Between the Lines: The Beggars' Tragic Opera (1992)

The Between the Lines column from the August 1992 issue of the Socialist Standard

The Beggars' Tragic Opera

Embarrassing. Condescending. Insulting. Unentertaining. Time-wasting. Infuriating. Boring. ITV Telethon (all day, Sunday 19 July) Semi-recognisable stars sing bad cover versions of bland songs. Cut to twenty seconds on the miseries of living with Alzheimer's Disease. Soft focus; sad classical music. Cut to the man from Kwik-Fit who plays the game of seeing how many times he can say Kwik-Fit and look benevolent within twenty seconds of prime commercial time. Donation: a few thousand lousy pounds. The cost of the same length of purchased commercial space; a lot more. Children with missing limbs are shown playing basketball. The audience cheer. Facially disfigured people plead for funds. The studio audience cheer and wave cheques. Silly little proles with buckets full of pennies scream in ecstasy as the scoreboard shows that five million pounds has been collected. Michael Aspel gives that horrible little grin. Five million pounds: how much to the class who own nothing; what a piss in the wind to the class who possess everything. Cut to the phones where kids donate their pocket money and the poor redistribute crumbs to the poor. Bring on the Chippendales. Forget the suffering and think of a hen night in Scunthorpe as the solution to society's problems. Final collection: fifteen million rotten pounds. Less than last year. Don't they know there’s a recession on? Who will take a collection for the wage slaves who are broke after donating two-hundred quid after one lager too many in the No-Hope Arms? Final shot: a line-up of camera-hungry celebs singing a worn-out American tear-jerker. ’There are mountains in our way. . .' The mountains are made of profit; those in need never get to the top. Telethon hands out sticking plaster to a few of those that fall along the way. Isn't that Cynthia Payne amongst the crew of swooning time-wasters? Well as long as it's for charity—and where was the Minister of Fun? Is this reviewer alone in finding the whole performance of commercialised begging, pumping the worker's guilt and expecting the propertyless to provide for the helpless, a hideous spectacle? Fortunately not. Several disabled workers protested outside the Telethon studio, indignant at a show which makes them objects of pity to be thrown crumbs to the accompaniment of hollow cheers. Fifteen million begged-for pounds; petty cash in the world of military madness. It is when the world is free from money that such offensive spectacles will be unnecessary.

Out with the old, in with the old

Panorama (BBC 1,9.30 pm, Monday. 13 July) was about how the old Russian rulers, seeing the end of their bogus 'communist state' in sight, began setting up private companies in their own names using state funds. These parasites, long the beneficiaries of working-class exploitation under state capitalism, are now private owners of capital. These are the new rouble millionaires whose freedom to exploit we in the West are urged to celebrate as a coming of liberty. An ex-Central Committee member from the discredited Communist Party of the defunct .Soviet Union is shown driving a Merc and looking like any other pouncing thief to be found in the gentlemen's clubs of Chelsea. You won't find them in the food queues. Maybe they'll organise a Russian Telethon so that they can appear on the telly offering a few roubles to the wage slaves out of whose poverty they have carved their privilege.

Thieving Queen

Talking of privilege. The Queen of Mean (BBC, 9pm, Friday 17 July) was good for the bile. The film was about Leona Helmsley, the US millionairess who ended up in prison because she was caught not paying her taxes. The film-makers depicted her as ruthless, callous, heartless and out for nothing but money and power. Sounds like the ideal C.V. for a capitalist parasite. No wonder they call her The Queen. Why shouldn't she live like a selfish, useless, uncaring swine? Since when was there money to be made out of caring? Mind you, Aspel’s probably on his way to a knighthood and someone in the Kwik-Fit P.R. department is in for a handy little Christmas bonus this year.

Steve Coleman

These Foolish Things: It takes your breath away (1995)

The Scavenger column from the June 1995 issue of the Socialist Standard

It takes your breath away

Orimulsion is a cheaper fuel for electricity power stations. It is based upon bitumen and is imported from Venezuela. Since it has been used at Merton power station, near Ramsgate, asthma attacks in the area have quadrupled. Because it is cheap there are plans to introduce it at a number of other power stations.

So what's new?

They throw the most lavish parties. Last year they air-freighted more than £13 billion in cash into the country to satisfy the popular demand for foreign currency. Their offices are already extravagant temples to Mammon. But now Russia's bankers want more.

With the Kremlin’s help they arc amassing enormous political power. In short. Russia's new plutocracy can boast of wealth and influence to rival the Medicis or the Rothschilds. Sunday Telegraph 16 April.

Current account

In the first five years of private operation, the regional electricity companies accumulated £1 billion surplus funds, instead of reducing charges to customers. Professor Stephen Littlechild, the highly-paid regulator appointed to prevent such excesses, either knew nothing about this or chose not to take any action. Whichever was the ease, he was useless.

The Thatcher nightmare

House prices have fallen by 25 percent in real terms since 1990 and experts believe that they have much further to fall. Over a million people in Britain arc caught in the negative equity trap, where they currently owe an average of £7.000 more in mortgage repayments than their home is worth on the market. Apart from the debt burden, this makes it extremely difficult for them to move house. During Margaret Thatcher’s rule, with her campaign for a “home-owning democracy” and income tax relief on mortgage interest payments, house prices doubled in seven years. Now the market is swinging back again.

True Brits

National Grid, the electricity transmission company being privatised, has avoided paying almost £2m in tax by setting up a financial arm in Dublin.

The company ladled £160m of its cash flow into the tax avoidance scheme before the government stepped in to make the arrangement less attractive.

A National Grid spokesman yesterday confirmed the existence of the "special purpose” firm and defended it as: “a tax-efficient way of managing the company’s money which is our duty on behalf of the shareholders. It is part of our treasury function, and normal practice for UK companies that have big cash flows” Independent on Sunday, 2 April.

The Scavenger

Russian billionaire won, workers nil (2003)

A couple of arseholes.

From the September 2003 issue of the Socialist Standard

The sale of Chelsea Football Club to the second richest man in Russia made a good story for the tabloids – and even the broadsheets. “From Russia with £3.4bn” and “Tycoon buys club with loose change” were typical headlines.

There were some spicy elements in the story. The price of Chelsea FC – a mere £140m – would have enabled Roman Abramovich easily to buy also Manchester Utd, Real Madrid and Juventus. The buyer is a youthful 36; his casual dress and unshaven appearance is not that of your archetypal billionaire. On top of that he is a foreigner, mysterious, somewhat reclusive and therefore of dubious character. Also a bit of a paradox: MP for a remote and poverty-stricken area in Siberia, spending one week a month there, the rest of his time on a vast estate in a heavily guarded area strictly off limits to the Russian public because the new wealthy live there.

Abramovich is interesting not so much for his foray into football, but as an exemplar of changes in Russia in the last few years which have made that country a leading player on the stage of world capitalism. In August 1998 there was a financial crash, the rouble was devalued, and international credit dried up after some defaults in payments. In the Yeltsin era businesses had been privatised in opaque deals which (according to the Guardian of 3 July) “make Britain’s privatisation fat cats look like lean models of self-denial by comparison.”

Astute businessmen like Abramovich were able to become extremely rich extremely fast by exploiting the laws which allowed companies to trade on the huge difference between Russian and western prices for raw materials. Abramovich’s businesses, which included oil, television and aluminium companies, grew in number and complexity. His companies are nested within companies within other companies, many of them outside Russia. His British interests are controlled by a holding company, Millhouse.

More can be learned about contemporary Russian capitalism from the 5 July 2000 issue of Worldlink, the magazine of the World Economic Forum. This magazine enables workers employed to help run capitalism in the interests of one set of exploiters to talk to workers employed to help run the same system in the interests of other exploiters. Apparently, things are looking up for Russian capitalists, especially those with political connections (Abramovich is said to be a close friend of President Putin). Earlier Russia had “poor” banking and tax systems. Now “liberal currency regulation allows enterprises and individuals to keep their money in good international banks instead.”

What do the Russian workers think of this new system compared with old-style “communism” (state capitalism)? Many of them are worse off and certainly not sharing in the prosperity of the privileged few. Insofar as there is a political opposition in Russia, it is centred on the old Communist Party beliefs. But, as Worldlink is happy to report: “The communists now only insist on more state enterprises and more state financing . . . Both the right and the left have come to their senses and settled for a normal market economy.”

No wonder Blair and Putin shake hands when they meet, no doubt congratulating each other on the success of the system – for themselves and their cronies. The workers have yet to realise that there is an alternative and to act together to bring it about.

