Boris Kagarlitsky on the New Deal proposal for Russia
First published in Russian at Rabkor. Translated and lightly edited for readability by Dmitry Pozhidaev for LINKS International Journal of Socialist Renewal.
Translator’s note: From the penal colony where he is serving a five-year sentence for “justification of terrorism,” Boris Kagarlitsky has actively participated in the detailed analysis of the New Deal proposal for Russia developed by a group of leftist economists. Together with his colleagues at Rabkor (Worker Correspondent), the online leftist media platform he edited for many years, Kagarlitsky has invited leftists to engage in this process — not merely as observers and commentators but as active participants, contributing their concrete proposals and vision for a leftist program.
The New Deal program asserts that Russia will inevitably enter an era of major transformations. This is not simply a matter of shifting key trade partners, such as reorienting from Europe to Asia. The coming changes will impact all spheres of public life, from the economy and law enforcement to mass culture and social policy.
The program’s authors emphasise that they, like the majority of their fellow citizens, hold broadly defined social-democratic views. They argue that the fundamental goal of societal development should be the construction of a more humane social order — one that guarantees an essential set of inalienable personal rights and freedoms.
However, they express deep concern that Russia is moving further away from this ideal. The country, they argue, is plagued by systemic inequality, poverty, and corruption, as well as a severe lack of solidarity and opportunities for broad public participation in decision-making.
They further highlight that the military actions initiated in 2022 against Ukraine have not only intensified these problems but underscored the urgent need for a substantive and constructive alternative to the prevailing order. The New Deal program attempts to outline the contours of such an alternative.
The program is structured around four key areas: economic objectives, political objectives, human rights guarantees, and social policy. Kagarlitsky has contributed his analysis (originally published at Rabkor) to three sections — economic objectives, political objectives, and social policy — offering insights into the challenges and necessary reforms in these domains. His analysis is published below.
Economic objectives
It is undoubtedly positive that leftist economists are seriously working on alternative economic policy proposals. Moreover, taken individually, the proposals on financial management and the labour market appear useful and persuasive. However, the problem is that isolated financial measures or labour market reforms alone will not work.
Here we see a characteristic mistake of social-democratic economists, who assume that effective policy measures can simply be implemented in a neutral environment — without resistance. However, the environment is far from neutral. The effectiveness of any policy depends on the structure of the economy and the dominant interests within it. That is why what is needed is not just financial and labour market reforms, but structural transformations — those that address property relations and the distribution of resources across industries, social groups, and regions.
Russia’s oligarchic economic structure can only be overcome through sufficiently radical measures. In fact, such measures are also more realistic, because a half-hearted, moderate approach will not be effectively implemented — it simply will not be allowed to succeed.
Anti-oligarchic measures
A key step is the genuine nationalisation of so-called “state corporations,” which today are in fact private companies parasitising off the state. Additionally, a strategic development mechanism should be established in the form of an expanded, reorganised, and democratised public sector.
Beyond nationalising companies engaged in the extraction and primary processing of natural resources (oil, gas, metals, coal, forests, water, etc), it is essential to restore a unified energy system under state management and integrate transport infrastructure by re-nationalising airports, ports, railway companies and telecommunications.
The New Deal document rightfully highlights platform labour, but this issue will not be solved merely by improving labour legislation. Instead, public platforms must be created that operate on principles different from private ones. This could involve nationalising or buying out some existing platforms or establishing new ones, depending on the political situation.
It is crucial that anti-oligarchic reforms do not create a united front of business opposition against them. Therefore, reforms should improve the conditions for small and medium-sized enterprises — for example, through tax policy adjustments, demand growth, and other measures. Notably, the New Deal devotes very little attention to tax reform, which is a critical issue.
Investment policy and Keynesianism
The document briefly mentions the need for increased private and public investment. However, not only is this the most important issue, but the priorities for investment — where and how funds should be allocated — are not specified. Here, Keynes’ revolutionary idea of the socialisation of investment is highly relevant. A publicly accountable state sector must become the driving force of investment in the economy.
Public funds should be directed toward: machine-building, especially transport engineering, development of advanced technologies, infrastructure projects, scientific research, and regional development.
Closed public investment circuit
A previously discussed idea should also be recalled: the closed circuit of public spending, meaning that most funds should be channeled through specialised public sector companies, ensuring that money cannot be extracted from the system (that is, stolen).
In addition, the creation of regional public construction companies could help produce high-quality housing at prices lower than those of private developers, thereby driving down market prices — an approach successfully implemented in Austria. Some monopolistic developers should simply be nationalised. Similar measures could be applied to retail trade.
Agriculture and cooperative development
The document fails to address (however briefly) the promotion of cooperatives, particularly in agricultural production and processing. In fact, the agricultural sector is barely mentioned at all, despite the significant potential of cooperatives in scientific startups, services, cultural projects, and other areas.
Federalism and regional empowerment
Strengthening regional financial capacity and granting them the ability to implement their own investment policies could form the foundation for genuine federalism. However, this would require administrative reform and regional empowerment — a highly contentious issue.
Democratic governance of the public sector
Since the discussion has turned to the public sector, two aspects are critical: first, transparency and accountability in its operations, and second, worker participation in management.
The New Deal authors clearly favour administrative-technocratic methods (and even acknowledge the difficulty and cost of implementation). However, the real solution lies in democratisation, self-management and direct participation in decision-making. This aligns with the ideas of [Greg] Yudin and [Artemy] Magun in their constitutional project, though I am not familiar enough with their work to develop this point further.
