I spoke recently with a radio journalist from Cologne. A pleasant woman, she was one of those western leftists who try and “understand” Russia. She just could not believe that the Putin regime’s ideology was anti-communist and was based on condemnation of all revolutions, whether the October Revolution or the French Revolution.
“How can that be? We are walking here on Insurrection Square. Monuments to Lenin are not demolished in Russia as they are in Ukraine. And you tell me the regime is anti-communist?” she said.
I hope that after Putin’s remarks that Lenin planted an atomic bomb under Russia and was responsible for the Soviet Union’s collapse, my companion will see the light. I no longer have such hopes for Russian liberals who believe that under Putin we are living through a new edition of the Soviet Union.
In fact, Putin has been very consistent albeit historically ignorant. The 1917 Revolution is as hateful to him as the collapse of the Soviet Union, as hateful as any other subversion of Power with a capital p, which in the eyes of the people should remain sacred if only because it is Power, and all power comes from God. From the viewpoint of legitimists like Putin, the destruction of monuments to Lenin or the renaming of streets is a break with the mystical continuity of Power and thus almost a revolutionary gesture.
In Putin’s eyes, Lenin and the Bolsheviks really were devils incarnate, for they radically asserted the right of the masses to revolt and abolished continuity with the past, thus demolishing the mystique around the notion of the state.
During the Stalinist period, however, the Bolshevik Revolution itself was incorporated into the national myth. It is in this bronzed, mythologized form that attempts have been made to adapt all things Soviet to the needs of the new oligarchy, who have imagined themselves the successors of the Rurikids, the Romanovs, Stalin, Yeltsin, and all manner of saviors of the Fatherland and guardians of stability. Fortunately, this stunt does not work with Lenin and never will.
Ivan Ovsyannikov is an activist with the Interregional Trade Union Workers Association (ITUWA/MPRA) and the Russian Socialist Movement (RSD). Translated by the Russian Reader. See my previous post on this topic, “Crumbling Down.”
All holidays are rituals of unity, and it is hard to imagine society functioning without them. November 4, however, is a truly odd day, whose originators ask us to experience unity for its own sake. It reflects the emptiness of official ideology, which claims the role of a national idea.
National Unity Day (Den’ narodnogo edinstva) will never be a truly popular, grassroots holiday. Whatever our attitude to living holidays like International Women’s Day (March 8) or Victory Day (May 9), despite the vulgarity surrounding them and the distortions of their original meaning, they are still bound up with significant societal needs: honoring wives, mothers, and heroic forebears. The sense of unity experienced by millions of people at tables laden with champagne and Olivier salad is maybe illusory but it is not groundless. But who besides thuggish nationalists is capable of feeling the narcissistic pleasure of “unity” as such, especially since it is totally unclear what we are called on to rally around?
The search for a national idea in post-Soviet Russia has resembled the quest for the philosopher’s stone, and has been just as fruitless. According to the Russian Constitution, the sovereign power in the Russian state is “its multinational people,” who are usually designated by the semi-bureaucratic term rossiyane [citizens of Russia, as opposed to russkie, ethnic Russians]. And yet multiculturalism (the coexistence of different ethnic traditions within a single society) is considered a dirty word, and federalism has finally been shunted aside by the vision of Empire. Promotion of ethnic nationalism, “Russianness,” and its concomitant Russian Orthodoxy, the official “spiritual bond,” has led to the fact that Chechens, Dagestanis, and Buryats, for example, are often not regarded as “citizens of multinational Russia,” but as suspicious foreigners like the migrant workers from the once-fraternal former Soviet republics.
However, as it flirts with Russian ethnic nationalism, which has served it well in Ukraine, the regime at the same time fears its devastating consequences for empire. While reacting morbidly to the most innocent speeches about federalization, the Kremlin also prevents the holding of the so-called Russian Marches. The regime’s rhetoric contains an explosive ambiguity. On the one hand, the regime constantly tells us about the “Russian world,” thus stoking ethnic chauvinism. On the other, it talks about the country’s multinational people and the danger of nationalism.
When they invented a holiday to replace November 7 (Revolution Day), the Kremlin’s ideologues deliberately chose the vaguest phrasing possible: “national unity” or “popular unity” [narodnoe edinstvo]. But what is “the people” [narod] today? The word is hardly equivalent to “nation” or “ethnic group.” In pre-Revolutionary Russia, the word denoted all the non-privileged classes, the “simple folk,” especially the peasants. The people was distinguished from educated society by its special (unique and authentic) way of thinking and living, as well as its perennial disempowerment and oppression. In other words, it was more a class and cultural notion than an ethnic or official legal concept.