Stan Parker

World View: Sent to Siberia (2000)

From the January 2000 issue of the Socialist Standard

It has been called the Frozen Hell. There are no trees. Nothing but rock and tundra. In the winter, which lasts from mid-September until the beginning of May, when the snow begins to melt, the temperature goes as low as –75oC, with blizzards drifting the snow eight-storeys high. The spring and summer last a brief three months; and for two months, in mid-winter, the sun never rises above the horizon. Sixty five miles to the west, the estuary of the Yenisey-Angara river (3,445 miles long) flows, during the short spring and summer months, into the Kara Sea and then the Arctic Ocean. For nine months of the year, it can only be reached by air or by a nuclear-powered icebreaker from Murmansk, docking at the estuary port of Dudinka.

Such is the location of Norilsk, the world’s most northern industrial city, with a population of 200,000 inhabitants.

In 1930, there was nothing there, except a few reindeers and reindeer-hunters. Nevertheless, in that year, Stalin proposed the Angara-Yenisey Combine for central Siberia, similar to the Kuznetz Combine planned for western Siberia. Shortly after, nickel and other metal deposits were discovered. And in 1935¸ construction of what was to be the city of Norilsk and the Norilsk Metallurgical Combine began. The problem, however, was, as elsewhere in Siberia: where would the Soviet state find the hundreds of thousands of workers it needed in such an inhospitable place? Few would volunteer to go there.

The solution was the collectivisation of agriculture and the dispossession of the kulaks, and other peasants, in Ukraine and south-western Russia. Together with “Trotskyists” and other “enemies of the people”, they were rounded-up and shipped off to eastern Russia and Siberia the Soviet Union’s era of what Marx called the “primitive accumulation of capital” had begun.

Responsibility for the administration of the Norilsk Combine was the Glavnoye Upravlniye Lagerei, or Gulag, the Chief Directorate of Labour Camps, a department of the Narodny Kommissariat Gosudarvetvernoy Bezopasnosti, or NKVD, the People’s Commissariat of State Security. After the Second World War, when the Soviet Union occupied the Baltic states, eastern Poland, hundreds of thousands of Balts, and thousands of Banderisti¸ Ukrainian Nationalists, were arrested and sent to such places as Vorkuta and Norilsk. Just how many prisoners passed through the Norilsk Combine is not known, as even the present Russian authorities in Krasnoyarsk, where the records are still kept, refuse to permit anyone to see them. Between 1935 and 1955, it has been unofficially estimated that 500,000 prisoners passed through Norilsk. Most died there, buried in unmarked graves or in holes in the ice.

Stalin died on 2 March 1953. Following his death, there was general unrest in many of the Soviet labour camps, including those in the Norilsk Combine. The strike began in zone 5 on 25 May. It soon spread throughout the camps and mines. Thousands of prisoners refused to work. The strike, which lasted about two months, was finally suppressed with many killed by the NKVD guards. After the strike, conditions for the prisoners were, for some time, considerably worse. But 1956 saw the beginning of the end of the vast Gulag system. The rapid industrialisation of the Soviet Union required a more sophisticated workforce of “free” wage-slaves. Not that that made a lot of difference to the surviving ex-prisoners in Norilsk! Nevertheless, some returned to western Russia, Ukraine and elsewhere.

But for many, after ten or fifteen years imprisonment, and five years “administrative exile”, there was nowhere to go. Some of the women married former guards and NKVD (later KGB) officials. All became state employees, or were pensioned off. After the collapse of the Soviet Union, ever-increasing inflation ate up their modest savings. Today, the Combine is no longer a state-run enterprise. No longer are the workers exploited by the state. It has been privatised; and according to James Meek (Observer Magazine, 4 July), “it was bought for fraction of its commercial value in 1995 by Vladimir Potanin, one of Russia’s richest industrialists, a man made very wealthy now by the old slavery and the new freedoms, and a business partner of George Soros”. Private capitalism had replaced state capitalism.

Yenseisk lies on the banks of the Yenisey river, 800 miles to the south of Norilsk. Trees grow here, and it is less cold. Indeed, global warming has been noticeable in Yenseisk. It has become milder, with the minimum winter temperature rising from –52oC to –40oC. Even vegetables can be grown under glass. Nevertheless, the ice only melts on the Yenisey in May, when boats from Dudinka arrive, or pass south to Krasnoyarsk. And over the last couple of years, a few thousand workers have managed to escape the frozen hell, and the smog and pollution, of Norilsk, downstream to Krasnoyarsk.

There is a road between Yenseisk and Krasnoyarsk, but no railway; and, furthermore, the local airline, which links such towns and cities as Norilsk, Yenseisk and Krasnoyarsk, is in deep trouble as it has lost most of its pilots. In fact, according to a local priest, Father Grigory, interviewed by the Guardian (3 December 1997), Yenseisk is “a dying town that lived in the past, by subsidies. There’s no industry. Now, it’s thrown back on its resources. The teachers and doctors haven’t been paid for months”.

Krasnoyarsk, a city of 900,000 inhabitants 200 miles south of Yenseisk, is the administrative centre of the area, and is situated on the Yenisey where it is crossed by the Trans-Siberian Railway. It has factories manufacturing equipment for Siberia’s mining industries, a timber combine and a food processing industry. But like Norilsk and Yenseisk, it too is depressed and probably in terminal decay.

One hundred miles to the west of Krasnoyarsk, also on the Trans-Siberian Railway, is the huge Achinsk Company, recently privatised, which produces alumna, most of which it sends to the Krasnoyarsk Aluminium (KrAZ) Company. It does not make a profit, yet it is the source of massive profits. It pays no taxes to the state. For it does not sell its produce direct to Krasnoyarsk aluminium, but through a series of intermediate companies, owned by the managers of Achinsk Company and KrAZ, all of which make “a killing”, and pay very little tax. Much of this money ultimately finds its way, in dollars, to the Bank of New York. Like Potanin, the owner of the Norilsk Combine, Georgi Lokk, the Chief Executive of the loss-making Achinsk ore combine, is a very rich man; from wealth created by the exploited, poverty-stricken workers of Siberia.

Peter E. Newell

Russian capitalism in crisis (1998)

From the August 1998 issue of the Socialist Standard

Russia is in trouble; and its economy is in dead crisis. According to many commentators, the country is facing its biggest test since the collapse of communism. By the end of June, the Russian stock-market had dramatically fallen; and, at one point, the MT5O index of the top 50 companies was down 37 percent over the previous month. Yeltsin was forced to raise interest rates to 150 percent, in an attempt to stop speculators from transferring their roubles into American dollars.

Russia’s crisis is not unexpected; nor is it surprising considering the slump affecting Japan. Indonesia, Malaysia, Korea and other economies of the so-called Pacific Rim. That a weak economy such as that of Russia should be affected by the downturn to the east was inevitable. To state, as have socialists for decades, that capitalism is global, is no more than the bare truth.

The former Soviet Union, of which the Russian Federation was the central core, has indeed collapsed. The former border republics, such as the Baltic States, Belarus, Ukraine and Kazakhstan have all become independent or at least quasi-independent of Moscow; and, in the main, no longer supply Russia with many of its raw materials at less-than-cost. The so-called Commonwealth of the former Soviet Union is a farce. Russia is largely dependent on loans from the International Monetary Fund.

However, what collapsed was not communism (or socialism), but a Russian-dominated empire, misnamed the Union of Soviet Socialist Republics, ruled by a one-party dictatorship and an economy which was over 90 percent state-controlled and owned: a bureaucratic state capitalism in which a relatively small elite (the apparatchiks) creamed off the surplus wealth produced by the workers and peasants of the country. The Soviet empire, and economy, collapsed due to a number of factors: state-run capitalism in the Soviet Union was grossly inefficient and had outlived its usefulness; the Soviet state could no longer carry the weight of the cost of enormous military expenditure, and large sections of the population were no longer prepared to support, or even tacitly accept, a one party form of government. Moreover, nationalist movements in such areas a the Baltic states and Western Ukraine, had become increasingly bold an active.

The change has not, however, benefited the Russian working class or peasantry. Far from it. Throughout the existence of the Soviet Union, they had existed in poverty and degradation particularly during the first 50 years ~ the “primitive accumulation” of state capital; and, throughout the period a the collectivisation and “liquidation of the kulaks’, and the purges of the 1930s, together with the forced labour of the Gulag, life for the majority had been insecure and brutal.

