2010je02:Russian Journal
A publication of the Russian Institute for the Yaroslavl Forum,
Editor-in-Chief Gleb Pavlovsky and Editorial Director Boris Mezhuev
Standpoint of the Week: 2012 =

“What Issues Will the Elections [in Russia and USA] Be Focused On?”

Excerpts [items with hypertext link are most relevant to our course] =

Walter Laqueur . . . . . . . . . 3
Alexander Cockburn . . . . . 4
Maxim Sokolov. . . . . . . . . . 5
Leonid Radzikhovsky . . . . . 6-7
Boris Makarenko . . . . . . . . 8-9
Marat Gelman . . . . . . . . . . 9
Robert Reich. . . . . . . . . . . 10
James Galbraith . . . . . . . 11
Karlyn Bowman . . . . . . . . 11
Mikhail Remizov . . . . . . . . 12-13
Dmitry Badovsky. . . . . . . . 13
Vladislav Inozemtsev . . . . .14-15
Anatol Lieven. . . . . . . . . . .16-17
Adrian Severin. . . . . . . . . 18
Jonathan M. Feldman. . . . 19
Simon Johnson & James Kwak review 13 Bankers: The Wall Street Takeover and the Next Financial Meltdown (2010) . . 20



Walter Laqueur: [KNIGHT holdings provide ID]


All over the world, we are faced with growing inequality – a dangerous widening of the gulf between rich and poor, in terms of both income and property. In America this began in the late 1970s, in Russia in the 1990s, and in Europe the trend also exists but in a less dramatic way. In China and India it is even more marked (the richest billionaires living in London are Indian or Russian, not British; the richest American billionaire is a Mexican). According to the Forbes list, there is twice the number of Russian billionaires in 2010 than there was just one year ago. The total assets of these billionaires amount to more than $3 trillion. This trend is bound to have negative political consequences—and not only for democracies, but also for countries which are not so democratic. This is particularly true at a time of economic crisis, when many people are suffering.

It is not so much that the rich and super-rich are acquiring greater political power (but this too is an important consideration); people are willing to put up with inequality in income and property but only up to a point. Once the trend goes beyond a certain point there is bound to be trouble. But what kind of trouble? This differs from country to country. At the very least it will lead to political instability, but it may well be worse. This explains the need for the White House to press for stricter regulation, to combat speculation (which causes a great deal of international unrest) and eventually also for higher taxes.

Social problems in the nearest future

One of the most important issues—and this too concerns America as well as Europe and Russia (but not China and Japan) is immigration, both legal and illegal. In the United States there are probably 10 million illegal immigrants, if not even a little more, mostly from Mexico, and their absorption into society while unemployment is running at 9% has become a central issue. Since the central government has not been able to develop a strategy on a federal level, all kind of decisions have been taken by the border states trying to restrict immigration. But there will have to be a unified policy and this will be a major issue in Washington. In Europe, needless to say, the problem is even more severe, because many of the new immigrants (mainly from Muslim countries, much less from others) have no desire to integrate. As a result, the whole demographic make-up of European cities is changing—one need only walk the streets of London, Brussels, Paris or Berlin to realize this. In brief, the old Europe is gradually disappearing and no one can say for sure what the new Europe will be like 20 years from now. As for Russia, I believe the same is true. Politicians are shying away from considering political and social consequences even in the nearest future.

Foreign Policy

The Obama administration has tried to ‘engage’ other countries, meaning to establish friendlier relations. It has had only limited success (and none at all with Iran) but it is still a reasonable goal because had it not done so, its critics would have claimed for the next 10 years that it missed golden opportunities.

There have been, and still are, conflicts with China but I believe they will be resolved because the approach of the Chinese leaders is sober and sensible, and the White House wants better relations too.

The agreement with Russia concerning nuclear weapons is very welcome, but it could have gone further, although perhaps it will in the future. Unfortunately, there has been not that much progress in other aspects of US-Russian relations.

There are various reasons, but this might change for the better once American troops withdraw from Afghanistan (the sooner the better) and once Russia has to accept its responsibilities its ‘privileged zone of influence’ in Central Asia.

Exclusively for RJ





Alexander Cockburn [KNIGHT holdings provide ID]

Dear Mr Cockburn, how would you summarize America’s current policy towards Russia? What do you think their agenda will look like in the run-up to the 2012 elections? Will America continue to act according to the ‘Biden doctrine,’ whose strategy is to ‘not quarrel with the Russians, and then they will die out on their own,’ or is there a kind of Obama stagnation which could come to an end by 2012?

The relations between America and Russia could be summarized by this trend, by the effects of Obama stagnation. In terms of the agenda behind these relations, we should say that their relatively calm nature so far depends on many things, such as Russian initiatives on arms control, the attitude of Russia towards possible NATO expansion, and of course the Iranian issue, which is the main issue at the moment.

Of the political, economic, and cultural, which aspects of thought should a Presidential candidate develop in order to gain the support of the country? Which set of topics are likely to become urgent by 2012?

Right now, mainstream America is anti-Wall St. and big business in general. The reason is clear and obvious – it was their greed and corruption that helped bankrupt America. Hence, the SEC civil suit and criminal complaints launched against Goldman Sachs – the immensely wealthy and powerful bank – are very popular. Obama’s rating shot up immediately after these measures were introduced, despite the fact that he received huge amounts of money from GS in his 2008 campaign, and that many of the bank’s former officials now serve in his administration.

During his campaign, Obama’s slogan was ‘change.’ What do you think will become the most popular slogans in the 2012 campaign? Are they going to be new and different, or are they going to be a logical elaboration of those of 2008?

It’s too early to give any clear answer concerning 2012 campaign slogans. There are too many imponderables, like the extent and strength of any economic recovery, the state of the housing market, of employment numbers, even of developments in Afghanistan, Pakistan, etc. Of course, things also depend heavily on the outcome of the midterm elections, and the shape of the US Senate.

Democrats will most certainly continue to use their 2008 ‘change’ theme, just as they’re planning to do for the mid-term elections this year. To quote David Plouffe, Obama’s prime political strategist, ‘This country is at a crossroads. We are trying to boost the economy in the short-term while at the same time create long-term projects in health care, energy, education, and financial reform that will lay a strong foundation for decades to come.’

In other words, ‘We promised change. Change takes time, particularly if Republicans only say No. But we’re delivering on that promise. We are rebuilding America.’

Will the topic of state involvement feature heavily in the 2011-2012 campaign? Will radical conservative forces in the US be able to influence the outcome of the electoral campaign?

The Republicans will likely charge that ‘state involvement’ – i.e. the Obama administration – has bankrupted America with ill-advised interventions such as the stimulus package, and now with attempts at Health Care reform.

The agenda will, in rhetorical and even substantive terms, lean towards the right. The Republican Party is currently an ‘extreme conservative force’ in America. Obama, on the other hand, is providing his liberal base with very little: his continuing support for offshore drilling, and various constitutional protections have weakened it considerably. And now, if her scant record is anything to go by, Obama’s nomination of Elena Kagan to the US Supreme Court will only help to move the court further to the Right.

