Russia

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Edward Lucas, the Economist’s Eastern Europe correspondent, raises a provocative point in his recent article for Standpoint Magazine.

It is certainly true that the worst aspects of the Russian system are often a concentrated form of our own worst shortcomings. Indeed, the West has largely lost the moral authority that it enjoyed during the last Cold War. Once it was the Russian elite who feared us, and ordinary Russians who admired us. Now the elite despises us for our corruption and weakness, and ordinary Russians see little difference between one lot of rulers and another.

So, after making such a nuanced, astute observation, what does Lucas go on to conclude? That Russia’s experience reveals some inherent, underlying flaw within modern society? That the West must seriously re-examine its own moral-philosophical underpinnings?

Nah!

How about: “just because we have many flaws does not mean that we are always wrong, or that somewhere else can’t be worse”.

That’s right! We might be greedy, corrupt and decadent, but there’s no case for moral equivalence with Russia, because they’re worse!!

Lucas brings up two cases in which the West has been charged with hypocrisy. Critics assert a double standard in the West’s push to for Kosovan statehood and its refusal to recognize the pro-Russian break-away regions of Transdniester and Abkhazia. Lucas recognises that this is one factor leading to the erosion of the West’s moral authority. So does he suggest a more consistent approach? A new politics of neutrality that could eventually transcend the east-west divide?

Erm, not quite:

“(the EU) is incomparably better than the thuggishness and mischief-making that are the hallmark of Kremlin policy in its former empire. We do not want Transdniester to become independent, because it will be like Russia. We do want Kosovo to be independent, because it will eventually be like us. Again, that is a blunt message, but one better spoken proudly than left unsaid.

Bottom line: We may be greedy, imperialistic, corrupt and undemocratic, but by jingo, our greed, imperialism, corruption and authoritarianism are still morally superior to Russia’s! Just because!!

Of course, there is a more reflective and reasonable, if alarming, lesson to be drawn from all this.

In his groundbreaking work Modernity and the Holocaust, the sociologist Zygmunt Bauman concluded that, far from being an irrational aberration, an “interruption in the normal flow of history”, or a “momentary madness among sanity”, the holocaust may in fact have been an inevitable outcome of an advanced, technological society in which politics had become decoupled from social controls.

“The Holocaust was born and executed in our modern rational society, at the high stage of our civilization and at the peak of human cultural achievement, and for this reason it is a problem of that society, civilization and culture”, he writes.

Likewise, the traits that Lucas and others criticise in modern Russia are not some kind of gross aberrations from Western norms: instead, they lay bare the problems and contradictions of Western society, civilization and culture.

Over the last 17 years, Russian society has undergone a condensed and accelerated version of the West’s slower, less extreme but equally steady drift towards greater intrusion of the market into politics and society, concentration of power and a weakening of civil society and democratic participation in politics.

Thus, far from providing smug confirmations of Western superiority, the excesses that Lucas sees and justly condemns in today’s Russia might just be warnings from our own future.

I’m not the nationalistic sort. I count in my head in English, I think Ukrainians are alright, at heart. Even the Georgians, when they behave. I quietly enjoy the good news from back home and decry the bad, with the equal dose of ironic detachment and self-referential mockery demanded of my generation.

Yet I’d just lost my voice after two hours spent in a delirious jingoistic orgy as Russia devastated the Dutch. Watching Russia’s mesmerising play unlocked something primal in me, something dark, smouldering, bloodlustily beautiful.

60 minutes in: caught myself trying to superglue a small Russia flag to my neighbour’s front door.

10 minutes into overtime: searching Aeroflot’s website, rearing to go liberate my brother Slavs in Kosovo and Estonia.

But enough about me: what does this success say about Russia? Two important parallels stand out:

1: The last time Russia triumphed under the closest thing to a Dutch coach was when Peter the Great applied what he learned in Holland to drag his country into modernity. He studied ship building in Amsterdam, kept a Dutch mistress and in addition to technological advances tried to introduce to Russia a protestant spirit of hard work and self reliance. Yet in many ways, Peter’s reign was a culturally repressive one. Peter’s contempt for indigenous Russian traditions and institutions meant that it was only during Pushkin that the Russian language and culture had begun to shed their aura of inferiority.

