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MODERN RUSSIA: IDEOLOGY, POLITICS, CULTURE AND RELIGION
DMITRY YEFREMENKO. "DEOLIGARCHISATION" IN POSTSOVIET RUSSIA: RETROSPECTIVE VIEW // The article was written for the bulletin "Russia and the Moslem World."
Keywords: financial oligarchy, neo-patrimonial capitalism, Russia, the "YUKOS case," economic reforms, privatization, ownership structure.
Dmitry Yefremenko,
Dr.Sc.(Politics), Deputy Director,
Institute of Scientific Information on Social Sciences, RAS
Abstract. The article considers the prerequisites and consequences of the struggle against the so-called oligarchs during the first presidential term of Vladimir Putin. The interrelation of the anti-oligarchic campaign with the processes of strengthening the "vertical of power" and the formation of a specific Russian model of neo-patrimonial capitalism is shown.
The history of Russia of the past two decades was marked by several significant turns, and the way of meeting them, and the vector of further movement have considerably influenced the transformation of the political regime and the role of Russia in the system of international relations. Among these turns was a struggle against the attempts to political domination of several
oligarchic groups, which unfolded in the period of Vladimir Putin's first presidential term (2000-2004).
The term "oligarchy" in the Russian historical context is associated with the 1990s. But the sources of this phenomenon go down to Gorbachev's perestroika, when a new social group of entrepreneurs almost without experience of organizing production and business in the conditions of open market competition came to the fore. Their road was different, they were able to achieve success not contrary, but thanks to the disintegration of the Soviet economic system, and their method of doing business included, among other things, the ability "to solve problems" at different levels - from local criminal groupings to the federal government. Due to such interactions it was possible to ensure reproduction in the qualitatively new conditions of the "power / property" tie, freeing it from the political and ideological restrictions of the Soviet epoch.
During the 1990s a specific version of neopatrimonial capitalism emerged in Russia. Max Weber characterized relations between power and property in Russia in the 16th - 19th centuries as a specific version of patrimonialism - czarist patrimonialism [Weber 1976: 621-623]. In the latter half of the 20th century Richard Pipes made a considerable contribution to the elaboration of the concept of patrimonialism in Russia, regarding the absence or vagueness of the dividing line between property and political sovereignty as a factor determining specific features of Russian history during the prerevolutionary period [Pipes 1993]. Shmuel Eisenstadt, adapting Weber's concept to the problem of modernization used the term neopatrimonialism [Eisenstadt 1973]. Neopatrimonialism can be regarded as a combination of two types of political domination - rational bureaucratic and patrimonial. The functioning of power in the conditions of neopatrimonialism is subordinated to formally legal standards only outwardly, whereas the real practice is informal and is determined by patronage and clientelism. Neopatrimonialism is characterized by the authoritarian organization of socio-political relations and the rent-seeking model of economic behavior [see: Erdmann, Engel
2006]. In the specific circumstances of Russia in the mid-1990s the main agents of political transformation staked more willingly on informal institutions, right up to actual transfer to "outsourcing" of the economic groups of interests of a number of functions of state governance. Such order of doing business compensated the weakness of the state and at the same time created additional insuring mechanisms for the political actors who were not sure of their political longevity, relying only on formal institutions. The culmination of neopatrimonial socio-political transformation was the presidential elections of 1996, the period of "seven-bankers-rule," "loans for shares" auctions, and finally the Default on August 17, 1998.
Evidently, the economic reforms of the 1990s were either non-oriented to overcoming the patrimonial system, or at the very first contacts of the reformers with the Russian reality, a tacit substitution of the aims of transformation. There is no need to talk at length about facts of real corruption or specific ways of life of certain members of Gaidar's team, for whom their stay in the government was only a transit point on the way from academic institutions to the Russian "Forbes list." Realizing the inevitability of the reemergence of the "power-property" model in the new conditions the reformers of the 1990s tried to make it serve them and their customers. In this sense reforms may be regarded as a kind of "social engineering."
In Russia of the mid-1990s, the political power formed a new stratum of big owners, who, taking advantage of the weakness of the state proclaimed their privileges in establishing control over the power which has created them. Informal institutions were substituted for formal ones and, as a consequence, political power was privatized by economic groups of interests after the Default of 1998, which concentrated about one-third of the Russian GDP under their control [see: Rutland 2008]. However the very essence of the economic crisis, which started on August 17, 1998 with the announcement of technical default and ended with the transfer of presidential powers from Boris Yeltsin to Vladimir Putin on
December 31, 1999, boiled down to the recreation of an ultimate patrimonial model of state power more acceptable to the majority of political and economic actors as well as mass social groups, with state power playing the main role.
