Suppose you are a reader of this blog/newsletter, and given that you are here, I assume you are. In that case, you might have noticed that its background image is a glass office tower in a state of complete disrepair – windows broken, oddly abandoned, ext. This is the so-called "blue tooth" that sits off the campus of the Russian Presidential Academy of National Economy and Public Administration (RANEPA). I spent over a year at RANEPA while doing my archival work in Russia, and the place has a lot of meaning to me: academically, personally, and symbolically. In my opinion, it represents the loyal-liberal dream in Russian politics. The hope is that by creating a good cadre of managers and public officials, the Russian state could be liberalized or professionalized enough to be no longer violent, corrupt, and erratic. The project of making "Capitalism without Capitalists" which seemed to work in Eastern Europe.
I am writing about this institution because it is now official that its rector, Vladimir Mau, has been relieved of his duties. This follows his initial arrest and then acquittal in a corruption probe. On her Telegram, Tatiana Stanovaya – perhaps the best analyst of Russian elite dynamics – argues that losing RANEPA is Mau's price for freedom. He has reportedly been in Israel in the past several months. The new rector, Alexey Kommissarov, is reportedly a man with connections to one of RANEPA's most powerful alumni – Sergei Kirilenko. RANEPA, the blue tooth, Mau, and Kirilenko are all powerful lenses into the history, practice, and ultimate failure of the liberal project in Russia.
RANEPA's mission is to train the future of Russia's administrative elite. Tellingly, it does not distinguish between government and public administration and corporate and business administration. All are subsumed under the framework of "management." There are a variety of ways to interpret this almost Freudian slip. One way is to read it through the lens of neo-liberalism. This framework would assume that RANEPA's approach is to dissolve the line between public and private, forcing the state to be run like a business. On the other hand, one can take a "neo-traditionalist" approach. One can argue that the lack of distinction between public and private administration signifies a creeping state takeover of the private economy that began to emerge in the 1990s.
These readings correspond to the popular versions of understanding the Russian 1990 and 2000s. However, like the broader reading of that period, they fail to explain RANEPA. Instead, RANPEPA is a deeply late-Soviet institution, and its history shows us that 1991 is less a caesura than a moment when late-Soviet trends accelerated to shape Russia's modern political economy. RANEPA was not actually founded in the age of capitalism, or even during Perestroika. It was actually a deeply Brezhnev-era institution. It was formally founded in 1977 as the Academy of National Economy of the Council of Ministers. The goal of this new institution was to create a Soviet MBA where senior enterprise managers could spend a sabbatical term to study the latest advances in management sciences, including the use of computers, mathematical-economic models, and new approaches to the deployment of "human factors" aka HR.
The impetus for forming such an academy came from the State Commission on Science and Technology (GKNT). The GKNT was a very particular institution in the USSR. Founded in 1958 to be something parallel to Gosplan for technological planning, it quickly became a base for reformist economic thought in the USSR. The GKNT's management was shaped by its deputy director, Djerman Gvishiani. Gvishiani was an unusual figure for a technology-focused institution – he was a philosopher of science whose dissertation was on the history of American management studies. More importantly, he was the son-in-law of Alexei Kosygin. Kosygin was a powerful Soviet technocrat and politician who served in various roles, including Chairman of Gosplan and Deputy Chairman of the Council of Ministers before becoming the Chairman of the Council of Ministers – the position in charge of running the state side of the Party-State – in 1964. Kosygin was remembered as a grey man who was deeply devoted to the proper and efficient organization of the Soviet economy. As such, he played critical roles in several aborted reforms which carry his name.
Gvishiani and his GKNT became centers for studying management because they viewed it as a kind of technology. Tellingly, Gvishiani's initial role was as deputy chairman for international contacts (leading to persistent and likely accurate rumors of his association with the KGB). Thus, he built a giant international network of management theorists, East and West, treating the content of management studies as a neutral technology that could be imported into the USSR and copied. In this framework, management sciences were just like a lathe or engine. Neutral and adaptable.