2: The last time Russia faced the Dutch in a European championship was 1988, at the heyday of Gorbachev’s Perestroika, which remade the country’s social and intellectual fabric. Incidentally, the inspirations for Gorbachev’s reforms were also Western European. Perestroika and ‘new thinking’ were heavily influenced by Italian Eurocommunism and Gramscism. Unlike Peter’s reforms, however, Perestroika ended up being a dismal failure in economic, military and technological terms. Yet it produced an immense cultural and creative awakening.

So was the match a metaphor for a national renaissance, and if so, which kind?

From a purely sporting standpoint, the renaissance of Russia’s team transcends these historical parallels. Hiddink did not remake the squad in the Western European image; in fact, he achieved what had eluded both Gorbachev and Peter the Great – using Western know how to activate and enhance inherent Russian strengths. In his brilliant piece in the Guardian, football historian Jonathan Wilson writes that “Russia’s thrilling commitment to fluidity represents a return to the fundamentals of their own footballing heritage”: after years in the wilderness, Arshavin and co have revived the authentic ‘total football’of the young Soviet side of the 1940s.

Russia is clearly experiencing a re-birth. Its massive sporting successes (whether in women’s tennis, the Olympics or hockey) after over a decade smarting from the horrors of transition only complement its economic and geopolitical re-assertion. Russia is in the news.

Putin’s rule, like Peter’s, aggressively sought Western engagement and know-how, and embraced with zeal its business (if not political) institutions. These instruments, however, were not used to ‘undo’ or ‘over-ride’ Russian culture as in Peter’s day. In fact, the Putin era was marked by a strained synthesis of economic and commercial Westernisation coupled with a peculiar, artificially inseminated nativism.

The state sanctioned fetishisation of the Soviet Union in popular culture, the Putin-inspired brand of laddism and machismo, the return of the traditional family, the constriction of press freedom, the growing ethnic prejudice and nationalism have been the repressive corollaries of this technical modernisation. Yet in one sense, the net effect is the same as in Peter’s day: a growing austerity and social intolerance. The current renaissance is neither deniable nor progressive.

In Euro 1988, the USSR lost to Holland. Like its squad, the Soviet Union itself had run out of steam. Yet the defeat coincided with the flowering of Moscow News, Ogonyok magazine and other independent media, and the general culmination of glasnost, or openness.

The booming, assertive and proud country that won against the Dutch yesterday could not be more different from its beleaguered, teetering predecessor of 20 years ago. Not least because that win came on the heels of the closure of yet another newspaper.

There seems to be new trouble brewing in the Baltics.

Fresh on the heels of outlawing Soviet symbolism in what the BBC Russian affairs analyst Steven Eke called “the toughest bans on symbols from the Soviet past adopted in any of the 15 countries that emerged from the USSR”, Lithuania is now apparently in talks with the USA about the possible deployment of the controversial ABM missile shield should an increasingly lukewarm Poland drop out.

Moscow is livid. According to the Financial Times,

“A senior Russian lawmaker warned on Wednesday that discussions between the US and Lithuania over co-operating on Washington’s missile defence system “could not but provoke anxiety” in Moscow….

…Konstantin Kosachev, head of the international committee of Russia’s lower house of parliament, [said:]

“It seems that, through such little steps, people are trying to cross the ‘red line’ beyond which problems begin for the security of our country”.

Crossing the red line! Yikes!

However, it was entirely natural that Lithuania should have come to America’s aid.

After all, Valdas Adamkus, the Lithianian President currently considering stationing US missile interceptors and radar on his territory, had worked for 30 years at the US Environmental Protection Agency (where he was responsible for amongst other things, hazardous waste) in a past life as a Republican American citizen!

There is even an EPA award named after him: the “Valdas V. Adamkus Sustained Commitment to the Environment Honor Award”.