But at least, throughout much of the Soviet era, Russian wage-slaves regularly received their monthly wages and although unemployment always existed to some extent throughout the Soviet period (but denied by so-called Communists), today many Russian workers, still creating surplus value for their new masters, have not been paid for months – “either because the company has no funds available or the have been allocated elsewhere. Last month coal-miners who had not been paid for up to 10 months blockaded the Trans-Siberian Railway” (Guardian, 16 June).

Other workers, including coal-miners in Southern Russia, have gone on strike, although this has been of little use to them: they still were not paid. The only way in which many unpaid workers have been able to exist is by growing food on small plots of land and gardens. Unemployment is rife, and the actual number unknown.

Not surprisingly, Russian society is dominated by corruption.At the top are the rich haute bourgeoisie, capitalists, of whom many were previously Soviet apparatchiks. Again, the Guardian:

“Many analysts believe they have played a significant part in Russia’s crisis. Far from stepping in to bale out the economy, they have been actively enjoying the collapse by trying to weaken the rouble. They then hoped to make huge financial rewards by selling oil and other goods for US dollars.”

Organised crime, run by local mafias, is also rife; and there is now an enormous black market, in which millions of Russians take part; but which, naturally, largely benefits the rich.

Taxes are the life-blood of the state; they provide the finance for both the administrative and repressive agencies (including the police and armed forces) with cash. However, the Russian government has, over the years since the collapse of the Soviet Union, failed to collect billions and billions of roubles in unpaid taxes, mainly due to corruption and inefficiency. In 1997, the Russian government collected just 50 percent of the taxes it was owed. Many—probably most—of the largest debtors are prominent capitalists who have done well out of Russia’s semi-privatisation (many large industrial complexes and companies are, in fact, still state-owned). Lukoil, possibly the largest of Russia’s oil companies, owes the state millions of dollars. Yeltsin has promised to reform the tax system. Not that that will make any difference to the poverty of the average Russian worker.

What of the future? The Russian economy may ultimately pick up; corruption may be tackled; most workers may even get paid their salaries on time, but whatever happens. whilst capitalism remains in any form, state or private, or some of each, the workers will still be exploited and repressed, and live in comparative poverty compared to their masters. Looking back to a nonexistent “communist” paradise in the former Soviet Union, as have a few mainly older workers, is as much a waste of time as looking forward to prosperity and security in a capitalist, “free-market” Russia.

Peter E. Newell

Cooking the Books: Ill-gotten gains (2022)

The Cooking the Books column from the April 2022 issue of the Socialist Standard

In his State of the Union message on 1 March President Biden told the Russian oligarchs: ‘We are coming for your ill-begotten gains’, ‘your yachts, your luxury apartments, your private jets’. The audience, including billionaire senators, rose to their feet in a standing ovation. Watch them at: tinyurl.com/2bbd5683. This side of the Atlantic, Sky News (28 February) reported that ‘Boris Johnson says Russian oligarchs will no longer be able to hide “ill-gotten gains” in UK’ and Liz Truss, the very undiplomatic Foreign Secretary, had said:

‘There are over 100 billionaires in Russia. We have compiled a hit list of oligarchs. We are working through and putting the cases together, and every few weeks we will sanction new oligarchs. We will be targeting oligarchs’ private jets, we will be targeting their properties, we will be targeting other possessions that they have and there will be nowhere to hide.’

In the House of Commons, a Tory MP, Bob Seeley, referred to the Russian capitalists as ‘kleptocrats’ (Times, 2 March).

The present Russian capitalist class amassed their wealth in the first instance when after the collapse of the USSR the new Russian government, as advised by free-market ideologues from the US, decided to sell off the state-owned industries. A small group, mainly members of the ruling nomenklatura but also dodgy businessmen who had flourished on the margins of soviet state capitalism — such as Roman Abramovich — were able to acquire these assets on the cheap, often via bribery and gangsterism (incidentally, the same happened in Ukraine). But this was just the ‘primitive accumulation’ of their capital, akin to what happened in England when capital was originally accumulated through overseas plunder and the slave trade.

Once accumulated in this sort of way, capital becomes respectable and is invested and used up but is then renewed and expanded through the productive activity of wage-workers, with by far the greater part of what they produce being appropriated by the capitalists as surplus value, the source of profits, and of the dividends and bloated ‘salaries’ that afford them a luxurious lifestyle. This taking of the unpaid labour of the producers is the source of the wealth of the Russian capitalists. That’s how they ‘got’ their ‘gains’. But this is no different from how billionaires everywhere get theirs, including in Britain and America. Their wealth, too, is ‘ill-gotten’, being legally stolen from the producers.

Anyway, what is an ‘oligarch’? What is a ‘kleptocrat’? In what way, if any, do they differ from a Western capitalist or billionaire?

According to the dictionaries, oligarchy is rule by a few (from the Greek word for few ‘oligos’) and ‘kleptocracy’ is power in the hands of thieves (from the Greek word for thief). Socialists used to call capitalists ‘plutocrats’ (as in Clause 6 of our Declaration of Principles), with power in the hands of the rich (from the Greek ‘ploutos’). All three terms are equally apt, alternative descriptions of the ‘1 percent’. They are rich. They are few. And they are thieves.

The Western billionaires cheering on the expropriation of the wealth of their Russian cousins should be wary. It might set a precedent and the day come when a delegate of the socialist majority will mount the rostrum to tell them: ‘We are coming for your ill-gotten gains, not just your yachts, your luxury apartments and your private jets, but your land, your factories, your means of transport and communications, all the means for producing wealth that you have appropriated. And you will have nowhere to hide.’

Ukraine: Good Against Evil . . . Or More Complicated Than That? (2022)

From the April 2022 issue of the Socialist Standard

The war in Ukraine has led to much sympathy and solidarity from people across Europe and beyond. And in a way, this is both understandable and heart-warming. Few want to see innocent people bombed out of their homes and turned into refugees, fleeing mass killing. The assistance people have been prepared to give Ukrainian refugees has been a testament to the basic solidarity and mutual support socialists have always said we are capable of as human beings.

The media have largely portrayed this war as a battle of good against evil. Socialists know that wars in modern capitalist society are never quite that simple. Sometimes the motivations for war are transparently economic (eg the Gulf Wars), while at other times there is a complex geo-political element, with states manoeuvring for political advantage and seeking to extend or defend their spheres of influence (the Falklands War was closer to this).

The Ukraine situation is complicated and most people (including us) did not expect armed conflict to actually break out. The ‘good versus evil’ scenario that is the dominant narrative doesn’t quite fit and as usual other factors are at play.

Democracy?

Over time, political democracy, imperfect though it always is within capitalism, has emerged as the dominant and favoured way for the ruling classes of nation states to manage their affairs. This has come about for a number of reasons – some because of political pressure from the working class wanting a say in how society is organised and run (e.g. the Chartists in Britain in the nineteenth century), but also because the owning class is rarely united. It is typically a mass of competing interests, not just between states but within them as well. Financial capital (such as the banks) often has different interests to industrial capital for example, and political democracy is a good way of the state arbitrating between competing interests.

Many states though take years to develop this type of democratic practice and culture as they have little by way of a tradition in it. Indeed, since the Second World War, while numerous states have gravitated towards elements of political democracy across much of the world, some have done it much more successfully than others. This is the story of many of the states that either emerged or reinvented themselves after the collapse of the old Soviet Union in the early 1990s, including both Russia and Ukraine. Both have elements of capitalist political democracy but in an obviously deformed way, and the type of political corruption that tends to exist at the fringes of more mature capitalist states like those in Western Europe, North America, etc tends to be more entwined with the state apparatus at a deep and fundamental level. Their past authoritarian cultures have had a lasting impact.

The think-tank Transparency International (not above controversy itself) produces an annual Corruptions Perceptions Index which ranks countries according to general perceptions of corruption and theft in their state machinery and operations. In 2021 Russia ranked a lowly 136th out of 180 listed states. Interestingly, Ukraine was little better at 122nd in the world as graft, corruption and client-politics there are legion. This manages to put both Russia and Ukraine even lower than dictatorships such as Cuba (64th) and China (66th).

Most politics in Ukraine is dominated by ethnic and nationalist considerations, with what could be described as the right/left political spectrum associated with more mature democratic states barely in existence. This situation is blurred slightly by the fact that Ukraine currently has a government led by a president (Zelenskyy) and party (Servant of the People) that have an orientation that is at least broadly aligned with some conventional notions of Western parliamentary democracy, including aspirations towards membership of the European Union.

