Russia’s Future – Democratic or Plutocratic?

By: Colin C M Campbell, PhD
September 25, 2011

The expectation that glasnost and perestroika would cause Russia to embrace Western-style liberal democracy may be less likely than was imagined. Our democratic ideology is characterized by three features: respect for human rights, rationalism and material prosperity. Human rights were a product of Enlightenment ideals, developed in the 17th and 18th centuries in Western Europe. They were articulated in the slogan of the French Revolution: “Liberty, Equality, Fraternity!” Rationalism gave rise to the name that the period chose for itself – the Age of Reason. Material prosperity was the product of the scientific revolution, which began in the 18th century and was strongest in the countries, which had embraced the Enlightenment, particularly the United States. The occupation of Russia by the Mongols for 300 years isolated Russia from these developments and it developed a system of governance, Czarism, based on a marriage of feudal autocracy and Orthodox Christianity . When Czarism collapsed in 1917, the Soviet system, with its emphasis on state control and central planning was no closer to liberal democracy than Czarism had been. The Gorbachev reforms of the 1980s abandoned central planning without enough private sector businesses able to take over. A small number of individuals, who became known as the oligarchs, obtained control of Russia’s key oil, gas and natural resources and amassed large personal fortunes. Vladimir Putin clipped their wings but Russia’s future remains as unclear as China’s. Both countries were Communist oligarchies that now show signs of becoming plutocracies. Since a convincing argument can be advanced that the United Sates is now also a plutocracy, George Orwell’s division of the world into the three warring oligarchies of Oceania, Eurasia and Eastasia seems eerily prescient.

Russia’s religio-autocratic culture developed over a period of 700 years. Its history begins in 862 when the Eastern Slavs were united by the princes of Kiev into a state called Kievan Rus. In 988, its king, Vladimir, adopted Orthodox Christianity and Russia came under the religious influence of Byzantium. In 1223, Russia was invaded by the Mongol Golden Horde and was its vassal for 300 years. Liberation from the Mongols was finally achieved by Ivan IV (the Terrible) in 1556, and he became Russia’s first Czar.

The role of Orthodox Christianity in liberating Russia from its enemies is important in understanding Czarism and its synthesis of autocracy with Eastern Orthodox piety. Resistance to Mongol rule was met with swift retribution. A massive army would be dispatched to slaughter most of the inhabitants of the offending territory and to take the remainder into slavery. When Tamerlane invaded in 1395, realizing that disaster was imminent, the Prince of Moscow appealed to the Russian patriarch for help. His advice was to send for the holy icon of the Mother of God of Vladimir. As it was borne to Moscow, people implored the Blessed Theotokos to save them. That evening, Tamerlane had a vision of a powerful Heavenly Queen threatening him, causing him to turn his army south, away from Moscow. Similar accounts tell of Mazovshi’s invasion in 1451 and Khan Ahmat’s attack in 1480. In both cases, these armies inexplicably retreated after prayers invoked the icon’s protectio n. Nicholas II used icons to bless his troops in WWI. The head of the Okhrana, the Czar’s secret police, had a disconcerting habit off holding conversations with an icon, while advising his agents. Even Stalin is rumored to have had a moment of spiritual clarity. When the Germans were at the outskirts of Moscow, he instructed a pilot to take the icon up in a plane and circle the enemy lines with it. A few days later, the Germans retreated.

If Orthodox mysticism was a powerful tool of Czarist governance, so was Romanov autocracy. When Peter the Great became czar in 1682, he realized that Russia lagged far behind the West. His abundant energy and dictatorial methods enabled him to create a powerful navy and a capital to rival Versailles, which he constructed at St Petersburg, on the Gulf of Finland. Catherine the Great maintained Russia’s orientation towards the West, when she became its ruler in 1762. She founded Russia’s art gallery, the Hermitage, was a friend of Voltaire and Diderot, created Russia’s national bank and printed its first paper money. Despite the Westernizing influences of Peter and Catherine, the differences between Russia and the West remained profound. The Enlightenment ideals of liberty, equality and fraternity, and the age of reason paved the way for the creation of liberal democracies in Europe. Autocracy and (to Western eyes) religious superstition remained entrenched in Russia.

