24.01.2008

Russia: Revival of class politics

What will the departure of Vladimir Putin as president mean for Russian politics? What are the prospects for the working class? Boris Kagarlitsky of the Moscow-based Institute of Globalisation Studies outlines his thoughts and perspectives

At present there seems to be a degree of certainty about the immediate political future.

Previously it had been very uncertain what was going to happen in relation to the presidency. Vladimir Putin had made it very clear that he was going to step down, but ironically this met with a lot of resistance, because a major section of the bureaucracy actually wanted him to stay on indefinitely and were quite prepared to change the constitution to ensure this. Technically this would have been quite possible and completely legal, thanks to Putin’s parliamentary majority and the control of the bureaucracy over the upper chamber and constitutional court. If Putin had just said the word, it could have been arranged within weeks, maybe days.

But Putin did not do this. He was actually involved in a struggle against certain sections of his own bureaucracy. Putin and his entourage are more concerned with taking advantage of their political positions to establish themselves in business. The real power is in the corporations rather than the bureaucracy per se. However, the core of the bureaucracy wanted him to remain in place so as to ensure continuity.

But this conflict ended in a rather odd compromise. On the one hand, Putin finally succeeded in nominating his successor - Dmitry Medvedev, who had been his preferred candidate from the beginning, and the candidate favoured by Russian private and semi-public (linked to the state but not state-owned) corporations.

But Putin had to wage a fierce battle behind the scenes to achieve this. The Russian president has many nominal powers, but in reality his position is very weak. In practice he is a hostage of the bureaucracy, which itself is linked to the interests of the corporations. It is more like a British monarch pretending to be a French president. Putin represents a managerial group very closely linked to specific business interests and projects. These projects - Gasprom, for example - have been very much favoured by the state during his presidency.

On the other hand, he had to mollify the competing interests so as to avoid a split within the emerging Russian bourgeoisie.

Capitalist success

In that sense Putin has been a tremendous success from the point of view of the Russian capitalist project. He managed to stabilise it at the top, which in turn helped to stabilise the whole system. However, the rewards for doing this are not seen as political, but business rewards. People have their shares, their business positions - not just Putin, but the people around him. But to fully enjoy their benefits, they have to be primarily in business, not in politics.

That is why Putin wanted someone else to take over. Preferably this person should have similar connections but be rather weak, so as to be more dependent on and loyal to the business groups backing him. Medvedev fits the bill. When he was nominated the stock exchange reacted positively. Russian and international investors were extremely happy.

But the price Putin had to pay involved a personal sacrifice. The bureaucracy insisted that he retain some formal position in government if he relinquished the presidency. So now he is set to be the next prime minister. After some hesitation and reluctance Putin had to publicly accept the offer.

Can you imagine the British monarch giving up the throne to become minister for work and pensions? That is the equivalent. The people who really run the country are unnamed figures in the presidential administration - not the president himself and certainly not the prime minister. These figures, such as Vladislav Surkov, the deputy head of the presidential administration, act like the old central committee. There are plenty of other, less well known people - people with the real power. The government is just an executive body that has to follow their orders.

It was a myth that Putin has extensive powers. It is like saying that Brezhnev had. He did not. It was the central committee and the politburo that had those powers. In fact many of the key decisions taken during his time were not supported by Brezhnev - such as the decisions to invade Czechoslovakia and Afghanistan.

The only time Putin really appeared to run the government was for three months in 1999. But basically that was just part of his presidential campaign. He never had the desire, interest or knowledge to actually run things himself. Nevertheless, to become prime minister is a terrible humiliation for a former president.

Nobody knew Medvedev or took him seriously. But if Putin remains part of the government as prime minister, that will act as a reassurance that nothing much will change - and the Russian public is very wary of change. Putin symbolises stabilisation and an element of success. Things like increasing wages and high oil prices, which are down to the market and nothing to do with Putin personally, are still credited to him by public opinion.