-LA Times

“Russia produced a sensational performance last night to join Croatia in the last eight of the European Championships….Sweden were shredded”

-The Independent

Russia outpassed and outclassed Sweden last night…To have produced a performance this bewitching in a game they simply had to win to progress to the quarter-finals says much for the resolve Hiddink has instilled in this team.

-The Guardian

Andrei Arshavin made a delayed entry into Euro 2008 - but Russia’s little master delivered a performance that was well worth the wait.

-BBC Sport

“Russia Silences Tabloid”

By Carl Schreck

The National (UAE)

“The fall of The eXile, which launched the career of Matt Taibbi, a political correspondent for Rolling Stone magazine, marks the end of perhaps the world’s most unique publishing project.”

“Irreverent mix of vicious humour, sharp political analysis and shameless hedonism”

“11 years of scorched-earth Gonzo journalism and taking down every sacred cow in sight”

“Sophomoric pranks on Russian government officials and western businessmen, savage criticism of western journalists covering Russia, and misogynistic club reviews informing male readers which clubs were optimal for finding overnight female companionship”

“The eXile once paid the handlers of Mikhail Gorbachev to convince the former Soviet leader to act as “Perestroika Co-ordinator” for the then-struggling New York Jets and give pep talks to the American football team”.

Moscow newspaper which mocked the powerful closes

Reuters

The Exile’s style of reporting blurred the line between comic and mainstream by tackling serious issues — crime, corruption, poverty and politics — with a harsh, jabbing humor. It also targeted Moscow’s foreign community and Russians with practical jokes and stunts.

“Raucous Russian Paper Closes Amid Kremlin Scrutiny”

By Alan Cullison

Wall Street Journal

Ribald pranksters

The paper’s club reviews advised which bars were frequented by violent thugs and which were popular with adventurous Russian women.

Michael McFaul, professor of political science and director of the Center on Democracy, Development and the Rule of Law at Stanford University, and a frequent target of attacks from the Exile, said he was “sorry to see the paper go” though he didn’t always agree with its politics. The Exile frequently assailed Mr. McFaul for his 1970s-style haircut.

The Exile assailed Western academics and journalists, whom it accused in the 1990s of understating the misery caused by the free-market reforms of President Boris Yeltsin.

Russian Bureaucrats Smother the World’s Best Alt-Weekly

Mother Jones

“Stormed into the Moscow bureau of The New York Times and threw a pie filled with equine sperm into the face of the bureau chief after accusing him of soft coverage of Russia’s political elite.”

It’s a little unnerving to think that 17 years of Russian history can be distilled into one bad 90s Swedish pop song.

Yet the struggles between business and the state, between Putin and Khodorkovsky, between liberals and siloviki, between the democrats and the Kremlin, far from being epic ideological battles between authoritarianism and freedom, do boil largely down to fights over ownership and, ultimately, money.

As Edward Limonov said, explaining the feebleness of the liberal opposition in Russia, “The Putin regime is a liberal regime, so it’s natural that liberals like Khakamada or Nemtsov do not seriously oppose it. Just look at Putin’s economic program: Low taxes, concentration of wealth in oligarchs’ hands, strict budgets. The Kremlin’s ideology is basically the same as that of Nemtsov’s and Khakamada’s, so of course it makes no sense to confront them as my organization does. They can only argue over the details of this liberalism, over who should own what”.

This should be kept closely in mind when looking at the TNK-BP spat.

It has been characterised in many Western outlets, and by BP’s Chairman, as a Russian bid to wrest foreign influence over energy resources. That may very likely be a welcome outcome for it, but at the moment, the Russian oligarch shareholders appear to be acting with full economic rationality. Ironically, it is the British side if anything that is exhibiting the more ideological traits, say the Russians, in forbiding TNK-BP from doing business with Cuba, Iran and Syria.

The oligarchs have accused the British of treating TNK-BP as a subsidiary of BP and preventing it from expanding in foreign markets where it could pose a competitive threat to BP. They also accuse Bob Dudley, the TNK CEO, of not presiding over the same asset value growth that rival firms like Lukoil have seen, and have said that they are not interested in selling their assets or transferring ownership to Gazprom.

