MOSCOW BLOG: Putin-Smithism

By bne IntelliNews December 13, 2007

bne -

Two big political stories were running in parallel on Tuesday, December 11 that highlight more than any other event in the last eight years why democracy is so unpopular with leaders in the CIS.

On the same day that newly anointed presidential hopeful Dmitry Medvedev suggested his boss President Vladimir Putin should become prime minister after Putin steps down in March 2008, there was almost a punch up in Ukraine's Rada, which had gathered to vote the firebrand Yulia Tymoshenko in as its PM.

Ukraine is now arguably the only true democracy in the CIS, whereas Russia's version could charitably be described as "flawed." However, Putin and the other leaders in the CIS must be watching the debacle of the Ukraine vote and thinking: democracy doesn't work.

The Rada session quickly descended into farce after Tymoshenko failed to secure the nomination by one vote - she got 225 but needed 226 in the 450 seat lower house of parliament to be confirmed as PM.

It's not clear what happened in the Kyiv vote, as President Viktor Yushchenko went out of his way to badger rebels in the pro-president Our Ukraine party to support Tymoshenko. According to reports, some deputies seem to have pushed their electronic voting button too soon, which, as a precaution to prevent double voting, turned their vote off. In any case, Tymoshenko's eponymous bloc BYuT are claiming that at least one vote cast for their leader was discounted because of a technological glitch.

What followed was typical for Ukrainian politics for the last two years: BYuT deputies stormed the podium demanding a recount. Deputies from the opposition Party of Regions physically blocked them. Scuffles broke out, but stopped short of fisticuffs. This is reminiscent of Rada sessions in 2006 when, on one occasion, protesters effectively ended a debate by breaking the speaker of parliament's microphone.

Opposition leader Viktor Yanukovych said as the Rada gathered to try again that all this showed was that a government that relies on a two votes for its authority - the number of seats the Orange coalition has in the 450-seat Rada - isn't viable. "Yesterday's events at the parliament showed that a coalition of 227 is obviously not viable. This has sent a clear and understandable message to our society that hopes for stability in the country are futile," Yanukovych said in a commentary posted on his personal website on December 12.

He has a point. Despite her obvious skills as a politician and the strength of her personality, what hope does Tymoshenko have of forcing through the painful reforms Ukraine needs if it is to carry on growing? Especially in a system where a hundred thousand bucks can turn a vote if a businessman (and the Rada is stacked with business interests) doesn't like a new law?

Compare this to Russia. What is potentially a hugely destabilising transition of almost absolute power from Putin to Medvedev is going extremely smoothly (so far). The Kremlin will remain in control and foreign investors gave a big hurrah when Medvedev's name was released, as they assume he will continue the liberal reform programme that is underpinning Russia's accelerating growth - so screw the pensioners, Chechens and every other second-class citizen that Russia has.

The trouble is that this handover isn't very democratic, insomuch as the people of Russia do not have much say in who gets the job. But just to make things really complicated - and this is the point that most Western commentators miss - is that it's very democratic from the point of view that the people trust Putin and are happy to go along with whatever he decides to do, which is what government is supposed to do: do what the people want.

And this is where Russia watching starts to get really confusing. What does one mean by democracy? The Russians themselves appear very confused over what the term means. A Levada Centre poll, using a multiple choice questionnaire, found in December that 44% of people thought it means freedom of expression, 30% said it represented order and stability, 26% said it stands for economic prosperity, and 21% said it is law and order. Finally, 11% of respondents said they believed democracy was empty talk.

In the West, democracy is usually equated with, among other things, a mechanism that allows all points of view to be expressed and which are represented in government. Russia clearly doesn't have this.

But a democracy is also supposed to represent the interests of the people as a whole and in Russia there is a broad consensus - people are happy with the government. The most recent polls give Putin over 80% popularity rating. This is something none of the Western countries have ever managed to achieve. How can you "express dissenting views" if there aren't any?