Later, a new supranational identity, the Soviet people [sovetskii narod], was constructed. We can argue whether it was a reality or the stillborn offspring of communist propaganda. However, this concept cannot be denied its logical shapeliness. The Soviet people was the unity of working people, freed from the yoke of the past and headed towards a post-capitalist future. Unqiue, authentic tradition gave way to Soviet society’s social authenticity and uniqueness. It had overthrown tsarism and capitalism, successfully defended its independence in the fight against fascism, and was proud of its unprecedented historical mission.
In post-Soviet Russia, however, there are no longer any communal peasants or builders of communism. Russia has no monolithic ethnic foundation or alternative social project that it could show to the world and itself. All that can be said about our society it that it is post-Soviet. But there can be no “post-Soviet” people. The mutilated shards of the imperialist, Soviet, and westernized mindsets have generated a postmodernist mishmash that a disoriented and atomized populace gags on and vomits out. It is not the nation or the people but the unscrupulous regime, which has no other purpose than self-reproduction, that is only the glue binding this stagnant society, a society bereft of guideposts. The November 4 holiday is a vacuum into which the ruling class gazes, a void that will eventually swallow it.
State Duma Rejects Indexation for Working Pensioners
October 9, 2015 Lenta.Ru
The pensions of working pensioners will not be indexed for inflation. Olga Batalina, head of the State Duma’s Committee on Labor, Social Policy and Veterans Affairs, made the announcement on Twitter.
She noted that all working pensioners would continue to receive payments, but the payments would not be raised while they are employed.
“You quit work, indexation kicks in again,” added Batalina.
Earlier, on October 9, she announced that the government had to decided index pensions twice in 2016. Batalina explained this would be done so that pensions would increase to the level of inflation for 2015.
On October 8, however, Deputy Prime Minister Igor Shuvalov noted that the possibility of a second indexation next year would depend on the Russian economy’s growth.
On the same day,the government approvedthe draft budgetfor 2016. It is expected thatrevenueswill reach13.58trillion rubles, expenditures, 15.76trillion. The deficitis projected at2.8percent of GDP(2.18 trillion rubles).
A part of the treasury’s expenditures will be covered by a freeze on pension savings. Another cost-saving measure is reducing the indexation of pensions (to 4 percent at an expected inflation rate of 12 percent). Moreover, the idea of terminating pension payments to working pensioners was considered.
Translated by the Russian Reader
Balancing Russia’s Budget Could Cost Pensioners $46 Billion
June 24, 2015 The Moscow Times
Russia’s economic crisis is forcing the government to consider sweeping savings on pension payouts, a move that could go down badly with a core part of President Vladimir Putin’s electorate.
The Finance Ministry this week floated a proposal to save more than 2.5 trillion rubles ($46 billion) over three years by raising pensions at less than the rate of inflation.
The measure comes as the ministry struggles to slash spending amid an economic recession that is eroding budget revenues.
A steep devaluation of the ruble has meant that prices have grown much faster over the past year than salaries, and since payroll taxes are the main source of income for the pension system, the Finance Ministry has said continuation of inflation-linked pensions could threaten the country’s state-run pension fund.
In May, average nominal incomes were 7.3 percent higher than in May 2014, while prices were on average 15.8 percent higher, according to the Rosstat state statistics service.
“If the income of the fund continues to grow slower than its payouts, it could break the entire pension system,” the Vedomosti newspaper quoted Deputy Finance Minister Maxim Oreshkin as saying last month.
The government is already subsidizing a 3.3 trillion ruble ($60 billion) hole in the pension fund, said Pavel Kudyukin, an associate professor at Moscow’s Higher School of Economics.
“This is no longer affordable for the state,” he said.
According to documents for a government meeting on Monday obtained by news agency RBC this week, the Finance Ministry has drawn up plans to curb planned pensions increases from 7 percent to 5.5 percent in 2016; from 6.3 percent to 4.5 percent in 2017 and from 5.1 percent to 4 percent in 2018.
That means that payments will be increased not in the line with the actual inflation, which is expected to fall back into single digits early next year, but according to inflation forecasts made in early 2014, before Western sanctions over the Ukraine crisis and a sharp decline in global oil prices pushed Russia’s economy into recession. Russian GDP is expected to shrink by around 3 percent this year.
