Viktor Postnov - about the patrimonial state

in The Moscow Times Publicist Viktor Postnov writes :

“Why does the state consider itself to have the right to manage business? The reason is simple - Russia still lives in the system of a patrimonial state, where the country belongs to the holder of power. In such conditions, people do not own a business, but are its holders and managers <…>.

Without a doubt, the invisible hand of the market operates in tandem with the visible hand of the state, whose task is to eliminate market failures by establishing transparent rules, encouraging competition, defining long-term playing conditions, developing social elevators and a social support system, investing in the development of human capital, infrastructure, etc. etc. But in Russia it turned out differently - the state orchestrates the invisible hand of the market, acting not according to the rules, but based on expediency.

For the sake of expediency, exchange rate management is introduced. For the sake of expediency, VAT was increased from 18% to 20% in 2019: money was needed for national projects, and the authorities decided that they would manage the resources of the economy better than the market. One could, of course, say that this is a normal element of fiscal policy - raising taxes in order to obtain resources for, say, infrastructure projects. But in exactly the same way, for the sake of expediency, the state funded pension system was destroyed <…>.

For the sake of expediency, the tax system turns into a kind of dividend - as a real business owner, the state is free to decide what part of the profit to withdraw through raising taxes or introducing one-time fees like windfall tax <…>. This is similar to the circulation of state money - when the role of government orders or preferential programs grows <...>, the state feels the right to regulate what part of the money it withdraws from businesses now, in order to return it later in the form of cheap loans or orders. Officials themselves admit that expediency replaces rules and the predictability that rules should provide.”