The mutual appointing of president and prime minister during one week followed swiftly on the heels of Putin's televised appeal to the public to support United Russia in the parliamentary elections on December 2. There is a very obvious political ballet being performed, and a pretty deftly choreographed one at that.

Of course, the difference is the checks and balances in the West and clearly part of the reason Putin is so popular is that he has effectively quashed whatever dissent there was. But watching the events of Tuesday makes one wonder which approach is better? Ukraine is doing well, but this is despite not having an effective government for nearly two years (and looks like it could be without one for another few years). Russia is doing better and is almost certainly going to continue to do well, as it's making the reforms that Ukraine can't at the moment.

Certainly, the Russian people clearly prefer their version to the Ukrainian version. A poll conducted by the Levada Center found that 68% of people prefer order to democracy, while only 18% said that they believe democracy is the most important factor.

The pros and cons of a "transition to democracy" that Putin now seems to be attempting with his move to the job of PM - the suggestion that he will turn Russia into a parliamentary democracy - are debatable.

Certainly, from the Kremlin's point of view the most workable option seems to be a middle way as Putin sits between two extreme examples: Ukraine and Belarus.

The latter is an economic basket case, but at least President Alexander Lukashenka has avoided an economic collapse and his pensioners are fairly happy with the way things are being run; this is about a third of the population and so a major constituency.

The other is a political basket case, but doing well economically and will do as long as it remains in fast catch-up mode, which can't last that much longer without some real reform.

If there really is valid argument for a middle path then why does Russia get such a bad rap? The short answer is that Putin is constantly trotting out democratic rhetoric and there is nothing that lights journalist's fire more quickly than hypocrisy. The knee-jerk reaction to this talk of democracy is that Russia's brand is not the Western version so, therefore, Putin is simply lying; by extension he is trying to build a police state, as Stalin used much of the same rhetoric.

This is to miss the differences of ideology that now drives the Kremlin. Perhaps a better way to think of what Putin is trying to do is to consider what Lenin tried to do when he took over.

If you cast your mind back to school history lessons, then you may remember that Marxism said a revolution would happen when the industrial workers rise up and oust their capitalist masters to take control of the means of production ending in a workers paradise. The problem Lenin had was that Russia wasn't an industrialised society but an agricultural society. The conditions for revolution simply didn't exist.

Lenin's solution, outlined in the pamphlet "What's To Be Done," boiled down to the need for the party to take the lead, not the workers, and create the conditions for a Marxist revolution and the paradise that followed.

Clearly, the Kremlin has rejected Marx's "Communist Manifesto" in favour of Adam Smith's "Wealth of Nations" as the underpinning ideology, which leaves Putin with a similar problem.

Smith describes a post-industrialised market economy with a middle class that form the backbone of the market. Yet Putin inherited a collapsed military-industrial economy where over a third of the people were living in poverty. Not much room for a market when some 40m people are simply trying to survive.

Like Lenin, Putin believes that this means the state must take the lead in creating the middle class and industry that will lead to the bourgeois paradise. This is Putin-Smithism (it won't catch on as it's too hard to say) and the defining difference is Smith's invisible hand is all too visible in Putin's Russia and is prone to punch you in the face if you resist the state, as Mikhail Khodorkovsky found out.

This analysis is meant tongue in cheek, but it still fits the current events better than the simple "Putin is a hypocritical dictator" line that many observers take.

It also explains the confusing way the Kremlin on the one hand will push liberal market reforms - now personified by Medvedev - and at the same time is quiet happy to kosh people like Gary Kasparov. It also explains what the Kremlin means by "state capitalism," which sounds like an oxymoron that has confused most and has been ridiculed by the rest.

And Russians are quite happy with this set up. A poll by the VTsIOM research agency said that 52% of people favour an economy based on state planning and distribution; this is in contrast to 41% asked the same question in 1997 when 67% of people polled said they believed that maintaining order is paramount, even if democracy and personal freedom become of secondary importance.

I think this lies at the heart of the clash between the West and Russia. The West would argue having the right system is more important than the success of the policies, whereas Putin believes that if he is doing what the people want (and it is working) that is democracy.

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