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Aleksandr Buzgalin: A strata of bureaucrats and oligarchs rule a caricature of Western capitalism, amassing fabulous wealth

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PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I’m Paul Jay in Washington.

Aleksandr Buzgalin, the Russian political economist, describes Russia today as a kind of Jurassic Park of capitalism, a bit of feudalism, a bit of a caricature or parody of Western neoliberal capitalism, and some of the worst remnants of Soviet bureaucracy. Now joining us to talk about power and who holds it in Russia today is Aleksandr Buzgalin. He’s normally based in Moscow, where he teaches at Moscow State University, but he now joins us from Amherst, Massachusetts, from the PERI institute. He’s lecturing there. Thanks for joining us, Aleksandr.

ALEKSANDR BUZGALIN, POLITICAL ECONOMIST, MOSCOW STATE UNIV.: Thank you for invitation. And I’m very glad to talk about my motherland. Unfortunately, I’m critical, but I am critical because I love my country.

JAY: So this is going to be the beginning of a series we do. Following this interview, we’re going to have other segments where Aleksandr’s going to take us through a PowerPoint that he’s worked on. But in your paper, Aleksandr, you give an example of how power works in Russia, and you used Gazprom as the example, the massive oil and gas company. So tell us a bit about Gazprom and how that illustrates the way this sort of corporatism, Russian-style, works.

BUZGALIN: So, first of all, I will use some abstract words, because I’m not familiar with secret details of internal life of Gazprom or any other corporation—and if I am, I am killed next day. So I want to be alive in any case.

To be serious, we have very strange system of relations inside corporations and between corporation and state. Gazprom, for example, is a company where shares belongs to both state and private owners.

But the key problem is not who has the control package, control part of the shares. The key question is what kind of internal relations are in this corporation. And real master of this corporation is not one, but strata, nomenclatura, which is partly state bureaucrats, partly top managers of corporation, partly big owners of the shares, and sometimes some financial bosses who are very interconnected with Gazprom and who are sponsoring—not sponsoring, but who are participating in financial operations of this corporation. And this unity, this strata, can be changed. Some people can move from state apparatus to the position of top manager of corporation, or from corporation to the ministry, or from ministry to the administration of president, or from administration of president to parliament, where it will be lobby of Gazprom through party United Russia, and so on.

JAY: It sounds like the relationship of Goldman Sachs to the federal government of the United States.

BUZGALIN: I say that Russia is caricature on modern late capitalism, and that’s true. In Russia this is very brutal, very primitive, very open. And, of course, to criticize in the United States, Russia is simple. But to criticize Russia means to criticize U.S. in many aspects, by the way. And I’m critical not only about my corporations, but also about corporations in all over the world, including United States. And, by the way, I want to stress that I love my country and I love my people, but I simply do not want to have such parasites as our oligarchs and bureaucrats on the body of my country. That’s why I’m critical. The more I’m critical, the more I love; the more I love, the more I am critical. This is important detail.

JAY: Okay. Go ahead. So talk more about Gazprom.

BUZGALIN: Yes. So, finally, I want to stress that this is a specific strata. And the name for this strata which I use is bureaucratic oligarch nomenclatura, because this is closed system, even self-reproduced system, like Soviet nomenclature in past. The difference is serious, because Soviet nomenclatura had some paternalistic elements of behavior, and their privileges were, I don’t know, extremely small in comparison with benefits, incomes of new elite in Russian corporations and Russian state.

We have also private corporations in raw material sector. And new candidate for president Prokhorov came from production of nonferrous metals. He is a big boss. He has half-trillion rubles—and this is many, many billion dollars of his personal wealth. And it means nearly nothing, because these private bosses are part of elite, and they’re in one team with our president administration, our prime minister administration, and ministers.

There are some dissidents inside the oligarchs, and they can be punished. Berezovsky can be in expelled, another person can be in prison. But this is only internal game, you know, like game between tsar and [baɪ’jÉ‘rÉ™]—counts in old Russia. Tsar is representative of the aristocracy. But if one from aristocracy will decide to compete with tsar, he will be punished. This is the case. But the whole political, economic, social interests, the whole system of interests of oligarchs and top bureaucrats are reflected in one—.

JAY: And what is the relationship between some of the biggest individual billionaires and the state bureaucrats, for example, I mean, led by Putin? And then you have billionaires, for example, the guy that won the aluminum wars and has cornered the aluminum market in Russia, and you have other billionaires that are very famous, they own sports clubs and so on. How much individual power to these billionaires have? And what’s their relationship to the state and Putin?

BUZGALIN: So, in comparison with Yeltsin period, there are some changes, and important changes, because in past, in 1990s, this new bourgeoisie had sometimes even more power than state. Now the situation is much more complex. Generally speaking, top officials, elite of our state, they are representatives of the objective interests of top bourgeoisie, of biggest bourgeoisie oligarchs. But personally one oligarch has no political power. So our top officials—president, prime minister, and all their staff—they must reflect that common interest. But they’re not puppets in the hand of one oligarch. If our president will decide to introduce progressive income tax and to nationalize natural resources, or to introduce free-of-charge education everywhere, or to decrease radically personal wealth of oligarchs, he will be dismissed next minute. But if Putin or anybody else will decide to punish one or another person among oligarchs’ team, he can do this and it’s not something extraordinary. This is a real dialectic of our situation.

