How Neoliberal Tax and Financial Policy Impoverishes Russia – Needlessly

* A shorter version of this paper has been published in the Russian Academy of Sciences journal, Mir Peremen (The World of Transformations), 2012 (3):49-64 (in Russian). An earlier version was posted by the Global Policy Forum meeting in Yaroslavl, Russia, September 7-8, 2011, on its website. Russian poverty is unnecessary. Like all poverty in today’s high-productivity age, it is the result of bad policy. There is no technological need for it, nor is Russia lacking in a full spectrum of natural resources and economic potential. So future historians no doubt will puzzle over how the nation was convinced to de-industrialize its economy and impoverish much of its population in favor of exporting fuels and minerals, and to impose more regressive taxes on labor and industry than existed anywhere ...

Russia: Reversing Economic Polarization and Poverty

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To avoid this fiscal cause of poverty, we must ask what kind of taxes steer wealth into the most productive lines, by lowering the economy’s cost of doing business, and preventing “negative-sum” predatory economic activities that impoverish the population? More specifically, is a tax shift onto land rent and monopoly rent (as Dmitri Lvov at Russia’s Academy of Sciences advocated in the 1990s) preferable to sales and income taxes?

Russia’s Economic Interests (Part 1)

After the Soviet Union dissolved in 1991, most of its members followed the neoliberal advice of the IMF and World Bank – and the Harvard Boys – and simply turned over the most lucrative resources in the public domain (minerals and fuels, real estate, public utilities, hotels, transport systems, etc.) to well-connected individuals and those working through banks. U.S. and other Western interests then helped these individuals move their money out to the West, while selling post-Soviet enterprises and real estate.

Russian TV, the G20 and US dollar diplomacy

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Michael was interview on Russian TV yesterday by Lauren Lyster. Watch the 10 minute clip here. There is no possibility of agreement at the upcoming G20 summit because the U.S. is declaring financial war on other countries, believes American economist Michael Hudson. The U.S. has been pushing China to revalue its currency – at a time when Washington has been pumping billions of dollars into its economy – a move viewed by other countries as an attempt to deliberately weaken the greenback. The issue of exchange rates is expected to be one of the toughest discussion points at the G20 summit in South Korea later this week.

Russia: Reforming the Reformers

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an Interview with Michael Hudson for Counterpunch By STANDARD SCHAEFER On Sunday, March 14, Russians will re-elect Vladimir Putin for a second term as president. In the Duma elections three months earlier, on December 7, his United Russia party won such overwhelming support that he will have the power to rewrite the constitution dictated by former Pres. Yeltsin under force of arms a decade ago. In which direction will Mr. Putin go? Will he continue to support the oligarchs who designated him to succeed Pres. Yeltsin? Their privatizations in the mid-1990s have gutted Russian industry and led to collapsing living standards, public services, science and technology, emigration and population shrinkage. Will this prompt Mr. Putin to shift gears to enforce what he has called a "new social contract"? If so, what does this ...

How Large is Russia's Land Rent, and How Will it be Used?

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In June, I travelled to Russia with Nicolaus Tideman to meet with some of our Georgist counterparts and help create a program for local communities to collect land rent. We also wanted to spell out the alternative. What would happen if the land were privatized in such a way as to let its rent and price gains be taken by absentee speculators (and the mortgage bankers lining up behind them) to load this property down with debt? Our first task was to estimate the magnitude of local rental and land values. However, it soon became apparent that trying to determine an economic price for Russian real estate was premature. Security of ownership is unclear in a political environment that continues to be marked by corruption. Real-estate taxes are ...

How Russia May Create a More Viable Financial and Fiscal System

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English translation of a pamphlet published in Russia by The Land Policy Association, St. Petersburg, Russia, April 1999 Instead of becoming wealthier and more like America since 1990, Russia is being turned into a third world country. In less than a decade the nation has been stripped of its capital and forced into debt to its former NATO adversaries. The point now has been reached where new credit merely covers the interest charges on past loans, so that the debt grows exponentially. Russia is being turned into an indebted raw materials exporter, told to sell off its natural resources and public utilities at distress prices to obtain the money to pay interest on its foreign debt – and to enable investors to convert their ruble earnings into foreign exchange. Even after ...

Dr. Michael Hudson's Testimony before the Russian Parliament

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"Since 1995 I have been a consultant to the Duma's Natural Resource committee, and have addressed the Duma on privatization issues on three occasions now. I am former balance-of-payments analyst for the Chase Manhattan Bank and Arthur Andersen, professor of international economics at the Graduate Faculty of the New School for Social Research, former chief economist of the Hudson Institute, current president of the Institute for the Study of Long-term Economic Trends (ISLET), advisor to the Canadian, U.S. and Mexican governments, UNITAR, and founder of Scudder Stevens' sovereign debt mutual fund in 1990, the first global "junk bond" fund. I am the author of Super Imperialism: The Economic Strategy of American Empire (1972, Holt Rinehart, trans. Spanish and Japanese), Global Fracture: The New International Economic Order (1978, Harper & Row, tr. ...