These changes, together with cuts to some other undisclosed social spending items, would save around 2.5 trillion rubles over 2016-2018, RBC reported, citing the Finance Ministry documents.
The government has said no decision has yet been taken.
The changes may require changes to legislation, which requires that Russian pensions are indexed twice a year in line with inflation.
Spending on pensions has risen rapidly in recent years as President Putin has sought to use booming oil revenues to raise living standards of pensioners and low-paid state employees.
Pensions were raised even in 2009, during Russia’s last economic crisis, Kudyukin said.
Russia’s roughly 40 million pensioners receive on average 12,900 rubles ($240) in state pension payouts, according to the data from Russia’s pension fund.
The Finance Ministry’s proposal to abandon the link between pensions and inflation aroused sharp criticism from other ministries.
Maxim Topilin, the labor minister, demanded that money be found for the indexation of pensions for next year and the following years and for an analysis of the effectiveness of spending, news agency RIA Novosti reported Tuesday.
Analysts polled by the Moscow Times doubted that the measure would be implemented, as pensioners provide a bedrock of support for President Putin ahead of planned elections in 2018.
“Pensioners are the current government’s main electoral support,”said Pavel Salin, head of the political science center at the Financial University. “The authorities will not reduce pension payments on the eve of the election period.”
Unwillingness to alienate voters is why another Finance Ministry proposal, to cut government expenses by increasing the retirement age of civil servants from 60 to 65 years, has little chance of approval, analysts said.
Hiking the retirement age has been on the agenda for several years — the idea has been repeatedly promoted by former Finance Minister Alexei Kudrin — but has never gained traction.
But even if the Finance Ministry succeeds in making savings on pensions, any discontent would not lead to dramatic political consequences, experts said.
The move could cost Putin a few percentage points off his rating, but not dozens, Salin said.
Putin could afford that — the president’s approval rating is at a record high of 89 percent, according to a poll by the Levada Center released Wednesday.
Given the political apathy of Russians and a surge in patriotic feeling that followed Moscow’s annexation of Crimea from last year, people will bear less generous pensions, Kudyukin said.
“The question is, for how long will they bear them?” he added.
Yesterday, August 8, 2015, Democratic Petersburg held a series of solo pickets on Nevsky Prospect, near the preserved WWII street warning sign that reads, “This side of Nevsky Prospect is the most dangerous during shelling.”
A protester holds a placard featuring an image of Tanya Savicheva, a young girl who recorded the deaths of her family members during the Nazi Siege of Leningrad in the Second World War. Savicheva herself died from intestinal tuberculosis in 1944, two years after being evacuated from Leningrad.
The total quantity of produce destroyed in Russia on August 6 exceeded 300 tons. “The destruction of embargoed products is implemented by all available means.” Russian Federal Government Decree No. 744, dated July 31, 2015
In the difficult social and economic circumstances, destroying produce is a crime against the citizens of Russia. Russia in 2014 (according to preliminary statistics from Rosstat): 16.1 million people earned less than the minimum subsistence level, and 22.9 million people lived on the brink of poverty.
Destruction “by all available means.” Is this gratitude?! Between January 2 and January 9, 1991, 21,400 tons of foreign food aid were delivered to Saint Petersburg.
Source: Alla Repina (Facebook). Thanks to Comrade ASK for the heads-up
[Russian] producers have mastered technologies for producing sour cream from soybeans, caviar from seaweed, and even meat pasted together from scraps as ably as producers in other parts of the world. According to Rosstat, Russia imported thirty-seven percent more palm oil in January and February of this year than during the same period last year. At the same time, domestic production of milk fell by nearly two percent, while the production of the “cheese” grew by approximately thirty-three percent. The experts have concluded this means the volume of counterfeit products has grown along with the increased production of cheese products.
The companies engaged in this business are the very same “domestic producers” whose profits are the cause of the comedy with the produce crematoria on the border. To assure yourself this is the case all you need to know is that the man who encouraged Putin’s decree, agriculture minister Alexander Tkachev, is a major latifundista. (Some label him one of the largest landowners in Europe.) Relatives of the former governor of Krasnodar Krai own 450,000 hectares of farmland. When they speak of defending Russia’s economic interests, they are talking about defending the sharks of Russian agrobusiness from foreign competition, not about the welfare of consumers, the plight of the poor or the salaries of farm workers. How import substitution has affected the condition of farm workers can be seen from the Timashevskaya Poultry Farm (the largest poultry producer in the Samara Region), where an attempt by workers to organize an independent trade union has met fierce resistance from the farm’s prosperous owner.
