Woman plus...

Crisis Is the Reality of Today: What About Tomorrow?


by D. A. Mityayev excerpts from the analytic report, April 1998

In recent years, politicians and analysts representing a wide variety of views engaged in extensive debates about the nature of the economy that had emerged from the ruins of the so-called 'integrated national economic complex' of the former USSR. The silent assumption in these debates was that the real economy is a sort of flexible substance that can be shaped into any socioeconomic model of choice, including any type of socialist ('Swedish', 'socialist market economy' and so forth) or capitalist ('regulated', 'oligarchic', 'national' and so forth) system. In reality, however, this assumption is far from being correct. You cannot shape national economies like raw clay into whatever you want.

Real economy development is ruled by a rigid logic of its own. Economic problems are insoluble with financial policies. The science of economics indicates that you cannot build a capital market and achieve the balance in commodity and monetary turnover, unless you have the proof foundation - national labor market to support it. And this foundation is exactly what was being undermined in Russia during the past decade. Both international and Russian practice of the past few months has demonstrated that capitals - for the reason of their inherent fluidity - tend to flow away from a national economy as soon as there is some evidence of its course on quick financial development not supported with sound technologic and intellectual bases.
The windmill of the national finance self-destruction gains speed in Russia, as finances develop all by themselves regardless of what happens in real economy; it is too late to stop it with either promises or threats unto withdrawing investors; neither high interest rates nor covert transactions will cure the situation.
In reality, the same old camp economy has gained new strength in colorful disguise of misleading liberal "mirage economy", and thus has predetermined the inevitable return to the policy of mobilization which soon will be conducted by both government and private managers.

New Mobilization Economy Outlines

Certainly, new mobilization economy (NME) emerges in somewhat difference appearance than it was in previous editions of economic mobilization, such as 'military communism', Stalin model of 30's through 50's, and its latest Brezhnev's edition in 'humane' oil paperback.
Any mobilization regime would seek mandatory centralized channels to consolidate industrial, public and individual reserves and reinvest them into strategic development 'epochal' projects of the regime. Reserves available to the regime, therefore, form the financial base of mobilization economy. Unlike its predecessors which could get hold over as much as 70-80% of tangible, labor and financial resources, NME may hope to control only 30 to 40 per cent of GDP.
On the other hand, NME will have free access to the principal strategic reserve of the nation: natural resources throughout the country which are state-owned even if developed by private companies. Schemes for direct mobilization of these resources will constitute the core of NME long-term strategies to expand its basis, while NME short-term plans will turn around its need to survey and mobilize liquid assets. Who will direct the NME development and who will benefit from financial resource reallocation and natural resource rentals?

New Mobilization "Core"

