Russia’s Economic Performance: Fudging the Stats

“The Country’s Leaders Are Relying on Erroneous Economic Data”
Economist Grigory Hanin Explains How the Official Figures Are Deceiving 
Alexander Trushin
Ogonyok
February 11, 2017

The article “Russia Cannot Be Understand by Labor” (Ogonyok 3, 2017), which dealt with low workforce productivity in Russia, struck a huge chord with readers. Serious academics responded to it, including Grigory Hanin, a professor at RANEPA’s Siberian Institute of Management, and Dmitry Fomin, an assistant professor at the Novosibirsk State University of Economics and Management. They are convinced the official figures on which both government agencies and the authors of the above-mentioned article rely do not jibe with reality.

We quote the letter they sent to us:

“Your magazine has been promptly sounding the alarm as to Russia’s lagging behind in terms of workforce productivity. Your focus on the obsolescence of Russia’s production facilities is also justified. But the stance adopted by the authors is weakened when they rely on figures from Rosstat, which embellish the real state of the economy, as the Soviet Central Statistical Directorate (TsSU) used to do. We have produced alternative estimates of macroeconomic indicators for the Soviet Union since the early 1970s and now for the Russian Federation, based on a number of more reliable figures from Soviet and Russian statistics. We have been able to refine Rosstat’s estimates. The gap in workforce productivity between Russia and the developed countries is greatly underestimated in the article. If instead of the quite dubious cost data cited there, you use the genuine data, you find a gap of five to seven times or more, sometime as much as ten times.

“The authors have greatly underestimated the deterioration of physical capital. We have made alternative estimates of the depreciation of fixed assets in the Russian Federation from 1991 to 2015, taking into account the real value of fixed capital during this period and the preceding Soviet period. The estimates have shown that the depreciation of fixed capital amounted to 64.4% in 2015, rather than the 49.4% indicated by Rosstat. […] For a better understanding of our country’s problems with regard to the depreciation of physical capital, we should factor in the depreciation of human capital, the disastrous decline in education from the 1970s to the present. The objective of navigating a way out oof Russia’s backwardness in terms of workforce productivity is extremly complex, requiring colossal efforts and sacrifices from the entire society[.]”

Ogonyok asked one of the letter’s authors, Grigory Hanin, to explain what was wrong with the statistics cited by everyone from government agencies to ordinary people.

What is the difference between the official figures and your estimates of Russia’s macroeconomic indicators?

According to the longitudinal research Dmitry Fomin and I have been doing, Russia’s GDP has not grown by 13.4% from 1992 to 2015, as Rosstat claims, but has decreased by 10.2%. During the same period, Russia’s workforce productivity has fallen by 30.1% instead of having grown by 9.2%, as the official figures claim. Basic fixed assets (buildings and plant, machinery, machine tools, and other assets involved in production) have decreased by 29.2% in terms of their full book value, although the official figures claim they have increased by 50.9%.

How do you explain this discrepancy?

The official figures deal with basic fixed assets incorrectly. We are talking about physical capital, a vital economic resource. Along with human capital, it defines the level of economic development and shapes GDP’s performance and value and other macroeconomic indicators. No other indicator has been distorted as much in statistics in the Soviet Union and Russia as this one. It is a fairly complicated indicator. Many countries have problems with it, even the World Bank, which does its estimates based on the official data submitted by each country, including Rosstat.

How important is the erroneous estimate of fixed assets?

First of all, when there is inflation, which there has almost always been in the Soviet Union and Russian Federation, the underestimation of fixed assets has always led to exaggerating their performance, since old and new assets are valued in terms of different rubles: old assets in terms oof expensive rubles, and new assets in terms of cheap rubles. All of this impacts the underestimation of the value of depreciation and production costs. Consequently, profits are exaggerated.

Meaning, we cannot get a fix on the real state of the Russian economy?

It’s a problem that has been dragging on since the late 1920s, when assets were, according to my calculations, undervalued by almost half. Consequently, resources spent on refurbishing the assets were not take into account, nor was the increase in production costs. In the 1930s and 1940s, the underestimation continued to grown, despite reevaluations in certain sectors. Only in 1960 was a general reevaluation of fixed assets carried out, but it was chockablock with mistakes. Afterwards, due to ongoing inflation, the error in calculating the value of fixed assets continued to grow. By the late 1980s, it had grown by four and a half times. By 2015, the fixed assets were underestimated by 7.3 times, according to our calculations.

