"The Seven Bankers", 1917, Bonapartism and fascism, Bourgeois democracy, Bourgeois state, Crimea and sanctions, Establishment, In Defence of Marxism, Ivan Loh, privatisation, the nature of the Putin Regime, the working class
Russia: the nature of the Putin regime
By Ivan Loh, 10 January 2020
This article was originally published in Russian on 23 April at 1917.com. It describes the Putin regime in Russia: how it came about, its main characteristics, and how it fundamentally differs from traditional bourgeois regimes as we know them in the West.
It is impossible to fight against modern Russian capitalism without understanding its internal structure and driving forces. Through understanding its weak points, we can develop tactics that will help us lead the working class to victory.
Russian capitalism is monopoly capitalism. In the 1990s, industrial and banking capital merged to become finance capital, with huge corporations controlling the national economy. Precisely the same situation exists today in all the developed capitalist countries. However, if we look more closely, we will see that, despite a similar economic base, the superstructure (i.e. the political systems) of Russia and the USA, South Korea and France, Turkey and Greece, Germany and China differ dramatically.
Political scientists attempt to explain these differences by using meaningless terms such as the “maturity of democracy” or ascribing everything to national character. Marxists, on the other hand, seek an answer in the relations of production, looking at them in their historical development.
Capitalism in its youth, when it was just entering the historical arena, often relied on the democratically organised militias of its own class — the national guard — to defend its interests. At the local level, repressive functions were placed in the hands of elected sheriffs and judges. By excluding proletarian and semi-proletarian elements with thresholds of property, and other qualifications, the bourgeoisie created its own, “relatively inexpensive” state. The United States can be cited as an example of such a state system until the end of the 19th century. The stability of such a state is possible only with the presence of a sizeable small and middle bourgeoisie.
The concentration of capital, however, inevitably leads to an increase in the proletarian and lumpen-proletarian layers in the general population. Obviously, the representatives of these layers are least likely to protect the property of the capitalists from their own poor or from foreign capitalists, at least not voluntarily, nor for free. Any mature, exploitative system needs not only armed bodies of men, but also prisons with jailers, police, gendarmes and detectives, and finally the tax service, which takes money from citizens of all classes to support the entire economy. The army is also professionalised, and whether the rank and file is hired or drafted, the officer corps consists of professionals.
The bourgeois state is an instrument of the bourgeoisie to enforce their rule, but it can take different forms in different contexts / Image: Energy.gov
Here, an uneasy situation arises for the first time — the bourgeoisie delegates the authority to protect its property to a special social group: officers and functionaries. But where are these people recruited from? And how is their loyalty to capitalism ensured? Initially, they were for the most part aristocrats, who came from the decaying class of landowners, but also the children of capitalists, who saw admission to the military and state elite as an honour. Coming from the propertied classes, they were associated with the capitalists through a common way of life, education and family relations.
It should be noted here that these largely historical ties tend to be destroyed as capitalism develops, demonstrating more and more its parasitic character. The offspring of big capitalists are not too eager to perform military or public service. Gradually, through the selection process of military academies and elite universities, more and more elements from the lower classes and national minorities penetrate into these state institutions, whom the system successfully assimilates.
At some point in historical development, the pressure of the working class forces the bourgeoisie to admit it to take part in elections. From this moment onwards, the majority of voters are proletarians, or petty-bourgeois from the city and village, the self-employed and peasants. Now, in elections of all levels, the various candidates cannot rely only on the votes of the bourgeoisie. The systematic deception of the electorate is a job that now requires a lot of time and cannot always be combined with conducting one’s business affairs. Politics thus becomes a profession. the process starts with the formation of bourgeois parties.
Bourgeois politicians take money individually or collectively in an organised manner from the capitalists, through election funds, and if they win the election they act as a lobby for the interests of a particular capitalist and, at the same time, the capitalist class as a whole. The bourgeois media and “political experts” play the main role in turning capitalist sponsors’ money into votes. Of course, a politician who has not justified the confidence of capital is immediately deprived of funding, and hence, access to the media.
The ideal arrangement for the bourgeoisie is a two-party system in which voters, disappointed by the anti-labour policies of one of the bourgeois parties, can vote for the other, and, after a few years, again for the former. Such a system exists in the USA.
