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The Conundrum of Russian Capitalism

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The Conundrum of Russian Capitalism

Pluto Press,

15 min read
10 take-aways
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What's inside?

Economist Ruslan Dzarasov examines Russian capitalism through a Marxist lens.

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Editorial Rating

8

Qualities

  • Analytical
  • Innovative
  • Visionary

Recommendation

Looking through a Marxist lens, economist Ruslan Dzarasov examines Russia’s economic slide and attributes it to privatization, the “financialization” of corporations and a corrupt Stalinist bureaucracy. He criticizes “big insiders” who secure their profits by bleeding their companies dry and expand their empires by engaging in hostile takeovers, often with the help of criminal gangs. The result, since the 1990s, has been the steady nationwide loss of earlier economic gains and a decline in the quality of life. While Dzarasov recommends revamping the legal system and enlisting the help of public-private supervisory committees to mend the present business environment, he doesn’t include detailed instructions on how to accomplish those reforms. While always politically neutral, getAbstract sees value in understanding Dzarasov’s ideas. While published shortly before the conflict in Ukraine, his book is a useful, if sometimes taxing, read for anyone working in Russia or considering doing business there.

Summary

“Global Accumulation and the Capitalist World-System”

The foundation of today’s big-business landscape in Russia lies in the behavior of the ruling elite and the current conditions of worldwide capitalism. In that realm, one of the most significant recent economic developments is a basic but largely overlooked change in the nature of corporations: their switch from “managerial firms to financialized structures.” This transformation is clearest when you examine “the capitalist mode of production.”

Corporations have always struggled to balance long-term plans that assure their continuation with short-term profits – that is one of “capitalism’s inner contradictions.” But by the 1980s, growing global competition for diminishing opportunities set corporations up to extract the greatest possible financial returns through mergers, acquisitions, asset stripping, downsizing and takeovers. That instigated the pivotal union of two previously separated entities – the ownership and control functions inside companies. Managers and directors clearly prioritized improving their stock prices to the detriment of long-term organizational growth.

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About the Author

Ruslan Dzarasov is a senior research fellow at the Central Institute of Economics and Mathematics of the Russian Academy of Sciences.

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