In the Soviet economy, all cost data that reflected productivity and national income growth, including the value of fixed assets, were distorted. Soviet production figures given in physical terms (tons, units, etc.) can be considered more or less reliable, because the central planning process was based on them.

But the problem persisted when we switched to a market economy in the 1990s?

In the early 1990s, Russian statistics switched to international standards. We seemingly had rid ourselves of the shortcomings of Soviet statistics, but new ones emerged. Several attempts were made in the 1990s to reevaluate fixed assets, but the official figures on the trends in fixed assets still turned out wrong.

What is your estimate of the scale of the disaster?

It was only this year we finished a full year-by-year estimate of the performance of fixed assets from 1991 to 2015. I have to confess the outcome was surprising. I should emphasize from the outset that our calculation does not claim to be totally precise. (There is no such animal in macroeconomic statistics.) But we are confident of its objectivity. So, the volume of fixed assets in terms of depreciation had decreased approximately twofold by 2015 compared to 1991. [This figure differs from the total book value, which is based on the original cost of the assets, to which upgrading costs have been added — Ogonyok.] This is much more than the damage incurred by the Great Patriotic War [i.e., WWII]. The decrease then amounted to 33.5%. Here is another figure. The Russian economy has lost a total of 422.5 trillion rubles in fixed assets, taking into account their depreciation over the last 25 years. This sum is equal to Russia’s GDP for the last five years. The reduction of fixed assets has occurred because capital investment during the post-Soviet period has been less than the scale of asset retirement. Rosstat, however, does not take this into account attempting to persuade us the reverse is true: that physical capital has increased by 51% since 1991. This radically alters how we evaluate the economy’s profitability, because it dramatically increases the costs of depreciating fixed assets. According to our estimates, in the early 2000s, their overestimation led to huge losses for the major manufacturing industries, while the commercial services sectors were highly profitable. Guided by official data on income, however, the tax authorities collected taxes mainly from the loss-making manufacturing sectors, thus exacerbating their financial difficulties, while exacting a minimum of taxes from the service industries.

How does the Russian economy look nowadays?

Let’s begin with the fact that half the fixed assets are left. I should note they are used better now in certain industries where the market economy has had a positive effect. The greatest reduction of fixed assets has occurred in manufacturing, but they have grown in the commercial services sector. At the same time, we have two industries that were almost wholly revived by foreign capital, beer brewing and confectioneries manufacturing. The services sector has increased almost twofold in Russia since 1991. This applies to the private sector of the economy: retail and wholesale trading, food services, hotel management and tourism, vehicle maintenance, private medical care, communications, public information services, and so on. In the public services sector—public healthcare, science and education, sport and physical education, housing and public utilities, the public road system—fixed assets have declined, but not as much as in industry. In Soviet times, there was a disproportion: an emphasis on heavy industry alongside underdeveloped service and consumer sectors. Now we see the hypetrophied growth of commercial services and the underdevelopment of the economy’s investment sector.

How has GDP’s performance fluctuated during this period, according to your calculations?

We have still not reached the level of 1991 in comparable prices, whereas Rosstat shows a surplus of 13%. However, in the 1990s, Rosstat even undervalued the drop in GDP a bit, because it gave insufficient weight to the gray economy. GDP was greater in the 1990s than Rosstat has claimed. On the other hand, from 1998 to 2007, the official figures greatly exaggerated the growth in GDP: 82%. According to our figures, growth amounted to only 48%. The upsurge in the early noughties, aside from a rise in the oil price, was due to the use of the reserve production capacity and manpower that had formed in the 1990s. By 2007, however, these growth opportunities had been tapped out. Stagnation and then a decline in economic growth inevitably had to set in. Which was what happened.

And things are also not kosher with the official inflation estimates?

Exactly. The underestimation of inflation levels is determined, albeit roughly, by the difference between Rosstat’s GDP performance stats and ours. This difference amounts annually to around two percentage points. Instead of 5% per year, say, it amounts to 7%.

Why do we need to calculate inflation accurately?

It affects social spending by the state: pensions, benefits, and all other payments that the state should index for inflation. And besides, there are the state’s investment costs, which have to account for inflation. But if accurate figures do not exist, then there is not enough money for new projects, which happens quite often.

Have foreign experts provided more accurate assessments of the state of the Russian economy?

No, they have all been mistaken, because they used Rosstat’s figures for their estimates. In the 1990s, they thought that since Rosstat had switched to international standards, they would not need to recalculate anything. On the other hand, the World Bank monitors two hundred countries, and it is simply physically incapable of recalculating the data for every country’s economy.