Such a technological approach to management was in keeping with the spirit of the Soviet 1970s. By 1971, many of the more radical measures of the Kosygin Reforms, including higher profitability demands and price reforms, were being rolled back. For many of the supporters of these initial reforms, the problems they were addressing were distributional. The USSR was too tied to subsidizing unprofitable, heavy industrial enterprises at the expense of the production of consumer goods. The most radical of these readings even supposed that this was a form of labor exploitation because it meant that workers were being alienated from the fruits of their own production. In turn, profitability meant aligning the USSR's economy with the underlying value relations which emerged from the productive relations of the economy. In other words, these theorists were getting dangerously close to declaring the USSR a kind of state capitalism.
By 1971, Brezhnev's consolidation of power had foreclosed these hopes. The reform was judged a success, and now the stage of "improvement" rather than overhaul had arrived. The key would be integrating new technology into the economy as part of a global Scientific and Technical Revolution. In turn, the problems of the economy would be solved through growing productivity rather than any political processes. There was no need for redistributing surplus value – under socialism, such a thing would lead to greater technical progress rather than oppression.
In this context, management science, as Gvishiani theorized it, became central to the future of the USSR's economy. Managing capital and labor was just one more technology to be introduced into production. In fact, it was a key enabler of the larger scientific and technical revolution. Modern managers would be critical to fully understanding and organizing new technical processes.
One problem the GKNT identified was that Soviet management cadres were usually engineers. This was an old complaint from GKNT-aligned intellectuals who blamed resistance to reforms on an engineering rather than economic mentality among the leaders of Soviet enterprises and ministries. Indeed, since the 1950s, we have many examples of economists and other social scientists being outraged at the decreasing amount of hours that future enterprise leaders were being taught subjects like economics and accounting in higher education.
In 1970, the GKNT began to study Western management education as a means by which it could introduce the leaders of the top Soviet enterprises to modern economic and social science tailored toward practical uses. Since this is not an academic article (though it probably could/should be), I won't get into the archival trail, but the GKNT worked to create a curriculum for such an organization to exist under the Council of Ministers to train state and enterprise cadres much like the Higher Party School for training Party cadres existed under the Central Committee. The Academy of National Economy of the Council of Ministers was born of this process.
However, almost immediately, there was a problem. The issue was that the kinds of candidates that they wanted to attract were not coming. Instead, it was much more junior deputies and younger managers that would be sent to Moscow. The people with the real power did not want to or need to learn about computational economic models to better respond to consumer demand or fancy new personnel management studies. Soviet managers knew how to manage for the Soviet system.
Such frustrations led this generation of economists and reformers to align with frustrated regional party bosses to form what I call the "Gorbachev coalition." These figures like Abel Agambegyian, who would go on to lead RANEPA, understood the failures of the USSR as one of management rather than of system or distribution. Perestroika was a project clearing blocking coalitions to create room for a new kind of Soviet manager and leader – an honest modern one.
To that end, in 1989, Agambegyian launched what would become the "blue tooth." RANEPA's current campus still reflects its Soviet heritage. The buildings are tall and concrete, and the carpets are thick. The blue tooth was to be different. It was to represent a modern–market USSR. As such, it was to be a 1980s-style glass office tower. That tower would host a new version of the Academy of National Economy focused on "commercial management" and include facilities for international conferences to foster trade and commercial connections with the rest of the world. The Soviet Union would truly embrace the MBA.
But, symbolically, the blue tooth never happened. First, the Soviet Union stopped existing. Any pretense of a specifically Soviet version of commercial society and management disappeared. Second, the building was to be built by an Italian firm that could actually design and build a modern office tower. That firm needed payment in hard currency, and hard currency had disappeared. Finally, there were issues with property rights. No one actually understood who owned the land the blue tooth stood on since the USSR's institutions now belonged to the Russian government. All this combined left the blue tooth – like the late-Soviet-era reform project a strange, incomplete husk, which became a target for people to throw rocks at.
However, the story does not end there. In addition to the blue tooth project Agambegyian also made the academy home to the team of economists working under Yegor Gaidar – himself a product of the Gvishiani-led Institute for Applied Systems Analysis. Gaidar's team had no more hope of creating a new USSR which blended capitalism and socialism. Instead, like an earlier generation of Marxist critics, they saw the USSR as corrupted state capitalism. The market in the USSR existed. It just was monopolized by state power. The fastest way of freeing the people was to break that state power by freeing the market and destroying the state capitalists. Eventually, these would be replaced by real capitalists who could manage enterprises efficiently and provide valuable goods. But like Agambegyian's generation of reformers, this critique was about individuals, not institutions.
