Executive Intelligence Review
This interview appears in the April 20, 2007 issue of Executive Intelligence Review.
INTERVIEW: STANISLAV MENSHIKOV

Russian Economist:
We Would Support a U.S. Return
to FDR's Policies

Russian economist Stanislav Menshikov was a guest on The LaRouche Show, an Internet radio program, April 7, interviewed by Harley Schlanger, the Western States spokesman for Lyndon LaRouche. This is an abridged transcript of the interview.

Schlanger: ...Today, we're going to look at the broader strategic and economic issues involving Russia and the United States. We are honored to have as our guest, Dr. Stanislav Menshikov, an economist and professor. Dr. Menshikov is a member of the prestigious Russian Academy of Sciences, and has been a participant in a series of seminars sponsored by Executive Intelligence Review in Berlin, engaging in an ongoing dialogue with Mr. LaRouche.

Dr. Menshikov has done extensive studies of the U.S. economy, having written several books on the subject. His most recent book, The Anatomy of Russian Capitalism, has just been released in English translation, published by Executive Intelligence Review, and we'll tell you later in the show, how you can get a copy of this book.

Also joining in our discussion will be our usual panel of members of the LaRouche Youth Movement. Today's panel will include Stephanie Nelson, Alicia Cerritani, and Anna Shavin.

I'd like to begin by taking up some of the broad topics you address in your book, which I've been reading and find most interesting. Most important for our policy concern is the present state of the Russian economy, which has been negatively affected by the adoption of neo-liberal economic policies in post-Soviet Russia. You write that the dominance of neo-liberalism in the West, especially due to the Thatcher/Reagan anti-state revolution, has shaped Russian policy after 1990; and neo-liberalism as a form of globalization in which the role of the state is minimized through free trade, privatization, and deregulation, has had an impact. In fact, in Russia, it's favored the emergence of a financial oligarchy associated with the collaborator of our former Vice President Al Gore, Viktor Chernomyrdin.

So, my first question for you is, what has been the effect of the so-called neo-liberal structural reforms on the Russian economy? And has this changed at all in the recent period under President Putin?

>Menshivov: Well, the main effect was that we have a very highly concentrated oligarchic capitalist system in our country. And you in the United States, you know, you have a lot of big corporations, but the amount of power that the Russian big corporations have is much larger than in the United States. Practically every branch of industry in Russia is cartelized, and this brings up prices very high. Prices in Russia, now, for the consumer, are on the level of the United States prices—which is not so bad, you may think. But actually, they are very high as far as most of the population is concerned, because the average wage in Russia is only $300 per month. And with American prices, those Russian wages are far too low. That's one of the main results of the oligarchic system in Russia.
Schlanger: Has this changed at all in the last...?

Menshikov: Yes, Mr. Putin, who is our President, tried to change this system. He's been trying to cut the power of the oligarchies, but he's not doing that too forcefully, and I would say basically, the oligarchic system still remains. He is, though, trying to increase the average incomes of the people, and that's a good thing. He's trying to increase the pensions. He's also trying to bring in more state power, in the sense that he's trying to make the state invest in those areas where private capital does not invest, because they think the profit level is too low.

So, he's really making certain changes, but I would say that these changes are not forceful enough, and he's not going at the right speed.

The problem now is, the Russian economy, if you look at it statistically, is moving fairly fast. I mean, it's increasing at about 6% every year. But it can't go ahead at that rate, if it keeps from investing capital in most of the civilian area of industry.

Schlanger: As you know, many of the economists, the neo-liberal economists in the United States, are banging the drums to warn that Mr. Putin's measures, including an increasing state role, is a return back the days of state central planning. How would you answer those economists?

Menshikov: No, I would say that that's rubbish, because of course, most—you see, 70%—of all enterprises in Russia are private now. And what he brings in is just on a small scale. For example, he nationalized one of the oil companies, but that brought the role of the state up to about 20% only; 80% is in private hands, and the industry is as cartelized as any others.

It is true that the gas industry is mostly government, but again, that is not unusual in Europe.

Schlanger: There's also been a series of articles accusing Mr. Putin of moving away from democracy, by moving against the financial oligarchy you've described. Again, how do you view that, the moves against Khodorkovsky, Berezovsky, and others?