What has changed under Putin is that individual oligarchs have become weaker, but ‘the oligarchy’ - the ‘community of corporations’ with specific interests - became stronger. What Putin did was to subordinate (and sometimes destroy) the individual oligarchs, with no responsibility even to their own shareholders, to the discipline of capital and to the collective interest of the emerging ruling class. People like Boris Berezovsky and Mikhail Khodorkovsky behaved in a kind of feudal way, like economic warlords. They were more concerned about their personal ambitions than accumulating capital, or developing and expanding their corporations.

In that sense Putin was the first class-conscious political leader for the bourgeoisie. He was not just ideologically motivated, like Yeltsin, but actually had a knowledge of the workings of capital.

Living standards increased, even for poor people, during the 2000s. How it happened is a different story. In reality it was down to the changing conjuncture in the global economy and also the fact that after the Russian recession hit its low in the late 90s, some Keynesian measures were implemented which succeeded in relaunching Russian industry. Neither had anything to do with Putin, who happened to be president and that is why he is popular.

With Putin as prime minister, the people will vote for Medvedev as president. They are being sold as a single package, like shampoo with conditioner. Buy one, get one free! The decision has already been made, but has to be ratified by the polls. Of course, to rig the elections would not be such a big problem, but to do that successfully it is necessary to have a large number of genuine votes cast for the right candidate. You can get away with adding 5% or even 10%, but certainly not 50%.

So that was the deal. The choice of Medvedev more or less satisfied both groups - the business elite were happier, but it was acceptable to the bureaucracy too. The bureaucracy actually preferred Sergei Ivanov, the former minister of defence and first deputy prime minister. But Putin pushed for Medvedev and the bureaucracy were happy enough with him.

All this leads to the suspicion that Putin will probably not serve as prime minister for very long. Everybody knows he has quite substantial business interests and there are some very lucrative top directorships potentially on offer. But a smooth handover to Medvedev would help guarantee the security of those business interests, and the bureaucracy need Putin to supervise the transition.

Afterwards Putin will be the businessman with all the political connections - a position that is actually more powerful than that of president. He is going to be the man the president must listen to. So Putin will not be leaving politics because he just wants to become a private citizen and is not interested in power - quite the opposite!

Class revival

From the point of view of the other side of the class spectrum, the situation is quite exciting. Ironically I feel that capitalism’s success under Putin is very good news for the left and for the labour and anti-capitalist movement.

One of the problems of a weak capitalism, at least in its early stages, is that it prevents the development of class interests and class organisation among workers. That can be observed also in some African and Latin American countries. Capitalist exploitation can be intense, but capitalist class formation and capitalist society as a self-perpetuating, self-reproducing entity is weak.

That means that the labour movement will also be weak. Social status is very unclear and class loyalty remains undeveloped. That was the case with Russia in the 90s. One of the reasons why the left failed to gain ground was that, although workers were unhappy with capitalism, they had no class-consciousness. There were marginal protests of a petty bourgeois type.

In the 90s Russian workers would often not be paid for long periods, but they continued working. Why? Because they were able to survive from growing some food on their allotments and from the factory’s own product, which they were given in lieu of wages to sell on the market. What kind of class-consciousness does this way of living engender? Since they learnt not to depend on their wages, they were not very much interested in trade union organisation, for example.

In other words, they were very unhappy with the system, but they had no familiarity with class organisation on a daily level.

However, during the Putin years, industry began to grow - not only in the oil sector, but also in the form of assembly lines for international brands. This produced a response in the form of trade unionism. Of course, this is not driven by socialist or Marxist ideology.

But there is a process of union development - mainly represented by the All-Russia Confederation of Labour (VKT). Last year it launched a recruitment drive and has managed to organise much of the food-processing and automobile industries. The VKT has also made inroads into banking and retail.

In November-December there was a big strike at Ford Motors. After three weeks this highly symbolic action ended in a draw - neither side managed to defeat the other. But negotiations are still taking place, with a new strike looming.

The dispute is mainly over salaries. In the last six months of last year there was a huge increase in inflation, which rose to 11%. Management were prepared to concede pay rises, but only to that level. However, the union pointed out that the wages for Russian workers producing the Ford Focus are the lowest internationally. Workers who make the same type of car in Brazil - not to speak of Spain and Germany - receive higher wages. The VKT insisted on the Brazilian level as a minimum, which the company has rejected.

