rise of Russian capitalism

James Devine jdevine at popmail.lmu.edu
Mon Sep 21 10:23:48 PDT 1998

Brad put forth the idea that Marx & Engels' MANIFESTO could be used to justify the US/IMF policies in Russia. Creating a bourgeoisie creates economic growth, abolishing bureaucratic-industrial "feudalism."

It might be useful to (re)read Marx on the so-called "Primitive Accumulation" at the end of vol. I of CAPITAL. This is recommended because, like most serious thinkers, as Marx got older, (1) his political-economic analysis got sharper and (2) his knowledge of economic history got deeper. CAPITAL trumps the MANIFESTO (and early stuff like his seemingly technological-determinist preface to the "Contribution to the Critique of Political Economy") on both of these levels. In addition, his historical material in CAPITAL also stands up pretty well in the light of later research.

The main message of these chapters (esp. ch. 27) is that the creation of capitalism -- the creation of the bourgeoisie -- was the result of a long spate of violence against the common people (the peasants, etc.) It was not a natural-seeming, consensual, democratic, or gradual process.

In modern terms, the traditional property rights system in England implied that the land was "owned" by _both_ the lords and by the people, where the nature of "ownership" rights was very different from that of capitalism. Not only did the people have the obligation to pay the lords various feudal dues, but the lords had the obligation to protect the people in a large number of ways (though the latter outweighed the former). "Political" and "econonomic" institutions were intimately connected, probably impossible to separate in practice. But then the lords, in conjunction with the rising merchant class, unilaterally redefined property rights as saying: this land is _ours_; we have no obligations at all to the people. We are willing and able to use force to preserve and extend our new property rights. (Eventually, said folks like John Locke, the benefits will trickle down to you (or maybe your to your grandchildren), so don't worry, be happy.)

It's as the Queen of England and Mayor Giuliani were to suddenly declare that the territory that they rule over was _theirs_ to own and use in any way profitable, even to break them into bits to sell on the market. Taxes would be renamed as rent, with no obligation to the new tenants except that the latter could use the land when given permission by the new owners. (Before, various services were provided for free, in exchange for being a citizen and paying taxes. Now there are user fees. Etc.)

It sure seems to me (a non-expert on things Russian) that something like this was going on in Russia: what had been public property (officially) suddenly became the property of a small elite (mostly apparchiks and mafiosi). This was always a very political process, not the product of some apolitical bourgeoisie. It was a process involving fraud and force, something that the IMF and US winked at from the beginning.

But history never repeats itself. Marx's story doesn't apply to countries that are dominated by others. The English imposed capitalist property rights on India, for example, turning tax-farmers (zamindars) into big landlords. But they also made sure that as many of the benefits as possible accrued to the English (and as little as possible to the Indians). The promotion of capitalism in India was used to give English capitalism a boost. The subsequent economic dependency of India remained a barrier to any independent development of capitalism there, a fact that independent India has been struggling with ever since.

Russia, having lost the Cold War, was similarly dominated, by the US, IMF, etc., who similarly tried to remake the country in their own image. Given the situation of Russian in 1989, there was little ability for the West to loot or to structure the economy to serve the West. It was more like the situation of Germany in 1919, being humiliated and sliced up by the victorious powers. Russian is lucky that they didn't have to pay formal reparations.

The kind of property that the privateers got was different than for the zamindars, while money flows have become easy. So the rising bourgeoisie, unlike the Indian zamindars, could take the money and run, over to banks in Cyprus and Switzerland. Given this option and the increasingly obvious failure of the US/IMF efforts (in terms of creatng a viable Russian economy), they became looters rather than stay-for-the-long-haul kleptocrats (and US allies) like Mobutu Sese Seko.

Jim Devine jdevine at popmail.lmu.edu & http://clawww.lmu.edu/Departments/ECON/jdevine.html

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