Professor/Lecturer Ellmann's Course Materials Page

Moscow crisis I
economic thought
MBA/MA - Anglo-American University International Finance
ERASMUS - International Finance
MBA - Money and Financial Markets
ERASMUS Money & Banking
M.A. Public Policy Economic Sociology
On the Origin of Facts

In Moscow traffic with Walter Benjamin
Dragan Klaic was in Moscow to run a theatre workshop. He was overwhelmed by the sense of impending financial disaster and nearly missed his plane home.
My Moscow hosts had assured me that I would be at the airport in no time at all - it was not only a Sunday but most the population would be out of town for the four-day holiday, they said. The weekend was connected with the public holiday on Tuesday 4 November, the Day of People's Unity, which had been introduced some years ago to replace the October Revolution Day, traditionally celebrated on 7 November. And yet, half way to the airport we hit a horrendous traffic jam. Sasha, the driver, inched off the Leningradski Shose and, passing the Perseus shoes megastore, started on a long detour through the faceless Golovinski Reon, which was jammed by other cars abandoning the highway or hopelessly seeking to join it.

In agonising slow motion, we passed Avangardnaya Street and I started to feel like a character in an absurdist Daniel Harms play, wondering what irony had inspired Brezhnev's urban planners to give such a promising name to this drab street of prefab high rises. The Avant-garde project, whatever it was - artistic, political or urbanist – ground to a halt at the Moscow periphery and so did I, condemned to miss my flight to Amsterdam. Then, a second splash of irony hit me when we crawled past Festivalskaya Street. I felt like the butt of a cruel joke because the reason I had come to Moscow was to run a research workshop on arts festivals. The two-day workshop had gone well, with much discussion between Russian and foreign festival organisers and experts, but here, on this public holiday in Festivalskaya Street, there was nothing festive in sight and nothing to celebrate. I was overwhelmed by gloom and despair.

Always when in Moscow I think of Walter Benjamin and his "Moscow Diary", a record of love, pain and misery in a shabby city. In the past weeks I had been reading his "Memories of a Berlin Childhood" and the evening before I had eaten in a cafe Dona Clara in Maloya Bronya, decorated with his 1920 Berlin photos. So I imagined how I would explain present-day Moscow to the ghost of Walter Benjamin, were he to come down and sit with me here in the back seat of the Mitsubishi 4x4.

What would Benjamin want to know and how would he analyse the latest twists of the post-communist transition? When Benjamin came to Russia in December 1926, pursing his erotic fascination for the Latvian poetess Asja Lacis, Russia had abandoned its New Economic Policy, a brief flirt with small-scale capitalism, and was sliding into the long, cruel night of cultural destruction and terror. Benjamin's peregrinations through Moscow's streets and courtyards mark the traces of an old city, soon to be erased to make place for the huge edifices of Stalinist architecture. The Berlin writer saw that the communist project was hopelessly stuck, just like the Mitsubishi in traffic.

Now, 82 years later, Russia is about to take leave of the Putin-era prosperity, shored up by high energy prices, and to slide, with the rest of the world, into the turmoil of protracted economic recession. Stability, prosperity and the 7% annual rise of the GNP has brought little progress to this distant Moscow periphery other than a few Western cars, some small-scale consumerism, patched up kiosks, countless construction sites and street repairs that only exacerbate traffic congestion.

Back in the city centre, just 10 km away, the ostentatious display of wealth, haughty office towers, luxury apartment houses, streets clogged with huge limousines set the urban scene. The barrage of advertising schlock and neon, billboards offering brand new taunhauzi and kotedzi, sushi joints and elegant restaurants, strip clubs and cigar bars, is as overwhelming as it was on my previous visits. When I was last here, in April 2005, I noticed that this capitalist explosion was accompanied by a certain unease and anxiety. Many of my friends felt that the price of this growing prosperity would be arrogant governmental interventionism, increased control of the NGOs, rampant corruption and pumped-up nationalism. Khodorkovsky was already in jail but had yet to be condemned to 9 years in Sibiria. So I was unable to gauge the full impact of the Khodorkovsky effect, which the Putin regime meticulously stage-managed to tame the oligarchs, sidetrack philanthropy in the innocent, apolitical cultural and social spheres and reign in critical and activist NGOs.

The dismantling and re-establishment of the Yukos empire and the grand gignol trial of its boss, symbolically re-arranged the balance of power, drew clear lines of what was permissible and tolerable, and extinguished all illusions of pluralism and the civil society movement that budded in the turbulent Yeltsin era. The gushing oil, gas and precious metal export profits corrupted large swathes of the intelligentsia, distributed more subsidies to public cultural institutions and renovated much of the decaying infrastructure. It created a class of wealthy consumers, fixated on culture as glamour and fancy entertainment - partly in the style of Hollywood glitz and partly along the lines of the super-patriotic, traditional iconography of nationalism and superpower nostalgia.