Whilst previous mobilization regimes used to have military industry for the 'core', the NME core will be a conglomerate of "winner" party's supporters in oil-gas-banking-media industries (hereinafter, "the core") who will get control over the integrated system in fuel and energy complex (FEC), capital finance and mass communications.
Unlike the violent nature of transition to the Soviet economy with elimination of private capital holders, transition to the NME may look more like smooth transformation or even "natural" evolution, though oppressive actions against "non-core" groups and businesses are also probable.
Natural growth of the core into the NME is predictable, because in current situation it does not really matter whether the core's assets are owned by government or private capital; what matters is that the core manage and control labor, tangible and financial resources. In other words, the core leaders' goal is to privatize management, rather than assets.
The core of new mobilization regime has already formed in Russia. It comprises not only individuals and organizations with aligned interests and common mission vision, but also a number of pro-mobilization mechanisms they have already implemented through fictitious structures of the present "mirage economy" to secure their power to manage actual economy.
Today we witness a limited number (10-15) of large companies that successfully operate on the national level, do not pay taxes and seem immune from prosecution for multiple violations. It looks like they are a "proto-core" of companies collected under one of several government umbrellas. As of January 1, 1998, the aggregate of overdue tax liabilities of GazProm and its affiliates exceeded $2 billion; YuKOS - SibNeft merger owed $1.5 billion; ONEKSIM group - $1.5 billion; Alfa Group - $1.0 billion; and so forth down the list of largest companies trading in natural resources and finance. By the first quarter end of this year, their unpaid tax liabilities have increased at least by half.
In the national total of cold taxes (over 80 billion rubles), "untouchable" companies are responsible for more than half of this amount. The visible excuse is that when the federal government is in really bad need, they may help it with a reasonable "cash shot". (Remember the advertising: If not for GazProm, government would never pay retirees?) On the other hand, in their role of emergency sponsors of government these companies are allowed to bypass up to 90% of appointed taxes (for example, with tax swaps and reassigning tax liabilities to subsidiary companies). Thus, the Interdepartment Balance Commission 1996 fiscal report indicates that 210 top debtors to the government budget (read, 210 top income taxpayers) covered as little as 8% of their tax liabilities with live money; 92% were covered with swaps.
1996/97 national budget deficiency demonstrated that coexistence of several government umbrellas allowing multiple financial industrial groups enjoy tax immunity would result in resource shortages and the government unable to cover budgeted expenses. On having been extrapolated from the micro-level of standalone businesses to the meta-level of large corporations, "soft budget restrictions" began to ruin (and by now have, in fact, ruined) the national budget.
In the result of transition to NME, the single government "roof" will replace multiple umbrellas. Selection of organizations eligible to enjoy the government shelter and admitted to the singular core will depend on who may lead in the race throughout the period of crisis, with continuous adjustments dependent on particular organizations' capability to align their position and interests with those of the winning political coalition of government and business.
NME Priorities
From the standpoint of the NME core, its interests (and budget) are initially aligned with government interests (and budget). Therefore, the emerging NME priorities will include:
Whereas serving external national obligations will remain among priorities under the NME model, internal debts may be easily denied through putting them on the account of "the former liberal regime" and/or their privatization by the "core" in its role of the said regime's heir.

Nationalization Scale and Priorities

Serving external debts of the nation will probably require mortgaging FEC products and natural resources. Therefore, the most part of FEC enterprises will be nationalized. The predictable scheme foe re-nationalization will be some sort of phasing-in of government controls: first, over exports and international trade operations (which will be monopolized by the government); and then, the state will get to control stocks of principal oil, gas and metal companies.
Presence of private management and capitals in the NME core will serve an expedient channel to redirect cash flows from outside companies to the core members in a lawful manner. Under this scenario, total re-nationalization of the FEC industry may not required, as strict tax, export and price controls will be enough for the core.
The next step will be to re-nationalize the financial system. The probable scenario here is re-establishing of "vertical banking" with a few federally authorized banks and their regional networks controlling transactions of state-owned businesses.
Manufacturing, construction and agricultural companies re-nationalization will happen then in a natural course of development, since most enterprises are chronic debtors to the government, managed by the same individuals who used to be in executive chairs in Soviet times and are only waiting for an opportunity to return under government coverage as soon as "state administration" may regain strength.
The main microeconomic problem in the process of transition to the NME will be the one deferred and non-payments. Universal failure to pay has already acquired features of the national plague resistant to any regular treatment.
Organization use mutual defaults as a shock-stop reaction to the hostile environment of liberal modernization where businesses are ineffective and manage to keep going with the no-pay device only. Government's and organizations' inability to untie the knot of mutual unpaid liabilities which is, in fact, a by-product of "financial stabilization" policies will eventually lead to a predictable outcome: the knot cut away.
As the NME is being implemented, the government will annul or swap unpaid liabilities of all operating firms and impose strict administrative control of all further payments - both to the budget and in business transactions - thus putting microeconomics to order. Administrative measures, however, may not be an effective cure for unpaid liabilities, unless macroeconomy is rearranged correspondingly.