If a mass, working-class party arises in the country, then the bourgeoisie is faced with the need to incorporate its leaders into the Establishment. This is facilitated by a multi-stage system of bourgeois democracy, where passing through local and regional parliaments, former labour leaders are gradually corrupted, both directly and indirectly, and tied to the ruling class and its Establishment.
The modern Russian state is built on the wreckage of the planned economy, which was looted and destroyed in the 1990s / Image: ITAR TASS
We should note that the Establishment as a historical, social and even cultural phenomenon does not exist in Russia. Of course, the odd former Soviet general stole and sold the cars and materials of a military unit stationed in Germany. However, even the systematic participation of state officials in privatisation did not lead to the formation of an Establishment as such. By privatising the enterprises that they ran, state officials simply became capitalists, forming a new capitalist class. Later, whether voluntarily or under pressure from a new generation of bureaucrats, many of them sold their assets in Russia and emigrated to the West, joining the ranks of investors or rentiers there.
Here, just like in the West, there is a link between capitalism and the state bureaucracy, but this is a different kind of link, one that turns state officials into capitalists. Importantly, the process is very often violent, accompanied by partial or complete expropriation of individual capitalists. It is enough to open any issue of Novaya Gazeta to read the heartbreaking stories about the hard life of excessively greedy businessmen languishing in Russian prisons and corrective colonies. Obviously, this is because the ruling class has no way of controlling the higher levels of the bureaucracy. But how did such a situation arise?
Unlike in many Eastern European countries, where the capitulation of the masses to western imperialism made it possible to privatise industry in the interests of western corporations, the main beneficiaries of privatisation in Russia were state enterprise directors, officials and higher-level party bosses. The Stalinist bureaucracy, or “the nomenklatura” as it was also known, privatised factories in their own interests. A smaller section of the property was distributed via voucher privatisation to the employees of the same enterprises.
It rapidly became clear that the extreme fragmentation of capital did not at all correspond to the high level of economic development. For example, Aeroflot was divided into several hundred regional firms, most of which had two or three aircraft. In the absence of free investment capital and given the primitiveness of the banking system, the value of assets was constantly falling. Future oligarchs bought up assets with money received from the sale of scrap metal or through financial pyramids. Such activity would have been impossible without a link to the bureaucracy. Finally, key assets were privatised in favour of the oligarchs during collateral auctions and paid for with money borrowed from the state.
“The Seven Bankers”
In the last years of Yeltsin’s rule, big business began to establish control over the country’s political system. The oligarchs used different methods to achieve this: Gusinsky through control over the media, Khodorkovsky through classical parliamentary lobbying (across all parliamentary groups) and Berezovsky through control of the “siloviki” (politicians from the military apparatus) and regional elites. The problem was that the bankers literally gnawed at the state from the inside out, forcing them to issue GKOs (government bonds) at ever-higher interest rates.
August 1998 ended with a government default. Having bankrupted their banks, the oligarchs “wrote off” their debts to the state, becoming even richer. The medium-sized businesses were hit by a loss of liquidity in bank accounts, the ruble collapsed, demand fell, and so went small business. This completely undermined the support of the Yeltsin regime, not only among the working class, but also among most of the bourgeoisie. Reluctantly, Yeltsin compromised by recognising the government of technocrats Primakov-Maslyukov. The oligarchs controlled the president, who did not control the government. Meanwhile, the oligarchs needed a liberal government that would allow them to take the last step on the road from turning bandits with private armies and assassins into respectable billionaires — to exchange assets with Western corporations, thereby guaranteeing their integrity.
In Yeltsin’s twilight, big business began to establish control over Russia’s political system. Putin seemed like an ideal ‘strong’ liberal, but he went further in consolidating his own rule than the oligarchs expected / Image: Kremlin
The transfer of power to Putin
In this situation, Berezovsky and co. developed a plan to transfer power to a “strong” liberal. Berezovsky, however, made a mistake: he did not read Putin’s dissertation the year before. Putin really turned out to be a liberal, but not like Pinochet – rather like Chung Doo-hwan [former South Korean army general who served as President from 1980 to 1988]. This was not an accident. Putin, like other FSB officers, saw how fragile property relations were in Russia, so he understood that he could play a more important role than that of puppet with Berezovsky holding the strings.