Alexander Cockburn was speaking with Nikita Kurkin and Julia Netesova


Maxim Sokolov
Russian journalist who writes for the magazine Ekspert

The campaign in Russia hasn’t yet begun in full. At the moment, the President and Prime Minister are not giving the impression that they are people who have come to a certain agreement and that they are ready to it. To have a real campaign, you need to at least have a minimal degree of clarity. Of course, everyone is interested in learning whether the result of their discussion will be of a cooperative or confrontational nature within this tandem. It is possible that they themselves are also interested in this very question at the moment.

Nevertheless, they currently look like people who do not know exactly what they want.

Also, we should remember that, even back in 2007, Putin dragged his decision out until the very last moment. This behaviour is characteristic of him in general and in this particular situation as well. Thus, it is somewhat difficult to speak in detail about the agenda in 2012 without also implying specific personalities. At the present time, there is nothing new in the government or in the opposition and this also applies from the point of view of policy.

In 2008, Dmitry Medvedev’s election program was based on advancing modernisation. But the word ‘modernisation’ itself is something that is non-dimensional and vague. Of course, everybody will continue to use this word in their banter, but it is unlikely to ignite people’s hearts and kindle their minds, because everyone associates his own meaning with this word.

I also think that, during the campaign, there will not be any serious attention directed at environmental problems either. Our country is not quite ecological, the “greens” have never really been popular here, and that is rather understandable. Things haven’t changed up to now; moreover, the Gulf of Mexico is very far from us.

With respect to Dmitry Medvedev’s criticism of institutions such as state corporations, I’m not sure that anyone will seriously protest against such a position – at least not in the sphere of public politics. The Communists have been carrying out their latest campaigns rather sluggishly. Gennady Zyuganov will say something about the anti-national regime, about the unity of national patriotic powers, and also bring up the issue of social problems. But I don’t expect that he will be engaged in the discussion about state corporations.


As for lobbyist groups and the representatives of those state enterprises themselves, I think that all of these problems will be settled behind-the-scenes, rather than publicly. I also don’t think that there is going to be a serious change in terms of Russia’s foreign policy priorities. Relations with Europe have been considered as a first priority for a long time, while relations with the United States have not for some time now.

Our country’s relations with Europe have improved, and this can largely be seen as an assertion of the notion that relations with Europe are of paramount importance for Russia.

In regards to the issue of Russian-American relations, they reached their lowest point during the Bush presidency. Thus, at present, it makes sense that any possible movement is likely to be directed upwards. Nobody knows how long this situation will last. In actuality, the United States’ relations with both the USSR and the Russian Federation have always witnessed ups and downs.


Furthermore, I would even say that the USA is preoccupied with other issues at the moment. Bush handed down a very complicated legacy, so the Americans are now facing a large number of problems. Now the Americans may have good reason to carry out a somewhat isolationist policy. If pursued, this policy should endevour to avoid interfering into the affairs of other countries. And, if possible, not to create new problems, because they have enough of their own already. It is a dangerous and perilous policy to settle the internal problems of a state by creating global chaos. However, at present, no such direction in the USA’s current policies can be observed.


In my opinion, Barack Obama has not yet completely performed the rough work that was entrusted to him by the people, and he still has yet to carry out a number of unpopular policies. It seems that the Republicans are not eager to take residence in the White House for this reason, realising that life is not going to be sweet in that seat over the next few years.

Coming back to the theme of our elections, I can say that, as a first priority, I personally would expect the future president to sort out the mess that has been created over the last ten years.

Exclusively for RJ







Leonid Radzikhovsky

1953:Birth of Leonid Radzikhovsky
1975:Graduated from the Psychology Department of Moscow State University
1993:1995; State Duma Member, the “Democratic Choice of Russia” political party
1995 and 1999:Ran for seat in Duma (for the “Our House Russia” Movement)
1996:Worked with the Aleksandr Lebed presidential campaign
1996:1997; Chief of the Political Broadcasting Desk of RTR TV-Channel; independent politologist and publicist
2002:2003; Political reviewer, “Russia” TV-Channel
2003:Ran for seat in Duma (for the “Union of Right Forces” and the Popular Party)
Radzikhovsky is a well-known PR-technologist and publicist
He has been a columnist for the “Russian Newspaper”, “Vzglyad”, “Versia” and the “Jewish Word” papers
He regularly appears on air in “Ekho Moskvy” and “Svoboda” radio stations

Dear Mr. Radzikhovsky, can we rightfully consider that the presidential election campaigns, in both Russia and the USA, have already begun? Can we at least presuppose what the respective political agendas of these campaigns are going to be? Since 2008, the Russian President Dmitry Medvedev has made modernisation one of the key issues. Do you think that this topic will lose its relevancy at this time or will it remain among the problems of first priority?

Many events are going to happen during the next three years. Let us hypothesise that an important discovery will be made in the field of atomic physics, allowing everyone to turn to uses of nuclear energy. Then let’s hypothesise that an important building will be bombed in a large city, so the main topic will, once again, become terrorism. The destiny of the Russian election campaign does not depend on such issues as these.

It is preposterous to say that we have already modernised so successfully that this goal has become an issue of the past. The problems of scientific and technical progress were discussed during the XXIII, XXIV, and XXV congresses of the CPSU, during which everybody began to speak about the scientific and technical revolution.

This topic is eternal. I saw the results of scientific progress, which were first imported from the West and then from the East. It has showed itself in the form of tape-recorders, cars, TV sets, personal computers, and a wide array of clothes, medicines, etc. The results of our own scientific and technical progress could recently be seen during the Victory Day Parade on Red Square in the form of SS-20 medium range missiles and the ‘Topol-M’ intercontinental ballistic missile. I have yet to enjoy the fruits of the scientific progress achieved in the domestic sphere in everyday life. Thus, the issue of modernisation will remain as urgent in 2012 as it is prior to that.

What political ideas do you think will largely influence the election campaign in 2012?

If we speak about Russia and its return to the liberal ideas of the 1990s, any fluctuations are possible in terms of ideas. Despite ideas, our country’s policy has not radically changed at the level of specific political decisions during the last ten years. The elite structure has changed. There are now more officials in it, and also people originating from the KGB. The role of government corporations has increased. The specific weight of small-scale business has decreased. In other respects, the economic and social structure of society has remained practically the same.

Even relations with foreign countries, in my opinion, have remained the same as they had been.


You say that Russian foreign policy hasn’t changed. What about the widely-spread statement that there has been a certain trend in Russia’s foreign policy from the USA towards Europe?

Unfortunately I don’t really have a clear understanding of what the expression ‘Russian foreign policy’ actually means. I know about trade.

We sell oil and gas and we sell it to Europe, because the USA doesn’t need it. We also buy goods partly from China, and partly from Europe. So regarding trade, that is rather straight-forward.

I also know a bit about PR. Europe is now being criticised less. It was not so long ago that the USA was criticised severely, but that has not been the case in the last few months. Can we still speak of a so-called Russian policy?

There are negotiations over Strategic Arms, which are continuing with the USA. But is this really policy? It doesn’t really have any fundamental sense, because we are not going to attack the United States in the next 100 years and they are also far from the idea of launching an H-bomb at us. There is not much of a real practical sense in carrying out these negotiations.