You have claimed that workforce productivity in Russian is lower than in developed countries, by five to seven times, or even ten times. What is the basis for these estimates?

There are two types of economists: macroeconomists and industrial economists. And there are methods of estimating workforce productivity. The first focus on price indicators, while the second focus on non-monetary indicators. The first calculation is often wrong due to the dubiousness of the ruble-to-dollar conversion factors. But you can use non-monetary indicators for certain industries, and then you obtain different outcomes. For example, petroleum production. Divide the volume of production by the number of people employed in the industry, and you get output per worker. You can do the same thing with metallurgy, machine building, agriculture, and all industries, and then compare them with other countries. That was how we got the outcome about which we wrote to you. The estimate was derived from numerous Russian industry publications.

How do you assess the state of human capital in Russia?

We suffered huge demographic losses in the twentieth century through wars, purges, famine, emigration. According to my estimates, we lost between 70 and 80 million people. Moreover, the losses affected the intellectual segment of the populace more: such people were more likely to die in wars and more likely to emigrate. Three of the four living Russian Nobel Prize winners work abroad. Add to that the degradation of secondary and higher education that has been observed since the 1970s. Plus the stupefaction of the populace by the media, especially the electronic media. I go to our library in Novosibirsk, one of the largest libraries in Russia. The reading roooms are nearly empty: there are more librarians there than readers. Recently, I visited the Bavarian State Library. Tears welled up in my eyes. I saw an enormous reading room, nearly a kilometer long, chockablock with people. If you go into our main bookstore in Novosibirsk you’ll find ten to fifteen shoppers, while in Munich they have a seven-storey bookstore. There are something like two hundred people people browsing the shelves, picking out books, sitting on couches, sipping coffee, and chatting.

Can we bridge the gap with the developed countries?

Bridging the gap is unthinkable. Imagine you are standing at the starting line, and your competitors have taken off and have a five-kilometer headstart on you. The government relies on erroneous economic data and underestimates the depth of problems. The illusion is generated that economic recovery is possible without serious costs. We have estimated that, in terms of 2015 prices, 14.6 trillion rubles in investments would be required to maintain fixed assets and grow them by 3%. Plus, we would need 900 billion rubles for working capital. To develop human capital—education, healthcare, research—we would have to invest 10.3 trillion rubles. This would amount to 25.8 trillion rubles a year, which is a third of Russia’s annual GDP.

And nothing can be done?

It’s possible to narrow the gap. To do this, we would have to redistribute incomes to physical and human capital, and to the neediest segments of the populace. But even that would require enormous efforts. We could, for example, redistribute incomes to narrow the social differentiation among decile groups from the current ratio of 30:1 to 6:1, that is, the figure that exists in most Western European countries. But this would all take many years to accomplish.

***

Ogonyok asked Rosstat to comment on the divergence in key economic development indicators for Russia. We are waiting for a response to this request.

Business Card

An  Economist with a Stance

Grigory Hanin finished graduate school at the Leningrad Finance and Economic Institute in 1962, and then worked at Novosibirsk State University. In 1968, he successfully defended his candidate’s dissertation, but the Higher Attestation Commission (VAK) refused to approve it due to its “market-based approach.” In 1972, Hanin was dismissed from the university for his dissenting views on the economy, which were, allegedly, “negatively affecting” students in the economics department. Hanin could not be expelled from academics, however. He successfully defended his candidate’s dissertation at the Institute of World Economy and International Relations of the Russian Academy of Sciences (IMEMO RAN), and then his doctor’s dissertation at the Central Economic and Mathematical Institute of the Russian Academy of Sciences (TsEMI RAN). Hanin did research on alternative macroeconomic estimates of the Soviet economy. In 1987, Hanin and journalist Vasily Selyunin published the famous article “Tricky Numbers” in the journal Novy Mir, causing a huge public outcry. Hanin is currently a professor at RANEPA’s Siberian Institute of Management, where he researches recent Russian economic history.