Menshikov: Well, Khodorkovsky—I would say that he's like one of those people who went to prison in the United States for fraud. So I wouldn't talk about him so much in defense of his actions. He's really a kind of a robber baron of the olden days, so what Putin did to Khodorkovsky I don't think is too bad. I think he's in the right place, now—I mean, Khodorkovsky, in prison.

Schlanger: You know, in Houston, we're very familiar with that, because we had Ken Lay, Jeff Skilling, and Enron here. One day they were heroes; the next day they were going to jail.

Menshikov: How many years did he get?

Schlanger: Well, Ken Lay passed away, so he avoided going to jail at all.... Skilling got 25 years.

Menshikov: Well, Khodorkovsky only got eight, so we are pretty liberal [compared] to the United States.

Schlanger: Now, one of the other paradoxes you wrote about in the book, that emerged under the so-called free-market conditions, is that the effort to maximize profit has led to a drastic reduction of investment capital into the technological development in industry. We've seen the same process of deindustrialization in the United States. But I'd like to get your thoughts on what is the effect of this process in Russia, both in terms of the ability to bring online new technologies, and then secondly, the effect on wages and living standards.

Menshikov: The effect on wages and living standards is, as I mentioned, very high prices, due to over-cartelization and over-concentration of economic power, business power. And the effect on technical progress has been stagnation. Russia has not created one single new product in the last 20, no 15 years, say. Any new products that appear on the market are imported, or a just slight improvement over what we had before.

Schlanger: So, there's little investment, even from the state, in the development of new industries, or bringing research and development...?

Menshikov: No, the state has not been developing into that either. The state has been given some money for basic science, but in the previous neo-liberal years of Yeltsin, and up till now, there's been precious little investment going into technical progress that goes to the people, that goes into the industry, into new products, into new technologies. And I would say that really, the amount of investment in new technologies is very low.

Schlanger: id] Now, I'd like to move on a little bit more in this discussion of the free market ideology, the shock therapy policies. In opposition to these policies, Lyndon LaRouche has called for a return to the American System economic policies associated with President Franklin Roosevelt, policies which lifted the United States out of the Great Depression. Mr. LaRouche, as you know, has taken this campaign for Roosevelt-style economic policies to Russia on several occasions, and we're seeing more discussion about Franklin Roosevelt in Russia, even more than in the United States, especially in commemoration of the recent 125th anniversary of FDR's birth.

Now, I know you're very familiar with Franklin Roosevelt's policies. You had a collaborative relationship with another of the leading proponents of Roosevelt, the late John Kenneth Galbraith. Do you see the prospects arising now in Russia, for an adoption of a reform policy, modelled on Roosevelt's approach, as an alternative to both the failed models of the central planning of the Soviet system, and the radical free-trade model of the post-Soviet era?

Menshikov: Well, recently we had some of our leading politicians—and I'm meaning one of the top of assistants to President Putin—made a big speech about Franklin Roosevelt. And he said that we would very much like that the Roosevelt tradition to return to the United States, and we would be very glad to join the policies that would emerge as the result of the coming back of that tradition. And we always thought very highly of President Roosevelt. Actually, though he died in 1945, I do think that he had a very deep impact on American policies, even after his death.

And now, I think we would very much support a return of the United States to Franklin Delano Roosevelt's policies—both internal policies, of course, but also his foreign policies. He wasn't actually a very good friend of Soviet Union, he was just a very pragmatic politician. But, he saw the Soviet Union at that time (that was what Russia was called), saw it as a big power in the world, a power which the United States would better cooperate with than fight against, and he was absolutely correct.

And that's what Mr. LaRouche is preaching, and I think he's absolutely right. If instead of spending money on the resumption of the arms race, which is where George W. Bush is heading, if instead of that, we would join our resources together with China, and India, and the other countries in rebuilding, and modernizing the world economic infrastructure, that would create a lot of new jobs for people, and would be a very stable foundation for the healthy development of the world economy, which is not healthily developing right now.