Russia on the other hand has more obviously still struggled to shake off decades of authoritarian control and culture and is run by what appears to be an ever-smaller clique led by President Putin, an elected dictatorship in all but name. Checks and balances on authoritarian actions and adventures are low and Putin has long hankered after recreating what some would refer to as the old Soviet Union without much of the associated Leninist politics. It could be seen even more easily as a recreation of Tsarist Russia, an empire which also included most of what is now Ukraine and parts of many other Eastern European states.

Whenever Putin sees an opportunity to embark on a military adventure in pursuit of this goal he has a tendency to move fast, with few if any challenging voices around him in the Russian hierarchy. The usual manoeuvrings and diplomacy around these situations by other states effectively become cast as an excuse to do what he most likely wants to do anyway (as with NATO expansion into the East). This then – at least in theory – strengthens his internal and external position as the leader of an empire trying to regain its ‘rightful’ position among the nations. This worldview has been exacerbated by longstanding grievances, both related to Russia’s historic standing and defeat in the Cold War, and also personal slights such as when his mooted interest in Russia itself joining NATO over two decades ago was rebuffed by both Bill Clinton and George W Bush.

Economic interests

In addition, Russia has its own clear economic interests too. As such, in 1994 it sought to set up its own trading bloc which came to full fruition in 2011 when seven other countries agreed to join it in a free trade area. These were Belarus, Kazakhstan, Kyrgyzstan, Tajikistan, Armenia, Moldova and Ukraine. But the orientation of Ukraine along with many other Eastern European states towards the EU led it to sign a ‘Deep and Comprehensive Free Trade Agreement’ in January 2016. Since then, Russia has suspended its free trade agreement with Ukraine and Ukraine retaliated by passing trade restrictions on Russia.

Russia has long created issues for the West that it has struggled to resolve. Doing deals with the oligarchs while watching Putin help rip up various geo-political agreements made in the 1990s after the fall of the Soviet Bloc has created a certain cognitive dissonance, but until recently it was the money that largely won out. Since the collapse of the USSR in 1991, the oligarchs who stripped the state of many of its assets for a massive profit have found a welcome home for the most part, particularly in the UK. The debutant balls that take place in Mayfair each summer are no longer arranged for Sloane Rangers but for the sons and daughters of the Russian elite. Many of the top FTSE 350 resources companies quoted on the London Stock Exchange are Russian – such as Evraz, Polymetal International and Petropavlovsk. The oligarchs and their families who own football clubs and newspapers had become ever more integrated into Western capital and it is hardly surprising, as they have qualities, connections and money admired by the elites in the West.

According to The Economist, 41.3 percent of Russia’s exports come to the European Union and the UK, while 34.5 percent of its imports originate from the EU and UK. The massive sanctions that have now been imposed as a result of the war in Ukraine will hit this considerably and it is clearly something the West would not have otherwise countenanced.

Arguably, the move to expand both the EU and NATO to the East have ‘provoked the Russian bear’, but it is a bear they have been prepared to happily play with for quite some time. This too despite the Russian invasions of Chechnya (1995), Georgia (2008) and Crimea (2014). And many on the political left have been closet apologists for Putin on the grounds that an enemy of an enemy must be a friend, irrespective of the discrimination and human rights abuses of the Putin regime and the fact that most of them would most likely end up in prison there just for promoting the views they have.

Murky business

So, one way or the other the war in Ukraine has interrupted business as usual, as wars tend to do. The previous Russian invasions of adjacent territory were not welcomed by the West but not proactively resisted either. Ukraine is too big, too close and the situation now perhaps too grotesque in some aspects for them to turn the other cheek completely. They will not wish to get involved militarily (at least not in an active sense) as that might provoke an even worse escalation, so the retaliation will be economic in essence, building on Ukraine’s own sanctions against Russia since 2016.

It is a mess, but the sort of mess capitalism delivers all too frequently. Socialists have sympathy with the oppressed and those struggling for basic democratic rights everywhere but don’t take sides in conflicts between elites. We know all too well that the victors soon become the oppressors (as happened in Russia itself post-USSR). To put it bluntly, we are on the side of both the Ukrainian people getting bombed out of their homes and the Russian soldiers getting murdered in battle because of the imperial fantasies of the leader who ordered them there.

DAP

“Local Boy Makes Good,” or “Alone He Did It” (1944)

Pamphlet Review from the February 1944 issue of the Socialist Standard

A very great war produces, out of profound social tragedy, its mordant satirical humorists. This one is no exception; in addition to biting ironists of the Nat Gubbins school, "Yaffle," and others, we may now acclaim one Reginald Bishop as the wittiest cynic of the day. With elephantine solemnity, Mr. Bishop has turned out a little booklet on “Soviet Millionaires” ("Soviet Millionaires," Russia To-day, pamphlet, 2d.), in which he playfully pretends that he is "explaining" that they are the result of "the establishment of socialism in Russia in 1934 " (p. 12).

The result is the funniest piece of satirical writing since this war broke out. For this we thank him very much.

How to do it! Mr. Bishop chides those who are shocked to hear of millionaires in Russia, and "to whom the very word millionaires represents an evil influence in society." He points out that Russian millionaires are “only" rouble millionaires; they do not possess the equivalent of a million pounds sterling (p. 3). "But even were a rouble millionaire possessed of as much money as a sterling one, it would still not be anti-socialist . . . because in the Soviet Union tho millionaire has acquired his roubles by his own toil" (P- 3).

"In all countries the law smiles upon the acquisition of wealth/’ says he (p. 3). (Our italics.)

It all started when the Society for Cultural Relations with Russia published that troublesome little pamphlet reporting how a few rich farmers and priests had "presented" (or lent) millions of roubles to the Russian Government. “ One, Berdyebekov, was publicly acclaimed as a millionaire" (p. 4). "Perhaps it is easier to understand how Soviet millionaires are made by studying the career of Berdyebekov than by any amount of abstract and theoretical discussion" (p. 4).

Just as simple as that! Like those physical culture adverts before the war—"You, too, can have bulging biceps in 10 minutes; send 2s. 6d."

In the new "Bishop" version of the classical figure of bourgeois political economy—the imaginary single individual—the Robinson Crusoe, who, on his uninhabited isle, becomes a "self-made" man. That same "Robinson Crusoe’’ who is the butt of Karl Marx’s scornful lash in Vol. I of “Capital"—not that Mr. R. Bishop would know anything about that!

And our Soviet millionaire really started from nothing. He was "an agricultural labourer" (p. 4).

It is rather handy that we’re not having any nasty old "abstract," "theoretical" discussions, because on the next page (p. 5) "17 other Kayak farmers also made similar gifts"—that is, seventeen more millionaires have popped up in the same neighbourhood, “who twenty-five years ago were more poverty stricken than the Russians themselves" (p. 5).

However, we’ll stick to Millionaire No. 1—Berdyebekov. This is how he did it. "In 1929 his village organised one of the earliest collective farms in Kasakstan ” (our italics) (P.4). "They (he and his family) have been collective farmers for close on fourteen years " (p. 4).

“The family had worked hard; the farm is prosperous; the family has accumulated savings, entirely the fruit of their own labour’’ (p. 4).

But on the same page: “In part, this prosperity has been due to the work and initiative of the farmers themselves, and in part, too, to the enterprise of the Soviet State, which developed cotton growing in that territory to an enormous extent’’ (p. 4).

So you see, the "Revolution gave them the land," “the village organised the farm." and "the Soviet State developed cotton growing" (p. 4)—that is, the Government supplied machinery and equipment, transport, etc., produced by social labour of the Russian working class—but—the one million roubles is STILL the fruit of the millionaire and his family’s own labour—just like Henry Ford, Tommy Lipton, and Lord. Nuffield.

No wonder Joe Davies, the American Ambassador, liked it so much!

Mr. Bishop says the Berdyebekov family have been farmers (really cotton growers) "close on fourteen years." Let’s give ’em fifteen years and see how much they’ve accumulated per annum. One million divided by 15 years amounts to 66,000 per annum, which is nearly 200 times as much as the average wage of an industrial worker per annum. (3,447 roubles in 1938—Daily Worker, February 13. 1943.)

Mr. Bishop tells his readers that it is quite wrong to think that a class of rentiers is being created in Russia—because they have to lend their money to the Government on "hard" terms. These terms are that only one-third of their investment bears interest by way of lottery prizes—two-thirds is redeemed at face-value (p. 8). Interest at two per cent. is open to organisations only, that is, collective farms, etc. But citizen Berdyebekov is the "chairman" of a collective farm, and therefore controls funds invested by it. He also has personal investments to the tune of one million roubles. Mr. Bishop tells us that the number of subscribers to the State Loan has grown to 60 millions, the amount to 41,000 million roubles. Mr. Berdyebekov, our millionaire, may draw interest at 2 per cent, on 300,000 roubles', that is 6,000 roubles a year. What chance a Russian factory worker has of investing in Government stock on a wage of under 300 roubles a month may be well imagined.

