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Freezing of Tariffs in Putin’s Way: It Won’t Succeed

Freezing of Tariffs in Putin’s Way: It Won’t Succeed
Кalashnikov Maxim 17.09.2013

It is necessary to work siphoning investments off from natural monopolies and to reject foolish "megaprojects"

Freezing of tariffs of natural monopolies is a desperate step. Tariffs for transportation, energy and heat smother everything acting as the main reason of inflation. The present mode causes crisis even here. "Russian Railways" declared that it is necessary to dismiss 60 thousand workers and to scale the most necessary investment programs down because of freezing of tariffs. It means surge in unemployment and problem with transport in the near future.

The power should have understood long ago: there are no simple, "command" decisions here! It is necessary to work persistently everywhere, instead of toiling with effective "public relations". There’s solution of the problem, but it’s too much for the Russian "vertical".


We discussed solution of the problem of tariffs in our party “Party Action” and came to the conclusion: it’s necessary not only to stop theft of managers, but also to transfer investment expenses from these monopolies to the state in general. To the hands of some special planned body. Post-Soviet practice when railroad, gas and energy workers have to finance necessary investments at the expense of increasing of tariffs in present conditions means death. It is continuous growth of quotations on energy and transportation. We have no competing railroads. We have no competitor to "Gazprom", Unified Energy System of Gas Supply. Splitting of "Unified Energy System" didn't lead anywhere: we still have monopolism, tariffs grow, so to say, by leaps and bounds.

It’s not a way out just to freeze tariffs. The matter is not only in loss of workplaces (if "Russian Railways" speaks about loss of 60 thousand workplaces, "Gazprom" - already about three hundred thousand and loss of a half billion rubles from investments). Simple freezing of tariffs won't allow railroad workers to embroider bottlenecks on the roads and to update rolling stock (we still have Soviet locomotives). It’s also catastrophe though postponed one.

The way out is obvious: to deprive natural monopolies of the right to finance investment programs in general. Let them submit applications for them to the state and to ground them carefully: no superfluous expenses here. "Gazprom" cries out that it loses a half billion investment resources, that it has lack of money and at the same time is ready to waste a half milliard dollars on construction of the skyscraper in Minsk. That is – 15 trillion rubles. It is necessary to slip on the wrists: modest mansion will be enough for your branch in Belarus, you – “lousy” managers!

The state, having made up plan of investments, will finance updating of "organism" of our infrastructure monopolies at the expense of the budget. To do it the state needs to reject such idiotic expenses as wasting of tens trillions rubles on the Olympic Games and the FIFA World Cups. If to do it, every inappropriate use of investments by "Gazprom" and "Russian Railways" can be stopped in a root. No senseless skyscrapers, only necessary objects. Thanks to it we keep frozen tariffs and it gives growth to non-oil industrial sector and agricultural industry.

Only this way it is possible to solve the problem without causing economic crisis because of disorder and plundering of natural monopolies.


Whether offered program has certain precedent? Yes, it has. Though not direct. America of the 20s which in no way is possible to call non-capitalist and non-market gives example of participation of the budget in business of corporations. Let's open remarkable work of the Stalin historian V. Lan “The USA from the First to the Second World War” (1947) simply sated with facts.

In 1927 by the time future U.S. President Herbert Hoover headed trade department. He faced a problem: the country was compelled to lose huge money transporting its goods exclusively using vessels of the European companies. Shipping companies of the USA couldn’t compete: the salary of officers and sailors on the American vessels was much higher, than on the European ones. Then Hoover worked out special program of the state support of the American merchant marine fleet. They started selling vessels at prime cost to private sea carriers, to subsidize them with good payment for mail transportation and to pay 50% of salaries to command structure of steamships (as a rule, to the officers of the Navies being transferred to the reserve) at the expense of the state. This way tariffs for transportation of goods remained competitive.

That is, Americans in those "market" times weren't afraid to apply principle when the state takes part of expenses. In interest of the general development of the national production.


We suggest to act the same way in relation to the natural monopolies in the Russian Federation. Yes, it is socialist principle. But it’s justified in this case: monopolies exist not for the sake of themselves, but so that to provide life and successful development of all other branches. After all it is impossible to do so that, say, the Institute of nuclear physics exists only to give work and money to its boiler station! National "boiler stations” ("Gazprom" and the railways in this case) can't be inherent worth. Therefore they should keep constant tariffs and the state – providing of their reasonable and verified needs for investments.