Schlanger: Now, before I bring on our panel of members of the LaRouche Youth Movement, I want to ask you one other question, about Mr. LaRouche's proposal for a New Bretton Woods and specifically the role that Russia can play: You know, a central feature of this proposal is Eurasian development, particularly the initiative for a Eurasian Land-Bridge as a corridor of development, connecting Europe and North Asia and South Asia along the old Silk Road. If the U.S.—this has always been, I think, part of the thinking of economic development in Russia—so if the U.S. were to move away from the Cheney-Bush unilateral new Roman Empire geopolitical doctrine, and bring in Mr. LaRouche to negotiate with India, China, and Russia for a New Bretton Woods, what response would you expect from political leaders in Russia?

Menshikov: Well, the fact is, that in spite of LaRouche's proposal being absolutely reasonable—I think the only reasonable proposal for world development—it has not as yet been discussed at any government level, and that's a pity! I would say that if the American government would change the kind of thinking it is now following, and accept at least in the main, Mr. LaRouche's program, the Russian government would respond very positively to that.

Actually, you see, what is happening: China is developing very quickly nowadays. It is developing at the rate of 10, 11% per annum. Now that is very much faster than either Russia and the United States, and if it goes on at that rate, in 20 years, China will be the biggest country in the world in terms of the economy.

Now, how is the U.S. looking at that? Instead of looking at it as a possibility to bring on more cooperation between our countries, because China's development means that many more resources can be used for rebuilding the world economic infrastructure, building the European Bridge, in spite of that, it is being seen as a competitor, as a danger, as a danger of driving America out of power in the world, reducing its geopolitical role, etc., etc., and that's looking at it in a confrontational way.

While, the way to look at it, is not confrontation, it's cooperative, the way LaRouche suggested. Because, the U.S. is a powerful, big country, a leader today, but then, China becomes the leader tomorrow. The way to work is to avoid a clash between these two countries—I'm not talking about a military clash, God forbid that! But also an economic clash: We don't want that. We want to bring those resources together. So as to assure an upswing on the world economy in the years ahead.

Instead of that, at present, we have all the makings of a new financial crisis, and the dollar is following. In Europe, we view that very, very acutely. The dollar is going down from month to month, and you in America may be not feeling that, in your consumer prices and so on. But we are feeling that, because every time the dollar falls, prices in Russia and Europe, they rise.

Schlanger: Well, I think we do feel that, in the United States, because we're becoming increasingly dependent on imports as well, and we have a huge trade imbalance as you know. But, I think as long as the government tells Americans that there's no inflation, people must think there's something wrong with their adding and subtracting in their own checkbooks! So, I think we've got a problem here.

Menshikov: Well, our governments are telling us the same thing. But in spite of that, we have a lot of inflation. Russia has more inflation than the United States, it's about 9 or 10%, that's what the government says. Actually it's more like 15 or 20%.

Schlanger: Well, I'd like to keep asking you questions myself, but actually, you mentioned the idea of the future, and we have some members of the LaRouche Youth Movement on today, who are involved in a fight for the changes for the next 25 to 50 years, so why don't we take a couple questions from them.

Let me start with Stephanie Nelson here in Houston. Stephanie, you have a question for Dr. Menshikov?

Stephanie Nelson: I do. And it actually goes well with the discussion at this point in time, about what you were saying, Professor Menshikov, about the growth of China, or their economy. So, my question is: since Russia and China both had systems of planned economy, based on variations of Marxist theories, I'd like to ask what you think the differences are between Russia and China coming out of those systems, and being integrated into the globalized market economy?

Menshikov: Well, you know, the Marxist economy in Russia's been destroyed in 1992, by those reforms we had, by the shock therapy, so we don't have centralized planning any more. And the trouble was that they destroyed the system before they could create a realistic and workable market system. They didn't have a market infrastructure, but they broke down the old central planning infrastructure, before they built up a new one that was workable.

Now, the Chinese didn't go that way. They also had a system of central planning. But they went in a way that was much more slow in reforms, creating the market economy step by step, and keeping all of the useful elements of the old system that existed. They still have a Gosplan, which means a state planning commission. They still have some centralized central planning and management, but again, more than a half of their economy is private. And they have big corporations, including big private corporations, but they do retain a central management that reduces the amount unnecessary competition between companies and concentration of resources on capital investment into the economy.

In fact, it's not only China that did that: Japan did that at the same time, and it was developing at the rate that the Chinese are developing today. South Korea did the same thing. They brought in the government to do that, and they didn't follow Marxism at all, and neither did the Japanese. It was just a pragmatic approach to how things should be managed in the economy.

