Two ways ahead for Europe and the former USSR | By Sergei Glaziev

Today we publish the second and final part of the interview with Sergei Yurievich Glaziev (You can read the first part of the interview here). Professor Glaziev, in his capacity as an advisor of President Putin, has been the architect of the Eurasian Union, regrouping a number of ex-Soviet Republics. He is an important Russian intellectual and politician, member of the Russian Academy of Sciences, a renowned specialist in Kondratieff’s long economic cycles and an influential opinion leader with leftist views in post-communist Russia.

Today’s part of the interview focuses on the dissolution of the USSR and the restoration of capitalism, on possible alternative paths, matters of socialism and market economy, the Chinese model, a comparison between the Eurasian and the European Union and the relation between capitalism and ecology.

Our interview with him took place last August. D.K.

You seem to dismiss Gorbachev’ slogans like “socialism with a human face” or “more democracy, more socialism”. Why? What do you think of Lenin’s definition of socialism like “Soviets plus electrification”? How would you define socialism now and what is the role of the masses, of the people, in the running of a “socialist society”?

These slogans launched by Gorbachev were perceived as demagogic, although they were followed by real political actions to democratize the political system, as well as serious management decisions on the conversion of the military-industrial complex, the reorientation of the national economy to the production of consumer goods, and the solution of the food problem. Many of these decisions were progressive in nature, but the problem was that they did not lead to the mobilization of the creative energy of the people, but to confusion and vacillation in society. The intellectual stratum, disillusioned with the communist ideology, together with the young people of the capital, who were seized by consumer psychology, wanted to break the Soviet-planned system and make it “like in the West”, naively thinking that it was possible to easily and quickly achieve the same level of consumption and democracy as in Western Europe or North America. At the same time, most of the party and government officials perceived Perestroika negatively, sabotaging Gorbachev’s appeals. The criminal community, as well as young people, saw in Perestroika opportunities for rapid enrichment based on the commercialization of the use of state property through cooperatives and other newly discovered forms of private entrepreneurship. Perestroika had no clearly defined goals, it opened the floodgates for decades of pent-up political energy of people, which, in the absence of a firm guiding force, acquired destructive forms. The masses, which received freedom of political expression, began to destroy the existing order, instead of gradually transforming it into a better one.

The role of the working class in these processes was far from the last, although not the decisive one. It is worth remembering the powerful miners ‘ strikes and their trips to the capital. They simply demanded higher salaries and social guarantees, but acted against the entire political system, also directed by American agents of influence. The role of labor collectives reached its maximum with the adoption of the law on state-owned enterprises, which introduced the election of directors at most of them. However, they did not work better because the pressure for wage growth increased and production discipline weakened. In a new world economic system, in which the socialist ideology prevails, labor collectives should participate in the management of enterprises through representation on the board of directors, as well as in the processes of strategic planning of the enterprise’s development. A significant place will be occupied by people’s enterprises, managed by the workers themselves according to a certain procedure.

Lenin’s famous formula “Socialism is Soviet power plus electrification of the whole country” was associated with the ГОЭЛРО program – the world’s first document of strategic planning for economic development based on the accelerated construction of power plants and the introduction of electrical equipment.

Currently, the core of the new technological order is made up of nano, bio-engineering, information and communication technologies, the transition to it is often called the digital revolution. Digitalization has reached all the leading countries of the world and has accelerated due to measures to combat the pandemic. It expands continuously the possibilities of managing both production and the social sphere. These opportunities can be used both for the purposes of socialist construction (it is no accident that China is a leader in 5G mobile communication systems, non-cash payments and settlements or solar energy) or of strengthening the power of Capital, equipping it with robotics and citizen tracking systems. Taking into account this reservation, we can say that the digitalization of production and management systems, together with the constitutional establishment of the dominance of public relations over private ones and the introduction of direct democracy and strategic planning tools, can become the technological basis for managing modern socialist construction.

Results of capitalist restoration in the USSR

Thirty years have passed since the destruction of the “socialist bloc” and of the USSR and the introduction of capitalist relations of production, of distribution and the corresponding “civilizational”, “ideological” superstructure. What does the balance sheet of the post-soviet experience look like? What prospects do you see now for Russia and the other ex-Soviet republics?

Market reforms introduced following the model of “shock therapy” turned into an economic catastrophe for Russia and the other former Soviet republics. The volume of production fell by half, investment fell five times and the income of the majority of the population fell below the poverty level. Alcoholism and drug addiction sharply increased, and an epidemic of socially conditioned diseases has begun. The total demographic losses in Russia alone amounted to about 12 million people. Monstrous social inequality has divided society into antagonistic classes. The country has been turned into a donor of Western countries: the export of capital from the territory of the former Union exceeded $2 trillion, the brain drain amounted to hundreds of thousands of highly qualified specialists, billions tons of non-reproducible natural resources were exported for processing abroad. Most branches of the high-tech industry have ceased to exist. During the thirty post-Soviet years, the economic activity has barely reached the Soviet level but with degradation of the structure of the economy and the volume of investment still half the Soviet level.

There are two prospects for further development: either the continuation of degradation on the periphery of American-European capitalism, or advanced development on the basis of a new technological and world economic structure modeled on the PRC (People’s Republic of China). In the second case, the possibility of outstripping the development of the Russian economy with a rate of about 10% of GDP growth per year remains. But to do this, it is necessary to revive the socialist ideology, subordinate market relations to the tasks of improving people’s welfare, subordinate monetary policy to the goals of investment and production growth, introduce a progressive taxation system, stop capital flight, “de-offshorize” the economy, deploy a strategic planning system based on public and private partnership.

The Russian empire has not known the disintegration processes all other Empires have known after WWI, for ex. the Austro-Hungarian and the Ottoman Empire. The greatest part of it managed to stay united around Lenin’s socialist project and even a new superpower was created out of it. It is debatable how much socialism really existed in the USSR, still it was called a “Union of Soviet Socialist Republics”. Do you see a causal link between the introduction of capitalism and the decomposition of the USSR? Do you believe the reintegration of the ex-Soviet space is possible in the context of capitalism?

Socialism in the USSR was an obvious reality, as well as the leading role of the Soviet Union in the creation of a world socialist system that covered a third of the world. The “dirigist” model of centralized planning was generated by objective circumstances, allowing the Soviet Union to win the Second World War against an enemy who had all the resources of Europe at his disposal. This management system turned out to be an order of magnitude more effective than the capitalist corporate model of the Third Reich. And it remained more effective than European capitalism until the transformation of scientific and technological progress into the main factor of economic growth. The lack of competition hindered innovation processes in the USSR, which resulted in the technological complexity of the Soviet economy and the growing backlog of the technical level of the national economy.

Historically, the restoration of capitalism occurred after the collapse of the USSR, so the connection is just the opposite. The rejection of the socialist ideology led to the collapse of the ruling Communist Party and the subsequent rapid erosion of the state administration system, which ended with the collapse of the country and the rapid growth of criminal entrepreneurship based on the plundering of state property.

The reintegration of the post-Soviet space takes place now in the form of a common market, the single regulator in terms of the state functions defined by the Treaty on the Eurasian Economic Union is today a supranational body – the Eurasian Economic Commission. Unlike the European Union, which I define as a bureaucratic empire, in the Eurasian Union all decisions are made by consensus with full respect for national sovereignty.