But the loudly trumpeted reforms of cultural and social systems never happened, much of the state income has been squandered, the stock market has been plummeting for months, Russian and foreign capital is fleeing the country, the government stability fund - once a solild 500 billion dollars - has been dented to salvage the flailing ruble and secure liquidity for the major banks. The tycoons have taken a severe beating and the crisis is only just beginning. With the worldwide economic recession exploding, Russian exports, consisting of 80% energy and raw materials, will generate much less money for the state budget and inevitably put the brakes on small-scale consumerism and the small and medium business economy created to sustain it.

The brights lights are starting to flicker in central Moscow. Only the night before, I saw a line of people in front of a travel agency: Aeroflot had stopped taking credit card payments, an ominous sign that the party's over. I was not only going to have explain credit cards to Walter Benjamin, I would have to tell him that this crisis of globalized capitalism wasn't just a liquidity crisis and a solvency crisis but a crisis of trust, involving the depletion of social capital by reckless speculation in derivatives, subprime mortgages and insured security swaps. This is not the fate of the work of art in the age of mechanical reproduction.

Admittedly, international stars are still Moscow regulars, festivals of all sorts abound, a publishing boom is spilling forth domestic and translated books as never before, former factories are being converted into creative hubs where small-scale cultural industry coexists with non-profit experimental art, internet use is rocketing. And affluent Moscovites are fighting the traffic on the way to the airport to take off for foreign destinations. But there is also a growing fear that the binge might soon be over – and then what? Benjamin's experience with the 1929 crisis and its aftermath could offer some painful analogies, but I am not sure that they are applicable. My Moscow interlocutors cannot see the future as a mere extension of the dynamics of recent years. Some major-scale discontinuity seems inevitable. The regime, impoverished and unable to bribe clients and pamper consumers, could well take a paranoid turn, and seek to assert itself through nationalist mobilisation at home and aggressive posturing abroad.

On the other hand Russian power holders, fearing social unrest and aware of the country's economic, institutional and demographic weak points, could also seek domestic and international appeasement. They might embrace initiative and nascent pluralism, seek to strengthen rule of law and respect of private property, in the hope that such measures might secure some goodwill abroad, and provide the stability and international support necessary to survive economic hardship. That a few weeks ago a Moscow court overruled the tax evasion charges against the British Council, might be an early signal of this second scenario.

If this is a window of opportunity (even it's just a fortochka, the tiny window that is occasionally opened in the long Russian winter to let in some fresh air), then European cultural networks, foundations, organisations and associations should not ignore it, nor should culture ministries, regions, cities and EU institutions. After all the West's arrogant and humiliating gestures towards Russia, now is the moment to reach out to Russian public cultural organisations, in particular to the small and weak world of informal and autonomous culture, to the radical and critical artists and intellectuals who bravely resisted corruption and authoritarianism. It is time to organise cultural exchanges, it is time for engagement, support and encouragement. With this Katrina of global capitalism bearing down on us, it is time to recognise that we are all in the same boat. There will undoubtedly be less public and private money for culture, fewer sponsors, donors and perhaps even audiences, but what really matters is to buttress cultural production against the social and political consequences of this crisis and oppose a radical shift to populism and xenophobia that threatens Russia and rest of Europe.

In the back seat of the Mitsubishi, Benjamin's shadow grew silent. It was visibly confused by my explanations and wild speculations and perhaps, too, by the depressingly monotonous periphery through which we we continued to crawl. He looked old and tired and I felt embarrassed and tired too, from all the stress and frantic speculation about what I would do if I missed my flight. My Russian visa would expire at midnight, it was a pre-holiday Sunday which made it difficult to come up with contingency plans and I did not cherish the idea of spending the night in the Shermetyevo 2 transit zone, waiting for some early morning flight to anywhere westwards.

I slipped into a self-protective nap and when I awoke, perhaps only minutes later, Sacha had managed to break free of the traffic and we were hurtling towards the airport, 2 hours and 20 minutes after setting off from the centre of Moscow. I only managed to catch my flight because KLM had extended the check-in time to wait for two-thirds of its passengers who, like me, were trapped in the traffic. I did not have to stay to celebrate the Day of People's Unity, I could be home for dinner. Benjamin's ghost had its own flying arrangements, away from Avangardnaya and Festivalskaya, away from Moscow.


Dr Dragan Klaic, is an Amsterdam theatre scholar and cultural analyst (