What could become a political agenda, if this entailed real politics, instead of just PR? I think that only one thing can: if we could miraculously realise that, after 50 years of talks about scientific and technical progress, modernisation and so on, it is time to stop talking and start doing something. We can’t modernise by ourselves. We have never been able to modernise without assistance. Peter the Great studied in Holland and, in the late nineteenth and early twentieth centuries, Germany and Great Britain were at the lead in terms of modernisation. In the 1930s, the Americans helped us to modernise. The mover of modernisation in Russia, like in all other countries, is always the one, who it is worth acquiring knowledge from.

For modernisation to actually occur, and not just idle talk about it, we need an external primary driver.

Theoretically, there could be three such movers: China, the EU and the United States.

China as a driver of modernisation is the most dangerous one, since we have excellent relations now, but they may forget who Siberia belongs to at some point, and we’ll have to show them this once again. This could be a very painstaking and insecure process.

With respect to the European Union, it is currently wrapped up in its own complicated and almost unsoluble problems.

Through the process of elimination, only one country -- the USA -- remains a candidate for being the main primary driver. We just have to realise this and decide what concessions we should make in their favour.


In its current state, Russia is more than convenient for the rest of the world. Nobody wishes us harm while, at the same time, nobody wishes us well.

Live your lives, sell your oil, do whatever you want in your own country, don’t threaten anybody, and nobody will threaten you. But it is a different thing to help you.

A strange thing has happened to Russia and one phrase can basically sum up the result of the twentieth century: ‘We have lost our main advantage’. One hundred years ago, the advantage that Russia had was an enormous peasant country with a very undemanding and cheap labour pool, while, at the same time, the country had a core of rather strong and educated intellectuals. Nowadays, it seems that every country can offer inexpensive manpower with the exception of Russia. What other advantages do we have to offer? This is an absolutely obscure question that our political elite should consider and work on.


Let us imagine a hypothetical situation, where the decision about who is going to be the next President is made during the general elections and not behind-the-scenes. Let’s imagine that your vote really counts. What would you like the future President to be like and what agenda would you personally vote for?

First of all, it is important to realise that we should stop telling vague stories about modernisation and start doing something in this regard. Otherwise, the remnants of the Russian civilisation will go under water very quickly. The quality of life will finally become lower than that which is seen in the BRIC countries and Russia will essentially become a Third-World country.

This means one thing: it should be explained very clearly that, for real modernisation to occur, one needs to pay the price. It should be made clear to the public exactly who will pay for this, how it should be paid and what the currency is, so to speak. Russia under Peter the Great paid the necessary price and this price was also paid under Tsar Alexander II. It was once again paid under the Bolsheviks and now it it time that we should also pay the price for modernisation. This would encite real discussion on this theme. In my opinion, this is the most important agenda existing today and in the next few years.

If we speak about personalities, then I am not an admirer of any acting politician. But I do not suffer from any phobia in relation to any of them either. I do not see any figures on our political scene. I also don’t see them in the world either. I think there will only be one candidate. I don’t believe that Putin and Medvedev will run for office at the same time. One of them, whoever is the successful candidate, will become President and gain his 70-80 percent of the votes. This is what public opinion polls tell us today. I also don’t think that the situation will change over the next two years.

Leonid Radzikhovsky was speaking with Boris Volkhonsky




Boris Makarenko

The questions put forth by The Russian Journal about the 2012 agenda would be best divided into two parts.

Let’s start with the electoral campaign in the USA. At the present moment, there is a mid-term campaign for the House of Representatives elections (in November 2010) happening, not to be confused with the presidential campaign in 2012. The peculiarity of the current situation is that Barack Obama has managed to impose his agenda both on foreign and domestic policy. The Bush-like republicans remain hostile to this agenda, but these do not make up the entire Republican Party.

I do not think that the vast majority of the American establishment will want to radically change the foreign policy being pursued by Obama, no matter who becomes the President. The disappointment and shame left over from the foreign policy led by George Bush are today wide-spread in both the Democratic and the Republican Parties.

On the other hand, Obama has sharply polarised the country in the domestic policy sphere. The primary cause of this polarisation was the process of reforming the health care system. This was a brave and even a daring act. In the short term, we will not know whether or not his efforts end up being successful. In any case, the Democrats are likely to lose voters after the mid-term elections.

Generally, we could say that Obama has made the Republican Party even more right-wing than it was previously. This is exactly what many Congressional candidates of the Republican Party are staking their campaigns on.

* * *

As for the situation in Russia, the 2012 campaign has not started yet and will not start until it is determined (and make known to the world) just who the candidates are going to be? The answer to this question will be known by the end of 2011. In the meantime, the basis for the campaign is being prepared.

First of all, the country’s agenda has been focused on modernisation for the past two years. This was President Medvedev’s slogan during the election. Other circumstances made him postpone his policy as he had to deal with other matters, such as the economic crisis, as well as the war in Georgia. In fact, he only returned to this policy in September 2009.

Whatever ends up happening, any of the candidates in the 2012 election will have to consider an agenda that includes modernisation as the key point. Essentially, the country already knows the agenda of the next presidency.

The campaign has already begun in a sense. At least it is true for the 2011 campaign for elections to Russia’s State Duma. Let’s examine the results of the last regional elections. The United Russia Party received on average more than 50 percent of the vote (the average of the previous election in 2007-2009 was about 60 percent and even more). If we read the statements of ideologists and party leaders, who aim to ‘return to the past indicators’, we will see that the campaign has essentially already begun. In Russia, the parliamentary elections are considered to be a sort of primary in advance of the presidential election.

The problem is that the presidential elections here are virtually always plebiscites, and the president is always ‘the president of all Russians’, like a super-party figure. Parliamentary party-based campaigns according to the proportional system should be inherently competitive, but after 2007, they have also practically turned into a plebiscite in terms of their results. With the present-day state of the development of political pluralism, this situation is risky since the rest of the parties are teetering on the edge of the vote threshold. Even if they manage to get into the legislative body (regardless of whether it is a federal or regional one), they cannot achieve significant influence for all of them. This means that promising political figures are losing their incentive to move to opposition parties.

It has been repeatedly stated (even by the country’s president) that opposition parties are not able to define an alternative vision of the country’s development. This is a fair statement. To define a vision, a party should have serious people who think broadly. The Communists have them thanks to the party’s inertia, but they tend to be in their seventies, as a rule. The United Russia Party has some as well, but usually these people had already become successful politicians before they joined the party. It is fair to say that the fewer opportunities a party has, the fewer new serious people that it manages to attract to its ranks. As a result, it is very difficult to predict the agenda of the parliamentary campaign. We cannot foresee what the opposition will stand for and if it will even be able to formulate an agenda.

As for the other issues on the Russian agenda, environmental issues are not likely to play a significant role. People are starting to think about ecology as a priority problem in two instances. Ths first is an issue when they live next to a polluting plant (but this is just a minority), or when the problems of survival, putting food on the table and the bare necessities are resolved and a person starts to think about their quality of life. Russia has not reached the stage where the environment can possibly become a priority issue for the popular majority.

The same thing holds true for the state-owned corporations. In fact, the popular majority does not care if there are any corporations, although there is a significant ‘but’ in this case. Namely, the population of Russia still assumes that state-owned industry (especially the large ones) is a good thing, and that private ownership in this field is detrimental.

