I remember defining capitalism as a social arrangement in which the dominant form of relations between people is commodity-money relations. A more classical definition, which was common in the Soviet Union, states that capitalism is a social arrangement in which the means of production are privately owned. It is quite obvious that in the nineties in Russia, there was no pure capitalism according to either of these definitions, but rather a transitional form of society, where old socialist (or despotic, in my understanding) relations were dying out, and capitalist ones were replacing them (as for the features of feudalism in the “sovok,” they did not disappear under the new order and have persisted to this day).
However, it must be remembered that, generally speaking, the term “capitalism” is more journalistic than scientific; therefore, when speaking about the existence of capitalism in a certain country at a certain time, we are speaking more about the society’s correspondence to certain values at that time. That is, capitalism rather in the sense of Weber (the spirit of capitalism as rationality and the Protestant work ethic) or Schumpeter (the spirit of capitalism as entrepreneurship and creative destruction).
Now, in the Russia of the nineties of the last century, the spirit of capitalism according to Schumpeter was present in abundance. It was a time of enormous opportunities and that very creative destruction. As for the spirit of capitalism according to Weber, it was nowhere to be found. What work ethic? Man is a wolf to man; if you want to survive, you have to know how to hustle. Capital was created primarily by plundering the Soviet legacy, by that same creative destruction, and by the ability to adapt the fragments of the old to new conditions better than others, rather than by the capacity for hard work, painstaking saving, and careful investing.
A similar question was asked of me three years ago, and at that time I wrote a whole essay on the subject titled “Why Altai Succeeded.” Now, without overthinking it, I am simply publishing it with minimal edits.
Why Altai Succeeded
The Gorno-Altai Autonomous Region is a small, sparsely populated peripheral territory of Southern Siberia on the border with Mongolia. There are no railways, almost no industry; there are mineral resources, but they are expensive to export due to a lack of infrastructure. It is inhabited predominantly by livestock breeders who are united into kolkhozes purely formally. It possesses significant tourism potential, which was practically unused by the socialist planned economy.
In the summer of 1990, talk of sovereignty began in the autonomous region. The leadership planned to demand a status upgrade to an autonomous republic, but instead, announcements began to appear—first in Gorno-Altaysk and Mayma, a few days later in all other district centers, and then everywhere. They hung on poles, on the doors of shops, post offices, and savings banks, or were simply pasted onto gates. The first print run was produced at the regional newspaper’s printing house, and thereafter it became a grassroots effort: some used typewriters, some wrote by hand. The text was as follows:
Comrades!
The General Secretary of the Central Committee of the CPSU, Comrade N.S. Khrushchev, promised Soviet citizens the construction of communism by 1980. Unfortunately, he was removed from office by a handful of party officials who preferred to develop the socialist system instead of building communism. But the laws of dialectical materialism cannot be cheated! And so, ten years after the promised deadline, Altai has finally built communism.
According to the teachings of Marx-Engels-Lenin, the state is an instrument of class oppression. A communist society is classless; therefore, the state on the territory of Altai has henceforth naturally ceased to exist. The Communist Party, which served as the vanguard of the builders of communism, no longer persists as a structure separate from the rest of the people upon the achievement of communism. The task of the Communist Party is accomplished!
The basic principle of communism is: from each according to his ability, to each according to his needs. Therefore, the inhabitants of communist Altai shall henceforth freely exchange any goods and services, valuing them only and exclusively according to their own needs. The amount of labor invested, which served as the socialist measure of a commodity’s value, is now disregarded. Concepts of added value, price zones, central planning, and the like are henceforth considered obsolete and possessing only historical value. Since states that use money as a measure of value still exist in the rest of the world, the inhabitants of Altai may also freely use the currencies of any states in their settlements according to their own needs, alongside any other values.
In their relations with one another, the inhabitants of Altai shall henceforth be guided by only two principles: mutual respect and communist consciousness. The first means that in their actions, residents take into account the interests of their neighbors and other involved parties, cementing their decisions with agreements. The second means that residents consider not only immediate needs but also care about what they will leave behind for their grateful descendants.