It is impossible to get limited only to "metal". After all thus they ruin personnel potential of Russia. Human capital. It needs to be rescued.


Considering heavy Post-Soviet realities I would extend this principle further. To stop growth of tariffs for air transportation is necessary to finance pilot teams from the state budget, having provided their salary using the same 50%. Let them be employed by private air carriers, let private companies offer them part of salary, but the state allocates them into special Flying team, national reserve of the staff. It provides decent wage-rate and state pension to all pilots, the state is engaged in their preparation, maintenance of training centers of the highest level, educational flying stock and airfields. Let experienced pilots teach youth, pass their experience independent of bad "managers".

What is reached this way? We completely solve the problem of lack of pilots and stop import of the Asian pilots – “guest workers” into the Russian Federation. (What does "Aeroflot" try to achieve referring to the lack of pilots appeared as a result of ruing of the USSR and the Ministry of Civil Aviation). We remove considerable part of expenses for aircrew and stop "economy" marasmus, when they try to reduce crew sizes to only two pilots. It means wearing of people, fatigue of pilots, direct road to mistakes and accidents. Crews of airliners should consist of at least four pilots! Including the navigator who helps to overcome and round of storm fronts.

In its turn, it gives the state chance to achieve stability of prices for flights. In addition the nation receives the most valuable personnel stock in case of military operations. Money should appear after refusal from Putin’s marasmus in the form of huge costs for sports and grandiose slangwhang. At the expense of suppression of expenses of Gazprom brotherhood on next temple.

The same principle can be used to build professional crews of civil seamen, nuclear scientists, space rocketeers (from the system of Ministry of General Machine Building of the USSR – ROSCOSMOS of the Russian Federation), railway engineers, power engineers, engineers and designers of military industrial complex, machinists, electronics engineers, operators, chemists, bioengineers, researchers in natural and exact sciences, in applied science. I would even give them all uniforms and signs of professional "workshops". To add pride and prestige.

The state is obliged to remove half costs for their content from enterprises everywhere, having created corporate solidarity and system of reproduction of technocratic personnel. Having given these experts (necessary to the nation hundred times more, than all herd of useless "creative class") basic salaries in 89-90 thousand rubles monthly. Taking into account the second half of salaries from the pocket of enterprises, they would earn 150-200 thousand a month. Thus we could prevent flowing of the Russian Federation into a new barbarity, into condition of raw hole with surplus of priests, lawyers and others at dense shortage of engineers and technicians. I don’t care that some would start to yell and to accuse us of creation of similarity of the Italian professional corporations at Mussolini. This mixture of the socialist and capitalist principles? I don’t care! If only it would work effectively. At last creation of the Flying crew at the German NSDAP proved to be useful, it was useful at revival of the German aircraft in the thirties. It worked out. So, we need something of the kind.

I think that it’s necessary to apply the same strategy in relation to teachers of schools and high institutions removing the heaviest part of the burden for their contents from poor higher educational institutions and regional budgets which can’t hold water. Teachers, workers of the major sphere of "person-making" and "production of staff" have to receive base wage-rates as well as officers of the Ministry of Defence – centrally. As we have catastrophe with education and personnel.

It’s not a problem to find money for it. We won’t rescue Cyprus with Iceland wasting billion dollars. We won’t "salt" financial reserves in the American bonds and in stocks of empty dollars. Let's refuse from idiotic "expansions of Moscow" which cost good war. Let's sell out ten presidential residences, let only couple of them remains. Let’s send high-ranking thieves into prison with confiscations and thus we will get money.

Then we will both freeze tariffs and save infrastructure from destruction, besides gold reserves of staff will be kept and multiplied.


First of all it is violation of "religious bans" of neoliberalism-monetarism which Yeltsin-Putin dignitaries in the economic block of the government have been professing since 1992. They will rather ruin the Russian Federation soon, than renounce principles and will agree on introduction of pragmatical elements of socialism to economy.

It also demands laborious and everyday work of the officials of the highest echelon, instead of pleasant distribution of money in intervals between pool and gym. The Russian lost such habit.

Therefore I predict: "freezing of tariffs" in Putin’s way will cause only new surge in unemployment and infrastructure disorder (after all no one fights against theft of managers in monopolies). We will receive new problems with railway transport and gas. It will become additional factor of political distemper in RF.

I hope that offered program will be embodied by already new power. National, peoples. Pragmatical, consisting of professionals, not of liberal fundamentalists, brainless fanatics …

If present power can act like this? No, it can’t!

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