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Aleksandr Buzgalin, professor of political economy at Moscow State University, says Jurassic Capitalism is behind the economic woes in the Russian economy

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SHARMINI PERIES, EXEC. PRODUCER, TRNN: Welcome to The Real News Network. I’m Sharmini Peries, coming to you from Baltimore. I’m in conversation with Aleksandr Buzgalin. Aleksandr, as you know from the first segment we have done with him, is a professor of political economy at Moscow State University. He’s the editor of the independent democratic left magazine Alternatives. Aleksandr, thank you so much for joining us again. ALEKSANDR BUZGALIN, PROF. OF POLITICAL ECONOMY, MOSCOW STATE UNIV.: Yes. I’m glad to be with you. And thank you for your attention to Russia. PERIES: So, Aleksandr, behind the whole spy and murder of Boris Nemtsov is really–it’s a somewhat of a smokescreen for what’s really going on in Russia at the moment in terms of the economy, with the oil prices the way they are, the capital flight that’s taking place at unprecedented rates. And life for ordinary people have been deteriorating rapidly. So tell us about some of what you are observing. BUZGALIN: First of all, I want to stress that we have a stagnation of Russian economy for many years. It’s not something urgent, something what appeared a few months ago, one year ago because of sanctions or something like that. Unfortunately, the problem is much, much more deep than problem of international relations, isolation of Russia, sanctions and so on. The problem is interconnected with the system of economic relations and type of economy, social life, which we have in Russia during last year, so maybe even from 1990s. This is, as I said in one of our conversations, capitalism’s Jurassic Park, situation when real power belongs to oligarchs interconnected with corrupted bureaucracy. And they control real property rights, they control system of allocation of resources, distribution of income, floating of capital, and so on and so far. This is their reality. And these type of economic relations led to the economic policy which is very strange mixture of shadow state regulation with so-called free market or former free market. Officially, we have very small mechanisms of state regulation, but really we have shadow control from all types of actors–governors, president administration, ministers, and so on and so far. So, as result, we have first of all very strange development of business, mainly interconnected with gas, oil industry, export of raw materials. Second, we have reverse only in one sphere, really big reverse. This is military-industrial complex. This is not something strange, by the way. In many countries, including United States, it’s the case. So it’s not only Russia. But I think this is not the most progressive variant to develop high-tech and so on. Also, it’s very important that we still have very big level of social contradictions and social differentiation. Even during crisis of 2008, 2010, we had growth of number of oligarchs and growth of their wealth. And this is in the situation of 10 percent decline of GNP for years of the crisis, during the years of the crisis. As a result, we received modern situation, when we have so-called zero growth–or, more probable, a few percent of decline of gross national product, plus big contradictions between different spheres of economy, regions, branches of economy, and a necessity to change economic policy. Maybe I want to stress that during last years, we have big changes in mass opinion. And we have not only really radical opposition. We have radical opposition, but we have also part of ordinary representatives, ordinary people, I can say, who were thinking more and more about necessity to change economic policy, to have progressive income tax and to decline parasitic incomes of Russian oligarchs, to change system of support of education, which is now very low–very small state support for education, health care, culture. It’s necessary to increase support of these spheres. And there is money in Russia for these purposes. Also interesting phenomenon–we have interesting phenomenon. Now even part of business in real sector, in such spheres as industrial production of airplanes or some elements for airplanes, machinery, automobile industry, some other branches of economy, even in agriculture, these businesspeople are now thinking about necessity to have state regulation, to have problems of development of economy, little bit imposed gains in style with strong industrial policy and [incompr.] elements of planification. I’m not big fan of Russian business. You know I am very critical about it. But it’s new symbolic–maybe new symbolic phenomenon that even business, part of business now is trying to propose very permanently, if I can say so, permanently is trying to propose alternative economic policy. Only one symbolic fact. In 2013, 2014, we have Moscow Economic Forums, with 2,500 people from all over the Russia, many international very important guests, like [incompr.] and so on. And this year, in two weeks, we have [incompr.] Moscow economic forum, and we already have more than 2,000 participants who registered for this forum. And big part of business is supporting our ideas, which are, honestly, very reformistic, very mild. But for Russia this is nearly radical, because if we are speaking about a 50 percent redistribution of GNP by state in favor of ordinary people, in favor of social justice, education, science, high-tech, this is radical change for Russia. If we are speaking about progressive income tax and 50 percent income tax for oligarchs, this is very radical for Russia. If we want to make 80 percent of, how to say, places and universities sponsored by state and free-of-charge education and universities as main sphere of education, main form of education, this is very radical for Russia. The same for health care. The same for culture. The same for support of education and schools, kindergartens, and so on and so far. That’s why we are now fighting for reformist goals. But for Russia this is nearly revolution or something like revolution. And very important aspect: the struggle for democracy is important part, but we have leaders and leaders of this struggle for democracy. Some of these leaders, like Nemtsov, whom we mentioned, and some others, they are very far right leaders. They are supporters of liberal policy. And for ordinary people, they’re a symbol of even threat that we will go from bad to worse. That’s why they’re not very optimistic about such type of struggle for democracy. PERIES: In terms of the platform that is required that you just laid out, is there a political strength behind that in terms of the Russian political landscape? BUZGALIN: It’s yes and no, yes because we have, let’s say, common opinion or growth of intellectual support even from ordinary intelligentsia, support to these values–I can say values of left social democracy. But in the same time, we have growth of support of national Russian spirit. And this is strange mixture. Main part of supporters of social democratic policy in sphere of economy and social life, they are Russian nationalists. This is one of the paradoxes. Typically, in the West, right-wingers are nationalists or nationalists are right-wingers. In Russia, it’s not so simple. We have some nationalists who are supporters of social justice, who are supporters of free-of-charge education in universities, progressive income tax, state regulation in favor of development of social sector and high-tech, and so on and so far. That’s why we have two types of contradictions: in ideology, internationalists, real democrats like we are and our friends and big part of intelligentsia and ordinary people, workers, and in the same time supporters of Russian national values. But we are together in our economic requirements or social economic requirements, and vice versa. Sometimes we are together with liberals in our political requirements of democracy and our critique of Russian nationalism. But we are in big–we have very big contradictions with them when we are speaking about social-economic status. This is cross, I can say, Russian cross. We have left and right, and we have democrats, internationalists, and statists, nationalists. Two divisions. Not very simple picture. PERIES: Right. Aleksandr, I thank you so much for joining us today and giving us some picture of the political and economic conditions on the ground and hope to have you back very soon to get into some of the details of this. BUZGALIN: Yes. I’ll be very glad to discuss with you questions of my country and international context of our events. And thank you for joining us on The Real News Network.


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Aleksandr Buzgalin is a Professor of Political Economy at Moscow State University. He is also editor of the independent democratic left magazine Alternatives, and is a coordinator of the Russian social movement Alternatives, author of more then 20 books and hundreds of articles, translated into English, German and many other languages.