Social Arrangement under the NME Model

Outlines of the coming social arrangement are already visible in regions that are most advanced towards the NME.
"Mirage economy" model has developed in Moscow to the state-of-art perfection: downtown "carnival" goes side by side with uptown "sleep-quarters" dullness; millions of retirees and federal employees in their daily fight to buy survival on scarce (though regularly disbursed) pensions and salaries are as happy with the Moscow authorities as a few hundred thousand of "new Russian" money-wasters are.
"Camp economy" shapes are dominant in "monopolis"-type communities where citizens face rigid requirement to work for their "ration" (survival minimum) of food called "salary" which is dispensed unto them in-cash or in-kind. Such communities include: "closed" towns serving military plants; oilers' and gas-developers' communities; Norilsk, Vorkuta, and hundreds of smaller settlements which are, in fact, isolated from the outer world. All these communities support the model social arrangement that had been forming in Russia for centuries and found its ultimate expression in the GULAG.
Therefore, the NME social arrangement is built on the traditional basis of hard work for a fixed salary twice a month with the federal center playing the role of a relaxant providing games and scoundrels to chat about.
The truth is that for most regions and wide majority of citizens the described social model is viable: with stability and predictability of life regained (low but regular salaries for hard and/or useless but steady jobs) people will hardly regret losing political liberties (which, in fact, are mere words for 90% of them).
Whenever people lack cash to buy them better life (e. g., travel abroad) and feel robbed off traditional values, they tend to compensate for it in some other ways; in Russia, millions make up for their forced failure with cheap liquors and drugs.
In this relation, the NME regime will bring relief to millions in dozens of regions, for (to however limited extent) it will help them regain life quality and social meaning with its orientation towards equalization of incomes. For 2-3% of the nation busy in retail trade and 5-7% of those who serve them, the NME will mean the end of everything.
At the same time, massive dropouts in the system of public education of the past decade, along with total "americanization" of the new generation, will badly affect social environment in Russia of the coming decade and make it far more intolerant and cynical as compared to the air of naive exaltation of 60's and of goodhearted slump of 70's. Anti-liberal (and hence, anti-intellectual) drive from the bottom line will be aptly used by top authorities to "screw the bolts"; that, too, is rather predictable, since economic mobilization schemes inevitably imply non-economic incentives.
The predominant social policy will be the one of populism, including such features as theatrical prosecution of "new Russians" outside the NME core businesses list. Dependent on its scale, the first surge of such legal actions may help government raise palpable funds (with the means of their confiscation from unlucky owners), while broad mass media campaign will help gain public support to such actions.
Government agencies' adjustment to the NME realities will result in creation of new tools of social behavior control and correction - both government and public.