Urban and environmental policy
Many additional challenges remain, including:
- Investment in small-town development, cultural projects and environmental protection (for example., reforestation, river conservation and waste management);
- Reorganising megacities after the chaotic market-driven expansion of the 2000s-2020s;
- Eliminating inhumane “human anthill” housing and replacing it with livable, human-centered urban design;
- Expanding access to culture and leisure for residents of outlying districts;
- Restructuring and de-privatising urban transportation networks.
The radical decommodification of the housing and utilities sector is also necessary, but it must be done carefully to ensure it does not simply become an unsustainable burden on local budgets. The experience of participatory budgeting may offer useful insights here.
Sectoral policy and professional communities
Comprehensive reform in energy, transport, education and other sectors must be developed in coordination with professional communities. However, this requires that these communities be organised and institutionalised.
Political objectives
The limits of minimalism: Political uncertainty and the need for radical reform
The political section of the program is undoubtedly its weakest point — despite the fact that, on the surface, everything seems to be stated correctly. But overall, the program is far too minimalistic. Who will implement it? If serious reforms are to take place, the situation may demand far more radical measures.
It is absolutely correct that the elites are not splitting into clear blocs but rather dissolving chaotically. The key question is: what will be the political consequences of this process? Paradoxically, it may open up a much wider range of possibilities than expected. And it is also clear that in the context of the opposition’s disintegration, the traditional dichotomy of “power versus opposition” is no longer relevant. The real issue is how new political forces will emerge and where they will come from.
The regional question
Another point: we often speak about redistributing power and resources in favour of the regions, but the regions themselves are structurally unprepared for this (emphasis by Kagarlitsky). In essence, the regional map of Russia would have to be redrawn from scratch. We have discussed this before — the issue has remained unresolved since the 1980s, and yet nothing has changed.
Social policy
As a principle, targeted aid should be rejected and replaced with universal and comprehensive support for the population. However, the authors of the New Deal program are not proponents of targeted assistance as a central approach; they propose it as a supplement to universal measures at the regional level. Tactically, this could work.
But the real problem lies elsewhere. Social policy is once again reduced to fighting poverty and supporting families — the same old priorities of social policy. And the crucial question remains unanswered: who will benefit from this policy beyond the poorest and families with small children? This is not about where to find the money — that problem is solvable — but about what this policy offers to people who are neither the poorest nor parents of young children.
The importance of a universalist approach
A universalist approach is valuable precisely because it benefits not only the poor but also the middle class — which is politically crucial for securing their loyalty and even active support for leftist policies.
What did the authors overlook?
Housing policy
Let’s start with the housing policy. The program rightly mentions state-led construction, drawing on the Austrian model. But why only social housing? The goal should be affordable, high-quality housing for all social groups — if even millionaires want to live in standard apartments, let them. This implies not only moderate rent prices but also below-market purchase options (though different types of housing should be allocated for rental and purchase to avoid speculative flipping). The aim should be to put pressure on the housing market, reducing both rental prices and real estate costs. And why stop at housing?
Commercial rent for SMEs
Why not apply the same approach to commercial rental spaces for small and medium-sized businesses (SMEs)? However, those benefiting from preferential rent should, in return, commit to certain obligations — not just price-related, but broader economic and social contributions. I would extend preferential terms to bookstores, eco-friendly manufacturers, cultural tourism projects, and similar enterprises that could receive support. However, state programs should be effective, not charity. Supported projects must not only spend money but also generate revenue (albeit with lower profit margins).
Social policy as infrastructure development
Social policy also includes:
- Transportation (investing in key routes and improving service quality).
- Urban planning (rational zoning and support for rural settlements).
- Walkable cities, ensuring jobs and essential services are within easy reach of residential areas.
This last point is crucial for reducing traffic congestion and the environmental costs of urbanisation.
Employment policy: Beyond market self-regulation
Russia currently faces a labour shortage, but that does not mean the market will regulate itself. It is necessary to stimulate the flow of labour into priority industries, such as high-tech manufacturing and scientific fields. A recent example: a cutting-edge industrial enterprise lost skilled workers who switched to working in a Wildberries warehouse — a clear sign of market distortions. Qualified labour in industry, especially in the public sector, must be incentivised — particularly in civilian sectors.
Access to education must be guaranteed, along with high quality education and the opportunity to study without financial distractions (scholarships, dormitories, etc). This applies not only to universities but also to vocational schools that train workers for industry and high-tech fields. Of course, teachers and researchers must receive decent wages and corruption in education must be eradicated — which requires structural reforms.
Employment policy for women
This should not be framed in terms of vulgar feminism, nor in the “family values” approach that forces women into unpaid domestic labor. Policies should ensure: flexible work arrangements (part-time employment, reduced hours), substitution services for temporary absences.
Tax policy: Missing from the discussion
Where is the tax policy debate? It is clear that tax breaks for big business and the ultra-rich must be abolished. However, progressive taxation must be handled carefully:
- To avoid burdening the middle class;
- To ensure simplicity and transparency — one of the flat tax's few advantages; and
- To prevent tax evasion. People should find paying taxes advantageous rather than resorting to avoidance schemes. Taxes are not just about raising state revenue; they should also shape economic behavior. The key principle: an efficient public sector = lower taxes.
Regional and environmental dimensions of social policy
Reducing regional disparities and stimulating the development of small and medium-sized towns is essential. Ecological employment policies should support the employment sector, such as forest restoration, traditional crafts and rural revitalisation — counteracting excessive population concentration in megacities.
Lastly, security, urban comfort and access to culture are also part of social policy.
Final thoughts
The New Deal program presents some important ideas, but its social policy remains too focused on poverty reduction and family support — without sufficiently addressing broader societal needs. A genuinely transformative social policy must be universal, structurally embedded and economically sustainable.