Russian, European politicians and the extreme version of neoliberal capitalism

Grigory Yudin wrote a column for the Swiss edition of the Neue Zürcher Zeitung, which she translated and published on her Meduza website. In general, the message is quite simple: Vladimir Putin understood well how the modern world works, skillfully corrupting European politicians and building in Russia an extreme version of neoliberal capitalism, where greed, self-interest and cynicism rule the ball. Putin proposed to the world the principle: “if something cannot be bought with money, then you simply offered not enough money.” And the world agreed. In general, Russians and Europeans differ little from each other. They are just used to the fact that Putin takes his toll.

I cannot say that I agree with Yudin. But I can't say that I completely disagree. The key premise of economics is simple: "People respond to incentives." Changes in constraints are important because they change the optimums for the agent. However, in addition to limitations, there are also preferences. And so the balance of constraints and preferences gives us the final result.

The conditions in which we make decisions are our limitations. It is impossible to influence them alone. Prices, budgets, taxes, subsidies, political and institutional conditions are all givens to decide in the moment. The forecast of changes in restrictions is also important: if we expect the situation to worsen, this cannot but influence current decisions. And expected events are built into our limitations.

But there are also preferences. Usually economists are not very concerned about them, they say, well, there is such a function, but there is such a one. Given the limitations, you can find the optimum for any preferences.

Under similar restrictions (for example, we have an inverse proportion between the volume of daily consumption and hours of free time - the more consumption, the less free time, because if you want to consume more, you have to work more) in countries, workers may have different preferences - who Some are leaning in favor of recreation, while others are in favor of consumption. And in this difference, it seems to me, lies a personal choice.

If it seems to you that you can buy anything with money, it’s just a matter of price, and the one who has the most corny resources always wins and it’s pointless to argue with him, perhaps you really fit into Yudin’s concept. But your preferences may be different, moreover, you may well come from a strict ethical system, and your decision may seem paradoxical from the standpoint of rationality. From the point of view of the layman, you can engage in completely meaningless business (for example, go to rallies or donate to human rights), but these are your preferences.

All this is what I am for. Of course, conditions are important (although the terms "neoliberalism" and "capitalism" usually mean almost anything that you don't like, as, for example, does Graeber), but preferences are no less important. And I believe that it is in terms of preferences that each of us is largely free. Yes, institutions are important. And yes, the systems differ from each other in the possibilities that it provides. Somewhere the chance of success is higher, somewhere the economy contributes to the growth of the supply of innovative entrepreneurs, and somewhere, on the contrary, it contributes to the generation of destructive ones. However, even in bad systems there is room for personal choice.

When we attribute everything to the system, we seem to remove the blame from those who directly made the decision. But the decision, whatever one may say, the person makes himself. Do you want to live in a better world? Or are you satisfied with the status quo? It's all about your preferences, which in this case are closely related to ethics.

As you know, people are capable of feats, but people are also capable of crimes. And often both of them exist in the same conditions. However, most prefer conformism.

Grigory Bazhenov 2022-07-05