Probable Political Scenarios of the Transition to the NME

First, we have to undertake an introductory review of methodologies used in political and economic analyses to define correctly the essentials of the present political regime.
There are two vectors that usually describe - in either explicit or implicit manner - the essence of any given political regime: (1) private v. public balance; and (2) individual v. state balance.
These two vectors are by no means aligned: private and individual interests are not the same, nor are the same public and state interests. Wherever these pairs are used as interchangeables, delusions arise: the state (being essentially the instrument of authority) is falsely assumed to bear some human values; the public is misconceived to be the aggregate of individuals; and so forth. While all the above may be looked upon as insignificant nuances, they are, in fact, essentials in the regime description.
At the extremes of the first vector, the following two models are present: liberalism -the individualistic social model where the society is the product of some sort of social agreement between individuals - on one hand; and paternalism - the collective social model where an individual is viewed as a "cell" subjugated by the society - on the other hand.
For at least twenty centuries now, the human society in the West used to develop the first model, while the Eastern cultures ventured the alternative path. It does not at all mean that either of models has proven to be more viable and/or effective than the other. From historic point of view, the competition between the two type of civilizations continues even with the US having taken over in recent battle for global leadership.
On the second axis, the two extremities are: democracy, i. e. the prevalence of individual aggregate (the people) over the state; and dictatorship, i. e. the unlimited authority of the state over individuals.
In this projection, historical lessons are far less obvious: one should not blindly associate democracy with the West and place autocracy in the East. There were enough dictators in Western nations, while exemplary democracies are sometimes found in the East (for instance, an Islam republic is a model society based on absolute power of the majority).
Interpolation of these two vectors produces the political plane with the four extremal models:
In this coordinate system, the Soviet regime of thirties through fifties is best described as a "paternal autocracy" with subsequent transition to paternalist democracy in sixties through eighties.
What reasons and driving forces stood behind that self-transformation of Soviets? First of all, it was the technological breakthrough in the field of communications. With the growing inflow of objective information, Western (liberal) values and standards eventually penetrated minds of the Soviet people and changed their attitudes and ways. At the same time, Russian society (with its inherent negligence of personal values) would not accept the individualistic model in its extreme with individuals utterly responsible for the government.
As the result, the society and its individual members readily acquired formal values offered by the West - first, with the latent urge to consume and behave "west-like", and then, with the all-embracing penetration of liberal and democratic values into public conscience and the national politics.
Having failed to make the difference between formal and actual acceptance of values, Western politicians and their national followers would not wait for democratic and liberal values to sink through; instead, they simply plotted the "first liberal revolution" - that is, tried to import the liberal democracy regime as an add-on to the liberal economy.
What were the fruits of those efforts? Probably, the best illustration is the example of the Liberal Democratic Party of Russia (LDPR). With the two major "west-like" labels formally in place (to secure sales in political market), V. Zhirinovsky & associates openly gain on values that simply contradict the designation of their party to win votes of those who actually disrespect individual rights - and such are many, in fact.
At the cost of double cutback of the national product, annual capital export of over $20 billion and the federal government's disability in its basic functions, the following elements of the notorious "sustainable finance" were exported to support the national capital market: banking; real estate trade; natural resource trade. This sector of the national economy yields $100 billion annually (which is 5% of GDP at most), and yet controls distribution of over 50% of GDP and appropriates at least 25% of GDP. It is absolutely unrealistic to expect that such a system may last for long in the national economy where markets are far from being competition-driven.
The evolution of President Yeltsin's political regime may be described as the transition from paternalist democracy to liberal autocracy. On having failed to actually liberalize either national economy or the society, the government found itself in need to support the "mirage economy" image (visual quasi-stability with promising prospects for western political and financial investors) on one hand, while, on the other hand, the regime had to support itself through steadily suffocating representative democracy as being opposed to the evolving direct presidential government. So, what are the chances of actual liberal autocracy development in Russia? They directly depend on resources available to the players, their strategies for the game and their flexibility in ever-changing environments. Three strategic scenarios are probable:
Scenario 1. "Ultra-presidential" anticommunist republic will develop with the active IMF sponsorship ("liberal autocracy" option).
Scenario 2. Paternalist democracy with the single governing party will emerge ("anti-liberal consensus" option).
Scenario 3. Presidential power will transform into the basis for the NME ownership ("nomenclature" option).