Even for a considerable part of influential interest groups, each of which represented a powerful network unit, the need for the function of state arbitration was quite evident. But more important was the fact that the state as the supreme arbiter had to ensure the preservation of a new structure of large property which did not have enough legitimacy in the eyes of a big part of the Russian population. For most Russian citizens privatization became an inalienable part of individual and collective painful experience, a symbol of crying social injustice and monstrous corruption. No wonder that about one-third of respondents even at the beginning of the 2000s spoke in favor of the renationalization of big companies, and behind the «stable and widespread negative attitude toward the results of privatization one could feel and see irritation and revengeful expectation of "game change." Paradoxically, this was combined with almost complete absence of any hopes for the restoration of "social justice"» [Zorkaya 2005: 94]. Insufficient legitimacy of the structure of big property remains a time bomb to this day, which can explode at the moment of destabilization of the social system, which is conditioned by a combination of external and internal pressure.
Joseph Stiglitz, Nobel Prize winner for economics, writing about economic privatization in Russia pointed out that the emerging private-ownership interests in that country led to the weakening of the state and destroyed public order by corruption and the appropriation of property by representatives of governmental bodies [Stiglitz 1999: 14].
At the beginning of the 21st century the demand for "return of the state" was a mass phenomenon and it was largely connected with the further expansion of informal institutions and relations, which could turn into a source of new social risks. On the contrary, the ability of a political leader heading the hierarchy of power to
control ambiguity and risks, even if this control was effected on the basis of the combination of using formal and informal institutions, proved highly in demand. In this sense the desire for "return of the state" meant that public expectations began to merge on one point, just as the interests of a considerable part of political actors, as well as apprehensions of influential interest groups. In essence, it was a demand for systemic stabilization, establishment of understandable and acceptable "rules of the game" in a compromise variant, excluding the repartition of property and "privatization" of the state by interest groups. Solution of this task became one of the key directions of Putin's policy during his first presidential term. It is precisely in this context that Putin's struggle with such figures as Boris Berezovsky, Vladimir Gusinsky and Mikhail Khodorkovsky should be viewed.
Putin-proclaimed "equidistance" of oligarchs meant that in the "power / property" combination it was power that played the dominant role. Putin's resolute actions aimed at curbing the influence of big business and its certain representatives on power bodies were at first carried on with the use of less political resources. The first of "equidistant" oligarchs was Vladimir Gusinsky who made the erroneous stake on the success of the Luzhkov-Primakov tandem at the parliamentary elections of 1999, and Boris Berezovsky who repeatedly hinted on his own resolute contribution to Putin's electoral success. Both of them were the living symbols of an epoch rapidly receding to the past. Their banishment from Russia should have vividly demonstrated the oncoming of a new epoch. The main result of the first round of the fight against the oligarchs was the return of the key media-assets under the control of the Kremlin; these media-assets were used by Berezovsky and Gusinsky as the most powerful instrument of strengthening their influence and expanding the business-empires controlled by them.
Although the forced change of the editorial policy of the NTV Channel and other mass media in Vladimir Gusinsky's holding have evoked serious fears for the fate of freedom of speech
and freedom of the press in Russia, the departure of the country's new leader from the influence of oligarchic groupings was completely in line with public aspirations. Meanwhile, the authorities did not demonstrate any intentions to revise the results of privatization, moreover, in case of adoption by business of new rules of the game the powers that be became the main guarantor of the preservation of that form of property which was formed by the end of the 1990s. After the departure of Boris Berezovsky from Russia this silent pact was adopted by almost all business-structures. The only exception was the YUKOS Company of Mikhail Khodorkovsky.
Khodorkovsky's challenge was of a systemic character and therefore it was regarded by Putin and his inner circle as a much more serious threat than Berezovsky's and Gusinsky' claims to political influence. The scope and direction of the challenge to fundamental political and economic changes were not disputed or denied by convinced supporters of Mikhail Khodorkovsky:
"The efforts of the YUKOS shareholders at the beginning of 2003 could be joined in a certain general picture: they turn against corruption, take the biggest oil company from state control, finance the opposition, breed a new generation of freedom-loving citizens, develop humanities, moreover they have a certain business-plan for Russia. In a little time Russia will be able to extricate itself from the personal control of President Putin and will become a full-fledged western country. In a sense, it was a sort of a virtual plot aimed at changing the social order. It was foolish to think that the persons in the Kremlin did not notice that plot" [Panyushkin 2006: 21].