The Numbers

A Big Difference

How official and alternative estimates of Russia’s macroeconomic performance vary

Rosstat’s figures Alternative estimates
GDP* 113.4% 89.8%
Productivity* 109.2% 69.9%
Inflation** 5.38% 7.38%

* In 2015, relative to 1991

** In 2016

Translated by the Russian Reader. Thanks to Sergey Shpilkin for the heads-up

Yesterday in Soviet History (Susanna Pechuro, Maya Ulanovskaya, and the SDR)

Susanna Pechuro. Photo courtesy of Sergei Stepanov
Susanna Pechuro. Photo courtesy of Sergei Stepanov

Sergei Stepanov
Facebook
February 7, 2017

On February 7, 1952, the closed trial of members of a Moscow young people’s literary club was held in Moscow. They were accused of disseminating leaflets, produced on a hectograph, about the undemocratic Soviet electoral system. A total of sixteen schoolchildren and university students stood as defendants in the case. They were charged with treason and planning the murder of [Politburo member and Stalin henchman Georgy] Malenkov. The group’s three organizers were sentenced to death. Three other members were sentenced to ten years in the camps, while the remaining ten members were sentenced to twenty-five years in the camps. In addition, Susanna Pechuro was accused of acting as a liaison between youth organizations and Jewish Zionist organizations.

Yevgeny Gurevich, Boris Slutsky, and Vladlen Furman, executed in 1952. Photo courtesy of Sergei Stepanov
Yevgeny Gurevich, Boris Slutsky, and Vladlen Furman, the group’s three organizers, executed in 1952. Photo courtesy of Sergei Stepanov and Wikipedia

_____________

At the end of World War II and shortly after, Malenkov implemented Stalin’s plan to destroy all political and cultural competition from Leningrad, the former capital of Russia, in order to concentrate all power in Moscow. Leningrad and its leaders earned immense respect and popular support due to winning the heroic Siege of Leningrad. Both Stalin and Malenkov expressed their hatred to anyone born and educated in Leningrad, so they organized and led the attack on the Leningrad elite. Beria and Malenkov together with Abakumov organized massive executions of their rivals in the Leningrad Affair where all leaders of Leningrad and Zhdanov’s allies were killed, and thousands more were locked up in Gulag labour camps upon Stalin’s approval. Malenkov personally ordered the destruction of the Museum of the Siege of Leningrad and declared the 900-day-long defense of Leningrad “a myth designed by traitors trying to diminish the greatness of comrade Stalin.” Simultaneously, Malenkov replaced all communist party and administrative leadership in Leningrad [with] provincial communists loyal to Stalin.

Source: Wikipedia

_____________

Susanna Pechuro, circa 1950-1951, before her arrest. Photo courtesy of Wikipedia
Susanna Pechuro, circa 1950-1951, before her arrest. Photo courtesy of Wikipedia

Susanna Solomonovna Pechuro (22 July 1933, Moscow—1 January 2014, Moscow) was Soviet dissident, political prisoner, and historian.

In 1950, while still a schoolgirl, she became involved in the underground youth organization Union of Struggle for the Revolution (SDR), formed by several 16- and 17-year-olds who had met in a literary club at the Moscow Young Pioneers House. The SDR tasked itself with returning Soviet society and the Soviet state to Leninist principles of organization, which, in their opinion, had been perverted by Stalin’s Bonapartist regime.

On January 18, 1951, Pechuro was arrested along with the organization’s other members. On February 13, 1952, the Military Collegium of the USSR Supreme Court sentenced Pechuro to 25 years in labor camps on charges of treason and planning the murder of Georgy Malenkov[.] The organization’s three leaders, Boris Slutsky (born 1932), Vladlen Furman (born 1932), and Yevgeny Gurevich (born 1931) were shot.

Pechuro served her sentence in various Gulag camps, including camps in Inta, Abez, and Potma. In 1956, the group’s case was reexamined. Pechuro’s sentence was reduced to five years and she was released.

Although she passed the entrance exams to Moscow State University’s history department, she was not enrolled. She graduated from the Moscow State Historical Archives Institute.

At the Historical Archives Institute, Pechuro researched the purges during the reign of Ivan the Terrible. Her work was published in the Proceedings of the Moscow State Historical Archives Institute. In 1961, she successfully defended her thesis, “The Decree Books as a Source on the History of Ivan the Terrible’s Zemshchina,” with Alexander Zimin as her advisor.

Pechuro worked in the Archive of Ancient Documents at the Institute for African Studies.

She was rehabilitated only on July 18, 1989, by the Plenum of the USSR Supreme Court.

A long-time member of Memorial, she signed the“Putin Must Go” petition in 2010.

Pechuro died in Moscow on January 1, 2014. She is buried at St. Nicholas Archangel Cemetery.

Source: Wikipedia

_____________

The Union of Struggle for the Revolution (SDR) was a radical left-wing anti-Stalinist underground youth organization that existed between 1950 and 1951.