Workers’ party

But it is not just about wages. If you look at the comments from workers on the union website, you will see that it is also about respect, dignity and class identity. In fact the slogan of a workers’ party was very much developed during this time. It has been used a lot by Alexei Etmanov, the chair of Ford Motors VKT.

People on the left, including myself, have mixed feelings about this. We do not want yet another British-style Labour Party to emerge, which is what Etmanov seems to be suggesting. Of course, nobody is proposing the Labour Party of Tony Blair, but something like the Labour Party of Keir Hardie or Clem Attlee is what they have in mind. We, on the other hand, are interested in a more politically substantial formation.

However, when this kind of slogan is developed spontaneously by the workers or their unions, it represents huge progress. So we have to support it, while at the same time explaining that it is not enough. That is the line we are supporting in our journal Left Politics, which was started a year ago and which has posed the need for a new left party.

So far, however, it is no more than just a slogan and we cannot say how, or whether, it will work out. However, I am optimistic about the coming period.

Russian capitalism is going to face substantial difficulties over the next few years. Firstly, a global economic recession is looming, which will definitely affect national capital quite dramatically. Russia is very much dependent on the export of raw materials and a domestic market fuelled by petro-dollars.

Secondly, even if oil prices do not fall, the Russian real estate bubble is very close to bursting. Moscow property prices are now higher than those in London. Yet income even for the middle class is not secure and outside Moscow salaries are much lower. Of course, there are certain sections of the Russian middle class that make more money than their British counterparts, but in general Russia is a much poorer country and such property prices are totally unsustainable.

Thirdly, there is the question of Russian corporate debt. In 1998 the Russian government defaulted on public debt, but now, while public debt is comparatively low, corporate debt is extremely high. It is possible that some companies may be forced to suspend their repayments and that could produce a major financial crisis. Already foreign banks have stopped lending to Russian corporations. Medium-sized businesses are particularly in trouble. They are forced to turn to Russian lenders with their much higher interest rates.

So capital is under pressure even though there is a lot of money in the country. There is likely to be a dramatic increase in the already high rate of inflation. The irony is, while inflation is high, the rouble is getting stronger against the dollar. Many middle class people receive their salaries in roubles, but nominated in dollars, which means their income is falling in real terms.

Meanwhile, Putin has been driving forward the second wave of neoliberal ‘social reforms’ - abandoning so-called benefits and subsidies, and marketising healthcare, education, transport and social services in general. This had been partially justified on the basis that people were now able to pay for what they needed for themselves. However, if real income is now falling, we can expect resistance to the neoliberal agenda - from both the middle classes and the workers.

While at present there does not appear to be major conflict within the state bureaucracy, the current period of transition is constantly producing the potential for such conflict.

Our tasks

Firstly, we must continue to build on current levels of class-consciousness - not just by tailing it, but by attempting to increase it and channel it away from the simplistic ‘We need a party to represent our interests’. This is insufficient. It is to pursue the politics of labour in a capitalist way, when we must go beyond the bourgeois politics of the working class. That means the development of some kind of class-conscious political organisation - whether it will be a party I do not know.

Secondly, we need a programme for the current crisis period, which addresses both social and democratic questions. We must be the most advanced democratic force in Russia, explaining the interconnection between Russian capitalism and the lack of democracy. This is precisely what liberals are unable to do and why they cannot make real progress.

Thirdly, at the same time as fighting for workers’ rights, we must advance some kind of socialist perspective. This is no easy task, but progress is being made. More people are joining the different leftwing organisations and the left is gaining ground in the unions. The union leaders are becoming more political and some have invited us to discuss our ideas with them. Working class militancy is growing.

All these are indicators of more favourable conditions. There is a rise in social struggle and awareness, where the left will be able to intervene and benefit. There is no way that events like the Ford strike could go unreported and as a result the left has become more visible even in the bourgeois media - there was no-one able to provide any kind of competent commentary except those on the left. I was quite happy to speak to the media, and Etmanov was featured almost daily during the strike.

However, we should not fool ourselves that we are about to make a breakthrough. Unless we do the real hard work, both organisationally and programmatically, we will not make substantial inroads.