Prerequisites of A Future Liberalization Cycle in Russia  

Now we return to "fundamental analysis" of the nearest future, limiting it by Russia in space and next five years in time.
Under any of the proposed scenarios, the idea of transition will be to modify the current pattern of economic turnover, as it has already proven its incapacity to secure integrity of the national economy and bring in enough income to "feed" either the government or the population.
The current pattern of economic turnover - natural resources and raw materials exported in exchange for consumer goods - had become ineffective back in 1995 with economic liberalization bringing domestic market prices to the equilibrium with international market prices, thus "extinguishing" the strategic resource of the reform. For a couple of years that followed, the nation was, in fact, "eating itself", while the internal debt steadily grew. By 1998, this resource was successfully ended up with.
Russia used to face similar problems many times in its history - and yet failed to learn that the road of ready adjustments to political and economic realities of the outer world would lead it to just another arrest simply because of Russian geographic span making it drop out of the tempo of worldwide changes. The cure for such dropouts of Russia from the world market would always be to dismiss its ineffective reproduction cycle based on outflow of commodities in exchange for inflow of consumer goods and replace it with national-level direct swap arrangement with the outer world based on natural resources trade in exchange for technologies to support domestic production of consumer goods.
This type of reproduction cycle always implies that the entire national economy has come to operate like a singular corporation, and in this quality seeks integration into the world economy after another failure to develop sustainable system for economic reproduction (no matter, military or liberal). For purposes of this paper, we shall designate this type of reproduction with the term cooperative scheme.
As soon as the nation in its corporate role loosened its control over resources competitive in the world market (i.e., ceased to be oriented entirely towards mobilization-based development of the national-scale cooperative scheme), smaller schemes would inevitably emerge to make up for weakened fundamental cooperation between Russia and the outer world with cooperative agreements based on current conditions in financial or commodity markets of the world.
For instance, with the resources of 1930-50's cooperation drawn completely (national agricultural sector ruined and international markets reoriented towards other strategic resources), Russia responded with developing of the new reproduction scheme - natural resources for food - which remained operative from early 70's to mid 90's.
With competitive advantages of 70's gone (world prices for oil falling), the newer cooperative scheme emerged in 80's - gas for piping - which implied direct trade of national resources for western technologies and investments.
The success of a new cooperative scheme would depend on its economic, structural and political consistency with underlying values - i. e., with the nature of strategic resources being offered to the international community as our national input in cooperation. In this connection, we now turn to analyze the NME prospects for sustainable development under the three predictable scenarios discussed in the previous section.

Liberal Autocracy Scenario

In accord with this scenario, the country will become a corporation based not on re-establishing the federal government unlimited control, but rather on its complete appropriation by the private core which is already in the process of formation. What scheme of cooperation will it support? Mobilization will be aimed at getting control over those resources and reserves that are available to the regime. They include primarily financial, natural and territorial resources.
In the sphere of finance, the only way to cooperate with the international community will be through accruing more debts.
Natural resources may be cooperated through transferring control shares in oil, metal, chemical and other resource-based companies to stockholders in the West, along with mortgaging natural deposits. Western partners' input will be management technologies and direct investments in natural resource extraction and transportation. This type of cooperation, however, may interest western partners only on the condition that they control product supplies in their national markets. Most affected by this restriction will be Russian gas industry with its 41% share in gas supplies to the West Europe.