The Union of Struggle for the Revolution (SDR) was organized in Moscow by university students Boris Slutsky, Yevgeny Gurevich, and Vladlen Furman in 1950. The organization drafted a program and manifesto that spoke of socialism’s degeneration into state capitalism, described the Stalinist regime as Bonapartist, and noted the lack of civil liberties, the farcical elections, the imperial nature of [Soviet] foreign policy, and the disastrous state of agriculture. The members of the organization reproduced the documents on a hectograph.

The members of the organization were arrested by the MGB in January and February 1951.

On February 13, 1952, the Military Collegium of the USSR Supreme Court issued a verdict in the case. The verdict stated that a group of Jewish nationalists had established a treacherous terrorist organization whose members had tasked themselves with overthrowing the current Soviet regime by means of an armed uprising and terrorist acts against the leaders of the Soviet government and Communist Party. The only SDR member who did not plead guilty was Maya Ulanovskaya. Slutsky, Gurevich, and Furman were sentenced to death. Ten members of the organization were sentenced to 25 years in prison, and three more, to 10 years. The three leaders of the SDR were shot on March 26, 1952, and their ashes were buried at Donskoe Cemetery. The surviving defendants were released from the camps after a retrial in 1956. In 1989, all the defendants in the case, some posthumously, were rehabilitated “for lack of evidence of a crime.”

SDR Members

Sentenced to death:
Yevgeny Gurevich (born 1931)
Boris Slutsky (born 1932)
Vladlen Furman (born 1931)

Sentenced to 10 years in prison:
Tamara Lazarevna (born 1932)
Galina Smirnova (born 1931)
Nina Uflyand (born 1934)

Sentenced to 25 years in prison:
Irena Arginskaya (born 1932)
Ida Vinnikova (born 1931)
Felix Voin (born 1931)
Grigory Mazur (born 1931)
Vladimir Melnikov (born 1932)
Yekaterina Panfilova (born 1932)
Susanna Pechuro (born 1933)
Alla Reif (born 1931)
Maya Ulanovskaya (born 1932)
Inna Elgisser (born 1930)

Source: Wikipedia

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Maya Ulanovskaya in the Gulag, 1955. Courtesy of Wikipedia

Maya Alexandrovna Ulanovskaya (born October 20, 1932, New York) is a translator and writer who was a member of the Soviet dissident movement.

Ulanovskaya was born in New York, where her parents Alexander Ulanovsky (1891—1971) and Nadezhda (Esther) Markovna (1903—1986) were Soviet spies working for the Main Intelligence Directorate (GRU). They were arrested in 1948 and 1949 on political charges.

In 1949, after graduating from high school, Ulanovskaya enrolled in the Moscow Food Industry Institute. There she joined the underground anti-Stalinist youth organization Union of Struggle for the Revolution (SDR).

On February 7, 1951, Ulanovskaya was arrested by the MGB. On February 13, 1952, she was sentenced to 25 years in prison. She served her sentence in Ozerlag.

In February 1956, the case was reviewed, Ulanovskaya’s sentence was reduced to five years, and she and her accomplices were released under an amnesty.

The same year, she married Anatoly Yakobson. In 1959, she gave birth to a son, who later became a historian, journalist, and politician.

In the 1960s and 1970s, Ulanovskaya worked at the library of the Institute of Scientific Information on Social Sciences of the Russian Academy of Sciences (INION RAN) and was involved in the Soviet human rights movement, retyping samizdat publications, passing information overseas, etc.

In 1973, she emigrated with her husband and son to Israel. In 1974, she divorced her husband.

Ulanovskaya worked at the National Library in Jerusalem. She has translated several books from English (including books by Arthur Koestler), Hebrew, and Yiddish. She and her mother co-authored a memoir entitled The Story of One Family, published in the US in 1982 and later reprinted in Russia. She is author of the book Freedom and Dogma: The Life and Work of Arthur Koestler (Jerusalem Publishing Center, 1996).

Source: Wikipedia

All texts except the excerpt about Malenkov translated by the Russian Reader. Thanks to Yuri Albert for the heads-up on Sergei Stepanov’s Facebook post, which got this ball rolling.

 

“You Lose . . . Comrade”

Alexander Dugin and John Candy: Not Separated at Birth
Alexander Dugin and John Candy: Not Separated at Birth

Eurasianist leader and self-confessed fascist Alexander Dugin had something he wanted to say to you about Donald Trump and the US presidential elections.

Dugin and his voiceover artists’ delivery and (unintentional) self-parody reminded me of the Second City Television (SCTV) episode in which the lowly Melonville station’s signal is temporarily blocked and taken over by “CCCP1, Russian Television.”

