In Feature Articles, Russia

Part two of an interview with Russian economist Vasily Koltashov, by Ulrich Heyden, published in Telepolis (Germany) on April 12, 2016, translated to English and published in Counterpunch on April 22, 2016

Vasily Koltashov is the head of the economic research department at the Moscow-based Institute of Globalization and Social Movements. The following is part two of an interview conducted with him by Ulrich Heyden for the German news outlet ‘Telepolis’. In part one of the interview, Koltashov explained that Western economic sanctions and the resulting economic turmoil in Russia have the people Russian people restless. And there are increasing tensions within the Russian elite, torn between reconciliation with the West or an independent course for the country.

In part two, Koltashov explains the concern of the Russian people of a chaotic ‘Ukrainian scenario’ washing over their country; the role of Vladimir Putin in reconciling the interests of different groups in the Russian elite; the political situation of the working class in Russia today; and why a resurgence of popularity of Stalin is occurring among parts of the Russian population.

Ulrich Heyden: Russia is eight years into an economic crisis. The West says Russian leaders are responsible for the crisis because of the excessive dependence of the country’s economy on the export of raw materials. Is this criticism fair?

Vasily Koltashov: The crisis in the Russian economy is the result of a global commodity overproduction and excessive accumulation of capital. If Russia had a more developed processing industry, a more developed securities market and stronger banks, the economy would still be in crisis. Proof of that is shown by the problems in the EU. But the strong weight of raw material production in Russia exacerbates the situation.

UH: In Europe, there are those who think that Vladimir Putin is something like a dictator and even a threat to Europe. What do you think?

Vasily Koltashov

Vasily Koltashov

VK: Vladimir Putin is the central figure of a complex system of compromises amongst the economic elite and between social classes in Russia. The decisions made in Russia are not to the liking of the United States and the European Union. They would like to overthrow Putin, even though his government implements neoliberal policies. But working people in Russia understand that an overthrow of Putin would usher in a Ukrainian scenario–widespread poverty, political dissidents harshly persecuted and a ‘decommunization’ process of rewriting of the country’s history. Faced with such choices, the Russian people support Putin.

Since Putin came into the presidency, the standard of living in Russia has risen sharply. The people are worried about their continued prosperity. Millions would still be in poverty, if nothing had changed from the terrible years of President Boris Yeltsin during the 1990s. The Russian liberals, on the other hand, praise beyond measure the Yeltsin presidency.

Putin is not as popular compared to the earlier years of economic growth and the time of reunification with Crimea (in March 2014). But the people hate the liberal “freedom fighters”. The latter has the support of only a small part of the government bureaucracy and the urban middle class. If the liberals were to try and take power in some kind of coup d’etat, there would be civil war.

UH: And yet Putin tries to make good relations with the West?

VK: Putin is trying to find a compromise with the U.S. and the EU. But those he calls “Western partners” do not appreciate the efforts. For them, Russia is simply a country where money can be earned and taken away, to be used to help stabilize neoliberal capitalism in Western Europe.

For the West, the verdict over Putin is in. They want to overthrow him and, in doing so, show off their power to the people in the EU. By the way, the Russian elite has not understood until now that the EU has turned into a prisonhouse of countries, lorded over by a dictatorship of finance capital and a policy of dividing ethnicities. That system is fragile and everything could collapse. This will come about once the people of Russia and the peoples of Europe agree on a different plan of European integration, a plan of equality, based on creating a protected, jointly regulated market with the aim of re-industrialization and development.

The EU tinderbox is the Balkans. Putin has steered clear of placing any fuse there and has tried for some kind of restoration of earlier, tolerant relations between peoples and countries in that region.

UH: Despite the economic crisis, the organizations of the left in Russia are small and scattered. What is the reason?

VK: Had the economic policy in the 2000s been less neoliberal and more protectionist, a more active industrial working class would have developed in Russia. There is the example of the automotive industry. There, a protectionist policy built up an industry and resulted in some power for workers. A new, strong union, the MPRA, emerged in the new automobile factories that were built.

The growth in personal revenues and wealth during the years 2001-2008 took place without class struggle. The growth was due to the worldwide economic spurt. In my hometown of Novosibirsk, the median income in 2004 was 100 euros; by 2008 it was 400 euros. To earn more money, you had to frequently change jobs because wages were on the rise but employers with a stable work force resisted paying wage increases.

It was a curious development: New employees would be paid a salary of 500 euros monthly while established workers in the same enterprise were being paid 300 euros or even 250. Only when the experienced worker found a higher paying job would his or her established employer offer to increase the salary. Russian citizens have new-found possibilities to fashion careers and earn more money.