After defeating Napoleon, Czar Alexander I reasserted the difference between governance in Russia and the West. His slogan was: “Autocracy, Orthodoxy and (Russian) Nationality.” This viewpoint had its own special integrity. The autocrat was consecrated by God in a mystical union of sovereign and people, as the One, True, Holy, Orthodox Christian state. Liberty, equality and fraternity, though not rationalism, were present in this culture, albeit in a different from to that in the West. Liberty was the freedom to belong to a social class, determined by birth. Serfs were freed from the anxiety that accompanies ambition and the aristocracy were bred to lead. Equality was the recognition that all Russians had duties and obligations to society, differing only in their span of control. The same spiritual and moral imperatives were placed on everyone and everyone would be judged in similar way by Almighty God. Fraternity was based on the mutual respect for each other&rs quo;s social position. The boyar, count or grand duke had a responsibility for the welfare of the serfs and a serf owed loyalty to his social superiors. This vision was sufficiently attractive to persuade the Tsarevitch’s English tutor, Sidney Gibbs, to abandon his Anglican faith and convert to the Russian Orthodox Church. Not surprisingly, this vision was not shared by all of the Czar’s subjects and Alexander II was forced to emancipate the serfs in 1861.

There were two glaring weaknesses in Czarism. The first was that, whereas Russia’s social leaders lived in splendid opulence, large numbers of its people lacked life’s basic necessities. The second was that birth was no guarantee of ability. Nicholas II, the last Czar, never wanted to be Czar, preferring the simple pleasures of family life and the comfort of his daily religious observances. He lacked the necessary military skills to defeat Japan in 1904 and Germany in 1917. He also lacked the necessary political skills to manage social change and was responsible for the Bloody Sunday massacre of peaceful demonstrators on January 5, 1905.

Finally, the family had a dark secret. The Tsarevitch was a hemophiliac, distracting Nicholas from his duties and causing his wife, Alexandra, to come under the influence of the sinister monk Rasputin. In 1917, Rasputin was murdered in a plot by aristocrats protecting the monarchy and British agents acting to keep Russia in the war against Germany.

It was too late for the Romanovs, however. In 1917, they were murdered in a botched, gruesome way by amateur assassins. The Czar was the first to die, shot at point-blank range by several bullets to the chest. He was lucky. He did not live to see what happened to his family. His wife and daughters had jewels sewn into their clothes, transforming them into bullet-proof vests. This forced the killers to fire at them repeatedly. Within a short time, the small room became so filled with smoke that the gunmen could not see their targets, forcing them to move upstairs, from where they could hear screaming and moaning. Eventually, they finished the job with bayonets. The whole episode was a ghastly mess, which would have been more humanely carried out by a military firing squad. The members of the Czar’s extended family were thrown unceremoniously down a well. Pious to the last, they could be heard singing hymns and praying for forgiveness for their persecutors. And so ended C zarism and three hundred years of Romanov rule.

The Bolshevik period began by affirming Enlightenment ideals: the brotherhood (and sisterhood) of men and women (the revolutionaries sang the Marseillaise), rationalism (the state was atheist) and industrial progress (through a series of Five Year Plans). Like Peter the Great, Stalin realized that Russia lagged behind the West. He sought to catch up by emulating the United States, in particular. At this time, America was constructing the Hoover Dam and Stalin became obsessed with the idea that progress consisted in flooding large parts of the country and building dams that would generate hydro power for factories. However, Enlightenment values quickly morphed under his rule.

Liberty for the individual existed to be surrendered for the liberty of the many and the common good, embodied in the State. The dams were built by forced labour. Towns and villages were flooded without consideration for the effect on the inhabitants. The Five Year Plans became Five Year Disasters for individual Russians. When Stalin decided that grain exports must be increased from 5 million to 7 million tons, the seed grain was exported, causing 5.5 million deaths in the ensuing famine. Equality was also a problem. Ideological considerations dictated that everyone should have an equal amount of land. The kulaks were peasants who, by hard work had made their farms flourish. Vodka-swilling layabouts were given the kulak’s land, in the name of justice and the kulaks were dispatched to Siberia, where 10 million died. Fraternity consisted of loyalty to the State. Rationalism disappeared as a public phenomenon and criticism of the State was a crime punishable by exile to Si beria.

A fresh start was made by the Gorbachev reforms of the 1980s. State subsidies were abolished and state enterprises were sold off to private individuals. In the Soviet economy, state subsidies were designed to offset production costs and price controls were intended to make commodities affordable. The state subsidies were provided by printing money and the price controls set up a demand for goods that the Soviet economy could not supply. Both policies were highly inflationary but, since prices were not allowed to rise, inflation largely remained hidden. In its place, there was a flourishing black market and underground economy, where those with money were able to purchase goods at their real market value. With the abolition of price controls, prices were allowed to rise and a flood of worthless rubles were unloaded on to the Russian economy, chasing non-existent goods from non-existent private enterprises.

In 1991, while Russia was still a Soviet state, the problem of inflation was tackled by the confiscatory monetary policy of Valentin Pavlov. Citizens were given three days to exchange 50 and 100 ruble notes for new ones, up to a limit of 1000 rubles. The policy was designed to confiscate the wealth accruing from unearned income, speculation, corrupt officials, illegal businesses and counterfeit money, creating a condensed money supply and halting inflation.