At the same time, speculation remains rife that a sale to Gazprom is a long term intention of the Russian side and the government.

My point isn’t to disprove the fiction that saintly Western oil interests are getting raided by fat, balding Russian versions of Gordon Gekko, or rule following legitimates bullied by an autocratic state; whichever side you take on that issue, such a moralistic line of reasoning can lead only to misunderstanding, a kind of economic anthropomorphism. This dispute is nothing personal, just business.

To this end, Russian based American businessman and blogger Timothy Post has alerted me to a great article by Steve LeVine, Businessweek’s foreign affairs correspondent. In a refreshing antidote to a lot of economic jingoism we’ve seen in outlets like the London Times, LeVine gives a no-nonsense, dispassionate and incisive view of the confrontation as a straightforward business dispute.

“Is the latest oil drama in Moscow truly a rough, 1990s-style grab for assets, as BP has cast its dustup with the Russian oligarchs Mikhail Fridman, Viktor Vekselberg and Len Blavatnik?”, he asks.

“The short answer seems to be no”.

The oligarchs have stated — and I think it’s true — that they simply disagree with how BP has managed their joint company, called TNK-BP. As 50% owners of the company, they want a greater say in its operation, including an expansion overseas. And they want the current CEO, Robert Dudley, to be sacked. BP could simply accede to these demands, and get on with business. That doesn’t currently seem likely, one reason being that Sutherland could have difficulty climbing down after taking the altercation so personally. Short of such a concession, one finds two potential outcomes, neither of them pleasant for BP: In the worst case (for BP), the largest single block of its own shares — about 10% of them — will come to be owned by the four Russian oligarchs. That is one suggestion by the oligarchs — that the dispute be settled by an exchange of their TNK-BP shares for BP shares. In this scenario, BP has said that it would sell control of TNK-BP to a Russian state company, probably Gazprom or Rosneft. The takeaway from this outcome is BP culture could be forced to change by such assertive new shareholders. Imagine Carl Icahn on steroids. In the less unfavorable outcome, BP would cut its losses and sell out its half-interest in TNK-BP. The buyer again would be either Gazprom or Rosneft, and the price would be far less than the generally quoted market value of $20 billion-$25 billion. BP would argue that any sum above $7 billion — appoximately the price it paid for its share five years ago — would be gravy. But in fact, it would be fleeing a genuine fear of the first scenario. By its hands-off behavior, the Kremlin seems happy to watch BP twisting. Don’t look for assistance from President Dmitry Medvedev”.

It seems cultural factors may also have been at play. Russian business lacks some of the important myths and normative strictures that rose in the West during the100 years or so of paternalistic capitalism that reigned till the 80s, and the current crop of billionaire financiers are definitely of the Hieronymus Bosch school of business ethics.

For example, there is little value attached to certain concepts that had taken hold in the West, such as the necessity for competition, the avoidance of monopoly, and a strict dividing line between the private and state sectors. Business is viewed as necessarily ruthless, and any profit-maximising strategies are fair game.

In many respects, this no illusions school of thought may be a more honest vision of business in general. Attempts to humanise capitalism through norms or political pressure have consistently fallen to the wayside when directly confronted with profit maximisation, the central raison d’etre of any business. The run away success of Rosneft’s IPO on the London Stock Exchange, over the protests of George Soros and others about the ethics of buying into a firm that allegedly acquired Yukos assets illegally, is a case in point. The success of the South Stream pipeline in out-manoeuvring the EU’s Nabucco consortium through aggressive business tactics is yet another. Ironically, BP leadership would also actually welcome the sale of the Russian assets to the state gas giant.

Thus, when BP’s Chairman called the dispute “a return to the corporate raiding activities that were prevalent in Russia in the 1990s”, Mikhail Friedman, one of the Russian shareholders, accused Sutherland of casting “this as a conflict between a recognized, respectable Western company and wild hordes of Russian oligarchs who are trying to seize power through dirty methods”.

In a comment on Steve LeVine’s blog, Mr. Post writes the following:

The expression should read, “All’s fair in love, war, and the oil business.”