In the described course of development, five years will be enough for GazProm to subdue to foreign investors. While America will try to get control over it with stockholders' money, Europe will pursue controls through major gas purchasers. Another probability is the one of the deal between U. S. and European players to force GazProm to leave the West Europe markets. In any case, the last working cooperation scheme (gas for pipes) will be defunct.
In its place, the last possible type of cooperative arrangements will emerge, and they will be based on utilization of territorial resources - the last resources left at liberal monopolists' disposal. Offers will include storage and dumping areas for industrial and nuclear waste, giving home to environmentally hazardous factories, trading hothouse exhaust quotes, giving up Kuril Islands and, probably, Kaliningrad oblast, nuclear disarmament trade-offs, and so forth.
Paternalistic Democracy Scenario
Paternalistic democracy regime will have access to wider scope of resources: along with finances, natural deposits and territory, it will be in position to mobilize two types of fundamental resource unavailable to liberals: population and the government. In liberal autocracy model, the state and the people are looked upon as obstacles that should be overcome or minimized. In paternalist model, they are the major reserve of stabilization and growth.
Unrestricted cynical exploitation of labor resources in the period of initial capitalization of Russian economy (late 19th - early 20th centuries) had reached its ultimate expression in absolutely inhuman features of Stalin's industrialization and collectivization - and then began to abate as somewhat softer regimes of Khruschev (characterized by exploitation of public enthusiasm) and Brezhnev (characterized by investing in human resources through education, healthcare, science, and culture) came to rule the nation.
Unfortunately, the most part of the "brain and skill" reserve that had been forming for decades was "fed" to the liberalization of 1990's. Nonetheless, in spite of physical and virtual intellect outflow and professional degradation of the labor force, the nation still has at its disposal the "critical reserve" of specialists with knowledge and skills.
Mobilization of this reserve will be a prompt and relatively affordable (in a sense that it will not require much capital investment) means to achieve the goal of "re-launching" currently idle industrial capacities and integrating their product into the present cooperation scheme. The principal opportunity here is to integrate GazProm with the national machine-building industry.
Low capital requirements associated with mobilization of skilled labor resources is the point proved with the actual experience of the past decade: despite dramatic decrease in cash inflow to the machine-building and the military product industries, these sectors of the national economy managed to survive and keep qualified personnel (though many specialists were forced to make their living at "secondary" jobs).
Under this scenario, five years is enough time to connect Yamal to the West with the second gas pipe and begin to develop gas fields in other Polar locations - and thus increase the current volume of natural gas export at least by half. Concurrent increase of gas supplies to various markets in Europe (including Turkey) and in the East (both Far and Middle), along with aggressive marketing policies aimed to sell gas at better prices (as for now, it is sold "in bulk" at the national boarder and then resold by gas retailors at prices which are 2-3 times higher), may help generate enough income to cover annual costs of critical imported products ($15-20 billion) and upholding the national energy system integrity (where the gas industry contribution amounts to as much as 54%).
This scenario implies building and exercising authoritative resources to help the national government act as an influential player both in European and Asian markets.
If this type of development actually happens, it will take much less time to produce prerequisites for the next liberalization phase than it took in previous editions of paternalism. The reason is that, however "rigid", the regime will be unable to control the entire national economy and society. Given the timeframe of previous cycles (more than 30 years) and the intensity of present distortions, we dare suggest that the next phase of "openness" will follow as soon as 10 to 15 years from now.
Nomenclature Restoration Scenario
This scenario will leave no space for any international cooperation schemes of economic reproduction on the national level.