But Mr. Bishop, gifted artist that he is, saves his piece-de-resistance to the grand finale: brushing aside as mere trifling chicken-feed the "misunderstandings’’ about lieutenants in the Russian Army getting 200 times as much as a private, and a colonel 400 times, "and so on for the higher grades’’ (p. 13) (maybe "Marshals" are millionaires!); you see: "it’s their careers" (p. 14). Yes, they’ve even got those in Russia, too, the "successful ones are entitled to more" (p. 14), just like home. Oh! and even a private in the Russian Army gets "free travel’’ (p. 13).

Why all this fuss about farmers, he says. "As is well known, the Bishops of the Orthodox Church . . . vied as to which could make the most generous contribution. But the contributions made by the Church dignitaries do not represent the only effort of the clergy ” (p. 10).

Stevanov, priest of the Moscow Church, donated his life savings (73,000 roubles) to the Defence Fund last year. He wrote to Stalin:

  "As a shepherd of souls I deeply mourn the fate of our brothers and sisters. ... I have deposited 73,000 roubles in cash at the State Bank ’’ (p. 11).

We must admit that Mr. Bishop has us there. After all, if a master cotton-grower can’t claim to have produced a million roubles worth of cotton by his own hands—who shall gainsay a "shepherd of souls’’ his 73,000 roubles. Perhaps he is a "Stakanovite" soul-saver, who has stepped up his output to world record heights during the war. Our "study’’ of the Soviet Millionaire does not seem to be very successful so far. Perhaps we’ve been studying the wrong book. Maybe if we leave the modern humourist Reginald Bishop—and turn to another satirical writer of the last century—who was sometimes "theoretical’’ and "abstract’’—Karl Marx, it might help.

In the "Handbook of Marxism" published by Mr. V. Gollancz, and edited by one of Mr. Bishop’s colleagues, Mr. Emile Burns, we read in an extract from Vol. I of "Capital" on page 376:

  "This primitive accumulation plays in Political Economy about the same part as original sin in theology. Adam bit the apple, and thereupon sin fell on the human race. Its origin is supposed to be explained when it is told as an anecdote of the past. In times long gone by there were two sorts of people; one the diligent, intelligent and above all frugal elite; the other lazy rascals, spending their substance, and more, in riotous living. The legend of theological original sin tells us certainly how man came to be condemned to eat his bread in the sweat of his brow; but the history of economic original sin reveals to us that there are people to whom this is by no means essential. Never mind ! Thus it came to pass that the former sort accumulated wealth, and the latter sort had at last nothing to sell except their own skins. And from this original sin dates the poverty of the great majority that, despite all its labour, has up to now nothing to sell but itself, and the wealth of the few that increases constantly though they have long ceased to work. Such insipid childishness is every day preached to ns in defence of property."

There was a man in Russia once, generally known by tho name of Lenin, who wrote a little booklet (abstract and theoretical) called "The Teachings of Karl Marx," wherein he quoted the following from Vol. Ill of "Capital":—

  "The transformation of rent in kind into money rent is not only necessarily accompanied, but even anticipated by the formation of a class of propertyless day labourers, who hire themselves for wages. During the period of their rise, when this new class appears but sporadically, the custom necessarily develops among the better situated tributary farmers of exploiting agricultural labourers for their own account, just as the wealthier serfs in feudal times used to employ serfs for their own benefit. In this way they gradually acquire the ability to accumulate a certain amount of wealth and to transform themselves even into future capitalists. The old self-employing possessors of the land thus gave rise among themselves to a nursery for capitalist tenants, whose development is conditioned upon the general development of capitalist production outside of the rural districts." (Handbook of Marxism," p. 58.)

Leu in said that this theory of Marx, "of the evolution of capitalism in agriculture," was of especial importance in its bearing on backward countries such as Russia” (p. 558, Handbook of Marxism). It might even apply to cotton growing in Kasakstan.

We agree with the Daily Worker, wherein Mr. W. Holmes averred that Reg Bishop has done very well in dealing with statements by "Hyde Park spotters," that in Russia to-day the social system is one based on wage-labour and capital. The "Hyde Park spouter" is the Socialist Party platform, and Mr. Bishop's pamphlet is so good that it can be confidently recommended to any political sap who still swallows the guff about Socialism in Russia

Horatio.

Siberian capitalism (2004)

From the August 2004 issue of the Socialist Standard

In the January 2000 issue of this journal, under the title “Sent to Siberia” we described the development of the Norilsk Metallurgical Combine and the emergence of the city of Norilsk. It has been, and is still called, the Frozen Hell. Before 1935, there was nothing there except a few reindeer and reindeer-hunters. But shortly after, nickel and other metal deposits were discovered.

The then Soviet rulers were only able to develop the area by shipping in hundreds of thousands of dispossessed kulaks, and other peasants and workers, as forced labourers in what we described as Russia’s era of the “primitive accumulation of capital”. At that time all such projects, and all the major means of production, were developed and subsequently owned by the state, which was controlled by a minority of “communist” apparatchiks, of whom many ultimately evolved into a privileged and increasingly prosperous nomenklatura or state-capitalist class.

Following the collapse and disintegration of the Soviet Union many large enterprises and combines were privatised, and the workers were no longer exploited by the state. The Norilsk Metallurgical Combine was one such enterprise. Vladimir Potantin, already a privileged apparatchik, was able like many other former Soviet bosses to take advantage of the new privatisation laws and, as a business partner of George Soros, acquire the Combine in 1995 for a fraction of its actual value. He soon became one of Russia’s richest industrialists. He and not the state then exploited the workers. And the Combine is now called a Mining Company.

But what of the workers who have created his riches? And what kind of place has the city of Norilsk become?

Pollution and poverty

Since November 2001, Norilsk has, as in Soviet times, been largely closed to foreigners. But after considerable trouble, Nick Walsh managed to get permission to visit the city in 2003. He described the situation and the condition of the workers in the Guardian (l8 April 2003). In the winter the temperature dropped to –62oC which, due to global warming, was about 10oC milder than ten years previously. In the summer, the temperature can reach 23oC, but only for two weeks. Every day the soot from the Mining Company turns the snow black, and the mine sends 5,000 tonnes of sulphur dioxide into the atmosphere, which makes the air taste sour.

Indeed, the Norilsk Mining Company produces one seventh of all factory pollution in Russia. Every year, it churns out two million tonnes of waste gas, and 85 million cubic metres of dirty water. Its impact, say ecologists, is felt as far away as Canada and Norway, and it is killing the forests for hundreds of miles.

   

Walsh comments: “In Russia, big business runs much of the country, so few even raised a quizzical eyebrow when, last year, the co-chairman of Norilsk Nickel, Alexander Khloponin, was elected governor of the local Krasnoyask region. Last year, he declared his income to be £1m a month, but reportedly earned £30m in share dividends alone.”

A Norilsk Nickel Company spokeswoman accepted that only four percent of all adults in the city were healthy. The hardest working 12 percent of the Company’s workers may retire at 45, but one worker told Walsh that “you pay all your life towards a pension you don’t live to collect”. Most workers cannot afford to leave Norilsk, as they do not earn enough to buy a house elsewhere. They average between £200 and £500 a month. Says Welsh: “They live, work and reproduce for the Company. The money goes round, and eventually people pass away. The city’s isolation means that they pour their wages into Company-owned shops and facilities.”

A market economy

Krasnoyarsk, a city of 900,000 inhabitants almost 1,000 miles south of Norilsk, is the administrative centre of the Central Siberian area. Like Norilsk, it has been depressed and is probably in terminal decay. But it is the home of the giant Krasnoyarsk Aluminium Company, owned by the oligarch Oleg Deripaska’s Rusal Group. The smelting plant is the second biggest of its kind in the world, producing more than 930,000 tonnes of aluminium a year.

In Soviet times, says Terry Macalister, writing this year in the Guardian (23 June) from Krasnoyarsk, the plant produced aluminium pots and pans for domestic kitchens, but now produces aluminium ingots, which are shipped all over the world, including to Britain, where Oleg Deripaska has a stake in the Anglo-Dutch steel company Corus. Jobs at the aluminium smelter, which originally employed 10,000 in Soviet times, have been cut in the last twelve months to 6,700. Duncan Hedditch, who is the tough new Australian boss of the plant, says that he hopes to reduce the number of workers to below 5,000 within three to four years. Yet at the same time, Deripaska is expanding productivity and, therefore, increasing the exploitation of the remaining workers, and investing $270m in modernising the plant.