Schlanger: Why do you think that the Russian government, after the fall of the Soviet system accepted the shock therapy policy from the West, instead of resisting it?

Menshikov: Because they have the illusion—I mean some of the experts in the country had an illusion—that if they would free prices before they had enough production, and privatize companies, before they had enough efficient managers, that they could bring about the kind of level of life that is in Europe or in the United States, but that didn't happen!

Schlanger: Is that where the oligarchs came in? That they were able to grab the resources?

Menshikov: Well, yes. First of all, the oligarchs came in. Second, production instead of going up, went down. We lost half of our gross domestic product in the '90s, and that included not just the war industry, which was—that was OK—but we also lost a lot of consumer industries, and we lost a lot of our production in the other areas, for example, in the cars, in the televisions, and other consumer goods. So, that was a destructive kind of policy.

Now, the Chinese were much wiser, and they adopted a market system, but they adopted a system that realistically maintained some of the elements of the old system. And this led to a growth of 10% per annum for 30 years! For 30 years, they are developing at 10%. That's why they're coming close to the United States even today. They're still about two and a half times smaller than the United States, in economic terms, but in 20 years they'll be larger than the United States. And that's when the real problem of either cooperation or confrontation between those countries will emerge. And Russia will be a very secondary player at those time. Both the U.S. and China will be about 20% each of the world economy, and we will be only 5%, you see; we'll be secondary to those two giants.

Schlanger: ... Luckily, the Chinese did not listen to their own Chubaises and Gaidars.... I'd like to bring in the second of our LaRouche Youth Movement panelists, Anna Shavin from Boston. Anna, do you have a question for Professor Menshikov?

ANNA SHAVIN: Yes. We are right now undergoing a major shift, where we where we've noticed a generational... [audio loss] of generations. In the United States, recently we had elections, and what LaRouche has described as the 18 to 35 year olds came out and declared that they're going to become the most politically significant sector of the population, and they voted a Democratic majority into our government.

Now, there's a huge difference in the orientation of this 18- to 30-, 35-year-old group, and they have a real orientation towards the future, and it's distinct from the Baby-Boomer or the generation of 50 to 65 year olds in the United States. I know that I'm wondering, and a lot of us are wondering, does that same generational gap, or cultural separation exist in someplace like Russia?

Menshikov: Well, the age that you mention, the people in those ages are very different, you see. If you look at our oligarchs, you'll find that most of them got their riches at those ages, between 18 and 35—well, not exactly at 18, but say, between 25 and 35, or between 25 and 40. So, here you have a generation of young people who were concentrated on getting rich as soon as they can, and not necessarily by creating new products, or by creating new factories, or new productive units, but by speculation mainly. Or, by simply buying up at discount prices government enterprises that were privatized.

Then after getting those, buying those, or rather getting them free, or half-free, they would just simply pump oil or produce aluminum from things that had been created in the Communist times, and blame the Communists while using the factories they built and the oil wells they discovered, and getting rich that way.

So, you find, in that part of the population, people who are ready-made speculators. Even though they lived and grew up in Soviet times, they had this talent for underground—at that time private property was not widespread in Russia and was somewhat illegal—but they developed at that time, those particular talents which are not creational, but rather destructive in certain ways. So you have a different kind of generation there.

Nowadays, I think we are changing. I think that generation is changing. I think the younger people are thinking more about developing the country as the way it used to develop, I mean in expanding its productive capacity, expanding its creative capacity, coming back to the big scientific discoveries for which Russia was famous, as well as the United States.

But, actually, still at this time, we don't have the kind of people who moved your industry, coming to power in our country, like Henry Ford I, who was a young engineer when he started. Or, the current owner of this setup—what's his name?

Schlanger: You mean Bill Gates?

Menshikov: Yes, Gates, who also became very rich at a young age. But he developed computer programming as a way to make it available to millions of people. We don't have those kinds of young people coming up in Russia, yet, unfortunately. And I'm looking very much attentively at—we have for example, a fairly young fellow who has become a billionaire in a few years by promoting different kinds of what he calls "elite vodkas"—we have had kinds like that! Yes. And he is just now promoting selling new elite Russian vodka in the United States, and spending a lot, a million dollars, on promoting that kind of product. Now, you can easily see, that's not technical progress, of course—

Schlanger: At least, not a new technology.

