HOW DO YOU SLAY A DRAGON?

The main thing that should be understood about social inequality in the Putin era, is that at its foundation lie non-economic factors. It’s artificially created inequality that’s supported by political violence. Consequently, the only way to fight this inequality is to eliminate the political factors that give rise to it. So all of the propaganda efforts that the Kremlin puts into this battle against poverty can be seen simply as a vicious insult. The main precondition for an effective battle against poverty in Russia is to remove the regime that has created and increased this poverty by its very existence. The regime has acted like an enormous pump, sucking the money out of the pockets of millions of its citizens and dumping it into the pockets of Putin’s millionaires.

How has this pump been constructed? How come this is what’s hoovering up the country’s wealth? The answer is pretty obvious: the regime exists and enriches itself mainly because there’s no control over the way it exploits resource rent. It divides up the profits from the sale of raw materials – oil, gas, metals and timber – in a completely arbitrary fashion, doing simply as it wishes and acting in the interests of a narrow circle of people. I believe that in order for Russia to be a state that provides for its people, it’s vital that society be given back control over its resource rent – that is, over the rent profits from the extraction and exploitation of the country’s natural resources. This is provided for in the constitution, but doesn’t exist in reality.

The idea of giving back to society control over resource rent isn’t new. Communists write and talk about this a great deal. The question is, do we genuinely give this control to society, or do we return it once again to the state? If we return it to the state, then once again control will be handed simply to another small group of people; just a different group this time. And even though the Communists’ idea that everything should once again be nationalised would be a fairer solution than what we have today, it would lead to be another historical dead-end for Russia. A return to the USSR would inevitably lead once again to a bureaucratised, static and inefficient economy, which is what destroyed the Soviet Union. This is inevitable with any gigantic state monopoly, especially in a country where the corporate culture is so undeveloped, where the officials are poorly educated and economically illiterate, and where, what’s more, there’s a centuries-old tradition of corruption and sabotage.

But this is not the only issue. The principal drawback in what the Communists are proposing of marching into the future by way of the past is the insoluble political bureaucratic equation: the more resources that are concentrated in the hands of the state, the greater is the state’s role in their redistribution. And the greater the state’s role in their redistribution, then the greater the quantity of resource rent society has to leave to the mercy of the huge redistribution system. This means that both from the point of view of society itself, and of each individual citizen, this whole reverse nationalisation makes no sense at all. The lion’s share of resource rent will be spread across the state’s huge power structure; another part of it will be wasted because of the inefficiency of the state monopoly; and the crumbs that are left will go to the people, and, what’s more, in return for their giving up on their rights as citizens. The question as to who will actually head up this machine for theft and deception – whether it would be Putin’s followers or Zyuganov’s followers or someone else – bears no significance for Russia’s fate.

How can we break this vicious circle and tear the rents from Russia’s natural wealth out of the hands of the criminal bureaucrats? I believe there is a solution, and it’s a fairly obvious one. It’s a different matter that it’s not much use to those who are currently in power, nor those who hope to take over power. The ones who would benefit are those in today’s Russia who are deprived of proper political representation, and whose voice, therefore, is never heard. I think that the only possible solution to the problem of what to do with resource rents in Russia is to lock them into the social needs of the population. This would cut out the state’s role as the middle-man in their redistribution.

And such a possibility genuinely exists in Russia.