Monday, October 26, 2015

Putin’s Destruction of Entrepreneurs Hurting Russia More than Stalin’s Destruction of Peasants Did, Bitkov Says

Paul Goble

            Staunton, October 26 – Igor Bitkov, a Russian businessman the Kremlin stripped of his company, drove into exile and continues to persecute even though he is imprisoned in Guatemala, says that Vladimir Putin’s destruction of entrepreneurs and genuine entrepreneurial culture hurts Russia even more than Stalin’s destruction of peasant in the 1930s did.

            Bitkov who has thus experienced on his own skin and that of his wife and children the situation whereof he speaks, says that “at present, the class of entrepreneurs in Russia has been almost completely destroyed” –that is, the class of genuine entrepreneurs and not those who call themselves that but who feed off the state (

            This has happened, he argues, “because Putin understands that it is precisely such people who are the real threat to his dictatorship. Having resources, influence and the support of the population, they could effectively struggle with the archaic, semi-feudal Putin regime which has blocked the development of the country and is pushing it on the path to degradation.”

            Another analyst has suggested that “entrepreneurs in Putin’s Russia have been subjected to repressions in a greater degree than peasants in Stalin’s USSR,” Bitkov says. However that may be, he says, it is certainly the case that “the elimination of entrepreneurs will have worse consequences for Russia than the elimination of the peasants.” 

            That was easy to hide as long as prices for oil were high, but now that they are not and are unlikely to be again anytime soon, Bitkov argues, the lack of real entrepreneurs in Russia is being felt and will continue to be felt ever more directly and seriously as Russia’s GDP continues in free fall.

            Some foolish “optimists” are now saying that as a result of the ruble’s devaluation, labor costs in Russia are now lower than in China and that this will lead to a growth in industrial production.  “Unfortunately,” Bitkov says, “this is not so.” Instead, low pay will lead even more professionals and scholars to leave and more bankruptcies among those who remain.

            To be sure, exporters may make more money, “but in Russia, the lion’s share of exports are from companies controlled by oligarchs who are not inclined to reinvest their profits in the development of the economy of Russia.” Instead, they will in the future as they have so far under Putin send their money to safe havens abroad.

            Were they entrepreneurs, they would behave differently, Bitkov says.  “In the entire world with the exception of North Korea, it is precisely the entrepreneurs who secure the development of countries. They assume risks, carry out projects, and create jobs. They are respected and valued by society and the authorities” – everywhere except in Russia.

            In Putin’s Russia, government propaganda promotes a different image of entrepreneurship, portraying those engaged in it as thieving, lazy and unprincipled “enemies” of society.” And on the basis of that image, the Putin regime hounds and ultimately destroys anyone who is a real entrepreneur.

            “Sooner or later, the dictatorship will collapse under the weight of the economic problems it has created,” Bitkov says. But even when that happens, it will take a very long time for society to “believe again that entrepreneurship is not a parasite on budget flows” and that instead, it is a quality needed to promote the development of the country.

            Except for the most vulgar Marxists, whose ideas seem to inform Putin and those around him, no one believes or should bellieve that “theft and entrepreneurialism” are “one and the same thing.”  
            In another essay, Bitkov suggests that this problem is part and parcel of a more general “Putin problem.”  He writes that he “does not know a single Russian problem which could be resolved under Putin,” even though the list of problems which the Kremlin leader has created is “quite long” (
            “Any dictatorship creates problems but does not solve them. [Such regimes] arise by offering people simple and quick recipes for the resolution of this or that problem. But as a result, they not only do not solve them but rather give birth to new and significantly more problems.  Vladimir Putin is clearly part of this category of rulers.”

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