Publication: Prism Volume: 4 Issue: 15

By Aleksandr Buzgalin

Today, it has become almost a cliche to say that the Russian economy, and Russian society in general, are the place where the largest financial-industrial groups collide. Their fusion with the state apparatus, and the corruption of the latter have become just as much of a cliche. Likewise, the oligarchic character of the country’s government (the so-called “semiboyarshchina”) can hardly be in doubt.

But there has been little analysis of the nature and role of these formations (from now on, I will use the term “clan-corporate groups”) in society.



In order to understand the nature of the power of these groups, one must examine the socio-economic system in Russia today, understand who its master is, (above all, in the economic sphere), who benefits from the model of transition as it exists in practice, and how the mechanism of their “competition” has been set up.

It is possible to understand this system, if one goes a step beyond the traditional analysis of economists (plan or market? private or public property?) and political scientists (right or left? pro-presidential, regional and other elites). One needs, at a bare minimum, to analyze what I have called “capitalism’s Jurassic Park.” I am referring to the state-corporate model of capitalism which has taken shape in Russia, full of the “relics” of Soviet society, with its authoritarian political system, paternalist bureaucracy; its passive population, accustomed to social dependence; a narrow stratum of entrepreneurs, concentrated in the “shadow economy”; its “deficit economy” with limited resources, dominated, not by the mythical central planning of 20,000,000 different forms of production “down to the last nail,” but by “planning deals,”–the semi-legal horse-trading between bureaucrats and enterprise directors over prices, resources, etc., etc., etc…

The key social link of this economic system is the clan-corporate group. The author calls these structures capitalism’s “dinosaurs.” Today, two types of dinosaurs dominate the landscape. Some–the “herbivores”–are gigantic, unwieldy structures: the former state enterprises. Others–the “predators”–are much smaller, but much more active: the mean and hungry private corporations, who actively “gnaw away” at the former state structures.