In socio-economic terms, America to Russia — a guiding star. Yes, it’s true — despite all the anti-American rhetoric. In the Russian territory, of course, there are still remnants of Soviet egalitarianism and humane principles (remember “the Moral code of the Builder of communism”), which was spread through all social institutions. But they’re quickly fading into oblivion under the blows of hoofs insatiable Golden calf.
In order to understand where this road leads, we must look at all the same America. The current election campaign in the US demonstrates such a degree of anger of the electorate, which was not, perhaps, a hundred years-plus — since the time of gross, rampant profiteering of the capitalists and the full suppression of the workers. (I have to talk about this Marxist language, because otherwise you can’t say). Those times when I worked 14 hours without days off, vacations, sick leave, compensation for injury in manufacturing, unemployment benefits, statutory minimum wages, etc. was nothing. Work hard while you can, and say thank you that you kept at work.
In America, as in Europe, capitalism was mitigated by social reform only after he had spilled much blood: willingly sharing, employers are not wanted, the people were on strike, the strikers were shot… In the U.S. armed forces brutally suppressed and the Great railway strike of 1877, and Pullmann strike of 1894, and the miners ‘ strike in 1912, 1913, 1919, 1920… this was All — from the song words can not erase. But later there was also a capitalism with a “human face” instead of the notorious “feral grin”. With all social “softeners”, mentioned above, and many others.
And then, in the late twentieth century, began the regression. Globalization, outsourcing, fraudulent financial schemes — all in the name of profit, and it’s never enough, come on more, more… And now America has begun to return to the past hundred years ago. Real incomes have been dropping steadily for forty years, the rich get more obscenely rich, while the poor are increasingly poor. Declining middle class — the backbone of American society for many decades. And the main problem — including Russia — that the American model is spreading around the world. All of this is a natural result of the influence of the American economy on the world: the US economy is almost a quarter of global GDP.
London the Economist “looked the part” on the American situation. And not just from outside, but from the profit of this Holy of holies of the market economy. “America, writes this authoritative edition was the land of opportunity, a country of optimism. Now the possibilities have become the prerogative of the elite: two-thirds of Americans believe that the economy acts in the interests of the money bags. But the optimism turned into anger. The fury of the electorate is the driving force of “uprisings” by Donald trump and Bernie Sanders…”
The Economist found the root cause “uprisings” is the almost complete lack of competition which gives large companies an exorbitant rate of return. The American companies it is 40% higher than in other countries. I checked on the website of financial-research firm Yardeni Research, Inc.: its graphs show the rise in net corporate profits (after tax) in relation to GDP growth of the country. Profits grow faster — with a record advance.
Actually profitability is as it initially is by definition a positive concept: it is considered that every company, private or public, must be profitable — otherwise it has no right to exist. But it was not always and not everywhere. In different countries at different times and at different scales liberated from the burden of profitability of public sector — health, education, social welfare, public transport, communications, etc.
In this respect, America was and remains one of the most backward countries: in the USA there is no universal free health insurance, no paid holidays and maternity leave, no universal minimum old age pensions, irrespective of employment or free public transport for pensioners, free tuition in state universities. They say that once, at the dawn of their existence, they were free, but then quickly commercialize and since then has been steadily rising. (Of course, they are cheaper than private prestigious universities type of Harvard or Princeton, where a year of study on the bachelor has already exceeded $60 000, but 20-30 thousand a year is also not nothing). Presidential candidate Bernie Sanders, who proudly calls himself a socialist, wants the universities, living off of the taxpayer’s money, again became free, and rightly so!
The bad news is that Russia has chosen, consciously or by coincidence — as a model of socio-economic development it is America. In Russia’s nominally free medical, coexisting with the commercial, but her living space are steadily declining and soon, probably, will come to naught. The same thing happens in education. And, as in the United States, Russia has a powerful industrial lobby, which — let us call things by their proper names — buy them the right legislation to allow further inflate drug prices, health care and education. (Added to this is higher than in the U.S., the coefficient of corruption, leading to an additional increase in the cost of everything used by the Russians).
In relation to the profitability of Russia and America are two very different pictures. In November of last year, “Kommersant” wrote with reference to the analytical data of the Bank of Russia that “the level of gross profit in the Russian economy remains one of the lowest… from countries with comparable per capita incomes”. But in regard to structural issues — monopolization, which according to the Economist, between the US and Russia have considerable similarity. The study of NES and the Corporate University of Sberbank showed that the share of 5% oil and gas companies (from 643 of the corporations that created 77% of Russian GDP in 2014) accounted for 88% of the profits. The disparity is obvious — it is obvious to everyone, even for non-economists.
The Americans monopolization does not reach the heights of the Russian, but increases every year. Mergers and acquisitions have become epidemic — this applies to banks, airlines, television providers (cable and satellite companies), pharmaceutical corporations, etc. For the consumer, this in practice means only one thing: him give less, and take with him more.
If in 1990-e years the likelihood that highly profitable American company will remain the same after 10 years, was 50%, today — 80%. That they are so well done? Innovators, inventors, skilled investors that invest their profits in production development and thus multiplies profits? Nothing of the sort! High and stable profitability comes mostly from greed: instead of investing money in the development business or to reduce the prices of their products, corporations distribute to their shareholders and the rest are kept “under the mattress” — what is called “push penny”. As pointed out by The Economist, the excess liquidity of U.S. companies (the “potbelly”) is $800 billion a year, which is close to 4% of GDP. If the Corporation just returned from their lucrative record heights at a historical average, American consumer, as economists, we immediately would have received a 2% cost savings. But can’t get it!
From the point of view of the interests of the country to prevent a similar situation — at least short-sighted. In the US particularly, as there are on private consumption is about 70% of GDP. But in Russia, where this figure is somewhat lower (about 50%), with impunity to “lower” the consumer is a very risky business. And not only in economic but also in socio-political terms: the stability of society is rapidly declining under the impact of impoverishment. And it has become a real prospect for millions of Russians — contributed to low oil prices and lack of foreign investment and access to capital markets as a consequence of sanctions. “MK” recently reported: analysts expect falling incomes of the population in the next few years, 22-30%; only in 2016 purses of Russians “lose weight” at 5%.
…As of last year 14.5% of the U.S. population was below the poverty level. And 16% of Russians. So we caught up and surpassed America.
Any country has leverage over corporate greed, which is needed only political will. And preferably not too late.Related posts: