Putin is the product of a corrupt economic system that we must now reform


In all the comments about the war in Ukraine and the debates about whether the West bears any responsibility, very few people have made reference to social and economic factors. Yet, the Putin phenomenon must be understood as a new type of socio-economic system that was produced by a mixture of oil dependence and market fundamentalism, in a context shaped by the tsarist and communist heritage.

In the aftermath of the Cold War, enthusiastic Western economists rushed to Eastern Europe to dismantle planned economies by cutting state budgets, privatizing state enterprises, and liberalizing trade and investment. In only a handful of cases – mainly the Eastern European countries that joined the European Union – these reforms resulted in bourgeois capitalism. Elsewhere, to varying degrees, it has led to a new form of authoritarian kleptocracy.

During the communist era, the market was illegal and therefore market activities were considered a crime. It was therefore very difficult to distinguish between legitimate exchange and theft. The consequence of economic reform was the normalization of state theft. Through privatization, communist bureaucrats became oligarchs and competed for state subsidies. This situation has been aggravated by the increasingly rentier character of the Russian state due to its dependence on oil and gas; there was no need for a social contract with citizens since state revenues did not depend on taxation. Something very similar could be observed in Saddam Hussein’s Iraq or Bashar al-Assad’s Syria.

The regimes that preside over this type of kleptocracy tend to frame their narratives in terms of ethnic nationalism or racism combined with “family values” (misogyny and homophobia). Elements of this type of system can be seen in Viktor Orbán’s Hungary, which depends on rents from the European Union – or even in the rise of Donald Trump and Brexit, as the United States and the United Kingdom become more dependent on borrowing and income from financial corporations. assets. Russia, with its vast oil and gas revenues and history of brutal bureaucracy, represents an extreme version.

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Alex de Waal, international development expert at the London School of Economics, talks about the ‘political bargain’ – in which political entrepreneurs compete to steal from the state – as a way to explain the ongoing violence in parts of Africa . The political market is an extreme form of neoliberalism in which politics literally becomes commodified.

Ethnicized kleptocracy or crony capitalism is what characterizes many of the “eternal wars” and long-standing frozen conflicts in different parts of the world. These are wars where the various warring parties profit from the violence itself, rather than winning or losing. Violence generates revenue through negotiations within the state as well as a range of predatory activities, while extremist ethnic or racist positions rationalize violence. This is how we can understand the continued power of ethnic warlords in Bosnia, for example, or in Azerbaijan.

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