Of course, the destruction of produce appears cynical given that seven percent of Russians suffer from chronic malnutrition, an even greater number of people have been forced by the crisis to save on food, and there are three to five million homeless people, of whom over fifty thousand are children. However, the reaction of public, who have demanded the confiscated produce be given to orphanages or sent as humanitarian aid to Donbass, is insufficient, despite its moral validity. To deal with the social consequences of the crisis, what we need are not random acts of charity but consistent policies of redistributing incomes, defending jobs, and providing assistance to the poor. We must introduce progressive taxation, provide citizens with social benefits on which they can live, index pensions and wages, and regulate the labor market and prices of essential goods. In other words, we have to reject neoliberal policies that deliberately lead to the destruction of the welfare state. The issue of social welfare should not be an appendix to Internet discussions of the plight of Spanish ham and parmesan, but the central point in the agenda of all opposition forces claiming popular support.
Meanwhile, as bloggers crack jokes about the cheese Auschwitz at the Russian Customs Service, the government is preparing a draft budget for 2016–2018. It provides for measures such as raising the retirement age, reduction of the number of free tuition spots in universities, higher taxes and charges on ordinary citizens, a freeze on social benefit payments, and a refusal to index pensions, benefits, and teachers’ salaries. The specter of austerity has risen in Russia. Against this truly ominous threat, the games at customs appear to be nothing more than a red herring.
There is one point on which there is striking agreement among liberals, Putinists, and the “populist” segment of the Russian left. This is the idea that the majority of the Russian population adheres to leftist values, as opposed to the narrow strata of the middle class and intelligentsia in the big cities.
This simplified representation of societal processes, typical of both semi-official and opposition propaganda, is based on a juxtaposition of the so-called creative class with the notional workers of the Uralvagonzavod tank and railway car manufacturing plant, supposed wearers of quilted jackets with alleged hipsters. Discussion of such complicated topics as the Bolotnaya Square protests, Maidan, and Anti-Maidan revolves around this juxtaposition. The various ideological camps differ only in terms of where their likes and dislikes are directed.
Leaving aside left-nationalist figures like Sergei Kurginyan and Eduard Limonov, the most prominent proponent of the “populist” trend within the leftist movement is Boris Kagarlitsky. The whole thrust of his current affairs writing is to exalt the silent majority (the working people), who are organically hostile to the parasitic petty bourgeoisie that, allegedly, constituted the core of the anti-government protests in Russia in 2011–2012, and in Ukraine in 2013–2014.
Ukraine in the Mirror of Russian “Populism”
In an editorial published on the web site Rabkor.ru, entitled “Anti-Maidan and the Future of Protests,” Kagarlitsky (or his alter ego: unfortunately, the article has no byline) describes the events in Ukraine as follows: “Nothing testifies to the class character of the confrontation that has unfolded in Ukraine like the two crowds that gathered on April 7 in Kharkov. At one end of the square, the well-dressed, well-groomed and prosperous middle class, the intelligentsia, and students stood under yellow-and-blue Ukrainian national flags. Across the square from them had gathered poorly and badly dressed people, workers and youth from the city’s outskirts, bearing red banners, Russian tricolors, and St. George’s Ribbons.” According to Kagarlitsky, this is nothing more or less than a vision of the future of Russia, where only the “state apparatus despised by liberal intellectuals defends them from direct confrontation with those same masses they dub ‘white trash.’”
The fact that the venerable sociologist has been forced to resort to such demagogic methods as assessing the class makeup of protesters by reversing the proverb “It’s not the gay coat that makes the gentleman” indicates the conjectural nature of his scheme. (I wonder how much time Kagarlitsky spent poring over photos from Donetsk with a magnifying glass.) When discussing the social aspect of Maidan, most analysts have noted the dramatic changes that occurred as the protests were radicalized. “At the Euromaidan that existed before November 30–December 1,” notes political analyst Vasily Stoyakin, “it was Kyivans who dominated, and in many ways the ‘face’ of Maidan was made up by young people and the intelligentsia, albeit with a slight admixture of political activists. Many students, people with higher educations, and creative people attended it. […] After November 30, when the clashes began, […] a lot of blue-collar workers without higher educations arrived, in large part from the western regions.”