Russian Joker in the Game of Geopolitics

Back in the 19th century with its "golden" culture and "striped" politics, merchants living their lives away in wild carousals and gloomy "railroad" state capitalism emerging, the debate between Slavophils and West-oriented philosophers about what might be "the special Russian way" finally abating after decades of hot arguments, it seemed that Russia is going to finally return into the family of European nations leaving it to its neighbors to the East and South to wonder about their place in the world.
Soon, however, the illusion of certainty was gone - first with the 1905 revolution and finally with the World War I - and the nation embarked on the new torturous quest to find out its "historic mission" (according to national patriots) or new cures for "historic handicaps" of the nation that once more had proven to be incurable with regular social remedies (according to liberals, democrats and anarchists, as well as underground Bolsheviks). The amazing clarity of the Silver Age turned out to be the last sunset beams of Russian philosophy and fine art.
Being native, and not adopted, children of Russian intelligentsia (which is brilliantly proved by N. Berdyayev), "outrageous revolutionaries" terminated abstract talks about the destiny of Russia with a surgical procedure: they amputated from the national body an "insignificant" (from Marxists' standpoint) tumor comprised of aristocracy, capitalists and intelligentsia - along with their unfinished debates about Russia's place in the world and their place in Russia.
For three years the beheaded nation agonized in the civil war. Finally, new national leaders came to realize that they could no more rely on the power of authority alone and deny the power of money (goods) and the power of spirit (ideas). First, possession of these two powers was admitted at the top level of government only, resulting in mechanisms of top-to-bottom distribution of consumer goods and the ruling party's exclusive right to information (with centralized propaganda through field commissioners).
The following deployment of economic and ideology-spread networks was entirely dependent on technologies imported from the West: industrialization was based on replication of western processes; and ideology - on active use of the class theory (while at the turnover point antagonist classes in Russia virtually did not exist, for the total of industrial workers in 1917 was 1.5 to 2 million).
Notwithstanding technologies, strategic planning was far from being governed by a western logic of effectiveness, but rather by an eastern logic of accumulating more power at the topmost level of authority. Therefore, from the sociogeometric point of view, the Soviet government was the attack of inhumane values of the East and "Asian" production methods directed against the West softened with democracy and contracts, and self-imposed monetary and cultural limitations of authoritative power.
Europe was the first to apprehend this fact - first with deadly fear of the new barbaric empire, and next (as usually) with natural desire to extract profits from trade operations with "the tribe".
Moreover, Europe of the first half of the century was rather concerned with its own "vandals": from the air of universal disorder and violence of the early 20th century, fascist regimes emerged in Italy, Spain and Germany with the potential to subdue their neighbor nations that happened to came to this point practically defenseless. Fascism aggression was a total threat - both ideological and military. The Soviet threat from the East, many European leaders (including Churchill) believed, also existed, but the actual aggression might not begin until Soviet would have finished with their internal colonization.
Inevitable combat between national and international socialists was years ahead, and Nazis were preoccupied with how to consume delicious European flesh. So, how could the "cultural cradle" of humanity distract from what was going on inside and pay attention to what Russia was up to in 30's? Cultural shell turned out to be so thin and fragile protection against ancient dark instincts wakened in nations that used to be civilized for ages. So what would you expect from pagan tribes in the East? And then Europe, tormented with internal conflicts, would turn to the East in hope: only there it could smell the power enough to overcome its own European barbarity. "Civilized vandalism" of the West proved to be no better than eastern despotism.
The Soviet Union victory in the World War II, along with clear demonstration of the dominating power inherent in the new Russian Empire created by Stalin, posed the same old question of the past millennium: what is Russia? Europe's "regular savior" of evil? or the evil in itself that had eliminated the Nazi plague just to threat Europe with its own dictatorship?
This time it did not take long to tear off the savior's nimbus from the regime with ruthless Soviet tanks ironing democracy to death in Budapest and Prague (though few years of post-victory euphoria were enough for the West to share its "nuclear secrets" with Russia), and re-awake minds and hearts of educated people in the West to our cruel eastern nature.
At the same time Russia made another world-turning step which was bringing China to its side and making it naturally accept the state ideology of Lenin and Stalin as its own. The "iron curtain" was securely shut - this time for decades. From behind the curtain muffled moans and groans could be heard time to time; some actors would occasionally be fired by the Director for unsatisfactory performance and expelled from behind the veil just to make exemplary citizens of the "free world"... The Berlin Wall was the major symbol of that period.
When the curtain elaborated by tyrants (with the effort that had taken away millions of lives of peasants, prisoners and soldiers) finally raised, the public was amazed to see - instead of the expected Nazi-type Order - a confused crowd of feeble-hearted ex-distributors and distributees who could not and would not resist western leadership.
