The Conundrum of Russian Capitalism , livre ebook

The Conundrum of Russian Capitalism
The Conundrum of Russian Capitalism
The Post-Soviet Economy in the World System
Ruslan Dzarasov
First published 2014 by Pluto Press 345 Archway Road, London N6 5AA
www.plutobooks.com
Distributed in the United States of America exclusively by Palgrave Macmillan, a division of St. Martin’s Press LLC, 175 Fifth Avenue, New York, NY 10010
Copyright © Ruslan Dzarasov 2014
The right of Ruslan Dzarasov to be identified as the author of this work has been asserted by him in accordance with the Copyright, Designs and Patents Act 1988.
British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library
ISBN   978 0 7453 3279 6     Hardback
ISBN   978 0 7453 3278 9     Paperback
ISBN   978 1 8496 4909 4     PDF eBook
ISBN   978 1 8496 4911 7     Kindle eBook
ISBN   978 1 8496 4910 0     EPUB eBook
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This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Logging, pulping and manufacturing processes are expected to conform to the environmental standards of the country of origin.
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Contents
List of Figures
List of Tables
Acknowledgements
Introduction
1.
Global Accumulation and the Capitalist World-system
2.
From Central Planning to Capitalism
3.
Russian Big Business: Corporate Governance and the Time Horizon
4.
Rent Withdrawal, Social Conflict and Accumulation
5.
Insider Rent and Conditions of Growth in the Russian Economy
6.
The Accumulation of Capital by Russian Corporations: Some Empirical Evidence
Conclusion
Notes
Bibliography
Index
List of Figures
1.1
Net dividends plus net share buybacks as a percentage of internal funds in US non-financial corporate business, 1951–2011
1.2
Foreign direct investment in developing and transition economies, 1970–2010
1.3
Net dividends as a percentage of net investments in fixed assets in US non-financial corporate business, 1960–2010
1.4
Investment in fixed assets and net acquisition of financial assets as a percentage of US internal funds (book) in the US non-financial corporate sector in 1945–2011
1.5
Total financial assets as a percentage of nonfinancial assets in the US non-financial corporate sector, 1951–2011
2.1
Consumer price index in 1991–95
2.2
Inflation and slump in the Russian economy in the 1990s
3.1
The shares of ownership concentration of Russian firms
3.2
The ‘Mejprombank’ ownership network
3.3
A typical ownership structure scheme
3.4
Infrastructure of insider control over assets
4.1
The cash scheme of rent extraction
4.2
Ownership and control of Evrazholding
4.3
Price structure and rent distribution among the large and small insiders
5.1
Price indices for Russian industries, 1990–2003
5.2
Profitability of industries’ output in 2003
5.3
Profitability of organisations’ assets, by kinds of economic activities
5.4
Price structure and rent distribution among the large insiders of a) the privileged sector and b) the industries disadvantaged by price disparity
6.1
Private and public investments in fixed capital in Russia, 1990–2010
6.2
Distribution of the industrial organisations, according to the period of purchases of machinery and equipment
6.3
The share of enterprises abstaining from any investments
6.4
Affirmative replies to the question ‘Does the current level of investment in your enterprise secure necessary modernisation?’
6.5
Factors limiting production
6.6
Negative responses to the question ‘Is there available Russian-produced machinery, necessary for your enterprise, which is not inferior to their imported counterparts?’
6.7
The share of enterprises which management thinks that competition from non-CIS producers in their markets is increasing
6.8
The share of companies introducing globally innovative business practices, technologies and products
6.9
Responses to the question ‘What kind of services do banks provide to your enterprise?’
6.10
The ownership system at JSC Petchoraneft
6.11
Struggle of big insiders for control of Volgograd JSC Chimprom
6.12
The struggle of the Mazepin and Levitsky-Vekselberg groups of big insiders for control of the chemical industry
List of Tables
1.1
Relative import prices of manufacturers, average annual percent change, 1986–2006
1.2
Prices and money supply, average annual growth
2.1
Dynamics of the main social-economic indicators in Russia, 1990s
3.1
Ownership concentration in Russian big business
3.2
Ownership structures of companies in selected transitional countries, 1999
5.1
Producer price indices by kinds of economic activities
6.1
Dynamics of the value of fixed capital in industry
6.2
Origin of the machinery and equipment purchased by Russian firms
6.3
Sales and profit of Volgakabel
6.4
Major buyers of Petchoraneft on the world market
6.5
Some of Petchoraneft’s debt commitments
6.6
Profits and losses of Chimprom
6.7
Value, structure, and wear and tear of Chimprom’s fixed assets
Acknowledgements
I owe an enormous debt to the supervisors of my PhD thesis at Staffordshire University (UK), on which this book is based, Professors Peter Reynolds and Nick Adnett, for their continuous support and encouragement. They patiently worked with me over eight long years. I benefited enormously from their high academic standards, tolerance and understanding.
