Russian liberals in their theatre of the absurd

11 May 2010

Recently invited to an interview at the World Economic Forum in Davos, Boris Kagarlitsky laments the disillusionment of Russian liberals, who think “real capitalism” doesn’t produce crises, while as the crisis deepens, critical voices draw increasing attention among audiences in the West.

Boris Kagarlitsky's recent encounter with Russian economic liberals has convinced him that, far from shaking their faith in the market, the current economic crisis has only pushed them into taking even more extreme, irrational and dogmatic positions on economic development. SOMETIMES I feel sorry for Russian liberals. How difficult and unpleasant it must be to live in a world where everything doesn't behave quite the way it should. Imagine a scientist who, on a daily basis, watches as apples, falling from an apple tree, shoot up into the sky, instead of falling on his head guided by the law of gravity... Thus is the Russian liberal. He knows full well that the effect of the perfect laws of the market and of capitalism is to ensure - consistently and continuously - universal happiness and prosperity; that private property guarantees the flowering of freedom; that success - under the umbrella of capitalism - is the assured companion of the best, the talented, the enterprising. But, consistently and continuously, in the real world we witness precisely the opposite. Of course, the laws of the market economy, freedom of trade and the principles of capitalism cannot be doubted for a second. No matter what, capitalism is not guilty. It's people or circumstance - constantly and malevolently - that stand in the way of objective economic laws, hindering their realisation. And, for some reason, invariably they succeed in this sabotage. In regard to our own motherland, the fundamental thesis of the Russian liberal is that we do not have 'genuine' liberal capitalism. When capitalism is real, everything must be flawlessly good. But because in real life, alas, too many things, even if not all, are abominably bad, ergo, this is not capitalism! Those guilty of thwarting the reign of pure capitalism are: the Soviet heritage, Russian national traditions, the Tatar yoke and Byzantine orthodoxy, Communist propaganda and the disgusting barbarism of the public, a deficiency in diligence, and a surplus of bureaucracy. In sum, there are heaps of guilty reasons. However, axiomatically, capitalism is innocent. Of course, after almost two decades since the beginning of the liberal reforms, of universal privatisation and the discovery of markets, it is hard to insist that in Russia, there is no capitalism whatsoever. But this real-life Russian capitalism, as viewed by our liberal heroes, is somewhat 'wrong', exactly in the manner of Winnie the Pooh's complaint that 'the wrong sort of bees' that had bitten him were making 'the wrong sort of honey'. After hearing such talk for the 20th or 100th time, it is possible, naturally enough, to lose patience. But one should be more lenient, remembering that the real supremacy of capital in no way corresponds to the ideal concept of liberal capitalism that exists in the imagination of our interlocutor. Whether this ideal notion corresponds to any historical reality - maybe not Russian, but American, Belgian or Greenlandic, maybe not of the 21st but at least of the 18th century - doesn't cross the mind of our liberal interlocutor. He is as indifferent to concrete historical example as the German in the 19th century anecdote who extracts 'the pure idea of a camel' from the depths of his spirit. The trouble is that this ideal liberal capitalism, as envisioned by our Russian Oblomovs, never existed, never could have existed, because it is contrary to common sense. As a result, there are constant embarrassments: many Russian emigrants in America complain that, over there, there is no capitalism whatsoever but visible everywhere socialism of the purest dye. And, of course, our liberals have no doubts that socialism rules in post-Thatcher Western Europe. In the same spirit, one of Estonia's leaders laments that the 'socialist' European Union prevents his small proud people from constructing a 'genuine liberal capitalism'. You want proof of this madness? Be my guest! Estonia's liberals complain that Germans and Italians, saturated with 'red' ideology, for some reason demand that Estonia tax profits. Is this not monstrous! The crisis of the last two years has aggravated the intellectual disease of Russian liberalism to the extreme, transmuting it into its sharpest form. I became convinced of this - once again - when the editorial staff of an important domestic business TV channel invited me to discuss the World Economic Forum in Davos. In and of itself, this invitation was a significant event. Two years ago, no one would have even thought about inviting such an expert as myself to the studio of the business channel. But crisis has provoked a taste for critical analysis. Of course, it is not necessary to investigate basic questions or to attempt some understanding of same. But 'critical voices' must be heard, to get a rounded picture. Of course, the basic tune is dictated by voices of a completely different nature. Lately, liberal