Menshikov: —At least not in a generally accepted way. But it doesn't add too much prosperity to the Russian economy. Because, even that is aimed, not at the simple man in the street, you see—better vodka, at a low price—like Ford did, a car, but a simple car, but at a low price, a price that the worker in his factory could afford. This guy, our billionaire, is looking for selling vodka to people, not to the man in the street! He is thinking of becoming rich, by selling an overpriced product for the elite. That's his way of developing the economy.

Schlanger: I would just add a footnote to the Gates question, which is that the personal computer would never have developed without the work and the research done and the funding that came from the Defense Department in the '60s and '70s. So even there, you have a case where government investment paved the way for the development of the personal computer.

Menshikov: Yes, that's right.

So, the generational issues are a very difficult thing to give a straightforward and simplified answer. But I'm lecturing—I'm an old man by now, but I'm still lecturing, and when I meet the young people, they're very different people there.

Schlanger: Well it sounds like they could use the LaRouche Youth Movement in Russia. It might be time for that.

Menshikov: Well, the kind of youth movement today that the government is promoting, is a youth movement that is personally loyal to the President, to Putin. That's the kind. And his youth movement underlines, underscores, the idea that they are the managers of the future, they are the people who will manage government in the future. Actually I suspect that this creates a lot of careerists, who think of their career and not of really creative ventures or creative jobs, and creating new products, creating new ideas.

Schlanger: They put their personal career ahead of the pursuit of truth and social justice.

Menshikov: Even not pursuing a simple economic activity that develops products for the people.

Schlanger: Okay, we'll go to our third panelist, now, from Seattle. Alicia, are you there? Do you have a question?

Alicia Cerritani: Yes. In regards to developing young people with an impetus for discovery to develop any given nation, what I've seen in United States history is that the people who have made discoveries do have some sense of a national interest, of the development of a nation. And I think that my question would be that, the real genius of Roosevelt, a lot of it came from that his desire to develop his nation, it compelled him to develop other nations. He said, "I want to raise the standard of living of other nations, so we can deal with nations, and not just colonies or destitute developing sectors." So he created things like the Bretton Woods system, the IMF and World Bank, and he confronted a lot of the private interests who had kept the developing sector down, and in turn kept the citizens of the relevant nations from having a sense of national interest.

And my question is that, in the discussions that the Russians are having with China or India on the developing of their countries, is there a discussion around confronting the same private interests in the financial sector, with the interests of developing the citizens of the country to have such foresight that we were talking about earlier, between generations?

Menshikov: We don't have much of an economic discussion with China. I mean, on the level of simple people, or on the level of youth, or at least I didn't see that. But we do have, this year, the "Chinese year in Russia," because that's when the Chinese come around—Chinese companies, Chinese theater, Chinese sports, and so on—come around and demonstrate in Russia, show what their developments are. So we do have that kind of thing. But as far as I know, we don't have very wide discussions with the Chinese on a popular level, and not on the official level, of what kind of cooperation we should have together.

But you are right, in the sense that the kind of politicians we want are politicians that think of the country, of developing countries and developing nations the way Franklin Roosevelt thought. And in fact, I should stress that the International Monetary Fund and the World Bank were created together with other nations of the world, including the Soviet Union at the time. We also participated in discussions that led to the creation of these institutions. So we very much understand that, and support that kind of thinking.

Unfortunately, nowadays, we have a kind of disagreement with the United States about joint efforts in discussing those general issues of cooperation. The U.S. wants to really lecture others, more than to discuss on an equal basis of the kind of world institutions we need. They lecture others on what the democracy should be like, or they lecture others on what kind of economic systems should be like in other countries, and without really knowing or appreciating the kind of traditions that exist in other countries.

Now, I think that's wrong. I think that what should be done, of course, there should be discussion in which different ideas come together, and are being confronted and are being discussed and people learn from each other and try to see the way other people think. And they may think very differently, and you may disagree with them, but at least you should know the way they think, the way their traditions go. And that's the way of knowing each other, and that's the way of bringing each other together and a way of making them work together, which is really the Franklin Roosevelt tradition.

