Nothing like a feast to bring people together.
Andrey Movchan’s excellent commentary from the Carnegie Moscow Center is worth a very close read.
It is as thorough a deconstruction of Putin adviser Sergey Glazyev’s economic policy proposals as I’ve seen and, indeed, as is likely to be written. Movchan, an economist and former investment banker who knows as much about how Russia’s political economy works as anyone, gets straight to the point: Glazyev’s not an ideologue or self-reliant nationalist, but a shill for a very self-interested elite. I would take it one step further: What Glazyev is trying to do, is to reinforce the unholy union of money and ideology in today’s Russia.
Glazyev’s proposals, which have reminded most commentators of Venezuela and North Korea, include allowing Russian corporates to default on their foreign debts, a withdrawal from the international money-moving system (including SWIFT), the liquidation of US dollar reserves, a de facto ban on foreign currency purchases by businesses, and the nationalization of all the major enterprises that (will inevitably) go bankrupt. These are, of course, a recipe for economic disaster. And that, Movchan says, is the point.
A rapidly contracting economy is bad for the economy as a whole, but it’s great for those already powerful interests who will be best positioned to mop up the resulting mess. At the moment, the lowering tide is sinking their boats, too. If they don’t believe the pie as a whole can re-grown to its prior glory – and, with oil at $50 a barrel or lower, they may be right – then the best option is just to take more of the pie. Thus (to further mix the metaphors), Movchan says, Glazyev is suggesting that the sheep be slaughtered, rather than shorn.
I’ve written about this sort of thing before, about the self-interested elite ‘club’ that dominates policymaking in Russia. The conventional wisdom, however, has been that this money-driven elite has been at odds with the ideological elite, both because the ideological elite (the likes of Glazyev and Eurasianist ideologue Alexander Dugin) don’t have much money, while the economic elite (whether the likes of conservative oilman Igor Sechin, or the likes of liberal banker German Gref) don’t have much time for ideology, not least because it crimps their style. That has always been a bit of a distortion; plenty of people – not least Putin crony and erstwhile rail man Vladimir Yakunin, or media mogul Mikhail Lesin – easily occupy both sides. But the tension between economic self-interest and ideological stricture is real: the farther one goes in one direction, the harder it is to make contact with the other.
Glazyev, then, may think he’s squared that circle, by proposing a solution that allows him to win the ideological fight while offering a major cash grab to the country’s most powerful interests. For the moment, there seems to be little appetite to take Glazyev up on his offer: the money makers haven’t yet lost faith in the future to that degree. As long as there’s more money to be made tomorrow than today, the worst instincts of the ideologues may be kept at bay.