But that was meant to be funny. And it was also meant to parody not so much the actual Soviet Union (although it did a little of that, too, especially in its prescient “vilification” of “Uzbeks”) as it did North American Cold War attitudes and stereotypes of the Soviet Union.

Now what begun as high farce has returned as . . . I wanted to say tragedy, but it’s really the most vulgar of comedies. It’s definitely not funny anymore, though, whatever the real or imagined connections between the Fascist Pig in the Poke and the Kremlin.

Thanks to Comrade Maximum for the heads-up on the Dugin video. TRR

A Word from Our Sponsor

And now, a word from our sponsor, the common cause.

english-girls

Constructing life, however, is undoubtedly tantamount to producing culture. The life that man constructs consciously is, in fact, culture. Culture is the totality of man’s advances in transfiguring the world. Culture is the world, altered by man according to his mind’s ideals.

But culture, in this case, includes not only theoretical and symbolic endeavors, as encapsulated in science and art. A significant and essential part of culture are those modes of work that really change the world around us, not merely in thought and imagination. They include economics, production, agriculture, engineering, medicine, eugenics, practical biology, education, and so on. Indeed, an overview of all the current research and trends makes plain that culture’s contents are revealed as the things people actually to change reality using these means. Culture is not only pure science and pure art, but definitely consists in applying them to production, the mining and processing industry, labor, and technology. Hence, we can say that culture’s ultimate meaning and goal are actually to improve and transform the world through nature’s rational management.

The new culture of the future involves nothing other than identifying this universal culture, revealing it as the work of transfiguring the world.

It follows that the first task, which precedes all construction and organization, is expanding the common notion of culture and including in it the modes of human endeavor that have previously been regarded as outside its scope. In other words, what must vanish are the current disjunction between culture and life, and the consequent separation of theoretical and symbolic work, which generates expressions of knowledge and ideal patterns, from work that really, by means of action, changes our environment.

To this end, we must first clearly understand the source of this pernicious disjunction. Its roots undoubtedly lie in the ancient division of the world into the supernatural world, accessible only to the mind and imagination, and the earthly, material world where human action takes place.

Due to the limitations of his outlook and the feebleness of his power over nature, man was unable to effect a real, comprehensive transformation of the environment, and so he marked off a special field of endeavor where he found it relatively easier to enact the kingdom of his reason and his moral and aesthetic ideals. This was the realm of pure knowledge and the similar realm of pure art. Here, in a special world generated by the mind and imagination, man produced the ideas and images he wanted while passively contemplating external reality and acting on it only in his own inner world by enriching his intellect and furthering his aesthetic powers. In this segregated realm, he scored victories over unreasoning, vicious nature, but what these successes lacked was the fact they led to no changes in real life except for producing generations of especially sophisticated, accomplished people who were quite remote from the mass of humanity, who continued to languish in the grip of a life that was impoverished, meaningless, and misshapen. Thus did passive contemplation and abstract philosophizing evolve. They were joined by pure science and pure art. Scientists have engaged in pure theory, forgetting their work makes sense only insofar as it really transfigures the world, and that they, accordingly, are not a self-sufficient corporation, but merely a committee of sorts, designated by humanity for a particular goal: drafting a project for the world’s transfiguration. For their part, artists have surrendered to the symbolism of images and forgotten they only make sense insofar as they are linked to reality, and that art’s purpose is to provide people with an ideal of a better world and assist in actually converting the present into such a future. Consequently, culture has become detached from life and enclosed in the narrow confines of pure creativity, remote from reality.

The outcome of the disjunction between symbolic and theoretical endeavors and real cultural work has been equally detrimental to both. Without thought, action is meaningless; thought without movement is ineffective; while knowledge, since it is applied to nothing, degenerates into abstract intellectualizing; science that has no practical end ultimately turns into an exposition of methods that have no purpose; and art that produces only dead likenesses turns into a harmful amusement. On the other hand, lawmaking and economics, as endeavors that change the material world; medicine and eugenics, which change the nature of living beings; and education, which changes their mental nature, are likewise bereft of a particular purpose and come to serve private and individual interests instead of pursuing the task of transfiguring the world.