One of those young economists was Vladimir Mau. Mau was also a bit unusual for an economist. He was actually a remarkably talented economic historian and worked in the history of Soviet economic policy and thought. Here I am starting to lose a bit of my specialty and archival knowledge, but my impression is Mau became something like a chief of staff to Gaidar's team. Gaidar's reforms never actually worked, in part, because of political reality and Yeltsin's own corruption. In the end, Russian politics in the 1990s continued being a "negative" process of keeping the so-called "hard-liners" at bay and buying off powerful interest groups more than it was to build capitalist institutions. Mau understood that very well.
I suspect that RANEPA, in its current form, was born of that realization. For liberals like Mau, the period of early Putinism seemed like a time of transition and consolidation. Sure, it was corrupt and increasingly authoritarian, but it offered a respite and a chance to form a new generation not marked by the USSR. RANEPA's current form was declared in 2010, the height of Medvedev's seemingly liberal-technocratic inter-regnum. Mau was dedicated to such an agenda, given his participation and leadership of programs like "Russia's next leaders," which was meant to bring talented young people from the provinces into Moscow. However, as many others pointed out, this same program was also trying to build a "second generation" for Putinism. There the contradiction of the liberal project in Russia was laid bare. It was, again, about people, not institutions. Management, not power.
Perhaps an archetype of an energetic, post-Soviet technocratic leader is Sergey Kiriyenko. Kiriyenko came to prominence in 1998 as the "kinder surprise" when he was, out of nowhere, appointed Prime Minister in his mid-30s. He came in as a young, reforming Prime Minister who was quickly ousted after Russia had to default on its debt during the 1998 financial crisis. His replacement was the old-school foreign intelligence connected Primakov, who Yeltsin feared would come for him for corruption and whose challenge helped place an unknown, grey ex-KGB agent into the presidency in 2000. Since then, Kiriyenko has climbed the ranks of the system created by that agent and now is the First Deputy Chief of Staff of the Presidential Administration of Russia – essentially the man in charge of curating domestic politics. Since the state of the full-scale attack on Ukraine, he has become a coordinator for all political and economic activity in the occupied territories. Slowly, he is trying to consolidate power to himself. It thus unsurprising that the under siege Mau has given up his rector's chair to Komissarov – an entrepreneur in the car parts industry and organizer of "innovative initiatives" in places like Skolkovo.
Thus, RANEPA's story really is the story of the late-USSR and its gradual transformation into Putin's Russia. It is a story of how the Party-State as an institution is dissolved and the functionalization of Soviet politics in the late 1970s became informalized. The tragedy of Russian liberalism is that it never managed to form an alternative to personnel being politics. Instead of building states, it built new factories for cadres. And those cadres turned on them very quickly.
A few final unorganized remarks. My favorite moment at RANEPA was observing the Gaidar forum: a kind of Russian Davos for business leaders. It is an odd event where you can see Emannuel Wallerstein expounding on multi-polarity, the CEOs of major Western banks quietly still trying to keep up connections in post-2014 Russia, and the Chairman of the Central bank expounding on stricter regulation of the banking system. One of the funniest things about it, though, is that the staff of the even is mostly made up of very young RANEPA students, with all the girls dressed to the nines and wearing red, pioneer scarfs – this the Soviet nostalgia version of having them wear a full-on school-girl uniform. The year I was there, it came out that there were ads online for escorts to help staff the event and afterparties offering bonuses for doing "magic" with foreign dignitaries. Ohh how the name of Gaidar has fallen! And just a few months ago, the Kinder Surprise himself unveiled a statue of the famous old lady waving a Soviet flag to greet invading troops in bombed-out Mariupol (the lady, it later turned out, was doing so to try to keep the troops from looting).
The message of all this is clear, there is no future, but the past and in-system liberalism in Russia has been co-opted. Except there are no foreign dignitaries to perform "magic" on. The final emergence of Putinism in its fascist form has ended any hope of in-system reform. It is good that that illusion is gone. Technocracy won't save Russia. Only the scary work of politics and institution building. That will only come with the defeat of Russia on the battlefield by Ukraine, who are, through the power of revolution and war, carving out a true post-Soviet society.