Thus, the priority topic of 2012 is modernisation.

This is not only due to the fact that it is in the election programme, but also to the way that it is expressed. The best way ahead for Russia is to understand the pattern of modernisation described by President Dmitry Medvedev is in his article published in September 2009, and in his address to the Federal Assembly. In these two instances, he stated that modernisation should be democratic and that it should result in a political regime where political parties replace each other in forming the government authorities and that this constitutes political reform. It will be critically important whether or not the platform of any of the other presidential candidates will be compatible with President Medvedev’s idea.

Exclusively for RJ




MARAT GELMAN is a Russian art expert, publicist, political technologist, a member of the Public Chamber of the Russian Federation, and founder of the Marat Gelman Gallery
He is also the director of the Modern Art Center and the director of the Modern Art Museum (Perm).

Today, we can say that a campaign by the State Duma, not by the President, has begun in Russia. It seems that only the development of the Skolkovo project is aimed at the coming elections. 

As for Prime Minister Vladimir Putin, his activities concern mostly United Russia. It is my opinion that the party will face hardships unless their agenda is changed. It currently focuses on two questions. The first is a kind of plebiscite: are you for the power or against it? The second is fraught with divisions: are you for Medvedev and modernization or for Putin and stabilization?


Dmitry Medvedev appeared in the 2008 elections with a slogan of modernization, and while some aspects of it will surely be altered, the slogan itself will be kept until 2012. But today we should be talking less about economic modernization and more about institutional modernization. For example, it is crucial and necessary to effect a modernization of the Ministry of Internal Affairs and the court system.


Additionally, in 2008 Medvedev criticized the fact that such institutions have in essence become state corporations.  Indeed, the current system is not an extremely efficient tool for allowing state involvement in the economy. However, it is very likely that there will not be any discussion of the state removing itself from the field in 2011-2012. It is more likely that additional tools will be suggested to help carry out the development of state policy. Regarding the overall political agenda, it is clear that Dmitry Medvedev needs civil society much more than any of his predecessors do.


It would be ideal if environmental issues were included in the agendas of the upcoming election campaign. Unfortunately, this is very unlikely.


Currently, this topic can only be introduced through one channel, and that is through the health care program.


As we all know, the next American Presidential election is going to take place in the same year as the Russian election.


There is a good chance that America will continue shifting towards the political left; however, the extent of this shift will depend on who emerges as the opposition candidate. Meanwhile, both Presidents in Russia and in the USA will continue to play off one another.

This means that each will base his activities on criticizing the other administration’s foreign policy, a tactic that has now become most apparent in America.

Exclusively for RJ





Robert Reich


Dear Mr. Reich, in your opinion, what will be the main focus of the 2012 US election campaign? Will it see a new agenda that differs from President Obama’s 2008 call for ‘change’?

I would expect Obama to focus on the changes that he has managed to bring about to date, and in effect highlight that America is changing in ways that are improving the lives of Americans. I don’t expect the slogans to be much different, but I do expect them to place greater emphasis on tangible accomplishments.

Do you think that the issue of economic government intervention will be one of the major issues in the 2012 presidential campaign?

Republicans will try to make ‘Big Government’ the main issue, as they always do. Democrats will emphasize that Wall Street and big business have been tamed, and that Americans are better off now that they have moved towards a system of universal health care and that the economy has turned a corner. They will however stress that there is still much left to be done. Obama’s agenda of change is not yet complete.

On the whole, do you expect the political agenda to lean more to the left or to the right in 2012?

I suspect that the political agenda will remain rooted in the center, as most political agendas tend to be. The real question is where the center will be.

If the state of the economy has improved considerably and unemployment has dropped substantially by 2012, most Americans will feel good about the economic situation. If not, the Republicans will emphasize the national debt and deficit, and suggest that the current administration’s ‘big spending’ is responsible.

What issues – political, economic or cultural – should a presidential candidate who you would support place emphasis upon?

In America, the economy and employment are always the most important issues if unemployment levels are high. However, if the economy is doing reasonably well and most people are no longer worried that they might lose their jobs, another issue might become the most important, such as immigration or the environment. If there is a terrorist attack in the United States, national security will become the number one issue.

What are the major social transformations that have taken place in your country in recent years?

The biggest and most important social change occurred as a result of the deep recession – many Americans lost their jobs, savings, and even their homes.

This was deeply traumatic for many. And providing the backdrop for this, of course, is widening inequality of wages, income and opportunity.

Nevertheless, the nation has also become far more racially and ethnically diverse, and women are continuing to attain more positions of high responsibility.


Robert Reich was speaking with Nikita Kurkin and Julia Netesova





JAMES GALBRAITH is an American economist and political scientist
He is currently a professor at the Lyndon B. Johnson School of Public Affairs and at the Department of Government, University of Texas at Austin
Exclusively for RJ

At present, the political agenda, both the American and the international one, is moving neither to the right nor to the left. Instead, it is shifting towards total disorder. The idea that has been vigorously promoted by the right – namely that the state should not interfere in the financial crisis – happens to be gaining more and more support in the United States. It is becoming increasingly more popular within the greater society. The insanity of this idea is obvious due to the fact that we can now say for sure that, unless the state had interfered in this crisis, it would have resulted in utterly catastrophic consequences.

Along with that, American conservatives continue to be very active in trying to discredit the role of the state in the economy.

Unless the Obama administration eventually manages to send a clear message to the population that ‘everything is under control’, then having a reasonable political discussion will be becoming an increasingly problematic task to achieve even in the near future.

Economic topics have been the predominant themes during the global economic crisis and they will continue to be the dominant ones as long as the crisis persists. These topics, first and foremost, concern the United States, Europe and the Russian Federation. This will remain true for the remainder of this year, for 2011 and for 2012.

The main task for Barack Obama in 2011–2012 should be formulating the concept, which can bring together and synthesise all of the positive results that he has achieved for the country during the course of his presidency. This is indeed the main challenge that he faces today, because it is becoming apparent that, although the bankers and the banks have already recovered from the crisis, the majority of the population is still suffering from it. Of course, the situation may change radically by the official beginning of the election campaign in the USA, and unforeseen circumstances can also make significant corrections to the political agenda. For instance, the financial condition of the economy may improve, and the financial sector may be put in order. This would help Barack Obama tremendously . However, quite the opposite scenario is also possible.



KARLYN BOWMAN is an American political scientist and public opinion analyst
She is currently a senior fellow at the American Enterprise Institute and a columnist for Forbes.com.

Exclusively for RJ

The 2012 campaign has already begun but this is not yet visible. American politics is a permanent electoral campaign these days; presidents never stop running for office.

The game of American politics is played in the center of the playing field. The swing from a Bush administration to an Obama administration still remains between the 40-yard lines.

Right now, by far the most important issues are the economy and unemployment. Nothing else comes close in terms of popular concerns of voters, so these issues are what candidates should focus on.

It is still too early to know what the slogans will be for 2012, as it all depends on how the economy is performing. If things are improving, the president will say that his administration helped make such improvements possible. If they are not, the president will urge Americans to stay with him on the course he has set towards eventual improvement

One of the concerns about Obama now is that he has increased federal government involvement in the economy too much.

