March 20, 2008 (the date of publication in Russian)

Maxim Kalashnikov


Russia after global crisis: a subject or a victim of history?

It is already clear enough that the United States, Europe and the rest of the world is struck with more than just an economic slowdown but with something more essential and awesome – with the end of the order of modern capitalism. Anticipating an abrupt change in global development, the ruling elite of the West, visibly embarrassed, is jerking from one side to another.


In February, Washington ventured upon an unprecedented measure, deciding Ц contrary to the guidelines of market economy Ц to distribute an amount of $158 billion among the population. In this way, the powers that are trying to save the system, boosting the consumer demand and thus enabling the ordinary Americans to return the mortgage debts.

Nothing new under the sun: in 1935, during hard times of Great Depression, a certain Francis Townsend introduced his own remedy for economic problems of the nation, proposing to allocate a sum of $200 (present $2000) for every person of pension age, under the condition that this money is spent within a month. Two thousands of Townsend Clubs across the country advertised the idea that in case the Americans act accordingly, they would gain a warm existence in their old age while industry and trade would acquire solvent demand.

Today's recipe resembles Townsend's ideas but in a reduced, one-kick version. Thus, the US Government borrows a method from a non-liberal arsenal of the New Deal, wishing thus to pump more money into the military industrial complex. The deliberate slashing of the Federal Reserve's discount rate belongs to the same arsenal.

However, the US leadership is simultaneously trying to handle the same crisis with classical liberal measures of budget austerity and tax reduction. Thus, Washington is cooking an explosive mixture of Rooseveltism and Thatcherism Ц a sort of Irish haricot with marmalade, vanilla and pepper.

In a similar way, the agonizing Soviet regime of Mikhail Gorbachov mixed up stimulation of private initiative with excessive distribution from the Union budget that eventually resulted in its exhaustion and collapse of socialist economy. At the face of this disarray in Washington's decision-making, the most stupid choice would be continue taking advice from Western experts and WTO enthusiasts. We are today in equal conditions Ц with the difference that today's prospects of the West are desperate.



In the current situation, traditional methods of handling the crisis are turning their back side, only catalyzing the crisis. Things were different in 1930s when the American goods were produced in America, and consumers purchased national production Ц clothes, boots, TVs, autos, helping relevant braches of national industry to keep afloat, providing salaries for workers, profit for business, and revenues for the federal budget.

Who will benefit from the present distribution of US currency, regarding the outsourcing of major spheres of production to China, India and Mexico? The lion's share of this money will be spent for trainers produced in Thailand, T-shirts sewn in China, electronics assembled in Indonesia and Taiwan, and cars made in Japan and Korea. The crop from stimulation of domestic demand will be reaped by Western workers, businessmen, and budgets. In the United States, only owners of retail chains will capitalize from George W. Bush's generosity. But even this effect is not going to benefit America. Many of those retail chains are actually owned by transnational corporations operating predominantly in the same China, and syphoning money from their native land by means of various "tax optimization" schemes.

In the present world of postindustrial capitalism, distribution of money is no rescue from the crisis. It could be useful only if ordinary Americans were enough patriotic to pool for purchase of Abrams tanks and F-22 fighters, but this idea does not cross their minds.

Slashing the discount rate, i.e. pumping cheap money into the economy, is equally inefficient for the United States, eventually benefiting the same China, India, Mexico, Malaysia and Indonesia Ц nations that today produce goods for the US consumer. Generous disbursement of loans for private individuals for purchase of TVs and similar home technique, autos and tours is of no effect either. Tax reduction and budget austerity don't help as well.

In fact, the US system has outlived itself and is actually expiring. Even in case the United States manages to succeed in a desirable technological breakthrough in early 2010s, modern capitalism will die Ц as "Third Wave" technologies are incompatible with free market economy in the same way as steam engines, book printing and mechanical lathes were incompatible with feudal order.

Still, death of an old order and birth of a new one is fraught with disorder and war.



The present devolution of the United States dates back to the temptation of its financial elite with an essentially racist concept of a new division of labor, in which the economy of the United States was to proceed to an ostensibly supreme privilege of "economy of services", the "dirty" economy of industry being entrusted to the Untermenschen from developing nations. However, contrary to the expectations, the supposedly superior economy of services appeared to be less competitive in a long run.

The postindustrial ideology was based on the assumption that the supreme race, concentrating on finances, management and production of new technologies (eventually reduced to the sphere of managerial technologies), should not be engaged with in dirty business of productive industry. This business was left for the supposedly primitive but laborious Asiatic nations. The prophets of postindustrialism did not realize that education and science are not able to develop without the mechanism of practical selection of most productive minds Ц the mechanism provided by industry. As soon as industry migrated eastward, science and education traveled in the same direction, being eventually followed by capitals.

