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Purse Psychology

Purse Psychology
Delyagin Michael 23.06.2009

Crisis struck all Russia - including officials. However only low-paid officials, not connected with corruption basically changed their behaviour: not belonging to kleptocratic ruling class, they, as a matter of fact, represent a part of people and suffer together with it.

 

Opening in a number of minor state bodies traditional for Moscow streets shoemakers became the brightest illustration of falling of their standard of life: there's no money to buy new shoes, so officials began to repair them more often.

 

At the same time purchases of foodstuff in buffets of the status state structures which are carrying out price dotation essentially increased.

 

However the main lesson of crisis is related nevertheless not to a daily life of a great bulk of fair officials but to corruption practice of relatively small but socially and politically significant part forming, as long as it's possible to judge, ruling class of modern Russia.

 

The change of this practice is important also because it's a key, essentially significant element of modern Russian economy which from "economy of non-payments" of pre-default 90s transformed into "recoil economy" of 2000s. Without taking into account of corruption motivation it is impossible to understand the logic of social and economic policy carried out by the state. The ends of macroeconomic models describing development of the country don't hang together without estimation of total "kick-back" (official economists find way out calling "kick-back" "structural imperfection" of the Russian economy and "consequence of insufficient security of the property right").

 

Sudden reduction of financial streams in economy sharply activated struggle for property repartition. However the basic part of raiders (who can do nothing without corrupted representatives of law-enforcement and judicial systems) realized soon enough that capture of enterprises gives them not underestimated actives but mostly underestimated problems.

 

Therefore the great bulk of officials having concrete commercial interests left business (or direct control) having concentrated on the most profitable operations with state money.


It is clear that almost uncontrolled maintenance of liquidity of economy in autumn, 2008 and in the beginning of 2009 gave maximum possibilities for that purpose. Crediting of commercial banks, as well as replenishment of authorized capital stocks of enterprises and refinancing of debts in the whole was hardly carried out on a gratuitous basis, however the most scandalous operation was allocation of 175 billion rbl. (originally they spoke about 141 billion) on maintenance of freely falling share market.

 

As long as it's possible to understand, rescue of money of interested influential people, "having hanging out" in this market was the real target of operation; inflow of this money gave them chance to sell securities with minimum for those circumstances losses.

 

However losses nevertheless took place; Iceland became the most known "financial failure", persistent attempts to help it were caused, as far as one may judge, by "hanging out" in the Icelandic banks of considerable sums of private Russian money, apparently, no always belonging to businessmen. They failed to rescue them, possibly, because the Icelandic state is the least corrupted from all states of even Northern Europe and its representatives appeared to be unreceptive to arguments up to full misunderstanding.

 

Conversations about loss of the considerable sums of money belonging to representatives of the Russian bureaucracy haven't received unequivocal acknowledgement in the Shanghai investment funds, however huge losses suffered by the Russian bureaucracy in the markets of foreign real estate are indisputable.

 

Attempt to return these losses seems for the most influential social stratum quite natural - and many participants of real economic process complain on increase of relative density of bribes in process of crisis expansion.

 

Even if they are reduced, it goes all the same slowly, than the reduction of their base. One of the main lessons of crisis consists in the fact that corruption is not elastic on financial streams. Reduction of incomes leads to disproportionally weak reduction of bribes, therefore their destructive effect repeatedly increases.

 

Really: let's admit, before crisis from 100 roubles of budget money 35 went on "kickback", while 65 roubles were got by state funded organizations. Crisis reduced financial stream on the average by 30% - now from the budget are being allocated not 100 but 70 roubles; kickbacks decreased less - let's say to 30 roubles (in practice sometimes they even grow, though we will start with the softest hypothesis). As a result only 40 roubles goes "to the benefit of society": almost 40% less!

 

Except reduction of personal expenses (up to sale of superexpensive cars and real estate under almost below cost prices) and corruption intensifications, aspiration to ostentatious luxury became reaction of bureaucracy which is even higher, than usually.

 

Psychologically it's quite natural: being afraid of the future, people try to prove, first of all to themselves that everything's going on as before, without changes. As a result they organize "feasts in time of plague" which terribly irritate growing poor society and becomes independent factor of destabilization.

 

However, the ruling bureaucracy does not trust in future destabilization. Many representatives of it believe that system crisis is quite possible and is even most probable, however, they believe that "if something happens", they can leave country in time (often by personal planes) to some luxurious countries to own private residences or even castles and to enjoy saved up riches.

 

Misunderstanding of the fact that developed countries let them have accounts and real estate in their territory till the time when they possess power in the territory of Russia, blind and firm belief of our bureaucracy in the western legality is some kind of psychological riddle which does not have any rational explanation.

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