According to Vadim Karasev, director of the Institute of Global Strategies, as quoted in late January, “[T]he backbone of Euromaidan is men between the ages of thirty-five and forty-five, ‘angry young men,’ often unemployed. […] In my opinion, it would be mistaken to call Maidan a lower-class protest, just as it would be to call it a middle-class protest. It is a Maidan of all disaffected people who are able to get to Kyiv.” According to a study carried out in mid-December 2013 by the Ilko Kucheriv Democratic Initiatives Foundation, every fifth activist at Maidan was a resident of Lviv, around a third had arrived from Ukraine’s central regions, every tenth activist was from the Kyiv region, and around twenty percent were from the country’s southeast.
Sixty-one (two thirds!) of the protesters killed at Maidan were from villages and small towns in Central and Western Ukraine. As political analyst Rinat Pateyev and Nikolai Protsenko, deputy editor of Ekspert Iug magazine, noted, “Among the victims, we see a large number of villagers, including young subproletarians. […] On the other hand, occupations favored by the intelligentsia are fairly well represented [in the list of the slain]: there is a programmer, a journalist, an artist, several school teachers and university lecturers, several theater people, as well as a number of students.” By “subproletarians” Pateyev and Protsenko primarily have in mind seasonal workers “who live on the money they earn abroad.” Isn’t this all fairly remote from the portrait of the “well-dressed, well-groomed and prosperous middle class” painted by Rabkor.ru’s leader writer? We should speak, rather, of the classical picture observed during revolutionary periods, when peaceful protests by students and the intelligentsia escalate into uprisings of the working class’s most disadvantaged members (who for some reason were not prevented from fighting by either liberals or hipsters).
As evidence of Anti-Maidan’s class character, Rabkor.ru’s editorialist adduces no other arguments except to point out the “short text of the declaration of the Donetsk Republic,” which “contains language about collective ownership, equality, and the public interest.” However, many observers have also noted the growth of anti-government and anti-oligarchic sentiments at Maidan. Journalist and leftist activist Igor Dmitriev quotes a manifesto issued by Maidan Self-Defense Force activists: “The new government of Ukraine, which came into office on Maidan’s shoulders, pretends it does not exist. We were not fighting for seats for Tymoshenko, Kolomoisky, Parubiy, Avakov, and their ilk. We fought so that all the country’s citizens would be its masters—each of us, not a few dozen ‘representatives.’ Maidan does not believe it has achieved the goal for which our brothers perished.”
Maidan and Anti-Maidan, which have a similar social makeup, employ the same methods, and suffer from identical nationalist diseases, look like twin brothers who have been divided and turned against each other by feuding elite clans and the intellectuals who serve them. There is absolutely no reason to force the facts, cramming them into a preconceived scheme drawn up on the basis of completely different events that have occurred in another country.
Is Russian Society Leftist?
But let’s return to Russia and see whether the “populist” scheme works here. Can we speak of a “leftist majority” that deliberately ignores protests by the petty bourgeoisie, who are protected from popular wrath by the authorities?
This belief is common within a certain section of the left, but there is no evidence at all to support this view. Poor Kagarlitsky is constantly forced to appeal to absences. For example, commenting on the outcome of the 2013 Moscow mayoral election, he declared a “victory” for the “boycott party” (that is, people who did not vote in the election), which by default is considered proof the electorate is leftist. It logically follows from this that the absence, say, of mass protests against fee-for-services medicine must testify to the triumph of neoliberal ideas within the broad masses of working people.
Sure, in today’s Russia statues of Lenin are not knocked down so often, and Kremlin mouthpieces eagerly borrow motifs from Soviet mythology. The Communist Party of the Russian Federation is still the largest opposition party (but is it leftist?), and many people see the Soviet Union as the touchstone of state and economic power. But are all these things indicators of leftism in the sense the editorialist, who considers himself a Marxist, understands it?
To get closer to answering this question, we need to ask other questions, for example, about the prevalence of self-organization and collective action in the workplace. The statistics on labor disputes in Russia, regularly published by the Center for Social and Labor Rights, are not impressive. Even less impressive are the statistics for strikes. Independent trade union organizations are negligible in terms of their numbers and their resilience, and the rare instances of successful trade union growth are more common at enterprises owned by transnational corporations, where industrial relations approximate western standards. Activists in such trade unions as the Interregional Trade Union of Autoworkers (which rejects the paternalist ideology of the country’s traditional trade union associations) are forced to resort to translated textbooks on organizing and the know-how of foreign colleagues, not to native grassroots collectivism or the remnants of the Soviet mentality.