I also wish to express my profound gratitude to the staff of the department of economics at UMKC (Kansas City), who accepted me as a Fulbright visiting scholar. My special thanks to Professor Frederic Lee from the same department. He not only kindly invited me to stay at UMKC, but shared with me his enormous knowledge of post-Keynesian economics and the history of American business. Together with his wife Ruth, Professor Lee introduced me to American culture and way of life and the Missouri environment. I am grateful to Professor John Henry (UMKC) who discussed with me various topics which facilitated my research. Professor David Kotz (UMASS, Amherst) provided his valuable comments of my model. Professor Tae-Hee Jo organised discussion of my topic in Buffalo State College (New York) from which I gratefully benefited. I am much obliged to them and to all their colleagues who participated in the discussions.
My special thanks to consultant Dmitry Novojenov, who generously shared with me his wide knowledge of modern Russian business and was my indispensable co-researcher in Russia. I am also grateful to Dmitry Kuvalin at the Institute of Forecasting of Russian Academy of Sciences, who provided me with the results of his surveys and his advice. I owe a special debt to my colleagues from the Russian Academy of Sciences – Professors Valery Grebennikov, Vitaly Manevitch, Vladimir Khoros and Viktor Krasilschikov – and from Moscow State University – Professors Viktor Cherkovetz, Alexander Buzgalin, Andrey Kolganov – who provided invaluable advice content of my research, paving the way for its completion.
I am very obliged to a teacher of English from UMKC, Stephen Holland-Wempe, and to a sociologist and an interpreter, Renfry Clarke, for their help in editing my manuscript. I want to thank as well the former Chair and Commissioning Editor at Pluto Press, Roger van Zwanenberg, who encouraged me to embark on this project and supported the idea. I want to express my gratitude to the team at Pluto Press, especially David Shulman, including the managing editor Robert Webb, the copy-editor Jeanne Brady, Melanie Patrick, responsible for the cover design, Jon Wheatley, Jonathan Maunder, and Chris Browne, all of whom brought the manuscript through the complex process of production with a high degree of professionalism, cooperation and support and worked on marketing and publicity.
I want to thank my parents Inna and Soltan Dzarasov, who were a constant source of support and encouragement for me during all my years of work. My dear friends Christine and David Cole, Barbara, Jim and Edward Granter, Tricia and Alan Jones, Ishbel and Douglas Mair deserve a few words here for their help in improving my English and introducing me to English culture and the way of life, and, of course, for their magnificent hospitality which was a great relief from the hardships of my work in the UK. I am grateful to my schoolteacher Irina Voloshko who patiently taught me English when I was a teenager and not so easy to deal with.
Unless otherwise indicated, translations from Russian sources are my own.
It goes without saying that I am the only person to be blamed for any deficiencies in the work.
Introduction
O n the eve of the market reforms in Russia in the early 1990s, the prominent Russian television journalist Vladimir Pozner organised a talk-show with the provocative title ‘Do We Need Capitalism?’. The broadcast was seen as a triumph for liberals over supposedly backward opponents of the new system. Stanislav Shatalin, a highly regarded economist of the time, explained the essence of the new ‘one true doctrine’ 1 to viewers in a simple analogy: ‘Imagine a small pie, cut into equal pieces. That’s socialism. Now imagine a big pie, cut into unequal pieces. Even the small pieces of the second pie are much bigger than in the first. That’s capitalism.’ Another guest on the programme then pointed to the simple, straightforward road said to lead to the promised consumer paradise: the state should get out of the economy. This, it was argued, meant that the state should make way for ordinary citizens.
During the same period, Russian television was also running an advertisement informin