Economic system

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 have become oligarchs and competed for state grants. 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.

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.

The suppression of Russian opposition leader Alexei Navalny’s network of activists last year destroyed the opposition’s main organizing tool. But resistance to war can nevertheless grow.

Very often these conflicts begin as a result of peaceful pro-democracy protests but, as certain groups turn to violence, they tend to be hijacked by ethnic entrepreneurs. For example, those who chose to take up arms to resist the regime’s assaults in Syria were funded by Sunni donors in the Gulf, while the Alawite-dominated regime deliberately targeted Sunni areas, so the violence is increasingly framed in terms of the Shiite-Sunni conflict.

“Citizenship” – the antidote to kleptocracy

Vladimir Putin’s actions are framed in terms of concern over NATO expansion, nostalgia for the Soviet empire and accusations of Ukrainian ethnic nationalism. But it is Ukraine’s democratic experiment that poses the main threat to the repressive kleptocratic regime over which he presides. When he launched the war in 2014, it was to prevent an association agreement of Ukraine with the European Union which could have led to transparency and a weakening of the grip of the oligarchs. Perhaps Putin’s goal now is to turn Ukraine into an “eternal war”, where ethnicized militias engage in violence against civilians both for economic reasons (looting, looting, smuggling, etc. .) and for political reasons (generating ethnic polarization), as is the case in the so-called separatist “people’s republics” of Donetsk and Luhansk.

Even if Russia succeeds in taking kyiv and imposing a puppet regime, it will not be able to control the country. But it could lead to a sort of long-term violent anarchy that represents an alternative to democracy. After all, that’s what happened after the US invasions of Iraq and Afghanistan.

Could the invasion lead to a traditional war that would span all of Europe? The invasion itself seems to suggest that Putin is no longer rational. As resistance mounts and Western backlash intensifies, Putin is likely to increasingly use lethal force, reducing Ukrainian cities to rubble as he did in Chechnya. Perhaps he will even threaten to deploy nuclear weapons. This frightening prospect cannot be ignored: the checks and balances within the Russian state have been dismantled. The main hope is that Putin will be stopped by growing domestic opposition, not just on the streets but within the establishment.

The only compensatory logic to this type of ethnicized kleptocracy is what could be called “citizenship”. In all conflict zones, it is possible to find doctors and nurses ready to treat anyone in need, regardless of their ethnic origin, teachers who take inclusive education seriously, honest judges or civil servants , neighbors helping each other, and even local governments trying to provide public services without discrimination.

Where conflicts begin with pro-democracy demonstrations, the majority of protesters generally oppose the use of violence, knowing that the opposition will never be able to match the state militarily. When war breaks out, some leave, but others take on a humanitarian role as first responders, or as local mediators, or documenting war crimes, and so on. The paradox is that kleptocrats wouldn’t survive if there wasn’t civic behavior – there wouldn’t be anyone to steal from.

The courageous Ukrainian resistance and anti-war movement in Russia is a civic, not ethnic, reaction to the invasion. And their civic position has global support. An alternative scenario is that the war in Ukraine marks a turning point. This could be the time when the global financial system begins to control “dark money” – money emanating from kleptocrats. Or when we recognize that ending dependence on oil and gas is not just a climate imperative but necessary to confront rogue regimes. Or when we realize that we must offer asylum to people fleeing war, whoever they are. Above all, this could be a time when we begin to realize that there are no more “military solutions” and that we need to start thinking about an alternative human rights-based security system for the world.