And I also should remind you, that Franklin Roosevelt was one of the people who stood against the old colonial system, built on British, Dutch, and French colonial dominations of various countries.

Schlanger: Prof. Stanislav Menshikov will be turning 80 years old soon, but you have the optimism of youth as it's coming through.

...On the IMF, clearly the International Monetary Fund has changed from what it was intended with Franklin Roosevelt and the founders of the Bretton Woods system. In fact, as you point out in your book, the IMF created an unpayable debt pyramid that was imposed on the Russian government, as was done to Argentina, and recently President Kirchner of Argentina has moved out from under that. So, we do need cooperative enterprises, but at this point the IMF doesn't carry out that function.

I did want to ask you on this question of Russian industry and science: There was a statement yesterday from someone, from the Russian atomic exporting company, I believe it's Kiriyenko, who said that Russia will be exporting a large amount of nuclear power plants in the next 20 to 30 years. Clearly that represents an exception to this idea of decline of Russian manufacturing and depending almost entirely on cheap imports. So, are you familiar with that idea, and what do you think about it?

Menshikov: Well, that is one area in which Russian industry is more or less developed. And in recent years, under the neo-liberal reformers, the atomic energy industry has in fact deteriorated, and what Kiriyenko is saying is, is that we still retain the expertise to help other countries build atomic energy plants if they want to. And the potential is still there, the people are still there, the possibilities are still there: If some country wants to build up atomic energy plants, we can help them in doing this, and earn some additional dollars or other currency that way.

So, but this is one industry that also went under during those reform years that we had, and we're now trying to repair, so to say, redevelop, reconstruct. So, I think it could be a positive thing if some country wants to build up its nuclear energy, why not? Provided that it doesn't create nuclear bombs.

Schlanger: ... Stephanie, do you have another question?

NELSON: I do. And this is based on a personal experience I had, when a few years ago I studied for a brief amount of time, under some Russian professors in St. Petersburg. And there's one in particular who talked about the waves of democratization, and of course, he included globalization as some final step. And in the beginning of your book, you made reference to Francis Fukuyama's The End of History, and so, I'm curious as to how, and to what extent, has globalization brainwashing, as the inevitable "final phase" been pushed on Russian academia?

Or do they just send the American students to the one pro-West, pro-free trade professor, rather than someone like yourself who is critical of Russian capitalism and are looking for an alternative?

Menshikov: Well, I'm not looking for an alternative to Russian capitalism—I'm looking to improving Russian capitalism, and making it productive, and making it non-speculative, making it concentrate on building up material things, the kind of physical economy that LaRouche is preaching. Actually, my view is absolutely the same as LaRouche's view in that extent: If Russian capitalists would concentrate on building up the physical economy of Russia, I would be very much for that kind of capitalism, you see, yes.

But let me return to the first part of your question... globalism, and so on.

You see, perhaps it's a very good idea as an abstract idea, but many countries suffer from globalization; their economies are being destroyed by globalization. And so they're not very happy with globalization. Take Africa, for example: I don't think Africa's getting much of the results of globalization. Actually China's development is not a product of globalization: Of course, it does sell a lot of stuff to the United States, but that's just foreign trade. It doesn't mean globalization, it doesn't mean that China is being globalized, or that China is being flooded with foreign goods and foreign capital. It uses some foreign capital to a certain extent.

So, I don't think that globalization is just a kind of a one-way street. Globalization may have some positive effect, but it also may have a lot of negative effects. So one has to look at it more attentively, and see what completely it means.

As far as the IMF is concerned, today's IMF is absolutely different from the kind of IMF that was created in Roosevelt's years, and I think Mr. LaRouche is absolutely right when he's talking about a New Bretton Woods system. The old Bretton Woods system was built on a fixed-exchange-rate system; it was tied to the dollar.

We don't have to go back and tie every currency to the dollar any more. We have to return to a kind of stable rate system, and that has to be built up by cooperation among the leading countries of the world, not just the United States, but also Russia, and also Japan, and also China—actually China has one of the biggest currency reserves in the world, as well as Japan, and you can't just ignore that. They are the main creditors of the United States. Even Russia is a creditor of the United States at this time.

Schlanger: That's right.