There was the Troubled Asset Relief Program (TARP) that bailed out the banks, followed by the bailout of the auto industry, and then the stimulus package.

These were all very expensive programs, and even though Americans initially favored TARP and the stimulus, they now worry that government has grown too much. This is an area of concern for many Americans, and not just conservatives.

Both the economy and the environment are important issues in America. People think we can have economic growth and protect the environment at the same time. But when times are as difficult for the economy as they are now, employment levels and economic growth are more important to the people.






Mikhail Remizov


Since 2004, the Russian presidential elections have been a plebiscite, demonstrating public trust in the acting government; there are no grounds to believe that things will be different in 2012. The first stage of the upcoming campaign will require solving which candidate will represent the system of power and hold public confidence – Medvedev or Putin. Only after this stage can decisions be made regarding the appropriate message to deliver to the public for the 2012 campaign.

The first stage of the campaign has obviously commenced, signalled by public statements issued by both leaders. The competitiveness that has arisen has indeed been confirmed by the President in a recent interview with Danish journalists. His statements explaining how electoral competition between colleagues is absolutely natural in a democracy was viewed as a joke by the Russian media.

Simultaneous participation in the election by the acting president and the ex-president would surely contradict the spirit of the established system, something that Medvedev knows all too well. It appears contradictory indeed that, while maintaining he will discuss the matter with the Prime Minister and reach a decision cordially, he nevertheless seems geared to participate in the upcoming elections.

Such determination is surely a factor for success in itself. It should also be noted that the acting president has the grounds to expect a successive legislature. In my opinion, the basis for this lies mainly in the progress in his relations with the West, which has long been desired by the Russian ruling elite. Obama’s comments on the Russian President demonstrate that the West cast their vote for Medvedev. Several parts of the Russian establishment agree with this trend and support Medvedev as well.

* * *

The present shape of Medvedev’s agenda on foreign affairs can be viewed as part of the 2012 presidential campaign.  To be more exact, it is a part of the initial campaign that is dictated by the ruling elite. This is not to suggest that ratings and public trust are not important.

Currently, public ratings are a significant factor that work to balance the elite; and as 2012 approaches, they will surely be brought into the foreground.

This transition, from the consensus of the elite around Medvedev to a mass consensus presents certain problems, not only because the expectations of the elite and the masses are different, but because sometimes they are directly opposed. In my opinion, the focal points for contradiction lie in the way mass expectations are structured around the acting President.


Russians still view Medvedev as a dissident on the throne and as a leader who is not content with the quality of the Russian system, which includes its economic structure, human resources, quality of the state machine, and level of political culture. It is this dissatisfaction and openness to change that separates him from Putin and encourages many active social groups to openly support him.

However, he is not likely to take on this role again in 2012. As the leader of the state with four year’s experience, it is more likely that Medvedev will seek to employ the state’s resources to address concrete issues rather than meddle in more idealistic pursuits. Moreover, he will have to present not just an alternative to Putin but demonstrate a lack of alternatives available in the system, a strategy which has a long a successful history for those in power.

* * *

In other words, I assume that in the upcoming election, we are more likely to see the emergence of a conservative Medvedev rather than a reformist one. But how is this possible when his main message to Russia has been one of modernization? In all likelihood, Medvedev will have to convince the country that a desirable pace and direction of modernization has already been established.

This is not a trivial task, especially given the fact that today very few people actually believe it.

The projects that represent the President’s modernization plan, such as the creation of an innovation valley in Skolkovo or the Moscow International Financial Centre, must appear successful in the eyes of the public or at least promising in the long run. Moreover, their success should also be seen as vital to the country as a whole.

It is notable that the second aspect of the problem is even more difficult than the first. It is important to demonstrate that ‘the multispeed Russia,’ an image that is promoted by the aforementioned projects, is not only an integral state, but also an integral community. It is necessary to demonstrate that privileged sites of modernization, whether territorial, corporate, or industrial, will drive development of the nation’s economic and social spheres as a whole.

When considering the complexity of this task, it seems likely that political technologies will prevail over politics at the 2012 elections. In other words, the election agenda will be a tangent of Medvedev’s own agenda for securing a second term.

Most likely, a clear contrast will be apparent. If his campaign follows a motto of conservative pragmatism that is based on the status quo and on playing with the electoral results, Medvedev’s second term has the potential to turn out to be entirely different – it could be reformist and value oriented.

This sounds strange given that usually the opposite occurs, that is to say ‘idealism’ at the elections and ‘pragmatism’ only after the post is gained. In any event, it is likely that the president has a certain set of reforms planned for his second, and final, term.


Exclusively for RJ





DMITRY BADOVSKY is a Russian political scientist, and vice-director of the Social Tasks Institute

Exclusively for RJ

The election campaign of 2011-2012 will invariably adopt a particular agenda, and center on a few key topics. At the moment, judging by the present demeanor of all the potential candidates, it is difficult to make an accurate forecast of the topics that will either splinter or serve as some point of agreement for the candidates.

As the recent debates on the Victory Day issue revealed, there exists such a crucial problem throughout the nation with historical self-identity, common attitudes to the country’s history, and most importantly common attitudes to the Soviet era.

It is notable that there is such a strong reaction when the leaders of the country speak about Stalin and his role in World War II. Hardly any of the current presidential candidates will be able to ignore this topic during the run-up to the election.

The reaction of politicians to the issue of modernization as stated by the President have also varied considerably. There is a particular ideological consensus among the political class that the country should diversify certain elements of the economy and generally strive to overcome its relative backwardness.

While there may exist a wide variety of opinions on what modernization is and how it should be carried out, there is no outright opposition to modernization in the country in general, at least among the elite of the political class.

The apparent shift to the left in the face of the economic crisis will most likely be compensated by the growing demand to limit state involvement in the economy (a sentiment that is growing more and more popular not only in Russia, but also in the West). Owing to this trend, it seems likely that a more conservative voice will play a prominent role in the 2012 election campaign. _








Vladislav Inozemtsev

Director of the Russian Research Center on Post-Industrial Society, PhD in Economics.
He is an adviser to the Russian government, prolific public intellectual and writer on economic and political themes


Dear Vladislav Leonidovich, is it appropriate to view the campaign for the 2012 elections as having already begun? If so, is it possible at such an early stage to determine the questions and concerns that will come to define this campaign?


Often, political scientists describe that which is desirable as reality. Allow me to continue in this way. The 2012 Russian elections will only occur if President Dmitry Medvedev and former president Vladimir Putin compete with each other. While the probability of such a scenario is extremely low (given the current conditions of Russian ‘managed democracy’), such competition would nevertheless help to improve the overall image of Russian politics. However, since the Russian elite’s logic prevents them from admitting to such a collision, the campaign will not really be an election but rather a plebiscite.

Moreover, the campaign will probably not start at any time that suits the mass media, political experts, or even the potential candidates, but rather at a time when one of the two most likely candidates, having discussed all options with the other, declares his intention to stand for election. In reality, the day this campaign begins will effectively be the same day it ends, and the questions that usually define the relationship between voters and the candidates will not have any value. The public voice will be divided into two camps: one that supports the model generated in Russia in 2000-2008, and another one that opposes it. The opponents will form a minority regardless of how much or how little tampering is involved in the election results.


