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Does Pussy Riot Matter? Neoliberalism on the Loose in Russia

August 24, 2012

Read most of the coverage of Russia today, and you could be forgiven for thinking the country is more or less a battleground between the anti-Putin protest movement that has crystallized since even before the disputed Presidential elections this March on the one hand, and Putin’s gang of regime-fed oligarchs and bureaucracies on the other. With faces of protest like Aleksei Navalvy, Ksenia Sobchak, Boris Nemtsov, or, more recently, the music group Pussy Riot on the one side and Putin on the other, this presentation of Russian politics neatly recaptures all of the tropes of the legacy media’s coverage of Soviet-era dissidents. Substitute the courageous prose (and apocalyptic rantings) of Aleksandr Solzhenitsyn for YouTube videos of a “feminist punk rock collective” taking over one of Moscow’s largest cathedrals, and replace the gerontocrats of the USSR with Putin, but it’s still the same old song.

Pussy Riot: important or a distraction?

This narrative might be partly true, but it also obscures what may be a more important structural trend in Russian politics. Katrina vanden Heuvel, Editor of The Nation notes that in spite of the opposition of protest movement figures like Navalny to Putin, they are in striking agreement with the current government on the implementation of a law (“On Amendments to Individual Statutes of the Russian Federation in Connection with Improving the Legal Status of State (Municipal) Institutions”) that will have radical consequences for public administration in Russia. The law, writes historian and Russia commentator Sean Guillory

 effectively splits Russia’s public-sector institutions into two groups: “public institutions” and “new public-sector institutions.” The former includes national defense and security organs and larger medical institutions like psychiatry hospitals. The budget allocation of these organizations will remain the same. The latter, however, which includes the overwhelming majority of institutions, about 330,000, of health care, education, sciences and culture will be partially decoupled from the Federal budget and run according to market principles.

This already would make for quite a shock to provincial Russia’s institutions of local government, many of which, the law’s authors argue, are bloated and poorly run. (Fair enough.) But critics of the law, like Naderia Mukhetinova, an economics professor, have their worries. As Guillory notes, institutions’ budgets

will no longer be calculated on previous spending, but will be subsidies based on fulfilling state assignments, which cannot be refused, but the subsidy for which can arbitrarily altered by municipal governments. The law doesn’t provide any standards for determining the norms or financial payment for fulfilled work. Moreover, by making these institutions “autonomous,” the state is relieved of any responsibility for their economic viability.

That could be a good thing for a Kremlin looking to balance its books over the long term, but it could also lead to new problems of corruption in local administration. Whereas administrators might have used to simply take bribes to supplement their own meager state-run salaries, under the new regime it could become possible for managers of a cash-strapped school in an isolated areas to privatize the school, hire their relatives, and charge exorbitant fees. That’s why American commentators like vanden Heuvel, oddly channeling John Edwards, fret that the new law could lead to “two Russias.”

What to conclude? It’s true that the last time Russian political leadership tried to introduce a sweeping introduction of market principles into state-owned enterprises (in 1987 under Soviet leader Mikhail Gorbachev) the experiment went less than smoothly. And as many criticisms have been levied against American towns and cities increasingly privatizing their own services, it seems to us that there is far more potential for moral hazard – and true financial ruin – when bureaurats, resistant to real reform, resort to the kinds of financial and bookkeeping tricks that Americans are familiar with, as in the case of Poway, California. As upsetting as reduced library hours, or a privatized school system (so long as it remains responsive to parents’ needs) might be to Blue stalwarts, the costs of these are chump change compared to the billions of unfunded future liabilities that irresponsible public administrators have left to future generations at home. Given the huge entitlement liabilities public institutions racked up, the money often isn’t there for investing in public goods – libraries, healthcare, and education – that ensure long-term prosperity. That states with such an entrenched tradition of huge, expansive, and unaccountable bureaucracies as Russia are considering these kinds of reforms just provides further evidence of what is increasingly a global phenomenon.

Coming to a Kremlin near you?

What might be really worrying in Russia – as opposed to the case of Pussy Riot, which is distressing but which most Russians literally have never heard of - is the precedent for modern states to apply neoliberal logic to the bulk of their infrastructure, outside of security and defense. As someone who has to deal with post-Soviet institutional thinking on a daily basis, I can certainly agree that the number of administrators who need a kick in the pants – whether literally or in terms of thinking more commercially – is enormous. Traveling around the former Soviet Union – or to some of America’s worst schools – and you’ll see students getting robbed of an education while (in the case of the US) retired teachers continue to collect earned but still lavish pension benefits or (in the case of the former Soviet states) there is just no money directed to public education. Shakeups are necessary in both countries, but brutely submitting entire swaths of public services to market logic – while somehow excluding the police or military from having to make similar considerations – will undermine the strength of both countries in the long term.

From → Foreign Policy

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