The Krasnoyarsk aluminium plant produces three percent of the world’s aluminium, and consumes half a million tonnes of carbon every year. Some of the workers earn quite high wages by Russian standards: $800 a month, compared with an average of $250. But the going is tough. And, like the miners of Norilsk, the workers of the Krasnoyarsk Aluminium Company generally do not live to old age.

Workers of Norilsk and of Krasnoyarsk, like workers the world over, cannot win under capitalism, state or private. Many of their problems, however, would be solved by establishing socialism, although others such as pollution and the effects of ill-health, would take longer to eliminate. But, at least, a start could be made.

Peter E. Newell

Rouble-makers - Part 2 (2012)

From the January 2012 issue of the Socialist Standard

Link to Part 1

The concluding part of our article on how some capitalists originally accumulated their capital.

Roman Abramovich grew up poor: both his parents died when he was young, and he was brought up by an uncle. He was nothing out of the ordinary at school or in the army where, after two years, he was still a private; though as a soldier he is said to have sold contraband petrol to the officers of his unit. He married young and “married well” as the phrase is, because his wife’s parents gave the newlyweds a wedding present of 2000 roubles, worth at the time about £1000 (which was more valuable then than now). With this starting capital he set himself up as a street trader, selling plastic ducks. Abramovich’s present fortune is about ten thousand million pounds, so one’s first thought is that he must have sold a lot of them. Reports suggest that the ducks (which could be relied on not to quack) were smuggled in, thus avoiding the due taxes and increasing the resulting profits. (All this private buying and selling was then illegal, of course.)

Abramovich then went into trading automobile parts, retreaded tyres, other plastic toys and commodities generally. But the significant fact is that Abramovich was twenty when Gorbachev came to power, and small private businesses became tolerated. So Abramovich began making plastic dolls.  This, in our society, means that he was able to organize other people into making plastic dolls which he then sold, keeping the surplus value. Soon Abramovich was forming and liquidating numerous companies: he was into bodyguard recruitment, pig farms, and trading in oil and oil products. As one of the first out of the starting gates into private merchandising he was now making a lot of money – though some press reports claim it was not always along completely legal channels. There were occasional setbacks. In 1992 a goods train arrived in Moscow carrying diesel worth 3.8 million roubles. Abramovich met it and gave instructions for a different destination. He was arrested, charged with stealing state property and held in prison. But the people who got the oil duly paid for it, so Abramovich got out of jail and it was all forgotten.

Abramovich got to know Pyotr Aven, businessman and politician, who was in 1992 the Minister for External Economic Relations and, in 1994, the President of the Alfa Bank, one of Russia’s largest. On Aven’s yacht Abramovich met an even greater personage, Boris Berezovsky, who was in Yeltsin’s inner circle.

Abramovich made sure he became close to Berezovsky: their families even holidayed together. Berezovsky provided Abramovich with what is known in Russia as “krysha”, literally meaning roof: that is, with contacts, with political protection and, indeed, with a connection to the very centre of Russia’s government – to Yeltsin and Yeltsin’s friends. Berezovsky became Abramovich’s “godfather”.

Abramovich paid for this personal line to the centre of power with vast amounts of money: according to Abramovich on the witness stand in the current case, he paid Berezovsky during the 1990s no less than 2.5 billion dollars – well over a billion pounds (Times, 11 November). It was money well spent, since the 1990s was the decade when Yeltsin was disposing of Russia’s state industries. After cosying up to Berezovsky, Abramovich now cosied up to Yeltsin and his entourage, including his daughter Tatyana Dyachenko and his security chief Alexander Korzhakov. Soon he had an apartment in the Kremlin and was proving the truth of the old saying – it’s who you know that counts.

Yeltsin had come to power in 1991 when, like many other politicians, he was going to make everything fine for everybody. A year or two later (like many other politicians) he was despised as a failure. In 1996 he had to stand for re-election. He desperately needed money to finance a political come-back. Various auctions were held of state assets. Abramovich wanted to get hold of Russia’s oil industry – refineries, exploration enterprises, marketing company, everything – in a new entity called Sibneft. Abramovich’s witness statement to the court says, “Mr Berezovsky helped him acquire Sibneft in one of several rigged government auctions. These privatizations . . . allowed a group of oligarchs to gain control of vast state assets relatively cheaply in return for supporting Boris Yeltsin’s re-election campaign” (Times, 29 October). These are Abramovich’s own words, very carefully considered – telling untruths in a court case would rank as perjury, so he must have felt sure of what he wrote down. Since another Russian company, Gazprom, bought 73% of Sibneft in 2005 for 13.1 billion dollars, which would value the whole of Sibneft at 17.9 billion dollars, or at least a hundred times as much as Abramovich paid for it, one can agree that it was bought “relatively cheaply” and that the government auction must indeed, to use Abramovich’s word, have been “rigged”. In court, Berezovsky’s lawyer said that “an oil refinery manager who had opposed the deal that underpinned Mr Abramovich’s initial fortune had ‘died in difficult circumstances . . . he drowned’. Tantalizingly, no further detail was given” (Times, 2 November).

Abramovich moved on to consider the Russian aluminium industry. He said in his witness statement: “Prior to 2000, the Russian aluminium industry was disorganized, its assets were split between a number of different owners, and some of the players in the industry resorted to forceful methods and violence to protect their interests.” So he “was not keen to get involved in the industry, given its violent and unstable history. Criminal groups were fighting fierce battles for control of the profits generated . . . and dozens of businessmen had been killed in this struggle for control.” In fact, “someone was murdered ‘every three days’ at that time”. This period became known as “the aluminium wars.” However, another oligarch, Badri Patarkatsishvili, persuaded Abramovich to go for it, in return for the small consideration of half a billion dollars for his help as an intermediary. (Patarkatsishvili unfortunately died suddenly at his Surrey mansion in 2008, aged only 52, the very day after sending an urgent message to Abramovich saying, “he had something very alarming to tell me, and asking me to meet him urgently.” They decided it must have been a heart attack.) Abramovich, in alliance with another oligarch, Oleg Deripaska, successfully acquired Russia’s aluminium industry. Subsequently he extended his holdings in other Russian industries.

Deripaska, of course, was the man who hosted a holiday party on his luxury yacht in the eastern Mediterranean in 2008. The guests included Nathaniel Rothschild, George Osborne and Peter Mandelson. Mandelson was then the EU Trade Commissioner, and the EU had reduced aluminium tariffs, thus benefiting Deripaska. Some commentators alleged that it was inappropriate for Mandelson to accept Deripaska’s hospitality, but probably they were annoyed at not having been invited to sunbathe on the yacht. Others claimed that Osborne tried to get Deripaska to contribute to Conservative Party funds, but no doubt it was all a misunderstanding.

Abramovich insists he has earned his success. His wealth, he said, he had “generated through hard work and by taking risks associated with doing business in Russia”. It is true that some of those hopefuls who started out like Abramovich with the same aim of taking over some of Russia’s state industries have now retired to the nearest cemetery. Some of the men who took “the risks associated with doing business in Russia” are no longer with us; they have died of “lead poisoning”, to use the old euphemism, unless it was suspected that more exotic means of settling business disputes had been employed. And it is certainly true that all wealth is generated through “hard work”; it is only necessary to add that the person doing the hard work and the person getting the wealth are not always identical.

Abramovich’s evidence is currently causing raised eyebrows in London’s High Court, as he explains that he often gave out inaccurate information to the public and to potential shareholders, about who really owned his companies (“mainly for reasons of security”), that he signed important business documents which carried an intentionally incorrect date and that some people who signed documents as acquiring shares were not in fact acquiring shares at all – all of which would be offences under English company law. “If backdating documents is something that is not very ethical, then perhaps we can be accused of that. This practice existed in Russia and for sure we have done it,” said Abramovich. “If backdating this agreement is a sham, then so be it,” he told the court. “This is a uniquely Russian story,” Abramovich asserted. Other documents recording purchases, Abramovich told the court, contained the names of people who were supposedly purchasers and recipients of shares but in fact were nothing of the kind. “It is a Russian tradition”, Abramovich told the (somewhat surprised) court. Indeed, some of the state companies apparently were kind enough to give important assistance to the oligarchs who were bidding to take them over. Private Eye (11 November) said: “the puzzled judge did try but failed to get Abramovich to explain exactly why state-owned companies would assist in their own purchase without any written agreement. Another ‘uniquely Russian story’.”