Nowadays the environmental question is one of the main concerns in Russia, America, and Europe. Does this indicate that the public is tired of talking about the economy and that America and Russia are more responsive towards environmental issues?

In regards to what you are saying, Russia is definitely an exception, as its citizens do not concern themselves with environmental issues. To a lesser degree, Russians still take interest in energy issues. However, the economy will remain at the centre of any election in every country of the world for at least the next three years, or until the consequences of the recent financial crisis are fully resolved. In Russia, environmentalism holds the same prominence as it did in Germany during the first half of the 1980s. That is to say that presently, sewage drains into rivers where people swim, and the pollution of fresh water and factory exhausts in local communities are a cause of great concern. The sense of a national environmental consciousness in Russia is not present, whereas in America the situation is approaching a new level of development where the concern for the environment is becoming increasingly prominent.

Nevertheless, this does not deter Americans from buying the most powerful cars in the world and from using twice as much energy as leading European countries. Moreover, America has also refused to sign international agreements that limit the emission of greenhouse gasses.


Barak Obama’s campaign slogan focused on ‘change,’ while Dmitry Medvedev’s focused on ‘modernization.’ In your opinion, what themes are likely to dominate in 2012, and how will they measure up against the slogans of 2008?

I am not sure that Medvedev’s modernization slogan represented the same trend as Obama’s campaign for change. Unlike Obama, who immediately started ‘dismantling’ the Bush legacy, Medvedev has never claimed to break with Putin’s policy. The modernization concept was issued later and, in many ways, was a reaction to the financial crisis and to growing insecurity as an unstable ‘energy superpower.’ Although a supporter of modernization, Medvedev will only adhere to such a slogan as far as it proves to be beneficial by 2012.

Without a doubt, Obama is more radical than Medvedev. His new team came to power in America and essentially changed how the American social state functioned. They created entirely new conditions for financiers and encouraged greater openness towards the rest of the world. Yet Obama is in a situation similar to that of Medvedev. Both leaders have begun a series of changes that will be tested in 2012 for public support. In America, the most popular slogan for the Democrats will focus on allowing the President to finish his reforms, while Republicans will most likely cry out for the need to rescue the country from socialism. At the present moment, it is difficult to determine what side will be more convincing.

This scenario most likely will not happen in Russia, since the reformer will probably give way to Putin who is not associated with any reforms. However, no one will completely discredit Medvedev’s term, and there may yet be slogans that appear, and the main candidate will prefer the attitude of ‘working, instead of wasting time on conducting a campaign.’

Will relations with America and Europe be at the centre of attention during the 2012 Russian election campaign? Will the opponents of the current Presidents of Russia and the USA demand a revision of the Reset policy?

No, they won’t. ‘Reset’ does not provide any visible results that can be used for pre-election purposes. No responsible Russian politician will criticize Obama’s America after eight years of President Bush. Moreover, during the next few years, Europe will become increasingly preoccupied with itself and will not be able to take any interest in Russia. Currently, only the opposition calls for Russia to join the EU. Such an option would be too restrictive for Russian elites used to the atmosphere or the lack of restraint. In regards to the USA and Europe, Russia is a peripheral problem. ‘Reset’ will not be discussed during the campaign since too little American voters actually know what it means.

Do you expect the political agenda to be revised in 2012? What issues do you think should be resolved? And when considering the probable candidates, who would you like to see succeed and gain public support in either the Russian or American electoral race?

The 2012 agenda cannot be defined with the categories ‘left’ or ‘right.’ Many Americans will certainly criticize Obama’s social reforms and will want to shift to the right.

Nevertheless, very few individuals will be ready to openly apologize for the market elements and the financial profiteering that ultimately led to the crisis. In Europe, people will want more social guarantees, but not everyone is willing to bail out losers like Greece. Therefore, it will be the candidates who construct an agenda that deals with the contradictions between the left and the right that will emerge victorious.

Personally, I’d like to see President Obama succeed and further develop unity and solidarity amongst American society. The crisis and reforms will aggravate not only the contradictions between the economic classes in America, but also the ethnic and racial ones. If Obama manages to become the embodiment of a unified nation, and prevents division among American society by finding causes that will rally together both the rich and poor, and Americans of all ethnicity, then he will succeed. However, if he tries to capitalize on creating opposition between different parties of society, then he will be at risk of failure.

In Russia, I support President Medvedev, and fully believe that he will be re-elected. If he is indeed nominated, then I would advise that he portray the ‘strong’ president, through his readiness and ability to refute the myths in regards to ‘the institutes’ that supposedly support his power. Russia is strong enough today to dispel the myths of Stalin’s ‘genius,’ and such props are no longer necessary for us. In turn, it is necessary to reform enforcement agencies more radically, making them service the people rather than working for the political elite. It is necessary to develop at the very least a ‘consultative’ democracy that takes the advise of expert communities and the political opposition. Medvedev needs to be himself and I am confident that if voters see his personality, as it partly appeared in his interview with the Izvestia newspaper on May 7th, his support will be sincere and widespread.

Vladislav Inozemtsev was speaking with Nikita Kurkin



Anatol Lieven
Senior Researcher at the “New America” Institute
[KNIGHT holdings provide further ID]

The election campaign of 2012 has already started to gear up both in the US and in Russia, but the general situation is by no means unique for either country.

The American political system has one significant problem, and it is the permanent election campaign. In the US, the presidential term is rather short, only four years, and there are mid-term Congress elections. As a result, political life is trapped in a constant state of campaigning to raise funds for the next election.

This environment of constant elections conceals the real issues of primary importance even from its participants. The US and the rest of the world need to make a choice as to the main course of development. The US should decide whether it is going to become a more social-democratic country than it is now, but not in the European sense of the word. The US should decide whether it is going to move along the progressive path that was favoured after 1960-ies, or roll back to an individualistic society with an unrestricted free market.

Sooner or later, American democrats will come forward with a program largely similar to that of Franklin Delano Roosevelt, who implemented a very efficient program after the financial crash of 1929. Extremely effective measures aimed at regulating the American banking system were carried out in order to avoid such situations in the future. This system worked quite well until the 80s and 90s, when the Republicans, led by Reagan, and then the Democrats under Clinton, began to dismantle it. We are dealing with the current financial crisis today as a result.

In preparation for the coming election, Democrats should adopt the following message: ‘Our country suffered an economic catastrophe in the early 1930s. Democrats came to power, and for the next forty to sixty years, even under the Republicans when Eisenhower and Nixon were in power, America basically followed the policies of the New Deal, which fought the greed of banks, and emphasized investments into such infrastructures as roads and utilities and the development of the American national industry and American technologies. This development plan was achieved by common Americans, and they were the best years in the history of the country.

There were high levels of employment, social security, and cheap energy. Unfortunately, since the 1980s, the Republicans have run for office on a platform of wide capitalism with a focus on deregulation. Not surprisingly, one financial crisis followed another, the most recent of which would have been as terrible as the crash of 1929 had we not spent trillions of dollars to cope with it. It is time to get back to the good life. It is time to forget all the nonsense about an absolutely free market economy.’