This is not the place to discuss how Berezovsky and Putin managed to unleash a “small victorious war” in Chechnya. However, the consolidation of the state had completely different consequences than the oligarchs expected. Those who did not agree to accept the new rules of the game, either completely withdrawing from politics or following Putin’s diktats in every detail, were defeated and their property was confiscated. The most famous example is Khodorkovsky and his Yukos, but many other oligarchs suffered the same fate.
The public sector and “renationalisation”
Corporations primarily associated with hydrocarbon production were mostly returned to state control. State corporations and joint-stock companies with the participation of state capital (a controlling stake known as a “golden share”) operate in market conditions. This is formally done in the interests of shareholders, but in fact it is in the interests of top management, whose appointment is in the hands of the state, not minority shareholders. Such nationalisation has nothing to do with a planned economy.
State ownership here serves primarily for direct or indirect control by large private capital (for example, through electricity tariffs on non-ferrous metallurgy and railways). It is only secondarily an instrument of state management of the economy, the development of its priority areas, and so on.
Bonapartism arises in a situation where the ruling class loses control over the state and becomes dependent on it / Image: public domain
A situation where the ruling class loses control over the state and becomes dependent on it is well known in history. The concept of bourgeois Bonapartism was introduced by Marx in his 18th Brumaire to describe the political regime of the Second Empire in France, when officials and governors were appointed by the emperor, but official candidates behind the emperor and other candidates participated in parliamentary elections. The ruling capitalist class retained property, but in defending its interests was forced to fully rely on the emperor.
The reason for the establishment of the Bonapartist regime was the inability of the bourgeoisie to maintain control of the proletariat (and thereby guarantee the inviolability of private property) after the victory of the 1848 revolution and the collapse of the limited bourgeois democracy of the Second Republic. The bourgeoisie silently agreed with the restriction on freedom of agitation, assembly and clubs, only insofar as they understood that this was the only way to prevent the transfer of power into the hands of the proletariat in Paris and Lyon, where it constituted the majority of the population.
Having committed himself to preserving the existing class society, Louis Bonaparte combined political repression against the communists with the legalisation of trade unions (in the second half of his reign) and recognition of the right to strike for workers for the first time in the modern era. Trying to appear as a strong politician, the emperor pursued an active foreign policy, the crown jewel of which was a “small victorious war” with Prussia, which led to the defeat of the French army and the Paris Commune.
Base and superstructure
The state is an instrument in the hands of the ruling class. This statement is undoubtedly true in general. However, if we look at the history of class societies, we will find whole epochs when the state – that is the bureaucracy – managed to subjugate the ruling class, paralyse its will and govern the country without its actual participation. An example is the Late Roman Empire, where the Senate – the democratic authority of the slave-owning class – almost played the role of jesters under the emperors, whom the Praetorian guard put into power and deposed. European absolutism with its “Sun King,” whose bureaucracy raised him above the barons, deprived them not only of the right to collect duties or to judge the condemned, but even — what shame — to fight duels! If we turn to the history of the 20th century, we can name Chiang Kai-shek, who combined a market-based capitalist economy with a political system in which all power was in the hands of the Kuomintang party bureaucracy.
Bonapartist regimes may seem extremely stable, but internal contradictions inevitably lie behind their apparently solid political support. On the one hand, there is open corruption and the direct seizure of property by state officials — as the bourgeoisie has no other way of limiting their despotism except through “petitions to Bonaparte”. On the other hand, “Bonaparte” stands before the oppressed classes as the political figure responsible for everything. Unlike liberal capitalism, guilt is not passed on to the individual. The head must ensure, if not prosperity, then at least some elements of a social state. If the gingerbread throne crumbles, then you have to sit on bayonets! In conditions of prolonged economic growth, Bonapartist regimes may peacefully transform into liberal democracies, but in a crisis, collapse is more likely.