All conflicts are settled amicably by the residents involved in the conflict, according to the principles of mutual respect and communist consciousness. They may also turn to any other persons or organizations for judgment, pledging to carry out the decision rendered by them.
All property remaining to the inhabitants of Altai from the times of the socialist system, both personal and state-owned, continues to remain under the management of the same persons who managed it under socialism. Mechanisms for changing the managing persons are developed by the residents independently for each specific case, based on the principles of mutual respect and communist consciousness.
In relations with citizens of other states, the inhabitants of Altai are guided by the same principles as in their relations with each other. Any person is free to come to Altai for recreation, for settlement, or to engage in various activities. As long as they observe our principles, they are our welcome guest.
The inhabitants of Altai consider wars to be a remnant of a bleak past; therefore, they respect the borders of states and have no intention of seizing their territory by force. When traveling outside Altai, the inhabitants of Altai are guided not only by the principles of mutual respect and communist consciousness but also comply with the other requirements of those states.
The inhabitants of Altai will not tolerate attempts to turn history backward; therefore, they will oppose any attempts to revive a class society and a state on the territory of Altai. A sign of a class society is the distinction of any groups for whom different rules apply than for others. Signs of a state are: the forced seizure of valuables, the coercion of people to work, the restriction of freedom of action, and other violent actions carried out otherwise than as compensation for specific calculated damage.
It is clear that the stated principles differed greatly from the trends of recent years, and scholars of Marx’s works might find many of the introduced definitions quite debatable. But, first, the main, well-known communist principles were explicitly stated in this manifesto. Second, anyone who had read science fiction could easily recognize the bright communist future in these principles, and nothing else. But the most important psychological factor was that the manifesto declared victory. While the rest of the USSR was contemplating admitting defeat in the competition with capitalism, and reading “Dunno on the Moon”—where it was assumed that man is a wolf to man—as a visual aid for building a new order, the majority in Altai understood perfectly well what kind of system they had established and how to behave within it.
According to the manifesto, all functionaries of the national economy fully retained their positions; only party workers were left completely without roles. Attempts to assert their rights led to them being reminded: “You bitches removed Khrushchev!”. And, frankly speaking, the CPSU aktiv was not that large in a territory with a population of fewer than two hundred thousand. In any case, some party workers left for Russia; no one placed obstacles in their way.
Russia took a pause; the union leadership found itself in a predicament. Had this been a matter of militant nationalism, with the oppression of Russians and other excesses, they might have considered deploying troops. But to forcibly return those who had already moved to a new stage of development back to socialism? That would mean the collapse of the entire ideology. Keeping such a thing secret would have been impossible; glasnost had long been triumphantly sweeping across the USSR. It ended with Gorbachev officially announcing in October 1990 that an experiment on the transition to communism within a single region had begun on the territory of the Gorno-Altai Autonomous Region.
Already the following year, as everything in the USSR began to shake and the first foreign investors arrived in Altai—several hotel chains and one agro-industrial holding—a mass exodus of Soviet cooperators, currency traders, and other sufficiently wealthy citizens to Altai began. They discovered that both they, their money, and their initiative were welcome here.
At first, Soviet rubles were mainly used in Altai, then they predominantly switched to the US dollar and the Swiss franc. No one saw the need to conduct their own currency policy.
The few asphalted roads did not have time to fall into complete neglect during the transition period. Road services initially scraped by on small orders for asphalt paving inside villages or repairing bridges over mountain rivers, but gradually larger investors stepped in, and orders became overwhelming. In 1991, road workers set up a post at the entrance from Russia and began charging transport traveling to Mongolia. This was enough to maintain the Chuysky Trakt in a satisfactory condition. Gradually, a sufficient number of services emerged, each grabbing various road sections for maintenance and profit. Over time, the fee-collection mechanisms evolved toward greater user convenience—as is customary, in accordance with the principles of communist consciousness and mutual respect. Also, strangely enough, the total absence of any bodies designed to establish traffic rules and monitor their compliance did not particularly affect the accident rate.
Small aviation continued to operate between district centers, as well as to Biysk and Barnaul. By the time small aviation in Russia began to wither away, the Japanese had already started building an international airport in Gorno-Altaysk.
