Tags

, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Guerin’s “Fascism and Big Business” (ca 1936; 1939) provides analysis of the economic basis of fascism in Nazi Germany and Fascist Italy, which is largely applicable to Russia as well. Guerin wrote: “fascism, in Italy and Germany alike, has been subsidized above all by the magnates of heavy industry (iron and steel, mining) and by bankers with a stake in heavy industry. Let us anticipate for a moment the conclusions we shall later draw: the detailed and objective study of fascism in Italy and Germany will show clearly that the heavy industrialists, the “big business men” are the chief, and one might even say the only, beneficiaries of the fascist dictatorship.”

Russia is highly dependent upon mining, oil and gas, and, the related heavy industry-weapons production sector(s): “Russia is one of the world’s leading producers of oil and natural gas, and is also a top exporter of metals such as steel and primary aluminum. Russia is heavily dependent on the movement of world commodity prices as reliance on commodity exports makes it vulnerable to boom and bust cycles that follow the volatile swings in global prices. The economy, which had averaged 7% growth during the 1998-2008 period as oil prices rose rapidly, has seen diminishing growth rates since then due to the exhaustion of Russia’s commodity-based growth model….” https://www.cia.gov/the-world-factbook/countries/russia/#economy

Russian mining companies, mining magnates and investors, would have benefitted from Putin’s dirty artillery war against Ukraine, yet they have remained mostly unsanctioned. They probably are even benefitting from “western” countries beefing up their militaries, as well, due to lack of sanctions.

For instance, mining magnate Potanin, Russia’s richest man, was only recently sanctioned by the US, in his personal capacity, but Norilsk, 36% owned by him, remains unsanctioned. Potanin has had ample time to profit and hide away his money: https://en.wikipedia.org/wiki/Norilsk_Nickel Rusal https://en.wikipedia.org/wiki/Rusal and others: https://en.wikipedia.org/wiki/Mining_industry_of_Russia https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221215 https://www.rferl.org/a/russia-us-sanctions-potanin-rosbank/32178531.html Norilsk remains unsanctioned by the USA: https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1104 https://www.bloomberg.com/news/articles/2022-12-15/us-sanctions-russia-s-richest-tycoon-nornickel-chief-potanin

The Russian economy is very dependent upon its military industrial complex and the related mining industry: “Russian governments of all political persuasions have consistently promoted the country’s state-controlled military-industrial complex. In the years 2012 to 2016 Russia exported 4.7% more armaments than in the period 2007 to 2011.” https://de.wikipedia.org/wiki/Russischer_Rüstungsexport Based on weight and purchasing power, rather than $ costs, Russia is probably the largest arms producer-exporter in the world.

Guerin’s “Fascism and Big Business” (1936; 1939) provides analysis of the economic basis of fascism in Nazi Germany and Fascist Italy, which is largely true for Russia, too. However, Putin renationalized most of the oil and gas industry, which had been privatized, though he partially re-privatized them, while maintaining controlling interests (50.5 or 51%). The oil industry has benefitted from this war, as well, through sales and higher prices – at least initially. It also allowed Russia to fund the war.

The military industrial complex is mostly Russian government owned.

Nonetheless, the feeder mining sector and mining magnates have been mostly unsanctioned, except for remaining original Jewish oligarch-magnates, Deripaska and Abramovich, in their personal capacities. Non-Jewish Potanin escaped US sanctions for almost a year – until mid December 2022, whereas Russia’s full-scale invasion started at the end of February. He escaped UK sanctions until the summer.

Most of the original Jewish or part-Jewish oligarchs (Khodorkovsky) have not fared well in Putin’s Russia – either due to Putin or due to sanctions: https://web.archive.org/web/20221108054129/https://www.haaretz.com/life/books/2002-09-19/ty-article/the-russians-called-them-the-oligarch-yids/0000017f-f2d7-d223-a97f-ffdf30cc0000

Unlike pre-fascist Italy and Germany, Russia hasn’t had much light industry to stand in opposition to heavy industry. The Russian revolution undermined Russia’s economic development by jumping it from a peasant-serf society to a militaristic dictatorship, meaning that its light industry-consumer sector has suffered. Even though China was also jumped from peasant economy to communism, their leadership has chosen to put a lot of focus on the consumer sector and consumer exports, unlike Russia’s leadership.

The Russian government already controls industry and not vice versa. Regarding fascism, Guerin (1945) states: “Heavy industry wanted to strengthen its economic hegemony with the aid of a dictatorial state which should be its state; light industry feared this development”. While the tech sector was created by and is somewhat merged into the US military-industrial complex, this doesn’t seem to be very true for Russia. Despite claims to the contrary, Russia’s military seems comprised of “dumb” weapons, rather than “smart” ones. The exception would be military hackers, who are presumably “smart”. And, Russia has been desperately seeking parts on the international market.

More from Guerin (1936; 1939) “fascism, in Italy and Germany alike, has been subsidized above all by the magnates of heavy industry (iron and steel, mining) and by bankers with a stake in heavy industry. Let us anticipate for a moment the conclusions we shall later draw: the detailed and objective study of fascism in Italy and Germany will show clearly that the heavy industrialists, the “big business men” are the chief, and one might even say the only, beneficiaries of the fascist dictatorship.