The microwave oven was once invented by an American physicist, employed as an engineer with a company producing guitars. For merely practical reasons, he required a technological alternative to traditional drying of timber, enabling to avoid shrinkage. Eventually, he invented a device drying timber from inside much more efficiently than a traditional kiln.

Thus, the requirements of real economy gave birth to a breakthrough innovation. Could this American engineer make a similar invention in the United States that imports ready-made guitars?

By today, the substrate of innovation has emigrated from the West to the East. Meanwhile, the US elites overlooked the implications, relying upon the miracle of Internet economy supposed to generate huge profits. This belief was based upon Microsoft's monopoly for computer technologies, expected to provide huge real incomes from virtual products. But the miracle did not work.

Progress of communicative technologies was broadly advertised as a decisive breakthrough, often compared with the industrial breakthrough of Henry Ford's technologies of automation in 1920s. In fact, there was nothing in common.

The advertisers of the "miracle of virtual economy" used to refer to Alvin Toffler, the prophet of postindustrialism. In fact, Toffler expected the West to develop highly advanced robotized computer production servicing real economy and making it more efficient Ц particularly by using new types of energy and inventing new materials. Toffler overlooked the fact that the emergence of these technologies was not favorable for the financial elites. The corporate community preferred a globalistic division of labor to a scientific-technological revolution. The unipolar world hegemony was viewed as more efficient if based on traditional colonialist manipulation and not on distribution of technologies of advanced types of energy production.

Eventually, the United States found itself alone with an unworkable deindustrialized economy, while China, deriving pragmatic lessons from Toffler's ideas, used this opportunity to play on the fallacy of the West.

The first signs of a systemic crisis were obvious already in 1999, when the collapse of the virtual economy bubble undermined the stability of US currency. At that time the global influence of Washington was high enough to coerce the European community for involvement into the crackdown upon Yugoslavia, viewed by independent minds of Europe as a deliberate effort to prevent the rise of the newly-introduced single European currency.

Two years later, this continuation of economic policy with military means proved inefficient, and Washington was forced to use the special operation of 9/11 to unleash the fabulous "global antiterrorist endeavor" to secure its control over Asia and thus to save the US economy from a looming default. In fact, it was just postponed for several years.



In 2001, the US leadership still possessed an opportunity for saving the Western system. America could disburse billions of dollars not for wars in Afghanistan and Iraq but for new programs of advanced scientific and technological development. America could concentrate on providing an alternative to traditional energy production, at least by introducing oxygen-hydrogenous fuel elements. Reduction of dependence from oil and gas could be also guaranteed by unfolding new nuclear energy projects, spawning mini generators and fast breeder reactors.

America was still able to create robotized self-reproducing industrial systems, new systems of city management, including innovative types of transport. It was also possible to boost space research and related civil technologies, introducing mass technological education as it was in the times of John Fitzgerald Kennedy.

In other words, a flight to the Mars could be a real alternative to occupation of Iraq. With comparable expenses, it would provide hundreds of breakthrough economic innovations. Production of ultrahard light materials for the missile airframe alone could raise dozens of companies, the same materials implemented in an array of mundane industries. Compact nuclear generators, designed for the flight to the Mars as well as for supplying a permanent camp on it surface, could be developed into a powerful means of the West's energy security. This scientific-technological breakthrough promised a new source of civilizational progress for the American society, as well as a guarantee of the nation's financial stability.

Instead, the corporate elite of the United States impelled the Government to cast around $1 trillion for militarist adventures. Iraq became a huge "black hole" for America, its foreign debt multiplying with no perspective of return (in case this money had been spent for technological innovations, it would have returned with a high profit).

The further development of the crisis is hard to foresee due to its complexity and scale, and the variety of implications too much depending on the political process and personal decision-making. The ongoing increase of US military spending and new initiatives of spawning overseas missile systems indicate that Washington is likely to venture new global military conflicts in order to save its economy. However, America's ability to convince the West of necessity of these wars is visibly shrinking.



Analyzing the current US crisis, the Russian leadership should fairly admit and fairly explain to the people that the USSR's disintegration and the subsequent arch-liberal reforms have brought no benefit to our nation and to the Russian world generally. In fact, the domestic liberal ideologists have voluntarily infected the nation with germs of the West's civilizational malady.

Secondly, the current chaotic behavior of today's West indicates that Russia should secure itself from implications of the crisis of postindustrialism, and not restrict itself with trade obligations in WTO and similar frameworks.

Thirdly, Russia has to invent its own design of a new economic and social strategy, accumulating the experience of the most advanced achievements of socialism and capitalism on the most successful stages of their development.

Fourthly, Russia has to introduce new types of advance industrial production, implementing unique technologies of dual use. This suggests qualitative elevation of technological education, in order to prevent deterioration of human capacities. They require immediate and massive support, as they are indispensable for survival of the nation in the looming time of civilizational troubles.

We have to realize that our time of living in the matrix of modern capitalist system is restricted. The matrix is going to reload.

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