The outcome is humanity’s atomization into a number of warring centers. Culture is no longer produced as the common cause of human efforts, while the latter develop, each in its own field, as self-contained strivings. Hence the birth of the destructive particularism we find at the heart of cultural liberalism, which was proclaimed during the Renaissance and has evolved into modern cultural chaos. In this state, the common conscious action of people, instead of blazing a course for itself through history as a single, powerful stream, has trickled away into a thousand rivulets, which have mostly ended up as standing puddles of fetid water. Each man lives only for his selfish purposes. A number of dead ends arise, discrete lives fenced off from the rest. An idol in the guise of personal prejudice or passion is erected in each such dead end. Mutual bloody war erupts in the name of the idols, tearing humanity apart with strife. However, at the same time, people are united by irrational factors, but this unity is usually based on narrow-mindedness and passivity, and crumbles when it encounters consciousness, even in its primary selfish, individual form.

These phenomena have caused the crisis now experienced by European culture. It is clear it cannot stay in a state of modern individual atomization, and just as clear that the way to past attempts at unification, based on extinguishing consciousness, is forbidden to it due to its hypertrophied modern evolution. The only way left is to produce a culture in which consciousness would not be removed from life but would projectively manage it, moreover, manage it not in the sense of separating people from each other, but, on the contrary, in the sense of uniting them as completely as possible on the basis of a common cause.

That was an excerpt from Valerian Muravyov, “A Universal Productive Mathematics” (1923), in Boris Groys, ed., Russkii kozmism (Moscow: Ad Marginem Press,  2015), 180–184

Translated by the Russian Reader

Crisis Art

E.I. Liskovich, Capitalism in the Grips of Crisis, 1932. May Day installation on the Obvodny Canal, Leningrad
E.I. Liskovich, Capitalism in the Grips of Crisis, 1932. May Day installation on the Obvodny Canal, Leningrad. Photo courtesy of Andrey Pomulev

“Echoing the Moscow satirical installations is E.I. Liskovich’s composition Dying Capitalism, erected on the Obvodny Canal in perfect harmony with the surrounding landscape. It features the huge plywood figure of a capitalist, half submerged in the water of the canal and calling for help.”

Source: The Artistic Design of Mass Celebrations, 1918–1931 (Moscow & Leningrad: OGIZ & IZOGIZ, 1932)

Thanks to Comrade NO for the heads-up

Mikhail Kozhukhov: A New Year’s Story

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Mikhail Kozhukhov and Valery “Cap” Vostrotin

Mikhail Kozhukov
Facebook
December 25, 2016

A New Year’s Story

The previous text set off a storm of emotions. I was told I should clear out of “our” country, accused of insanity, named every name in the book, given advice (I really love that), and chided, of course, for my “Afghan” past. Since that’s how it’s going to be, here’s a New Year’s story for you on the topic.

I rang in 1989 at the 345th Guards Airborne Regiment, one of the toughest in Afghanistan. Its battalions were constantly sent into combat, and it was the rare operation in which they were not involved. They would return to base flying the regimental flag. That was not in the regulations. The regimental commander, Valery Vostrotin or, “Cap,” as they called him, thought that up. After his first wound in the literal sense, the surgeons sewed him up like an old sock, and he came back “over the river”for a second tour of duty, this time sporting a Hero of the Soviet Union Star. The soldiers adored Cap. His photo, clipped from newspapers, hung over many a man’s cot in the barracks. I had never seen anything like it.

We became friends in Khost, during the same operation [Magistral] on which the plot of the film The 9th Company is based. The 9th Company is part of the 345th Regiment, after all. Valera had commanded it himself once upon a time. Under his command, the 9th had been involved in storming Hafizullah Amin’s palace.

I cannot convey what the New Year’s celebration was like. The airborne troops pummeled the sky with everything that could and could not shoot. The commander made the rounds of all the battalions. As his guest, I tailed him, and then we stayed up and talked all night. It was then that he autographed this playing card “in pledge of [a] long friendship.”

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When we said goodbye the next day, I recited him Igor Morozov’s lyrics to the song “We’re Going,” which was gaining popularity but had not made it yet to Bagram Airfield: “From once-conquered heavenly peaks we descend charred steps to earth.” There is a line in that song: “And we haven’t finished our business yet, but we’re going, going, going.”

Vostrotin listened and paused before saying bitterly, “We never had any ‘business’ in Afghanistan.”

By the way, it was Vostrotin who did not storm the Russian White House in 1991. He flew the Volgrad Division, which he was then commanding, to Kubinka Air Base, but when they had traveled as far as the Moscow Ring Road, he stopped, and did not advance any farther.

We had no “business” in Afghanistan. And we don’t have any in Syria.