Why so? What made the "developed socialism" regime stagnate and give up without a fight? It would take more than mere economic explanations to understand the reason. Of course, the Soviet Union was the loser in effectiveness competition with the Western economies and could no more bear the burden of spiraling military costs. On the other hand, however, the Soviet mobilization economy had proved to be highly efficient during the World War II; GULAG laboratories used to produce brilliant ideas and advanced technologies. China, Cuba, Indonesia, Korea and even post-war Japan are examples of how ideological monopolism and single-party systems may support effective economic development and growth. So what were the real drivers of the death spiral that would ultimately lead post-war Russia to complete economic disaster at the close of the century?
Just as it had once happened after the 1812 war, in 1945 Russia had an opportunity to glimpse at Europe. And though the fresh "wind from the West" was soon officially disclaimed and oppressed under the label of "cosmopolitanism", subconscious affection to everything western remained: first, it was approved adoration of East Europe "people's democracies" and "progressive" western authors; next, the steadfast drive towards "west-like consumption" induced by what people used to see in trophy films; and finally, the ever-growing inflow of western consumer goods bought with the increasing oil export.
And here we come to the critical "mistake" of Khruschev and Brezhnev regimes (from the standpoint of the entire system's survival). Having proclaimed the goal to "increase prosperity of Soviet people" ("build communism" in the earlier edition) and voluntarily turning the nation into an oil- and gas-producing European outskirts, the regime thus traded its citizens to the West in exchange for consumer goods for limited distribution through special shops for party and government executives.
As soon as the iron curtain had fallen down, the king was naked, and leaders in the West faced the dilemma: should they assume responsibility in face of history for the population of the Evil Empire lying in ruins? Or should they keep on exercising their "righteous rage" and merely redirect it from the Communist Party (after all, it used to be a good business partner) to Russian "oligarchy" and "organized crime" (nowadays partners of western businesses). Initially, the West chose the first option: IMF's "guiding light" was there to show confused Russians the path out of post-communist ruins. The concept of "limited support" replaced the concept of "containment" in its role of the West's prevalent geopolitical doctrine. Alas, the western doctrine of today is based on the concept of "pressure" to force Russia out of its traditional political and military influence spheres and markets.
On the other hand, the East tempts Russia to re-associate with it, rather than with the West, and thus to avenge for humiliating lessons of the post-"cold war" period taught by cruel western teachers. Certainly, the East is not so powerful today as it used to be; the East may even seem to humbly admit Anglo-Saxon global leadership; and here lies the main reason why the East may aspire to make up for the offense of having been defeated in the global battle at the expense of a third nation (e. g., Russia).
For Russia to make the right choice, it will take of the government, companies and individuals to overcome the chronic disease of mutual dissatisfaction and accusation and merge into a consolidated national community and to deserve international appreciation of the nation serving the communication channel, rather than the dividing point between the West and the East. For many centuries Russia used to keep its balance in a somewhat clumsy posture: its head half-turned to the West with a shy guilty smile on the face ashamed of its massive bulk securely resting on eastern values. In such a situation, personal choice between the European culture and the Asian way of life is not an easy task; therefore, most of us prefer not to choose but simply to live as Michurin's hybrids of both. Be it known that this way frustration and even mental disorders come.
The drama of the situation is that we are suspended both personally and historically: the North is distasteful to us (though we readily capitalize on its resources); we are no more welcome in the South (Central Asia and Caucasus); we are afraid of the East; finally, we are short of resources to buy ourselves a place under the sun in the West.
And how about making the choice nationally, rather than individually? Woe unto me, nobody is here to spare me of the load of wast historic and geographic spans of my native land! Every one of us will have to choose for him- or herself. First we have to delineate and guard some internal borders of the spiritual realm which is, in fact, the determinant core of any nation. We have to align towards the national idea in common. Helpless singular particles will never produce a thunder. Today Russian nation has come to yet another turning point in its thousand-year history: for the first time we find ourselves in bad need to concentrate on what is going on inside of us. Such "Self-concentration" may be interpreted by outsiders as either Russia's challenge to the world or our temptation of self-seclusion. In fact, it is hard to explain from the standpoint of global informational transparency and free communication of values and benefits concepts that prevail in and dictate to the world today. Therefore, self-isolation is not the answer. It will make no good either to the Russian nation or to any of us. Furthermore, if we keep to readily submit ourselves to czars, leaders and other "guests" to rule over what happens in our households and minds, personal accounts and communities, our next step will be not towards the "promising future" (of which we have been lucky enough to take a glimpse), but right over the edge of and down to the bottom of the abyss of Russian traditions. At the bottom, however, we are going to face the same old irresolvable questions, along with lost opportunities to sell Russia's actual potential and the imperative to market the last it has to offer: free space for "2000 Christmas sale".

                      Woman plus...