Konstantin Sonin, one of Russia’s leading economists, wrote a column about my anti-oligarch manifesto, and that is very good, even though Konstantin tries to correct me by arguing that oligarchs are a state failure.
Why is that very good?
First, this needs to be discussed. The problem of wealth inequality and inequality of opportunity is a key issue for our country. We need dozens and hundreds of similar columns, both for and against.
Second, and this is excellent, Konstantin addresses the substance of the problem, whereas in 95% of cases any discussion of this kind immediately turns into “nothing can be done,” “the past cannot be undone,” “a compensatory tax on the results of privatization is impossible, because the capital has changed hands a hundred times,” “it’s dangerous, it will bring about a new ’17” (a reference to 1917, the year of the Russian Revolution).
This is a kind of learned helplessness, encouraged by those in power: nobody likes the fact that 0.1% of the population owns 88% of the nation’s wealth, but people are told not even to think that life could be organized more fairly or that real steps in that direction are possible.
But there is one point on which I want to disagree with Sonin: his abstract framework does not work. This is bad policy carried out by the political leadership and officials. It is their fault, not the fault of businessmen. It is a “state failure,” not a “market failure.”
But who are this state and these officials? They are the oligarchs. That is the whole point of oligarchy:
The political power of the Kovalchuk “businessmen,” who have bought up half the country’s media, far exceeds the power of any establishment party except the ruling one. They have more influence over the country than the Communist Party of the Russian Federation or the LDPR (Liberal Democratic Party of Russia), even though millions voted for those parties.
The business empire of the “official” Shuvalov is an order of magnitude larger than that of 99.9% of the country’s entrepreneurs.
Oligarch Potanin is a former First Deputy Prime Minister.
Oligarch Alekperov was the First Deputy Minister of the USSR’s oil and gas industry.
and so on.
The oligarchs—both the old ones, born of privatization, and the new ones, enriched by state contracts—formed this political regime, and they sustain it. In Sonin’s view, they are part of the market that took advantage of state failure. I believe they are the state, deliberately rigging the market in order to secure an overwhelming advantage in making money.
Now, in 2016, the oligarchic regime is better described differently:
It is more like a vile ouroboros: fusion, mutual dependence, symbiosis. Democracy, the market, and competition are all equally frightening to them, because they promise only hardship and ruin.
The oligarchs (it is important to look at my definition of oligarchs) contribute to the weakness and backwardness of state institutions, which in turn preserve and multiply their wealth.
Timchenko is like Yarovaya, and Usmanov is like Burmatov. They are all equally harmful, and there is no need to sort them into different columns of a table.