* “Amongst the people killed on board the plane that crashed were Anton Gubankov, the Defense Ministry’s ‘minister of culture’ and his staff member Oksana Badrutdinova. Really good people… The plane, the ambassador, and dozens of servicemen. And there will be more. We have no business in Syria.”

Mikhail Kozhukhov is a well-known Soviet and Russian journalist and television presenter. In 1999–2000, he served as Vladimir Putin’s press secretary. Translated by the Russian Reader

Georgi Plekhanov, Apostle of Russian Marxism (exhibition)

Depiction of Land and Will demonstration outside Kazan Cathedral. Image courtesy of the State Museum of Political History of Russia
Land and Will demonstration outside Kazan Cathedral, December 6, 1876. Image courtesy of the State Museum of Political History of Russia

Georgi Plekhanov, Apostle of Russian Marxism: On the 160th Anniversary of His Birth
The State Museum of Political History of Russia, St. Petersburg

Thinker and revolutionary, founder of Russian social democracy, and major theorist of the Russian labor movement, Georgi Plekhanov (1856–1918) occupies a prominent place in Russia’s political history. Occasioned by the 160th anniversary of his birth, the exhibition focuses on the political biography of this talented propagandist and popularizer of Marxism, showing how his views evolved as the Russian revolutionary movement (1870–1917) progressed from the Populists to the Marxists. Avoiding both apologetics for an “outstanding Russian Marxist thinker” and Soviet-era accusations of Menshevism and opportunism, the exhibition shows the socio-economic and political conditions that shaped the revolutionary’s worldview.

In 1876, Plekhanov was an organizer of the clandestine organization Land and Liberty, taking part in rallies and strikes, and penning proclamations. During the first political demonstration in Russia, which took place outside Kazan Cathedral in Petersburg on December 6, 1876, Plekhanov delivered a diatribe against the autocracy. He rejected terrorism as a means of struggle, and when Land and Will split in 1879, he headed the underground Populist organization Black Repartition. Fleeing from police persecution, Plekhanov went into exile abroad, spending a total of thirty-seven years in Switzerland, Italy, France, and other European countries.

In 1883 in Geneva, Plekhanov founded Emancipation of Labor, the first Russian Marxist group, which published the works of Marx and Engels and popularized Marxism. Plekhanov became a prominent Marxist theorist and a leader of the international socialist movement, participating in the congresses of the Second International, and producing numerous works of journalism, philosophy, and literary criticism. In 1900, Plekhanov and Lenin launched the underground newspaper Iskra. Plekhanov was also involved in founding the Russian Social Democratic Labor Party, but after the party split into Bolshevik and Menshevik factions in 1903, he was at odds with Lenin.

The exhibition deals at great length with Plekhanov and Lenin’s relationship, which evolved from cooperation to confrontation. Plekhanov emerged as a political antagonist of Bolshevism and a critic of Lenin and the October Revolution. (He dubbed Lenin’s “April Theses” “nonsense.”) The exhibition has also captured the fierce polemics about Marxism that Plekhanov conducted with the Populists Nikolay Mikhaylovsky and Lev Tikhomirov, the revisionist Eduard Bernstain, the Legal Marxist Pyotr Struve, and Yekaterina Kuskova, ideologist of the so-called Economists.

The exhibition features documents, photographs, and works of Georgi Plekhanov, as well as numerous exhibits on the history of the Russian revolutionary movement, including Land and Liberty’s first leaflets from the 1870s. Paintings and drawings illustrate the events to which Plekhanov responded.

Georgi Plekhanov's funeral, Petrograd, 1918. Photo courtesy of humus.livejournal.com
Georgi Plekhanov’s funeral, Petrograd, 1918. Photo courtesy of humus.livejournal.com

Plekhanov’s death mask and a documentary film about his funeral (provided by the Russian State Documentary Film and Photo Archive) witness the end of his life. On June 9, 1918, Plekhanov’s coffin was escorted by students, clerks, teachers, journalists, lawyers, and workers—by no fewer than ten thousand Petrograders who refused to obey the instructions of Bolshevik leaders. People of different political views and convictions marched should to shoulder in the funeral procession, including Mensheviks and Socialist Revolutionaries, Constitutional Democrats and ardent monarchists. Only the official Bolshevik authorities demonstratively refused to be involved in the funeral. One of the greatest men of his time was thus laid to rest.

The exhibition has been mounted in cooperation with Plekhanov House (Russian National Library).

Opens December 10, 2016.

Translated by the Russian Reader. Thanks to Cogita.ru for the heads-up