Such an appeal would meet with great success across the country. Of course, one should not think from this that Obama’s campaign will call for socialism. A system of constant interference into the economy will be offered, but will go no further than policies between the 1930s and the 70s. Obama will also hopefully offer measures to protect the environment, paying earnest attention to the overall social wellbeing of the country. Obama’s administration will not move any further left than these strategies. In response, Republicans will no doubt initiate a hysterical campaign against Obama, accusing him of inciting socialism and communism, and at the same time appealing to once again develop unrestricted market relationships.

But, in spite of all the ‘tea parties’ and the populism of middle-class white Americans, as of now, nothing can warrant a Republican victory – bankers remain bitterly unpopular, and Obama should build his campaign on the basis of punishing them, taming them, and regulating their activities. Many Americans will sympathize with this position.

However, the final say will depend on the conditions of the American economy at the time of elections. If there remains high unemployment ratings by 2012, and if the economy grows sluggishly, then Obama is certain to lose the elections, regardless of what he may promise.

* * *

The economy is still a topic of heightened interest in America. The problem is that nobody knows for sure how to improve the economic situation, largely because America has been bogged down with debt and, to a large extent, surrendered its economic independence to China. In this regard, it is likely that we will hear even greater appeals to curb the excesses of an untrammelled and wild capitalism. Sooner or later, Obama will decide to play his strongest card – the regulation of bank activities. He will be forced to do it in his fight against the Republicans.

Energy, provision of independent American energy carriers, [efforts at] decreasing threats to the environment and the dependence on imported oil, will also be key issues. Obama has declared himself as the follower of a reliable US security without adventurism: ‘We need to win the war in Afghanistan, but we are not going to get involved in any other wars’ – such is the motto of Obama’s strategy.

* * *

In Russia, ultra right nationalists have only a pitiful candidate to offer, whose election would almost certainly solve nothing. However, liberals don’t really decide anything either. Everything is decided by the current authorities and their different factions. Any attempts by America to improve relations with Russia must be made with them.

So, if the Republicans (‘the American nationalist party’) think that today’s Russia has become to close with America following the ‘reset’ process, they might look to make sure that such relations be cooled. Most likely, Russian-American relations during the coming years will prevail through the same effect that has been prominent for many years in the relations between the US and China.

In moments of opposition, Republicans and Democrats speak rather harshly about China before elections: ‘We need to support Tibet and Taiwan we have to be more firm when demanding respect for human rights, and more uncompromising in trade relations.’ Once in power, both parties quickly realise that to actually implement these suggestions could prove rather dangerous. The US cannot make sudden moves in their relations with China, because then China may demand that America honour its financial obligations, leading to the collapse of the entire fiscal system of the nation. Something similar could perhaps become a basis for future relations between the US and Russia.

At the moment, Iran remains at the centre of Russian-US relations. Naturally, the Republicans may try to return to the issue of deploying an anti-missile defence system in Eastern Europe. But then Russia could refuse to support any US initiatives regarding Iran, forcing the the Republicans to either accept whatever Iran is doing, or attack them directly. Such an attack would mean a quick defeat in Afghanistan, because the Iranians would move to support the Taliban.

Implementing any of these measures would surely be a reckless step for any US administration.

* * *

At present, elections in the EU amount to almost nothing. The European Union still believes that it plays an important role in the Ukrainian issue and in the relations between some other countries and Russia. But in practice, expansion of the EU has finished, with only a few Balkan countries remaining as potential areas for future influence.

Admitting Turkey into the EU would prompt considerable outrage among the electorate of many Western countries, and may even lead to the emergence of racist and fascist governments in Western Europe, and to the outright disintegration of the European Union.

Possible membership of Ukraine into the EU is merely a phantom of current events. Everyone is now witnessing the painful and very expensive attempt to save Greece, and it is still unclear whether or not their attempts will meet with any success. A succession of defaults is still possible in the EU – in Greece, Portugal, Spain and even Italy. The EU is spending large amounts of money in order to prevent this. In such an environment, there is no one who would have the resolve to admit Ukraine to the EU. No one wants to start paying the bills for yet another country on the verge of bankruptcy.

Exclusively for RJ



Adrian Severin
A special bulletin of the Russian Institute dedicated to ‘The Yaroslavl Initiative’ of Russian President Dmitri Medvedev initiated a debate around the warming in ‘Black Sea political relations’ brought about by the signing of agreements between Russia and Ukraine concerning Russia’s Black Sea Fleet bases in Sevastopol. From this angle, Russian Journal interviews Adrian Severin, the former Foreign Minister of Romania and currently a member of the European Parliament as a representative of the Social-Democratic party.

The strategic situation in the Black Sea region follows the move of the main security front from the line linking the Adriatic Sea to the Caspian Sea to the one linking the Persian Gulf to Central Asia, Afghanistan included. Therefore, today the area is less strategically important for the non-riparian global actors than a few years ago.

Actually the Black Sea is not a region in itself. The Black Sea is a meeting point of different regions: the Balkans, Asia Minor, the Southern Caucasus, and Malorussia.

The EU became a riparian participant and political player in the Black Sea region once Romania and Bulgaria became members. In this context, we must see the Black Sea area and some of the countries such as Ukraine or the ones in the South Caucasus as being part of the common neighbourhood of the European Union and Russia.

From this point of view, the challenge for both Russia and the EU is to avoid this region becoming an area of conflict. If any of these players were to consider this area as one of their exclusive domains and consider unilateral intervention, this would create a real threat of conflict and unrest.

In a way, the origin of some of the frozen conflict in the area lies in the fact that the EU and Euro-Atlantic powers never came to terms with Russia as far as the post-Soviet status of these areas is concerned.

Nevertheless, the EU has all the classic leverages of a soft power. It should use them in order to ‘reset’ its relations with Russia in the Black Sea region. This is possibly easier to achieve than the US-Russia reset, and perhaps also more urgent.

The new EU policy should be focused along two main lines: on one hand, the EU should work in a multilateral format with Russia and their shared neighbors on energy and security issues – and the military neutrality of the common neighborhood could be a part of those multilateral agreements. On the other hand, the EU should develop economic and political cooperation with the countries in the common neighborhood on bilateral bases, each of them being able to make its choice freely following an assessment of its geo-economic interests, namely the opportunity to associate with a potential partner representing its customers as opposed to associating with a potential partner representing its competitors.

Together with some of my colleagues I have already proposed a Union for the Black Sea. That Union should be built on the basis of already existing formats of cooperation, the most important one being the Black Sea Economic Cooperation Organization. Of course, this organization was founded when the EU was not yet a political player in the region. Therefore it must be adapted to the present geo-economic and geo-political context. This context allows and requires the broadening of the common security mechanisms around the Black Sea. Secondly, the Union for the Black Sea should combine the institutionalization of the regional partnerships with a political integrative superstructure. Its format is to be discussed. It should be simple and flexible.

The strategic aim of such a Union is to transform an area of conflict and rivalry into one of cooperation and peace. This Union should belong to those who directly converge at the Black Sea and not to the global powers that are neither riparian countries nor have any direct vital interest in the area. 

