The Russian government has taken several measures over the last few days to prevent price rises in the country's industry, primarily in the fuel and energy sector.
The new moves included Prime Minister Sergei Stepashin's setting up a special government committee responsible for ensuring gasoline prices do not increase.
"We're forced to run as a semi-wartime economy," Stepashin said, not bothering to disguise his real aims.
Indeed, economic principles have little place in Stepashin's latest plans. The new committee will function as a rigid administrative body with powers to revoke licenses, act through pressure on local authorities, and-through the Interior Ministry-oversee the country's gasoline pumps, making sure that no one hikes prices without good reason.
Another key event was the signing on June 16 of an agreement setting an effective moratorium on price rises in a number of sectors. The agreement was signed by the government and by more than 50 leading oil, gas, electricity, transport and metal industry companies, including: Unified Energy Systems (UES), Gazprom, LUKoil, the Railways Ministry, Transneft, YUKOS, Sidanko, Sibneft, Rosneft, Slavneft, Tyumen Oil Company, ONACO, KomiTEK, Severstal, Magnitogorsk Metallurgical Combine, Vorkutaugol, Novolipetsk Metallurgical Combine, KamAZ, AutoVAZ and GAZ.
But one may ask who in a market economy decides what constitutes reasonable grounds for a price increase. Stepashin's new economic policy leaves no room for doubt: his special committee. More precisely, the police. Russia's "petrol pump kings" will soon taste the delights of dialogue with authorities under gunpoint.
Instead of protecting businesses from crime, Russia's police will shortly be protecting businesses from businessmen. All is fair in war, the saying goes.
But Stepashin did say "semi-wartime economy," implying that to make a harmonious whole, there could also be room for a market-oriented component. Stepashin is always hinting at the fact that an economy run administratively from above-the new Cabinet's preferred method-is an "extraordinary measure."
But in his search for "new instruments of economic policy," the prime minister keeps running up against his own military tendencies.
Although Stepashin projects a perfectly civilian image, he nonetheless thinks like a military man. Faced with a crisis situation, he does not turn to tough economic measures, but pulls on administrative and legal levers.
That said, he has made some attempt to search for new economic solutions. Stepashin recently set up a government economic council, bringing together many liberal economists, including Yegor Gaidar, Yevgeny Yasin and Sergei Aleksashenko. Stepashin is open to advice and ideas and no doubt will act on suggestions made by the council. But that is all in the longer term.
In the meantime, the government has clearly launched the country's first steps toward a mobilization economy. It is no coincidence that the prime minister spoke of a "semi-wartime economy." With parliamentary elections at the end of this year and presidential ones next year, Stepashin is fully aware of the task at hand-either win the elections or devise some other way of keeping power.
Maintaining some sort of status quo rather than market reform will be the government's priority. And in this context, administrative measures become fully justified. That will include a moratorium on price rises, police control over business, special committees of every description with the power to say who is right and who is wrong. True liberals will hate it, but it seems an effective approach for a weakened Russian government.
It would be hard to condemn General Stepashin for his thinking, but Prime Minister Stepashin, on the other hand, could well find the crisis-ridden Russian economy hurling accusations his way. As for the fate of Russian business, sooner or later mutiny will break out in the ranks, and "semi-wartime" measures could become 100 percent military.