STAFF NEWS & ANALYSIS
Russia Versus the West: A Tale of Serial Promotions
By Staff News & Analysis - January 06, 2014

Greed must have limits or we risk ending up like the Russians, trusting no one … Mutual trust in a society is easy to destroy but very difficult to build … Russia underwent the Revolution, with its overturning of society's ranks and distinctions and the destruction of fortunes, civil war and subsequent state terrorism, and more recently, the breakdown of the Soviet Union. – UK Telegraph

Dominant Social Theme: Russia is bad, greedy and corrupt and the West is … free.

Free-Market Analysis: We have noticed that this is becoming a more prevalent elite meme. There is no doubt Russia is under sustained attack from the West and in the elite's top publications, especially Reuters, Russia is regularly damned as a corrupt, failed state.

Of course, just because Vladimir Putin is under attack doesn't mean he is a hero. He is the public face of the ruling Russian mafia, and as such he is "standing up to" the West – surely not through any larger sense of idealism but simply to try to save his own skin.

Indeed, that is how these situations always resolve themselves. Whether it is Muammar Gaddafi, Syria's Bashar al-Assad, or Putin, if one is seen as an impediment to Western globalism, one is deemed expendable.

Putin is apparently not sufficiently cooperative. Or maybe the West simply needs an enemy. Anyway, Putin is said to be worth something like US$50 billion, but whenever he goes to sleep at night he surely must wonder whether he will wake up the next morning … and where.

He is increasingly painted in the Western mainstream media as a thug presiding over a failed state, in much the same manner as Gaddafi. This article in the UK Telegraph makes additional points in this vein:

Two business people meet, one Russian and the other British. The Russian says to his friend: "The trouble is that one of us comes from a crypto-socialist country, while the other comes from a country capitalist in tooth and claw."

He is right. But can you guess which country is which? Britain is the crypto-socialist country and Russia is the country capitalist in tooth and claw. You have to know the two countries to appreciate both the irony and the wisdom of this categorisation.

The Christmas break has given me the chance to reflect on what makes our two countries so different – and what this means for the wider world of economics. I first had an insight into these questions when I visited Russia in the dying days of the Soviet Union.

It was clear that communism was on its last legs and that when it fell major changes would result. But it wasn't clear how things would work out. The economic purists – including some very distinguished American economists – believed that all the Russians had to do was to sweep away the apparatus of state control and the free market would do the rest.

I was more sceptical. It was always clear to me that institutions really matter and capitalism cannot deliver the goods without well-functioning ones. Otherwise, it just degenerates into the Wild West.

That is what happened in Russia, with a rapacious state just about holding things in check – while fully participating in the pillage. The ill-effects are partly disguised by huge revenues from oil and gas – and partly exacerbated by them.

… In the UK, the boundaries between the state and the private sector are still badly drawn, with ill-effects on the provision of services in education, health and transport. But as a society we are now, I think, realising the essential limits to greed and self-interest. And we are slowly setting about reforming institutions and business cultures.

This may be one of the few favourable legacies of the great financial crisis. In Russia, I fear, there is a mountain to climb. Mutual trust in a society is easy to destroy but very difficult to build. Without it, capitalism cannot flourish.

What we can see here is a promotion, an attack, a concentrated kind of propaganda.

For one thing, as G. Edward Griffin has shown in extensive writing, Wall Street helped fund the Soviet Union and even sent Lenin back to Russia from Germany to lead the new, Red nation-state.

FDR gave away Eastern Europe at the end of World War Two, a move regarded as a radical mistake, but it guaranteed a Cold War, which was perhaps the point. Western elites constantly seek military tension and the Cold War worked well for a very long time. Societies were polarized; institutions were further militarized.

When the Soviet Union finally "fell," Harvard trained economists swarmed Moscow like flies. These are portrayed as free-market oriented, but no Harvard economist is free-market oriented. They all surely subscribe to various flavors of Keynes's General Theory.

Thus, what this article describes as Russian free-market capitalism was nothing of the sort. What was installed was the same sort of lawless, monopoly money system that has infected the West these past 100 years.

It begins with the motor of a central bank basically controlled by the same interests that control government and the nation's largest corporations. It is surely no mistake that Russia has made corporate personhood legal along with monopoly central banking, thus almost guaranteeing the kind of corporatism that the West currently suffers from.

All the Great Powers – the US, Britain, Europe, India, China and Brazil – have exactly the same system. It really doesn't matter how leaders are chosen, whether by consensus in China or democracy in the US, the real backbone of control resides in corporate personhood and central banking.

And thus, we can say with some certainty that when this Telegraph article attempts to draw a distinction between Russia and Britain, this observation is not correct. Leaving aside the political systems – that don't really count – there is not much difference between the two countries, or any other large country in the world today.

They are all, unfortunately, led by supine and savage elites that are increasingly concentrating wealth and power, much as Putin has in Russia.

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The article also wants to sound a cautionary note about "mutual social trust." But we have a hard time believing there is more trust among British residents currently than Russian ones.

The big point of the article is that government alone can provide the antidotes to the greed and rapaciousness of a free-market society. This is such a confused observation it is hardly worthwhile unpacking it.

Suffice it to say that government is NOT the guarantor of civil society and that it is too much government, not too little, that creates social problems and even civil unrest.

Russia was never a free-market capitalist country and its current problems stem partially from the corporate-style state that was inflicted upon it after the "downfall" of communism.

Russia surely does not suffer from a lack of mutual trust any more than the Anglosphere. To try to contrast Russia and England, and claim that Russian problems have to do with too little government and that England is fortunate to have politicians devoted to creating MORE government is well, kinda … idiotic.

The only reason to write this kind of article and indulge in this kind of tortured logic is to try to set up the West, once again, as a reasoned society that is wisely and well governed. In other words, it is government that makes the difference, and Putin and his government are simply not up to the task of governing Russia properly.

We totally reject this sort of nonsensical worldview. The only reason to propose it is because, for one reason or another, Western elites want to put additional pressure on Putin by painting him as a savage and a usurper – while reemphasizing the civilized and trusted nature of Western civ.

After Thoughts

Putin may be both, but at this point are Western systems any better?

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