Privatization of exploitation in Russia

As Hakamata [1] has pointed out, the current crisis in Russia cannot be understood or remedied by economic theories and methods because it stems from the ethos of reckless cheating by “entrepreneurs” and other businesspersons. Because of the rampant practice of cheating, firms as well as consumers cannot count on honesty in business activities. Maruyama discussed [9– 11] that the hidden purpose of the communist regime was exploitation of the poor under the pretext of protection of the poor, as will be explained below. During the communism era, the state government system exploited the poor and the powerless. The current postcommunist “entrepreneurship” is a privatized continuation of exploitation. During the tsar regime, many foreign intellectuals had been employed by the Russian nobility, and French was spoken among upper class Russians. The anti-tsar revolution was instigated by foreign intellectuals. Even Lenin was Jewish, as was officially recognized in the early 1990s. Communists, who included Russians as well as foreigners, organized illegal and often violent activities to overthrow the tsar regime and gain political power. They used the rhetoric of advocating the improvement of the life of the lower class. After the revolution, communists instituted a dictatorial system which was enforced by terror, secret arrests and executions. Their purpose was accumulation of wealth and power. While factory workers could be easily indoctrinated, farmers remained quite autonomous and resistant to communism. Communists purged and executed a great number of farmers. The following example illustrates their method. A farm boy needed a new shirt and went to a neighbor to work for a few hours in exchange for a new shirt. A communist agent, dressed in an expensive fur coat, arrived and demanded the boy to sign a statement that the neighbor had exploited him. The body first refused but was forced to sign. The farmer was arrested and executed. The agent confiscated the farmer’s possessions. It is often assumed that communist systems provide no motivation, incentives, rewards or opportunities for expertise. But this assumption is incorrect [10]. The communist systems were based on allocation [6,7]. For example, for a factory, the “profit” consisted of monetary and material allocations from the government. It was not necessary to make a profit on sales. Since the delivery of allocations could take several years, clever managers overrequested the allocations and accumulated excess inventory, and side-traded it with other factories in order to obtain urgently needed items. Expertise was necessary in the wheeling-dealing, and efficient managers gained material reward, social recognition and psychological pride. Furthermore, since all materials were considered as “state property” which belonged to “people”, individual workers in many of the communist countries felt no guilt in stealing officially stocked materials. In such systems, it was quite logical and “legitimate” to steal. Therefore the current rampant cheating in business adcivities is a logical extension of the communist ethos. Exploitation and cheating became privatized. China was an exception, where in the 1950s the communists subverted the traditional Chinese concept of humbling into confession of guilt [12]. In their brainwashing sessions [4], the Chinese competed in confessing sins: the more confessions one made, the more prestige one gained, and for that purpose, one invented fictitious sins that he/she did not commit. Until 1980 [2], any individual gain was considered to be a “crime against people”. In Russia in the 1990s, not only individual entrepreneurs but also semi-official organizations such as cooperatives as well as administrative collective entities such as “nomenklatura” which continued to exist after privatization were highly exploitative. For example, in order to enable individuals to purchase stocks of state-owned factories, “coupons” were issued to individuals, supposedly exchangeable with stocks. But cooperatives and “nomenklatura” deceived the inexperienced members by saying that if the members gave their “coupons” to the cooperative administrators who would act like stock exchange agents, the members