30 FASCISM AND BIG BUSINESS

But to return to our analysis. Why, in the early stages, are the heavy industrialists almost alone in subsidizing and egging on the fascist movement? Why are other capitalist groups-and those, notably, which may be lumped under the heading of light industry or finished goods industry-why are they, in the beginning, noncommittal and sometimes even hostile towards the growing fascist movement?

One does not have to go to Italy and Germany to observe that heavy and light industry do not have the same economic interests and do not use the same social and political strategy.

Conflicts are constantly breaking out between the two groups. Light industry often complains about the overlordship of heavy industry, which makes it pay through the nose for raw materials and machines.

In foreign policy, heavy industry, living in great part off munitions orders (originating in its native state as well as in “friendly” powers), is characteristically for a policy of “prestige,” force, and imperialistic adventure.

Light industry however, interested in exporting non-military products, has nothing much to gain from war or from autarky. Besides, it is much more closely tied up with international capitalism and international finance than heavy industry. It favors, therefore, a policy of international collaboration.

In dealing with labor, heavy and light industry usually rely on quite different methods. The chiefs of steel and mining enterprises are noted for their authoritarian attitude, their “tough boss” psychology. Their will to power is explained by the vast scope of their enterprises and the dominant role they play in the economy and in the state. But the explanation must also be sought in what Marx calls “the organic composition” of the capital invested in their enterprises: the ratio of “fixed capital” (invested in plant, raw materials, etc.) to variable capital (i.e., wages) is much higher in heavy than in light industry. The result is that the limits within which production is profitable are especially narrow in heavy industry.1

Whenever the steelmasters are unable to run their works at a sufficiently high percentage of capacity, the “fixed charges” (interest, depreciation) on their plants are distributed over an insufficiently large quantity of products, and profits are impaired.2 When a strike breaks out, the least stoppage of production means losses mounting into the millions.3 If the economic crisis sharpens they are unable to cut their fixed costs, and can only reduce their wage bill; brutal wage cuts are for them an imperious necessity.

The light industrialists follow a rather different labor policy. The organic composition of their capital is lower, their fixed costs less burdensome, their arrogance less overpowering.

Furthermore, the fact that they produce goods for consumption makes them fear that the too brutal measures of deflation demanded by heavy industry during a period of crisis will have a disastrous effect on the purchasing power of the masses, that is to say, of their consumers.

So most of them prefer, in place of strongarm tactics, what they call “class collaboration” and “industrial peace”… It is, then, hardly surprising that in Italy and Germany, heavy and light industry should have looked on the growth of fascism with quite different feelings. Heavy industry wanted to pursue the class struggle until the proletariat was crushed; light industry still believed everything could be patched up by “industrial peace” and political horse trading. Heavy industry called for a “dynamic” foreign policy; light industry leaned toward a policy of “internal cooperation.”

Heavy industry wanted to strengthen its economic hegemony with the aid of a dictatorial state which should be its state; light industry feared this development. But-the point cannot be too strongly underlined-the capitalist groups in light industry put up no serious resistance to fascism. They did not want its triumph, its “totalitarian” dictatorship, but they did nothing effective to block its progress….

they did not think a “totalitarian” fascist dictatorship was possible. They saw fascism as just one more political movement, which they could manipulate and even make use of. And so in both countries, “liberal” politicians closely connected to the light industry groups temporized with fascism.

Faithful to their customary tactics of “industrial peace” and political jockeying, they imagined that, once it was housebroken and parliamentarized, fascism would serve as a useful counterweigh… They succeeded only in putting it into the saddle. And on that day when fascism, to their amazement, had become a considerable political force in its own right, a popular movement which could no longer be checked without the use of armed force, light industry and its liberal politicians… resigned themselves to the triumph of fascism…” Guerin, “Fascism and Big Business”, 1939, 1973, Pathfinder Press, first published in French in 1936, 318 pp. https://archive.org/details/daniel-guerin-fascism-and-big-business-pathfinder-press-2000

“UK adds two Roman Abramovich ‘business associates’ to Russia sanctions list: Oligarchs Alexander Abramov and Alexander Frolov among four steel and petrochemical tycoons put on list” https://www.theguardian.com/world/2022/nov/02/uk-adds-two-roman-abramovich-business-associates-to-russia-sanctions-list

Too late in the game and not as major as it sounds: “MOSCOW, Dec. 16, 2021 (GLOBE NEWSWIRE) — Interros, Russia’s oldest private investment group founded by Vladimir Potanin, is allocating the funds to support promising high-tech projects and start-ups, which will need more funding as they develop…” https://www.yahoo.com/now/vladimir-potanin-interros-commits-1-201500844.html

“In December 2021, “Interros” redomiciled in Russia as “Interros Kapital” LLC, owned by Сyprian company “Whiteleave holdings limited”, a part of “Interros”, in special administrative district on Russkiy Island in Primorsky Krai”. https://en.wikipedia.org/wiki/Interros Potanin benefitted from France leaving Russia in May 2022 and selling Rosbank, yet was not sanctioned until mid December 2022. https://en.wikipedia.org/wiki/Société_Générale “Starting from April 2022, [Rosbank’s] majority shareholder has been Interros, after Société Générale has left Russian market due to the international sanctions following the 2022 Russian invasion of Ukraine.” https://en.wikipedia.org/wiki/Rosbank Potanin and Rosbank were only sanctioned in mid-December 2022.

https://en.wikipedia.org/wiki/Mining_industry_of_Russia