Russian intellectuals have been disturbed by developments in the United States. Obama frightens them. It is only in America that liberalism can be leftist and politically correct. In our country, this is not acceptable. Our liberal immediately and honestly says what he thinks. He explains that it is not necessary to send humanitarian assistance to lazy savages in Haiti or to be sad about some unknown people in Africa. Our commentators categorically dislike the American president. In the first place, because he is 'black', and, secondly, because he is 'red'. The latter thesis seems to them just as obvious as the former one. Conversation with a liberal So, even now, being treated to tea right before the live-on-air appearance, I listen to the reasoning of my partner in the dialogue, the liberal economist, who explains to what extent Obama is dangerous. As it turns out, the American president has two sins. He is trying to increase the participation of the state in the economy and he attempts to limit state handouts to private business. Only an utter villain and enemy of society can try to limit banks' access to government money. But it is still more criminal to demand control of how banks use this money, to regulate their activities, and to limit the bonuses of their managers. The recipe for saving the world is simple and obvious: give still more money to the people who led the world economy to the edge of total ruin and never ask them about how they are going to use this money. Usually, such conversations confuse me somewhat. But really, gentlemen, would you do exactly the same with your personal money? Give your money to those who already failed once, and not even request some accountability? Don't you think that this is a little risky? Logic requires raising the simplest question. Either the market is an irreproachable, self-regulating system, and thus it is not necessary to beg for bailout money from the state but simply wait till this system heals itself. Or maybe it is not. In that case, perhaps it is advisable to manifest somewhat less confidence in banks, corporations and their masters? In response to my doubts - which, by the way, were expressed very carefully and politely - my interlocutor was sincerely amazed. 'How can you mistrust people who gathered in Davos?' he questioned. 'After all, they are exactly those people who move the world economy forward!' At this point, I could not refrain from expressing fresh doubts. Somehow, it had always seemed to me that the people who move the economy forward are those who work, producing goods. After this observation, my collocutor's eyes bulged: what do workers have to do with this, what relation do they have to production? I acknowledge that after this question I, too, felt completely dumbfounded. While I was catching my breath and trying to understand if I was hallucinating, my interlocutor attempted a new and, as it seemed to him, decisive line of attack: 'Are you by any chance a Marxist? Only a Marxist could come up with something like this!' Simple-heartedly, I agreed. Yes. Exactly so. Marxist. Who could think that one word can have such a weighty effect? After hearing my 'yes', my interlocutor suffered mental collapse: horror, mingled with distrust, suffused his countenance, as if he had been exposed to a demon or a monster from outer space. And where? Right in the premises of the business channel! Finally, we were called into the studio, where the discussion, directed by an experienced programme host, was of a much smoother nature. I attempted to speak about systemic problems, which those mustered in Davos didn't want to resolve or even to discuss. I duly got the answer that the Davos leaders were quite right not to want any systemic analysis, because there are no systemic problems. The entire crisis is simply a random incident - as when a man walks, stumbles and breaks his foot. Now, the state must 'treat and feed business' until it stands on its own feet. It is expensive, of course, but what will you do, there is no other way out. Poor business! Poor visitors to Davos! Unfortunate cripples and invalids! The liberal economist reacted very simply to any doubts about the rightness of his theses. Is the World Trade Organisation useful? Undoubtedly. Yes, there are other opinions, 'but they are incorrect'. Because they are not correct, we are not going to discuss them. 'Bubbles' on the financial markets? Where did you get this idea from? There are no 'bubbles' whatsoever. The dialogue began to resemble a scene from the theatre of the absurd. Fortunately, this continued for not too long. The session approached its end. I could not wait to leave the studio as quickly as possible. My partner in the discussion evinced similar discomfort. Saying goodbye to me, the programme host attempted to smooth out the unpleasant impression of the discussion. 'You were speaking so convincingly,' he reasoned. 'So argumentatively. It is incomprehensible why he called you a Marxist.' 'But I am, actually, a Marxist,' I said. He did not believe me. I left the studio for the freezing street and ran to the metro. I wanted to leave this place somewhat rapidly. The theatre of the absurd is good, on stage. In real life, it causes depression.