Abramovich is now very close to Putin. He apparently interviewed politicians to see if they were suitable candidates for Putin’s cabinet. Abramovich has become enormously rich and, not surprisingly, has a squad of forty security officers to look after his personal safety. According to the Daily Mail earlier this year, he has four homes in Russia, two in the U.S., and three in France. In England he has six flats in Knightsbridge, and the Fyning Hall estate in West Sussex (not to mention a Premier League football team). He also owns the Eclipse, a luxury yacht 560 feet long, which has two swimming pools, two helicopter landing pads, several subsidiary boats or tenders and a submarine. According to reports in the papers, he has several other luxury yachts. He also has a Boeing 767, an Airbus 340, several helicopters, and ten luxury cars – a Porsche, a Rolls, a Ferrari and so on. However, he told the court that he had been “astonished by Mr Berezovsky’s spending habits when they met in 1994, and that he did not want a similar ‘extravagant lifestyle’” (Times, 2 November). So Berezovsky must have been living it up.

In the 2011 Forbes list of the world’s richest men, Abramovich was only the ninth richest man in Russia (where there are now no fewer than 114 dollar billionaires). So there are eight Russians who probably wonder how Abramovich can make do with so few houses, cars, luxury yachts and so on.

In the present clash of the tycoons, Berezovsky claims that the vast amounts of money Abramovich paid him were dividends from Berezovsky’s share of the companies acquired from the state in the 1990s, while Abramovich says they were nothing more than payments for Berezovsky’s services in keeping Abramovich’s name before Yeltsin as an appropriate man when Yeltsin wanted to make more money out of state assets. These matters will not be easy to decide when whole industries changed hands with little more than a nod and a wink, or in transactions recorded at best in documents which were unfortunately false as to date, and as to personnel, and as to share-holdings. (“It is a Russian tradition.”)

Several other cases involving the Russian oligarchs are down for early hearings in London. But surely any unbiased person who reads the reports of the current case must, on the facts revealed there alone, abandon any support of capitalism. The courts and the judges and the lawyers can argue till the cows come home about whether one oligarch has done the dirty on another, or whether one oligarch ought to have a few billion more and another oligarch a few billion less. It all misses the essential point completely. What these two oligarchs are arguing about is not about creating industry: the Russian oil industry existed and still exists; the Russian aluminium industry existed and still exists. Nothing in all these nefarious dealings in Moscow altered the basic facts of those industries. All this laborious and expensive squabbling in London is concerned with one thing only: which extremely rich person shall have more of the surplus value produced by these industries, and which shall have less. As Abramovich himself said in the courtroom about the Russian aluminium industry, “criminal groups were fighting fierce battles for control of the profits generated”. Not a single voice has been heard, either in the courtroom or in the lengthy reports of the proceedings in the papers, asking the essential question: why should the Russian oil-workers and the Russian aluminium-workers go to their work every day and produce oil and aluminium, and have so much of their hard work creamed off to in order to provide disgustingly extravagant luxury for people who probably couldn’t even explain what it is the oil-workers and the aluminium-workers do.

But then, that is what capitalism, whether the state variety or the private variety, is all about.

Alwyn Edgar

Voice From The Back: Taxing Your Incredulity (2012)

The  Voice From The Back column from the May 2012 issue of the Socialist Standard

Taxing Your Incredulity

A study by HM Revenue and customs found that the extremely rich are using avoidance schemes to reduce their income tax rate to an average of 10 per cent – less than half the average level. The Chancellor personally studied the ‘anonymised’ copies of the tax returns submitted by some of the country’s wealthiest citizens which showed some people are able to avoid paying income tax entirely. “Mr Osborne told the Daily Telegraph: “I was shocked to see that some of the very wealthiest people in the country have organised their tax affairs, and to be fair it’s within the tax laws, so that they were regularly paying virtually no income tax. And I don’t think that’s right.” He said, “I’m talking about people right at the top. I’m talking about people with incomes of many millions of pounds a year” (Daily Telegraph, 10 April). For a Chancellor of the Exchequer to be “shocked” and state that he doesn’t “think that’s right” is indeed incredible. Millionaires protecting their property is the very basis of capitalism.

Land of the Free?

Politicians in the USA like to depict America as the epitome of freedom and democracy and sneer at the repressive measures of totalitarian states, but their boasts are ill-founded. “America which is known as the freest country in the world has incarcerated more of its citizens than the rest of the world combined. 7.1 million Americans are either in prison, on probation or under correctional supervision. The numbers continue to climb each year as more prisons are built nationwide” (CNN, 2 April).

Recession? What Recession?

We are supposed to be living in an economic depression but this does not affect large sections of the owning class. More than 200 real estate brokers and lawyers, filed into an Off Broadway theatre last month to discuss a real estate boom. “While the brokers sipped wine and nibbled cheese, a panel of lawyers and a banker reviewed some of the biggest sales made to Russians, including the $188 million spent on properties in Florida and New York by trusts linked to Dmitry Rybolovlev, who made billions from potash fertilizer; the $48 million that a composer, Igor Krutoy, paid for an apartment at the Plaza Hotel; and the $37 million spent by Andrei Vavilov, a former deputy finance minister, on a penthouse at the Time Warner Center. … Over the past four years Russians and other citizens of the former Soviet Union have signed contracts to buy more than $1 billion worth of residential real estate in the United States, according to estimates from lawyers and brokers” (New York Times, 3 April). As the number of billionaires in Russia and Ukraine has more than tripled since 2009, to 104, according to Forbes, it is far from a depression for them.

Poverty and Plenty

Much is made of India’s industrial and commercial progress, with daily reports in the media of the increasing wealth of its millionaires, but this being capitalism there is another side to the story. “In India 93 million people are estimated to be living in slums; fully half the population of the capital, New Delhi, lives in slums, while the figure could be as high as 60 per cent in glittering Mumbai” (Inter Press Service, 4 April). Amidst growing affluence we have a growth in poverty and slums – that is how capitalism works.

Squalor And Splendour

The awful poverty and downright squalor of the Chinese working class is amongst the worst in the world but the affluence of their owning class is equally obvious. “The Chinese economy is booming at a blistering pace. It is driven largely by the Fudai: the superrich who call the superpower home. Many are just in their forties. From building 30-storey towers in just 14 days, to amassing a luxury fleet of sports cars or a private jet – China’s million millionaires and 600 billionaires are helping to change the country’s landscape. And China’s mad rush to urbanisation is only helping these elites get richer and richer” (Al Jazeera, 10 April). That this country of billionaires and poverty can still claim to be communist is surely one of the world’s greatest travesties.

50 Years Ago: Soviet Millionaires (1994)

The 50 Years Ago column from the February 1994 issue of the Socialist Standard

A very great war produces, out of profound social tragedy, its mordant satirical humorists. This one is no exception: in addition to biting ironists of the Nat Gubbins school, "Yaffle," and others, we may now acclaim one Reginald Bishop as the wittiest cynic of the day. With elephantine solemnity, Mr. Bishop has turned out a little booklet on "Soviet Millionaires" ("Soviet Millionaires," Russia To-day. pamphlet. 2d.), in which he playfully pretends that he is "explaining" that they are the result of "the establishment of socialism in Russia in 1934" (p. 12).

The result is the funniest piece of satirical writing since this war broke out. For this we thank him very much.

How to do it! Mr. Bishop chides those who are shocked to hear of millionaires in Russia, and "to whom the very word millionaires represents an evil influence in society." He points out that Russian millionaires are "only" rouble millionaires: they do not possess the equivalent of a million pounds sterling (p. 3). "But even were a rouble millionaire possessed of as much money as a sterling one, it would still not be anti-socialist. . . . because in the Soviet Union the millionaire has acquired his roubles by his own toil" (p. 3) . . . 

We agree with the Daily Worker, wherein Mr. W. Holmes averred that Reg. Bishop has done very well in dealing with statements by "Hyde Park spouters." that in Russia to-day the social system is one based on wage-labour and capital. The "Hyde Park spouter" is the Socialist Party platform and Mr. Bishop's pamphlet is so good that it can be confidently recommended to any political sap who still swallows the guff about Socialism in Russia.

[From an article by "Horatio’ in the Socialist Standard. February 1944.]