Again on Putin
Putin is not a fascist. The working class has not yet raised the issue of power, and Putin can still rely on the machinery of the bourgeois state / Image: Пресс служба Президента Российской Федерации
We saw how big business leaned on Putin, reasoning that after the crisis he would find himself in conditions of complete political isolation and surrounded by the embittered masses. By shifting the attention of the masses to Chechnya, Putin stabilised the political situation, and then a fall in real wages and the availability of investment in production led to economic growth. This was also helped by the higher price of oil. However, this period of growth was interrupted by the global economic crisis, which hit the Russian economy as well.
On the one hand, this led to the petty and middle bourgeoisie becoming very sceptical and disappointed towards Putin. On the other hand, the authorities realised how dependent the Russian economy was on the world market. The consequences of this were the mass protests of 2011-12 and Putin’s search for a new social base and yet another “small victorious war”.
Crimea and sanctions
From the point of view of Russian big capital, which lost many of its assets in Ukraine in 2004, the annexation of Crimea was a crazy adventure, which resulted in economic sanctions followed by stagnation in the economy. Putin probably foresaw this, and subsequently was able to kill two birds with one stone: firstly, to regain massive support from Russians frightened by the Maidan and inspired by the Crimean referendum, and secondly, to begin the repatriation of capital to Russia given the sanctions limiting access to cheap foreign capital, establishing control over the last large independent corporations in retail (for example, Magnit) and communications (Tele2).
The growth of the regime’s social base resulted in the creation of a number of mass movements in support of the President, but it is clear that he does not seek to use even 10 percent of the capabilities of these movements. Putin does not seek to create armed detachments of his supporters, preferring to strengthen the Russian Guard.
Bonapartism and fascism
As Trotsky pointed out, fascism begins as a mass protest movement of the petty bourgeoisie. In a crisis, it is caught between the revolutionary proletariat and big capital and is looking for a radical way out with the creation of fascist gangs involving most of the lumpenproletariat. Not being able to come to power on their own, they look for the opportunity to make a deal with big capital. For the latter, this is an extreme measure; as long as possible, big business seeks to confine itself to the classic Papen-Schleicher type of Bonapartism and only in a hopeless situation of a communist threat does it risk itself being dependent on fascist assault squads. In his last article, Trotsky explained that although fascism has elements of Bonapartism, it cannot be reduced to it.
What Putin sees today as a tool to suppress a potential movement of the working class is not the [far right] National Liberation Movement (NLM), but the National Guard (Rosguard) [an internal military force that reports directly to the President due to his powers as Supreme Commander-in-Chief of the Security Council]. His regime is more similar to that of von Schleicher than a fascist one. The mass movement of the working class has not yet raised the issue of power, and Putin can still fully rely on the machinery of the bourgeois state.
Spiders in a jar
So what is threatening the regime? First of all, the “cop wars” — i.e., the interdepartmental and inter-clan struggles in the context of a reduction in the “gravy train”. There are fewer and fewer medium-sized business which make it increasingly difficult to use bribery. Attempts to take “not according to rank” now end in jail sentences. New correction colonies are opened for those involved in corruption every year, but there are still not enough places. In such circumstances, it is especially difficult to prepare a successor to Putin and a transfer of power.
The need for a successor can arise for various reasons: another small war may not be victorious, there could be a collapse of the economy, or Putin’s health could fail. That is why “real” Russian politics is not focusing on Putin, but on the figure of his possible successor. It is here that there is a war of “compromising material” going on and where coalitions are being created.
Russia and the world are heading for a crisis, which will provoke the revolutionary traditions of the Russian working class / Image: Flickr, Taema
The working class
The world economy is moving towards another crisis, which will quickly lead to a drop in oil prices and a crisis in the Russian economy. Rising unemployment and falling living standards will bring the inhabitants of the Russian rural areas out onto the streets, but then the movement will reach the industrial centres. Having no support from below, the regime will be forced to rely on brute force, that is, on the Rosguard.
Then, not only every officer, but also every private will be faced with a choice. At this moment, what we stated above, the absence in Russia of a link between the officer corps and the bourgeoisie, will become evident. The precondition for this to concretise is a movement of the working class, socially and culturally close to the working-class soldiery, who will be ready to join their class brothers in the fight for a social revolution.