Exclusively for RJ





Jonathan M. Feldman

A special bulletin of the Russian Institute dedicated to ‘The Yaroslavl Initiative’ of Russian President Dmitri Medvedev initiated a debate surrounding the issue of the ‘focal’ model of modernization in Western intellectual circles. Russian Journal investigates further by interviewing Jonathan M. Feldman, a well-known American economist and sociologist, who is currently Professor of History of Economic Thought at Stockholm University in Sweden. The author thinks that the major challenge facing Russian society has to do with proper social organization and general economic reform rather than modernization.

There have always been different ideas of what modernisation means, and there are different gaps in economic and political theories. It has always been somewhat contested concept. In the U.S. context and to a certain extent in the European context there have been different views about what modernisation means.

One view has been a kind of version of what is called “trickle-down theory” (trickle-down economics is a populist economics of the times of Ronald Reagan administration). The idea is if you develop businesses and industries organised by certain groups, the benefits of that trickle down and eventually fall to all citizens.

There were those who criticised this – the so-called “dependency theorists.” They suggested that if you bring big transnational companies into a region of the third world, i.e. to a less developed region, that will be highly problematic because the value added of these businesses will be relatively low. However, after the cases of South Korea and new industrialised countries it was understood that the outlying regions, the so-called developing or peripheral economies, could develop and become highly competitive.

And then you have another case – countries rich in resources and exploiting them, like Russia and the Middle East. This created a contradiction for the “dependency model,” which is that normal capitalist growth does not provide net benefit to the economy.

Capitalism and Democracy

One of the vital questions of today is the question of whether you can have capitalist development without democracy or not. Ecological costs of economic development are another problem. Thus, the Chinese model was successful in some terms, but in terms of ecology it was not. In addition there have been several critical analyses done on the development in China, showing it is been highly uneven -- in other words, some groups have benefited and others have not.

One of the best models, quoted by the reforms that certain elite economists proposed for Russia after the fall of the USSR, was economic democracy. One of the best models for that are Mondragon industrial cooperatives in Spain. This is a model, which integrates several things: technology, specialised banking system, worker’s ownership and control.


Since people are more involved in business, they are more likely to make a greater commitment to work places, which improves productivity. So if you compare companies like General Motors in the United States, which has become very, very dysfunctional, with those of Mondragon, you will see that Mondragon is far better economically, even though it is an industrial cooperative. The idea that cooperatives like Mondragon are primitive and low tech is also a misconception that many people have. It has robotics, it has technical university and it has its own bank.

For Russia decentralisation is a must

Within Russian society you had certain thinkers who advocated some kind of decentralised economic system where the people would be more involved. These propositions should be taken into account by President Medvedev while projecting a plan of Russia’s long-term development.

The problem is if you have concentrated economic wealth, you have concentrated political power, because those with greater wealth have greater access to the media, they have more ability to manipulate people in management and bureaucracy, etc. That is why economic equality is a necessary condition to political quality.

This is a big problem. In order to solve it you have to figure out how to create the centres of economic autonomy. And you have a kind of chicken-and-egg problem, because to reform the political system and to get rid of the deterrents you need to reform economics. However, it is very likely that political class, which is to be reformed, will oppose to it. One way to break out of this chicken-and-egg dilemma and to create new business sectors is by developing networks better cooperative with forces outside of the given country – in my writings I call them franchise cooperatives. The idea is very timely, particularly given the great degree of disruption caused by the world economic crisis and the environmental crisis, which is to come.


Exclusively for RJ





Nikita Kurkin
Review of 13 Bankers: The Wall Street Takeover and the Next Financial Meltdown (2010)
by Simon Johnson and James Kwak

There are a number of bestsellers in the Anglo-Saxon literary tradition, all well known to the public, whose titles contain numerals. Among them are Fahrenheit 451 by Ray Bradbury, Joseph Heller’s Catch-22, and the film 10 Little Indians based on one of Agatha Christie’s short stories. Long before these, there was Seven Against Thebes by Aeschylus, and recently the vulgar film production of 300 Spartans appeared on cinema screens. Owing to semantic exclusiveness numerals do not allow hyphenation, and therefore have no metaphorical use. Yet, at the same time, numerals allow a writer a means of ‘informational expression’ which highlights the uniqueness of his work and bestows the special authenticity that he wishes to impart to the reader. Undoubtedly, such reasons did not escape the authors of what is an absolutely inartistic work, but one that is nevertheless meant for a mass audience –13 bankers.

When, in March 2009, President Barack Obama gathered the ‘captains of the American financial industry’ for a meeting to discuss the financial crisis, he uttered a phrase to them that was to become widely quoted. ‘My administration is the only thing that stands between you and the pitchforks.’ There were 13 bankers present to receive this warning. 11 years prior to this in Washington, in the bowels of President Clinton’s administration, when issues of levels of financial regulation were being wrestled with, this number entered the public space apparently for the first time. Larry Summers might not have been U.S. Treasury Secretary at that time, but he was already an influential political figure of the neoliberal camp. And at that point — a staunch supporter not limited by any financial freedom. He had mentioned over the phone that there were 13 bankers sitting in his office. The group was singing something to the tune of the band’s famous song, Tears of Rage: ‘We carried you in our arms on Independence Day, and none of you would in any way do away with the horrors of Roosevelt.’

Yet they soon did depart from ‘Roosevelt’s horrors’ – the financiers were to unashamedly and unreservedly indulge in the pleasures of unchecked profiteering. If Lenin had presented his ideas amongst this polyphony he most probably would have quoted something from his writings along the lines of the following: ‘Financial capital is concentrated in the hands of the few and using actual monopoly … consolidates the dominion of financial oligarchy, laying all society in thrall to the monopolists.’

The author of this article once argued with a convinced Russian libertarian. The strife was about the fact that such close mutual relations between the state and the Russian oligarchic regime in Putin’s Russia (built on the model of ‘state as corporation’ as once was in South Korea under Park Chung-Hee’s rule) will one day be the model for the American system. My adversary said that it was impossible for a political system as deeply rooted in the democratic tradition as the USA’s to follow such a course. But this very idea that an oligarchic regime has emerged in America – in which financial power is converted into political power – and where this political power also engages in a dialogue with the largest political players of the USA, can be taken as precisely the position of the authors of the book of 13 bankers. In their book they mention facts and examples from Russian and South Korean political history that demonstrating and support this thesis. And just a cursory glance at the bestsellers list confirms that such a point-of-view generates significant interest in the Western reader.

Simon Johnson, one of authors of 13 Bankers, is himself not alien to this oligarchy – he previously held the post of chief economist at the International Monetary Fund (IMF), which adds additional interest to the conclusions that can be drawn from this work. Its conclusions are as follows: in order to preserve the American democratic system it is necessary to take measures to counteract the absolute political power of the American oligarchy, as had already happened under Theodore Roosevelt and Woodrow Wilson in the early 20th century and Franklin Delano Roosevelt in the mid 20th century. As Johnson stated in his interview with RJ: ‘Today, we know exactly what caused the vulnerabilities in the system, and the fact that these causes have not been dealt with gives grounds to make unfavorable predictions for the future. To solve the problem, it is necessary to allow banks to go bankrupt.’

Eventually, the realization of the authors’ ideas in 13 bankers will allow both Americans and admirers of American democracy outside of the USA to assert that their future path of development does not, and will not, resemble the Russian course.