Plan to Confiscate Super Profits Shows Russia Moving ‘from Parody of a Legal State to Full Corporate One,’ Inozemtsev Says

Paul Goble

            Staunton, August 28 – The proposal by Putin advisor Andrey Belousov to confiscate some 500 billion rubles (eight billion US dollars) from 16 metallurgical and chemical companies underscore how far Russia has moved “from a parody of a legal state to a complete analogue of a corporate one,” Vladislav Inozemtsev says.

            “A contemporary state to the status of which Russia some time back aspired, presupposes a clear border between the state and the private sector.” That border may be modified, but “the fact of its existence must not be under any doubt.” What Belousov is proposing, however, undermines the principle, the Moscow economist says (theins.ru/opinions/114897).

            His suggestion is “based on the notion that there are two budgets in the country: one which is “the visible part of the iceberg” defined by the state budget and a second which is distributed” not by legal regulation but “’by agreement’ with those who are prepared to share informally their incomes” with the powers that be.

            In this second sphere, Inozemtsev says, “relations between the authorities and the business/people do not follow strict rules. Instead, everything is decided on the basis of a [constantly] shifting balance of interests.”

            According to the economist, “the Kremlin is prepared to recognize ‘the needs’ of entrepreneurs, pensioners, state employees, and young people, in general of all groups which exist in society, but considers dominant its own notions” as to how these are to be satisfied and who is to pay.

            “The tax burden on business,” in this understanding, “may not be raised for years, but this hardly means that the life of entrepreneurs will not get worse.”

            This recalls, Inozemtsev says, a passage about needs and interests and the role of the powers that be to coordinate them offered by Benito Mussolini in his book, The Doctrine of Fascism (New York, 2012), p. 25), as well as the conclusion of scholars that this approach is the core of Musolini’s fascist corporate state (Celli, Carlo (ed.) Economic Fascism: Primary Sources on Mussolini’s Crony Capitalism (Edinburg,Va, 2013), pр. 277-280).

            “It seems to me,” the Moscow economist continues, “that the real significant of ‘the Belousov plan’ and its evolution will become clear precisely when the conversion of Russia from a parody on a legal state into a complete analogue to the corporate state becomes an accomplished fact.”

            And that in turn carries with it a message not only for Russian businessmen but for Russians more generally: “If the majority always selects a strategy of consistent partial concessions to the authorities, hoping from their mercy, then no one besides the authorities will remain among the winners.”