The above applies to all other forms of voluntary associations, which currently encompass a scant number of Russians. Whereas Russian Populists of the late nineteenth century could appeal to the peasant commune and to the cooperative trade and craft associations (artels) and fellow-countrymen networks (zemliachestva) that were common among the people, the “populists” of the early twenty-first century attempt to claim that a society united by nothing except state power and the nuclear family adheres to leftist values.
The standard explanation for the failure of the Bolotnaya Square protests is that they did not feature “social demands,” meaning slogans dealing with support for the poor, availability of public services, lower prices and utility rates, and increased pensions and salaries. But such demands are part of the standard fare offered by nearly all Russian political parties and politicians, from United Russia to Prokhorov and Navalny. These demands sounded at Bolotnaya Square as well. Successfully employed by the authorities and mainstream opposition parties, this social rhetoric has, however, absolutely no effect on the masses when voiced by radical leftists, strange as it might seem. We are constantly faced with a paradox: opinion polls show that the public is permanently concerned about poverty, economic equality, unemployment, high prices, and so on, but we do not see either significant protests or the growing influence of leftist forces and trade unions. Apparently, the explanation for this phenomenon is that a significant part of the population pins its hopes not on strategies of solidarity and collective action, but on the support of strong, fatherly state power. The Kremlin links implementation of its “obligations to society” with manifestations of loyalty: this is the essence of its policy of stability.
Leftists in a Right-Wing Society
Finally, should we consider ordinary people’s nostalgic memories of the Soviet Union during the stagnation period a manifestation of “leftism,” and rejection of western lifestyles and indifference to democratic freedoms indicators of an anti-bourgeois worldview? According to the twisted logic of the “populists,” who have declared most democratic demands irrelevant to the class struggle and therefore not worthy of attention, that is the way it is. Instead of accepting the obvious fact that proletarians need more democracy and more radical democracy than the middle class, and that protests by students and the intelligentsia can pave the way to revolt by the lower classes, theorists like Kagarlitsky try to paint ordinary conservatism red.
They tacitly or openly postulate that workers can somehow acquire class consciousness under a reactionary regime without breaking with its paternalist ideology and without supporting the fight for those basic political rights that workers in the west won at the cost of a long and bloody struggle.
It is time to recognize that we live in a society far more rightist than any of the Western European countries and even the United States. What European and American right-wing radicals can imagine only in their wildest fantasies has been realized in post-Soviet Russia in an unprecedentedly brief span of time and with extraordinary completeness. The Soviet legacy (or, rather, the reactionary aspects of the Soviet social model) proved not to be an antidote to bourgeois-mindedness, but rather an extremely favorable breeding ground for a strange capitalist society that is simultaneously atomized and anti-individualist, cynical and easily manipulated, traditionalist and bereft of genuine roots. And we leftists must learn to be revolutionaries in this society, rather than its willing or unwitting apologists.
Ivan Ovsyannikov, Russian Socialist Movement April 20, 2014
Welfare Chainsaw Massacre
Ivan Ovsyannikov (Russian Socialist Movement)
September 30, 2013 anticapitalist.ru
A “welfare chainsaw massacre” is exactly what we might call the government’s actions and statements over the last few months. The ruling class is once again attempting to pay for the latest uptick in the economic crisis from out of the pockets of workers.
On September 1, while speaking to students at the Far East Federal University, Putin announced the transition to a policy of austerity and reduced social spending. “The world economy has slumped a bit, and ours is hunkering down behind it,” the president said in his typical manner by way of explaining the upcoming unpopular measures. And he supported an earlier proposal, voiced by Minister of Finance Anton Siluanov, to replace the “maternity capital” program with “targeted assistance to poor families.”
However, a few days later, Dmitry Medvedev said that the maternity capital program would not be cancelled. “But it will be modified,” Minister of Labor and Social Affairs Maxim Topilin added in a whisper.
The fact that public opinion has been probed on such a sensitive point is quite significant. The maternity capital program is almost the only widely publicized social achievement of the Putin era. Putin has repeatedly stated it was his idea. And now this essential element of Putin’s social populism has been openly questioned.