Menshikov: Because everybody is saying that we're very poor, but actually, every year we're investing about $20 billion bucks into the American economy by buying your Treasury notes.

Schlanger: Of course, as the dollar declines in value, that turns out to be not such a good investment.

Menshikov: It's not a good investment, that's exactly what I was hearing today over the Russian television, that people were saying, that's a waste investing in those American securities. It's a waste, because that way we're losing a lot of rubles, because the dollar is going down, and those securities are going down in terms of ruble prices. And the fund that has been created by the government to invest into American and other securities is really a misnomer: It shouldn't be, it shouldn't happen. But there you have the poor Russia which is investing in the United States, helping it finance the Iraq war and so on.

Schlanger: That's a big irony, isn't it?

Menshikov: Well, it's not just a big irony, but it's also a point on which many people are so critical of the current financial policy of our country. You see, we have two kinds of people in our government. Some of them are the neo-liberals, which are the Chubaises and the Gaidars of the olden times that brought a lot of disasters to Russia. And the other part of it, is our normal people who try to develop the country and invest in the productive sphere. So there is a fight going on between these two parts, and Mr. Putin seems to favorable at the same time to both sides. Which is not the best of policies of course, you see.

Schlanger: Anna, do you have another question for Professor Menshikov?

SHAVIN: Yeah, I do. We are in the process of developing a curriculum, and over the six years that we've really had the Youth Movement, we're starting now to really meat out a program in science and then a certain Classical approach to musical composition with choral work.

Now, I wanted to know: Do you think there is the potential to create some openings, I guess on the ground, in Russia, for this younger generation?

Menshikov: Well, yes, I think there are. But I also think that many of our—you see, we have a Minister of Education that thinks in these neo-liberal ways, and that means putting an accent on making education commercial. And that means, of course, opening up institutions where you have to pay a lot to become a student, you see. And I don't think that is exactly what you need. I mean, that what would be fruitful for bringing in people from the United States from the LaRouche Youth Movement, and expanding their education and using some of the Russian culture, some of the Russian science to learn, and some of the Russian musical tradition, and so on. But if you have to pay a lot of money for that, I don't think that would be proper for the Youth Movement.

Schlanger: You may know that the LaRouche Youth Movement basically recruits people out of those expensive universities in the United States so they can get a good education outside of the neo-liberal institutions.

Menshikov: But you see, as I said, some of our government cabinet ministers have this idea, of making everything commercial. They're right now trying to make the Academy of Sciences commercial, you know. See, even under the Soviet Union, we had a Russian Academy of Sciences that was independent of the government. I mean it got its money from the government budget, but it had its own self-government, and now they're trying to take this away from us. The Russian Academy just voted down the suggestions of the government, so there is a conflict going between science and the government at this very time.

Schlanger: Well, I think we share that same conflict in the United States....

I want to again encourage people to call in, or go online to order the book written by Professor Menshikov The Anatomy of Russian Capitalism. It's available through EIR and you can call us at 1-703-297-8434, or you can go on the larouchepub.com website and you can place an order there at our online store:

Now, Professor, I know that you're going to be celebrating your 80th birthday soon, and you have the best wishes from all of us in the LaRouche movement in the United States. Do you have any last thoughts about the importance of this kind of intellectual collaboration and discussion?

Menshikov: All I want to say is that, if you think this is a kind of highly sophisticated book, then you are right and wrong at the same time. Because if you just read it, you'll know a lot more about Russia, written by a Russian—not by an American. And that's not because I don't like your American experts on Russia, but because you will have the Russian thinking, the way Russians think about their own economy, and that's very important. But we also have a lot of facts and figures which you won't find in other books. So, I'm trying to promote my book, as you see.

Schlanger: Well, I would highly recommend it, I'll promote it! I've read it. I think it's an excellent contribution to this discussion. Thank you so much for joining us today on The LaRouche Show, and I hope maybe we can have you on again, sometime.

Menshikov: ... I would be happy to discuss more about the questions of the young people in the United States.

Schlanger: We'll look forward to that opportunity: Maybe we can get you over to the United States, sometime.

Menshikov: Well, let's think about that.

Schlanger: Okay—and Anna, Alicia and Stephanie, thank you. This has been The LaRouche Show. Thank you very much for joining us, and join us again next Saturday.

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