UH: What role was played by migrant workers?

VK: Poorly paid jobs were taken over by migrant workers from Central Asia. EU bureaucrats say they are opposed to visa-free travel for Russian citizens because they fear a large influx of workers from Central Asia. But that’s a lie. Russia’s low-paid workers – construction workers, cleaning staff, etc – have no right to travel to the West, though this could be beneficial for them. In the present system, millions of Russian workers feel a certain privilege, which is detrimental to the formation of a working class.

UH: Let us return to the question of why the left in Russia is so fragmented.

VK: Today, there is a deep split between the Russian liberal left, inspired by the ‘freedom struggle’ in Ukraine”, and the patriotic left. Both groups are very small, but the second is stronger and more influential. It influences a bigger audience and has known speakers. Among the most well known among them is Boris Kagarlitsky, the director of our institute. The patriotic camp consists of different movements and people from different classes, similar to the ‘third estate’ during the French Revolution in 1789-1790 which was fighting for civil liberties.

UH: Does the memory of the repressive years in the Soviet Union cause a weakness of the left? Does the reawakening of nostalgia for the years under Stalin’s rule act to discredit left wing ideas?

VK: The exposing of Stalin by the Russian liberals has created a new Stalin cult. The fact that it is the liberals doing this means that in their reactions, people care little to examine the terror of this period. They blame this on the critics of Bolshevism, Stalin and the USSR. In the eyes of the population, the liberals are “American lapdogs”, people who would destroy the country.

The large part of the Russian population wants to rebuild a social state. Stalin is seen as someone who stood up to the enemies of the country. The details do not so much interest people today. This is similar to what took place in France from 1816 to 1830, when the old order was restored. The people wanted the Republic and also Napoleon, who “put the old order in its place”. Criticism of Bonaparte was interpreted as an attempt to slander the people’s will. Later, the French came to understand that the Republic and Napoleon were two different things. The Russians will similarly understand some day. But for now, they first have to deal with the neoliberals.

UH: Some people on the left in Germany believe that there can be no common interests with Russia because Russia is ruled by capitalists and even imperialists. Are there, in your opinion, common interests between Russia and Germany which can be comfortably embraced?

VK: I lived in Greece from 2007 to 2013 where I studied and analyzed the economic crisis and the EU’s influence on the country. I can tell you, there is no more terrible, miserly and destructive imperialism in the EU than the German one. Russia is not a full imperialist power, because Russian capitalism is based on the production of raw materials. Our “hawks” do not know why they should bother with Donbass or Ukraine. Russia would have to “feed the people there” and there are no particularly valuable raw materials.

The EU and the U.S., on the other hand, are much more experienced and they are intervening decisively. With the help of the IMF, they take what they can from Ukraine and do not care that the people there become poorer as a result.

Putin and Russia are an ideal scapegoat for scaring citizens in the EU. But the Eurocrats are not afraid of Russia. They are in attack mode. The Russian regime is trying as much as possible to preserve its relations with Europe and come to an understanding with the EU. But the Russian leadership does not seem to understand that European finance capital wants Russia as a dependent, controlled country, not an independent center with its own capital city and its own policies.

The Russian elite has acquired much of its wealth illegally. Everyone knows that. From that fact, the European elite imagines it can grab the wealth of the present owners on a statutory basis and, according to the usual procedures in the EU, pass it over to new owners.

The conflict between the EU and Russia cannot be easily solved. It concerns every Russian, and therefore the popularity of Putin is high. From him, the people want only one thing: To defend the country unrelentingly and not allow Russia to be turned into a Ukraine.

In Europe and Eurasia, all workers share common interests, regardless of nationality. Russia is a country with a neoliberal capitalism. The EU is a bloc of countries behind which stands the United States. In essence, we all need another form of society, liberated from neoliberal Europe. We need a common economic plan with which to develop a social state. We need a union of states by principles other than neoliberalism. The fight for that has just begun. Probably it will advance more quickly in Russia compared to elsewhere because the imperialists are trying to push Russia into a corner. So the social contradictions are exacerbated here.

Vasily Koltashov is the director of economic research at the Moscow-based Institute of Globalization and Social Movements (IGSO) and a lecturer at the Plekhanov Russian University of Economics. He specializes in the study of economic crisis and methods of promoting growth. Koltashov researched the economy of Greece from 2007-2013. He writes for,, SV and other media. Koltashov is a graduate of the Siberian State Transport University in 2002 and has been active in the left political movements in Russia since 1999.

This interview was translated for Counterpunch by Roger Annis, in collaboration with Ulrich Heyden.


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