Letter: An Anarchist Listens (1970)

Letter to the Editors from the July 1970 issue of the Socialist Standard

Sir,

One is used to reading lies in the Socialist Standard but some are more unjustifiable than most. You claim: "Both anarchists and bolshevists counterpose leadership plus formal organisation to leaderlessness plus ‘spontaneity’. The socialist proposal that ordinary working . . .” ("Listen Anarchist", March). He goes on to claim that Anarchos is rare among anarchists in thinking that Communism is state capitalism.

Certainly some anarchists believe in spontaneity, some believe in syndicalist organisation, the two argue the case vigorously, but coexist happily in the same movements and since asking workers to act for themselves is the important part and the suggestion made by some and deprecated by others that industrial unionist organisation will help does not prevent very similar work being done by both. What we deny is that a bourgeois parliament is a suitable forum or vehicle for ordinary working people to operate democratically without leaders and insist that they need to build their own organisations to do this, whether this is done spontaneously i.e. without preparation, or whether it is done by a slow process of construction in syndicate organisations, or whatever.

Many anarchists — if not most — would perhaps prefer to use the term managerialist rather than state capitalist (even the Socialist Party of Great Britain has at last in its 1969 Conference acknowledged that the capitalist nature of the Soviet ruling class resides in its nature as an whole class and not in individual holders of capital) but with the exception of a very small minority anarchists do use one or other term to denote a class system.

No anarchist believes in leadership — though some of us advocate a militant minority pressure group, provided it is certain that it has no leadership function — and we are generally attacked for alleged opposition to all forms of organisation (untrue) and belief in spontaneity (not always true).

It is interesting that you claim that what is advocated in Listen Marxist has been advocated in the Socialist Standard for years or decades past. I have no particular liking for the Anarchos group, and have written to the English publishers with criticisms. but one might remind you of what Marx said on the matter; basically that it is Utopian to advocate demands beyond what the economic development of the age will stand, so if it is true that for decades the Socialist Party has been advocating all that is in Anarchos, which being edited by a cyberneticist is perhaps overly enamoured of automation, then you most certainly were idealistic Utopians advocating policies ahead of the time.

                                                                                                                            Faithfully,

Laurens Otter, 

Thornton Heath.

Reply: 

Maybe it’s because he is not always strictly accurate himself that Laurens Otter is always reading lies! For example, in the article he mentions we said that ‘‘most" of the ideas Anarchos proclaimed as new had long been advocated by us. Otter turns this into a claim that we advocate “all that is in Anarchos". Frankly, we did not even know' that Anarchos was a regular magazine.

We are well aware that there is a great variety of anarchisms (see ‘‘What is Anarchism”, Socialist Standard, December 1967) whose only common factor is an anti-State ideology. Otter concedes that he is one of those anarchists who stand for minority action. This was a feature of bourgeois revolutions like those of France in 1789 and Russia of 1917. Which is why we say that anarchism and Bolshevism are both left-overs from bourgeois revolutionary theories and stand opposed to the Socialist view that the workers must emancipate themselves.

Finally, a few points about the Socialist Party of Great Britain. We say that the workers must organise democratically to control Parliament because this controls the State machine which, at the very least, must be taken out of the hands of the capitalist class before the attempt to establish Socialism can be made. The democratic self-organisation of the working class, by the way, will not be through Parliament but in the socialist political party (and any economic organisations set up in preparation for the change-over to Socialism) which will control Parliament.

The resolution passed at our 1969 Conference on the Russian ruling class does not commit us to a managerialist view. It stated quite clearly that the ruling class in Russia were capitalists not managers and was mainly concerned with the terminology we use when referring to the Russian rulers. It did not represent any change in our analysis of state capitalism there.

Editorial Committee

Is there a capitalist class in Russia? (1980)

From the December 1980 issue of the Socialist Standard

To begin with, there is no such thing as a socialist country on the face of the earth. They are all, including Russia, China, Cuba, capitalist. Every country operates the wages system and in every country there are two classes—the majority who have to sell their energies in order to live and another class which buys those energies and pays me wages. In all countries, the state takes part in the process by adopting the role of employer. In England, for example, the state is the employer in the Post Office, the steel industry, the coal mines (made state property comparatively recently by Labour governments which thought — or rather said — they were introducing pieces of socialism). In many industries, however, there is no state ownership. Private capitalists run the bakeries, the clothing trade, the shops (though the state does own some shops—the betting shops known as the Tote). This system is known as the mixed economy and is of course a mixture of capitalism and capitalism rather like a bread sandwich.

In Russia, almost the entire economy is state-owned. Just as a British steel worker is the same kind of wage slave whether he works for the nationalised British Steel Corporation or for the small proportion of the industry in private hands, so it is with a steel worker in Russia. The only difference is that in Russia all workers, for practical purposes, work for the state; it is state capitalism as compared with the “mixed” economy. A distinction without a difference.

But, say those silly people in the Communist Party (and indeed in the entire press), there still remains a difference. In the west there is a capitalist class. We even know them by name. They are called Weinstock, Rockefeller, Thompson. They really do own the industries where the wage-slaves work. Can anyone name a comparable owner in Russia? Therefore there is no capitalist class there. Therefore it is not capitalism

There is of course a facet of truth here, in that individual capitalists do not own the means of life in Russia. The state does. The 64,000 dollar question then becomes: who owns the state? The answer is: A mixed bag of exploiters including the Communist Party high- ups; the top bureaucrats (apparatchiks); the top managers, artists and literateurs (those who write stuff approved by the state machine—the “dissidents” are lucky if they can scrounge enough paper to print their secret publications).

We are then told that in the bourgeois west you can see the capitalists. They are fat and well-fed and wear mink. They have yachts and country homes. But it is precisely the same in Russia. For a small minority, there are black Mercedes limousines, dachas in the country, villas on the Black Sea where it’s nice and warm. And even something that the western capitalists would not dare to claim for themselves: shops and stores where the workers are not even allowed in. Shops where they sell the caviare and the fine clothes. Such things would cause riots in London.

Anyone can go into Harrods or Fortnums and buy a Mars bar or a cup of coffee (and nobody would stop them buying vicuna coats at a thousand quid a time; for some reason the workers don’t seem to do that). Indeed a worker can lounge about at Harrods all day long and not buy a thing. But you have to have a special pass to go into the Harrods of Moscow. And the pass is not for you, chum. It is for the people who own the world.

The Russian workers have to shop in the stores where the cheap and nasty is sold. But the sheer contempt the Russian rulers have for their slaves is shown in ways that would shock western wage-slaves. A socialist propagandist went on a package tour to Russia last November, when the icy winds were blowing into Moscow from the frozen steppes. And he saw that the Russian workers were compelled to stand and freeze in queues outside the low-class stores, morning and evening.

In between they had to get themselves exploited for their pittance. And while scrabbling for their shopping they have the pleasure of seeing the capitalist class riding past in their chauffeur-driven cars to their posh warm stores where other slaves serve their needs.

History’s Carnival, the autobiography of expelled dissident Leonid Plyusch, describes how the children of the upper class have fresh fruit flown in during the winter from the Black Sea region to their opulent kindergartens.

The officer class in the armed forces has privileges which make those of their counterparts here pale into insignificance. They even have special parachutes so that their chances of landing in one piece are better than the workers’ in the ranks—who are expendable. Not long ago, the Russians made a great fuss about reducing the numbers of troops in their colonies like East Germany and the papers contained reports of trainloads of soldiers going eastwards. And when they stopped at the stations it could be seen that certain carriages were nothing better than cattle trucks. It must be so nice for the other ranks to know that they have got a Communist Party dictatorship ruling over them instead of the wicked Tsarist one. Too bad the cattle trucks are the same.

Actually, examples are not needed to show there is a capitalist class in Russia. If the majority of the people own nothing but their mental and physical energies, they have to sell them for a so-called living wage. But the workers produce a lot more wealth than they get back in wages. So where else can that wealth go except to the class that pays the wages—the ruling class, the capitalist class? An analogy is with the mediaeval Church, which was the extremely wealthy owner of the riches wrung from the peasants. Nobody owned the Church in the same way that, say, Isaac Wolfson owns a vast share in GUS but this did not alter the fact that the cardinals and the bishops and the abbots lived off the fat of the land.

It is true that the bishops could not bequeath a couple of churches to their children (they weren't supposed to have any, of course). And Brezhnev can’t leave a Fiat-run car factory in the Urals to his offspring. But if your children have all the best food and the best schools and the influence and contacts that well-placed families can provide it is more than likely that they will take their places as members of the ruling class in their turn. In any event, the vast majority of the population will remain wage slaves.

L. E. Weidberg