No less provocative looking are the experiment with introducing social norms for electricity consumption (see Andrei Zavodskoi, “Cruel Economy”) and the de facto raising of the retirement age, which has long been discussed and is today closer than ever to realization. According to Deputy Primer Minister Olga Golodets, “We are not discussing raising the [retirement] age for any category of workers. We’ve gone another direction by promoting voluntary postponement of retirement. That is our principled position, and the government’s position.” However, such tricks are unlikely to mislead anyone.
The most scandalous revelations, however, are the statements made by government officials concerning labor relations. If, until recently, Mr. Topilin based his ministry’s decision not to index Russia’s penny-ante unemployment benefits on the fact that “at present there remains a high probability of finding employment in the labor market,” Mr. Medvedev has now said the exact opposite. He argues it is time to get away from the policy of preserving employment at all costs and not be afraid of cutting inefficient jobs: “The times all of us now face are not the easiest. […] Some people—perhaps a significant portion of the population—will have to change not only their jobs but also their professions and place of residence.” There is no doubt we have fallen on hard times, but the Prime Minister is clearly disingenuous when he talks about “all of us.” Russia’s ruling elite has no intention of depriving itself of jobs and handsome profits. So, in a conversation with François Fillon, Mr. Putin elegantly hinted that he would “not exclude” the possibility of seeking a fourth term as president.
But has the Russian economy “hunkered down” badly enough to warrant such painful experiments on the population? Isn’t “stagnation” only a plausible excuse for implementing the longstanding plans of the gentlemen from the Russian Union of Industrialists and Entrepreneurs?
As was reported in late August, the Ministry of Finance planned to save 1.1 trillion rubles [approx. 25 billion euros] over three years by eliminating the maternal capital program and reducing expenditures on pensions. At the same time, federal and regional budget expenditures on preparations for the 2018 World Cup should amount to 438 billion rubles, that is, almost half a trillion. The mass protests and riots in Brazil, sparked by excessive government spending on the 2014 World Cup, are still fresh in everyone’s minds. Russians could learn a lesson or two from Brazilians.
But maybe massive sports venue construction projects will generate many new jobs and return the taxpayer money spent on them? No, they will not. Unlike the great construction projects of the Soviet era, when funds were invested primarily in developing production, Olympiads, Universiades, and World Cups are, by definition, loss makers for national governments. Many analysts trace the current economic disaster in Greece to the 2004 Summer Olympics, which enriched transnational corporations while depleting public finances. The London Olympics have also been declared unprofitable. As for the 2014 Sochi Winter Olympics, its unprofitability has been recognized by nearly all serious experts, including Vnesheconombank chair Vladimir Dmitriev, who said in an interview with Vedomosti newspaper that “a serious percentage of [Olympics-related construction] projects are calculated to make a loss.” According to Dmitriev, “Given the current model and market trends, there are big problems with returns on investments. For example, one million square meters of hotel space are being built in the Imereti Lowland. When this space goes onto the market after the Olympics, a sixty percent occupancy rate will be hard to achieve. The costs of many projects have seriously risen as they have been implemented. […] For many sites, there is no complete project documentation or confirmed cost estimates. All this confirms our doubts.”
As for jobs, they really will be generated—for thousands of migrant workers. Federal Law No. FZ-108, adopted specifically for the World Cup, leaves no doubt about that. First, the law establishes special lightweight entry requirements for foreign workers involved in preparations for the World Cup. Second, it limits the applicability of a number of existing labor laws, effectively legalizing slavery. As the Confederation of Labor of Russia (KTR) declared in their statement on the subject, “The potential for runaway importation and recruitment of cheap labor, undermining the national labor market, and leading to a decrease in wages and legal guarantees in the area of labor relations, and an increase in the level of unemployment among the population, has been legally enshrined in the Russian Federation.”
The government could not care less about the fortunes of workers during the crisis, and it does almost nothing to hide it. How else can we account (to cite just one example) for Mr. Topilin’s proposal to deny free health care to all informally employed and unemployed people not registered with an employment bureau?
In light of the foregoing, the Kremlin’s actions aimed at reconciliation with the liberal opposition also become intelligible, as do unexpected initiatives to put the “against all” option back on voting ballots. The authorities fear that public discontent will grow and want to channel it in a direction that presents no danger to the ruling elite. Whether this political maneuver succeeds depends in part on the willingness of leftist political forces and trade unions to win over public opinion and make the fight against austerity measures as much of a mobilizing factor as it has been in Greece, Spain, and other countries facing the consequences of the capitalist system’s crisis.