Private clinics first began to appear at hotels and sanatoriums; over time, solvent demand emerged in district centers as well. The rescue service began moonlighting by transporting patients from remote villages to district hospitals. In some cases, these were one-off orders, in others, subscription service agreements with residents, and in some, insurance companies managed to hustle in.
The level of education naturally dipped at first. Former school teachers worked with individual students on specific subjects, spending the rest of their time in their own gardens. Gradually, it became clearer what kind of specialists the communist economy needed, and the process began; in some places, it remained at the level of tutoring, while in Gorno-Altaysk and Ulagan, one secondary school each opened. Mainly, teachers gathered mixed-age groups and gave an intensive course of one or two subjects over a couple of months. The academic load remained laughable compared to the Soviet past, so children were more involved in household chores and found a full source of income quite early. On the other hand, it became common to voluntarily study specific areas of knowledge at a more mature age, when a person knew exactly what they needed and was ready to pay for it.
In the early nineties, excesses occurred when gangs from Russia arrived in jeeps, stealing cars, household appliances, and money. These issues were resolved in different ways. One could obtain contacts for a rival gang and lead them to the gang returning with the loot. One could organize armed resistance, as there were no restrictions on carrying weapons in Altai. One could provide leads to the Russian cops. In Mayma, which naturally suffered from raids more than others, a private security organization existed for a time—it was founded by Biysk gangsters who had been pushed out of the station market by competitors. Gradually, the opinion formed in the criminal circles of the Altai Krai that it was “beneath them” to act lawlessly toward the communists. They went there for cultured recreation, and sometimes for arbitration—the communist consciousness of their southern neighbors could be trusted.
In ninety-eight, Belokurikha joined communist (the de facto anarcho-capitalist system thus retained its original ideologized name de jure) Altai. In the RF, there was a default, a carousel of changing prime ministers, salary delays—while Altai investors offered good money in hard currency for the state property in the purchased Belokurikha. In the early two-thousands, the RF unilaterally carried out the demarcation of the border, established customs checkpoints and other strange attributes that states love so much. In 2014, Zhirinovsky suggested considering that Belokurikha and Northern Kazakhstan, along with Novorossiya, are ancestral Russian lands, but Zyuganov pulled him back, telling him not to dare sharpen his teeth on communists, and that in general, we could actually learn something from our southern neighbors rather than intruding upon them with our volunteers.
In 2006, there was an attempt to officially register the state of the Communist Republic of Altai—with the goal of joining the UN, WTO, and providing offshore services. However, the next day, the applicant’s entire fence was plastered with the communist manifesto, and he, after sober reflection, decided that things were fine as they were. He did not attempt to prove to his neighbors that his idea implied neither taxation nor other signs of a state mentioned in the manifesto, and he dropped his initiative. This communist inflexibility of the Altai people meant that no international company could keep its headquarters in Altai, as it was required to have a state registration, but this did not hinder real operational activity.
For trips around the world, the inhabitants of Altai initially used primarily Russian passports, which they obtained in Russian Biysk, but after the 2008 Georgian war, citizenship of the Baltic states and Israel became fashionable, and from 2010, Mongolia introduced a simplified procedure for the inhabitants of Altai, thereby fully satisfying the market demand.
Altai became a refuge for Edward Snowden, but this was not his most successful idea. NSA representatives, not hiding themselves particularly, flew to Gorno-Altaysk and captured the fugitive sysadmin, after which they departed for the RF and then to Washington. The Altai people did not obstruct the detention, but, first, they began to refuse US dollars en masse, gradually switching to Swiss francs for cash and bitcoins for cashless settlements, and second, in 2014, a veterans’ club opened near Onguday—something like a base for free mercenaries from all over the world—and when in 2017 the Russian FSB tried to capture Arkady Babchenko, who had fled to Altai, its employees were met with a rather unkind reception. However, it was managed without casualties or international scandals.
In 2020, the Manifiesto Comunista spread to Cuba, but that is a completely different story…
Our helicopter, fly ahead, the stop is at the commune!