Gorbachev resigned in the same year and Boris Yeltsin took power, abolishing the Soviet system completely. With low productivity and a shortage of foreign currency, the Russian economy was in a shambles. Yeltsin’s solution was the “loans for shares” program, under which state assets were privatized at fire sale prices to a few individuals, known as the oligarchs, who obtained foreign currency by selling off part of Russia’s huge oil, gas and mineral deposits. Since this money remained in the hands of the oligarchs, the average citizen’s standard of living plummeted.

The answer of the head of Russia’s central bank, Victor Gerashenko, was to print more rubles. As a result, in 1992, the first year of post-Soviet economic reform, inflation soared to 2520%. By 1993, it had fallen to 840%. In 1994, Gerashenko was replaced by Tatyana Paramenova, who reduced it to 10% per month. The weak economy stumbled along until 1998, when Russia was forced to devalue the ruble and reschedule its debt payments to foreign creditors.

After the crisis of 1998, the economy quickly recovered because of oil sales, and Russia paid off all its foreign debt, becoming a creditor nation like China. In 2000, Vladimir Putin seized the assets of two of the richest oligarchs, Boris Belezovsky and Vladimir Gusinsky, forcing them to flee the country. This effectively renationalized assets privatized in the “loans for shares” scheme. The outcome of these reforms remains unclear. Certainly, the transition to a liberal democracy is far from certain.

The professed goal of a Western-style liberal democracy is respect for human rights, rationalism and prosperity. In a liberal democracy, theoretically, liberty means that individuals have the right to pursue happiness, as they understand it. Equality means that distinctions of rank based on birth should be abolished and everyone should have an equal opportunity to pursue their vision of happiness. Fraternity places a needed restriction on liberty and equality, lest these lead to exploitive egotism. They should be restrained by the Golden Rule to love others as brothers and sisters, as you would love yourself.

These definitions were quickly deemed to be unworkable. Schiller, in particular, realized that liberty defined as the individual pursuit of self-actualization (Maslow’s term for the pursuit of happiness) is incompatible with equality. Plato and Aristotle’s freedom to pursue a culture of “sweetness and light” (Matthew Arnold’s phrase for the condition of happiness) was predicated on a slave society of the many doing the tedious work for the few. True equality would require that everyone would have to perform their share of drudgery, severely curtailing the time available for the pursuit of individual happiness. It seemed clear to the privileged few that the idea of equality for the many required modification.

Free market culture redefined equality as the freedom to acquire a marketable skill in order to become a producer and consumer. Everyone should have an equal opportunity to become successful, no longer defined in terms of self-fulfillment, but in terms of status (the reward of pride) and possessions (the reward of greed). Their opposites, humility and generosity, the virtues necessary to build caring communities, were either dismissed out of hand, or were seen as naive and stupid by, for example, the monetarist Milton Friedman and the “greed is good” and “I love money” Canadian Kevin O’Leary. Fraternity was the final casualty. The free marketeers attitude to the poor was that they should work harder if they wanted to escape poverty. On the campaign trail, George W Bush met a woman who boasted that she worked three jobs. George W enthused, “That is so American!” Only in the Land of the Free would someone be so deluded as to be proud that they had to work three jobs to be able to earn a living wage. Summing it up, liberty is the freedom to become a producer and consumer. Education’s purpose is to turn students into marketable commodities and equality means equality before the law. Anatole France’s trenchant comment on the law was, “The law forbids the rich as well as the poor to sleep under bridges.” The free market’s bottom line on fraternity is that the poor are poor because they deserve to be.

The result of this ideology has been to transform the US from a democracy to a plutocratic oligarchy. At the end of 2007, 10% of US citizens owned 83% of the wealth and 1% owned 40%. According to the Gini coefficient of wealth, the world’s most egalitarian countries are Canada, Australia and the Scandinavian countries. Next are Russia and Turkey. In third place are China and the US, and in bottom place are Brazil, South Africa and most of the “developing world.” It is countries like Canada, who remain the best witnesses to liberal democratic ideals. Both China and Russia are creditor nations, while the US, at the time of writing, carries a debt load of $14.7 trillion. In November 2010, the Chinese premier Wen Jiaobao met with Vladimir Putin and they agreed to trade using each other’s currency, posing a direct threat to the US dollars reserve currency status. Since Russia exports large amounts of oil and natural gas to China, the agreement also threatens the global petro-currency position of the US dollar. These developments suggest that the balance of power in the world is shifting from one super-power to three, each of which is emerging as an oligarchic plutocracy, fighting with the other two over increasingly dwindling natural resources. In one respect, at least, a world dominated by Russia, China and America is reminiscent of the Eurasia, Eastasia and Oceania of George Orwell’s imagination.