The West could have created an atmosphere of mutual benefit during the 1990’s when Russia was weak but instead the oil majors sought to use their leverage and take as much as they could get from a weak and desperate Russia. Their approach created a zero-sum playing field. Now that the Russians have found their footing and are playing as equally well as their Western counterparts, BP cries foul.

Can we take from this that the West doesn’t like to compete in games where their “opponents” are as strong and talented as they?

He may have a point. Indeed, the BP side’s public complaining over TNK-BP, though in many respects legitimate, does smack of sour grapes. When BP created TNK-BP in 2003, the new company was evenly split, 50-50, with no controlling stakes; unprecedented for Russian-Western joint ventures. At the time, Putin himself warned that that was a bad idea.

I am only speculating, but it seems that BPs original decision not to push for a controlling stake in the deal was grounded in the confidence that it could maintain informal dominance in the partnership. Now that capitalist-savvy Russians have beaten the Western giant at its own game, it’s no use crying foul.

“The owl of Minerva flies at dusk”, the philosopher Hegel, wearing only a false moustache and flapping his arms, liked to whisper conspiratorily to terrified passers-by.

(No wonder his last words were: “Only one man had ever understood me, and he didn’t understand me”. But I digress.)

Just so, I am having a very difficult time getting to the bottom of what’s really going on with Russia and energy at the moment.

First, there is the whole TNK-BP saga unfurling in Moscow.

TNK-BP is a Russo-British joint venture oil giant currently in the throes of a major boardroom battle.

Some assert that the billionaire Russian shareholders want to buy out the British and sell the company off to Gazprom. At the same time, Russian officials have publicly stated that it would be a bad idea. What’s behind all of this?

Then this morning, the Wall Street Journal carried a long and detailed essay about the Great Game between competing EU and Russian gas pipelines.

I am doing some research and digging through my old thesis notes to make something of all this, and hope to post something resembling an analysis very soon.

Although, if old Hegel was right, and the state of man’s mind conforms precisely to the state of the world as he views it, then it might take me a little longer.

ANYONE GOT ANY IDEAS? PLEASE SHARE THEM HERE!!

Not to be outdone by yesterday’s tennis ‘interviews’ in the Daily Telegraph, this Sunday’s New York Times front page photo made sure no-one skipped straight to the magazine section:

“Free and Flush, Russians Eager to Roam Abroad”, the headline beamed, in case anyone might also be interested in reading the accompanying article, which happened to be about the new-found prosperity of ordinary Russians. Here are a few interesting titd -bits from the piece:

“The number of Russian tourists visiting countries outside the former Soviet Union grew to 7.1 million in 2006, the last year statistics were available, from 2.6 million in 1995, according to the Russian government.

…[Increased] foreign travel reflects not just Russia’s economic revival under Vladimir V. Putin, but also how the country has become, in some essential ways, normal.

Many Russians interviewed here credited Mr. Putin, the former president and current prime minister, for their ability to travel, saying that he was responsible for Russia’s new prosperity.
If you have some time and a little money, you can travel. Just like everyone else in the world.

“It is now so easy — buy a package tour for $800, and here we are, in paradise,” said Ms. Kasyanova…”

Crickey! With all this globetrotting, is there like, anyone even left in Russia? Well, the New York Times certainly couldn’t care less.

But scholar and Russia blogger Sean Guillory has bothered to track down a few of these non-travelling losers, pickling peppers in Voronezh instead of packing La Scala.

21.7 million losers, to be precise. Yep, that’s the number of Russians living below the Federal subsistence (read: starvation) threshold of $95 dollars a month.

So here’s a little lesson in newsworthiness for the New York Times, next time it wants to devote a front page spread to a social phenomenon gripping Russia:

But then, how on Earth would you work a good bikini shot into such a story?

“They very rarely looked like endangering the Russian goal, Greece. There’s no doubt the better team won today, Russia showed good pace and got forward well and they are a young, quick team who are only going to get better and better.”
BBC Radio 5 Live pundit Pat Nevin