No matter how much one wants to always take the straightest path to a goal, if the interlocutor’s head is already shaped like a screw-hole, it’s pointless to hammer something straight in there; you have to screw it in.
This is where marketing comes to our rescue, with all its techniques aimed at increasing sales. For example, it makes sense to understand exactly what pain lies behind a mother’s objections. Because what is the point of talking about social safety nets in private companies in a free market in an affluent society, if her pain isn’t caused by the demise of Soviet social security, but, say, by savings burned in some financial pyramid, or by shootouts in the streets. Then, we work with that pain.
Pyramids
Explain that the most important reason for the rapid rise of pyramids was the need to protect one’s savings from hyperinflation, and hyperinflation was caused by the state’s frantic emission of money. Consumers never demand inflationary money; they much prefer stability, or even deflation, so that they can simply put money in a piggy bank and have it retain its value for decades.
And this is Bitcoin, Mom. Designed by hardcore ancaps specifically for that very purpose. Even gold, as a tool for long-term value preservation, works worse, because gold production can be increased in the event of a surge in demand, but you can’t pull that trick with Bitcoin. Well, and if there are cryptocurrencies, then we can boldly get rid of all these central banks, hooray.
Shootouts
Explain that in the wild nineties, the state by no means stopped regulating issues of civilian weapons and establishing rules for resolving conflicts. The police were happy to pressure law-abiding citizens, giving them neither the means to effectively oppose gangsters nor the ability to sue them, but at the same time, they readily backed down before any moderately brazen thug. Naturally, this created a powerful economic incentive for criminal behavior and provided no reward for striving toward a peaceful resolution of issues. In effect, this means that in the nineties, the state worked with all its meager power for the aggressors, until it managed to somehow squeeze the preferential right to banditry away from private aggressors.
Tell me, if you were cornered on the street now with a demand for your wallet, and you pulled a Glock out of your purse and shot the robbers, would you perhaps be praised for riddding society of dangerous criminals? No, you would be charged with illegal possession of a weapon and exceeding the limits of self-defense, and you’d be imprisoned for a long time, eating up taxpayers’ money in jail. And if you don’t shoot, but only frighten them, you’ll be charged just for possessing the weapon, and you’ll still be imprisoned. So why on earth do you need such a “protector”—this very state?
Oh, you don’t want to carry a Glock, you want it so that people don’t attack you? Well, can you go to an insurance company and get insurance against robbery? No. Because companies would only start insuring against that if they had the right to maintain order and effectively oppose gangsters. And that is exactly what is forbidden—state monopoly. No matter where you turn, no matter how you try to secure your life—you run into this or that state prohibition.
You’d better know what is currently in your mother’s head instead of ancap. Act subtly, feed her individual cases, both regarding state lawlessness and (this is much more important!) regarding the effective resolution of vital issues without the state or even despite it. And eventually, she won’t even notice when she starts discussing these things with her neighbors, because people are very fond of secret knowledge unavailable to ordinary mortals—how could she not share it with those ignorant folks?
People are held captive by Hobbes. The idea of a war of all against all, from which the benevolent state saves them, looms over their minds. It is even strange that it hasn’t started being taught in middle school yet. However, propaganda doesn’t necessarily need to delve into the depths of the history of philosophy; it shoves the wicked nineties in people’s faces and tries to convince them: here it is, your ancap—do you like it, do you want it again, you cannibals?
This is precisely what people ask first when they hear that there is not a single service officially provided by the state that could not be provided with higher quality and at a lower cost in a free competitive market. In other words, people say, you want to privatize everything, abolish all social protection, and leave only a wild market flooded with scammers and bandits, with no one left to fight them.
After such an approach, not everyone manages to explain that a new set of nineties is certainly not the goal, nor even an inevitable consequence of the transition to a market, and let’s look at Georgia, for example, which is much closer to current times. Many simply shut down, either because their personal experience of the nineties was too painful, or because they didn’t intend to have a discussion in the first place and simply consider this the most effective thesis against ancap.
Did you miss me?
As for the memes about roads and similar folklore—that is the interest of those who are younger, who didn’t experience the nineties at a conscious age, and for them, ancap is just some abstract internet joke