JAY: Right. Now, the way you describe the situation of the elite, this kind of alliance between the top administrators of the companies, the billionaires who own shares, the state and the state bureaucrats as a whole stratum that controls the economy and power in Russia, is this partly at odds with American interests that would like a more open Russian economy and politics for more freedom for American capital to have more penetration and power within the Russian economy? And then, is some of the leadership of the protests that are being accused of being pro-Western, do they represent business interests in Russia that also feel blocked by this kind of consolidation of power, and so they ally with the Americans? How does that dynamic play out?

BUZGALIN: Thank you for extremely important question. And this question shows that you feel the real problems of my country, and not only of my country.

I want to stress that we have, first of all, necessity to be careful in expressions. Of course we can say freedom of movement of capital, and this is pure economic expression. But word freedom for me means something much more than opportunity to invest where do you want. That’s why I will say good opportunities for hegemon of capital.

So Russia creates some problems for hegemony of foreign capital in our economic space. And this is also problem of division inside Russian bourgeoisie and inside Russian economic elite, because big part of this elite is interconnected with state and has wonderful access to very tasty natural resources, budget, and so on and so far. But another part of bourgeoisie, another part of our economic elite, does not have this access, and, of course, they are very angry because they cannot have such big norm of profit as their competitors, who received power and who save the power and who reelect again Putin.

And that’s why some Western corporations are also in opposition, because they cannot eat all natural resources of Russia and a lot of other opportunities to make business in my country without limitations. They have limitations, because another part of oligarchs is using this wealth. Problem for us is not simply to create problems for transnational corporations. Problem is not to have instead foreign dinosaur, Russian dinosaurs. Both are worse. That’s why we want to change the situation on the whole.

As far as opposition is concerned, yes, unfortunately—I want to stress unfortunately—during demonstrations on the tribune we had some leaders who came from the past, from 1990s, and who are representatives of part of bourgeoisie, part of elite, which now has no power and has no good access to natural resources, state budget, and other very important sources of enrichment. That’s why we have also negative feature: support of this opposition by dirty business of 1990s, first; and second, support of this opposition by Western mass media, Western officials, and Western corporations.

And when, after meeting of the protest, elite of these protest, those who were trying to show that they’re leaders—they’re not, but they were trying to show that they’re leaders—they were invited to U.S. embassy for elite reception. And, of course, it discredited in terrible form all protest movement and it was terrible. They betrayed real movement of protest. And this is awful. But this is the game, this is the contradiction, this is real policy, and we must understand all difficulties and all problems, and to fight against not only Putin and his team, but also against so-called opposition, which wants only to move us from 2000s to 1990s, which is even worse.

JAY: And just quickly, ’cause what I’m going to ask you requires a very big question, but just give me the headlines. What would you like to see a Russian government do now? What kind of policy would give what you called in your presentation “a better future”?

BUZGALIN: So, first of all, government and president cannot change situation in my country. We have very deep contradictions interconnected with production relations, property relations in particular, with institutions, with political system. And it’s necessary to have radical changes, democratic, socially oriented—not socialist, but democratic, socially oriented changes in all spheres of our economic, social, political life. That’s why government cannot do this. This can be done only together.

That’s why main problem for us, main goal for us is activation of social creativity, activation of real networks, civil society, NGOs, social movements. And only from below we can change Russian situation. From above it will be just game, it will be just imitation of reforms—more or less democratic, more or less social, but imitation.

JAY: But when you say “radical change”, don’t you have to change who owns stuff? I mean, if the commanding heights of the economy are owned either privately or through crony capitalism with the state, links with them, don’t you have to change how things are owned?

BUZGALIN: The problem, of course, is very interconnected with property, and not only property relations but property as wealth. And we need this redistribution of the wealth, because wealth was created on the criminal basis, on the basis of extraction of rent from natural resources. And such property cannot be basis for effective development. Even from the point of view of efficiency, economic efficiency, not only from the point of view of social justice and democracy, we must have changes in property relations and distribution of the wealth.

JAY: So what does that mean? Does that not mean some form—some kind of new form of public ownership or collective ownership of some kind or another?

BUZGALIN: Let’s start from the very small changes. But in any case, it will be democratic, socially oriented revolution, I can say. But it will be small changes. It will be openness for business, openness for collective enterprises and state enterprises in different spheres and different forms. It will be not socialist economy. We cannot create this during one day and on modern basis. We need socially oriented economy, minimum like Swedish model of capitalism. I am not fan of social democracy and Swedish model, but for Russia this is future. And after that, I hope and I think we must move forward, but this is another question for another interview.

JAY: So you’re talking about next steps.

BUZGALIN: Yes, of course. But myself, I am Marxist, critical Marxist, and I’m never—I will never—how say?—make secret from this. But I do not want now to start from, for 30 seconds, explanation of very complex positive program.

JAY: Okay. Well, I encourage everybody to watch the PowerPoint presentation. And we’re going to put this all up over the next few days. And then we hope soon Aleksandr will be available in a live web chat for your questions. So thank you very much, Aleksandr.

BUZGALIN: And thank you for invitation. It’s a great pleasure and honor for me.

JAY: 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.