-Soviet Russian regime; it is the very basis of its existence. Corruption was pervasive in the last decades of Communism, but it took far less ostentatious forms than today. The dachas of Communist officials were laughably rustic by the standards of 21st century Russia. Privilege often consisted in little more than the right to buy a can of salmon or a few links of sausage in a special shop, without standing in line like the masses. The corruptionists (as Latynina calls them) became bolder when they found that Yeltsin lacked the inclination to restrain them in any way. Putin, as Yeltsin’s handpicked successor, has perfected the use of corruption as an instrument of power. Transparency International ranks Russia as tied with Laos, Yemen, and the Central African Republic for the 154th most corrupt country (and falling) out of 178 surveyed in 2010. Some people dismiss TI’s rankings as being only an index of “corruption perceptions,” but the perception of corruption is exactly what is driving people onto the streets.

The third theme is that the Russian protests are a middle class phenomenon. They are not a revolt of the 99% against the 1%, as the Occupy Wall Street movement casts itself. Instead, they are a revolt of an abused middle class both against the 1% of oligarchs and against the lumpens—the drunks, the slackers, and the infuriating lowest layer of corrupt officialdom with which the middle class cannot avoid frequent run-ins.

The Russian protesters have no common program, not Latynina’s or anyone else’s. Many look to the past, rather than the future. Some of the most visible features in the videos of last week’s protests were the many yellow-white-black nationalist banners, based on a 19th century imperialist design, and the equally many red hammer-and-sickle flags. The less ideologically driven demonstrators, interestingly, chose white ribbons as their symbol of protest. Perhaps white represents the hope of a clean and honest government. Perhaps it represents the blank space on which the future of Russia could be written after whiting out the twelve more years of Putin that the next round of fraudulent elections is all too likely to bring.

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