Apparently, the decisive motive of the authorities' decision to dismantle Khodorkovsky's business-empire was the fact that following the deal of a merger of YUKOS with Roman Abramovich's giant SIBNEFT (April 2003) negotiations began on the sale of the blocking equity participation of the joined company with ChevronTexaco and ExxonMobil. The successful negotiations meant the transfer of Khodorkovsky's business-empire to the high
league of transnational corporations, and its owner himself, having entered the Areopagus of the global entrepreneur elite could become practically invulnerable and untouchable for the Russian authorities. The loss of political and legal control of the Kremlin over the crucially important asset of the Russian oil industry could bring about not only a sharp growth of the alternative center of influence on the country's economy and policy, but also a revision of the very formula of neopatrimonial capitalism. The success of Khodorkovsky's project should have opened the gates to convert property into political power, and the latter - into new property. There is not enough grounds to believe that this spectacular deal was planned by Khodorkovsky in order to do away once and for all with patrimonial relations, corruption and the specific instruments of Russian business in the 1990s.
By the fall of 2003, when the confrontation between the Kremlin and YUKOS ended with the arrest of Mikhail Khodorkovsky and Platon Lebedev, it was found out that the authorities had exhausted all sound legal instruments to complete this struggle. The YUKOS Company has been able to put up serious resistance to the Russian government pressure, which is shown by the multi-billion claims presented to Russia by its shareholders. The obvious political background if the sentence on Mikhail Khodorkovsky and Platon Lebedev explained the attitude to it of Russian citizens depending on their political preferences. In many cases the criminal component of the "YUKOS case" turned out to be beyond the framework within which the supporters of some or other political positions were ready to regard the Putin-Khodorkovsky confrontation.
According to a widespread view, the "YUKOS case" was a major event in the first two terms of Putin's power. In many ways it could well be regarded the main dividing line. For one, the consequences of Khodorkovsky's arrest, YUKOS bankruptcy, and the use of the virtual "Baikalfinancegroup" for the redistribution of the basic YUKOS assets were of great importance for the relations of Russia and the West. Naturally, the main reason for the tension
that arose between Russia and the West was not the arrest of the leader who allegedly offered the Russian people a democratic alternative. Having crushed Khodorkovsky's business-empire Putin has clearly outlined the bounds of the penetration of transnational and American capital in the key sector of the Russian economy. The demonstration of the fact that the master of property in Russia is the Russian power also meant that in its foreign relations Moscow would resolutely claim equal partnership. Besides, the "YUKOS case" coincided with the first diplomatic opposition of Moscow to American invasion of Iraq. From that time on, a possibility of possible integration of Russia in the American system of global management, which was examined seriously enough during the first two years after the September 11, 2001, terrorist act [see, for example: Nikonov 2002] ceased to be considered by leading world actors as a real option.
The Khodorkovsky-Lebedev affair has become a serious political event for the Russian liberally-minded public. Back in 1999 the electoral bloc "Union of Right Forces" which took the baton of liberal ideology from the "Democratic Choice of Russia" undertook active and relatively successful efforts in order to join the future Putin's coalition of winners. Approving the resumption of military hostilities in Chechnya, the leaders of the Alliance hoped to see a new Pinochet in Putin, who would not only suppress separatism, but also break internal opposition to the neoliberal economic course.1 As a result, the "Union of Right Forces" (URF) overcame the 5-percent barrier and formed its own faction at the State Duma (the lower house of Parliament). However, the presence of liberally-minded figures in the government, who were ready and willing to continue the course of the Gaidar' reforms were in no way connected with the electoral success of the URF. In the 2003 elections it was not enough to support the actions of the authorities, but it was also necessary to formulate one's own attitude to all major aspects of policy, including the campaign against the YUKOS Company. It was necessary to dissociate from Khodorkovsky and support Putin,
although with certain reservations, or, on the contrary, to make the overthrown oligarch their banner and resolutely break up with the existing ruling regime. The URF leadership was not bold enough to do either one or the other, although under the pressure of the opposition information mainstream it was forced to denounce the actions of the authorities against the YUKOS management.
The image of regime victim, the courageous behavior of Mikhail Khodorkovsky at the trial and in prison camp and his talent of a political analyst have largely contributed to the growing respect of this man on the part of liberal-minded people. However, these positive feelings proved rather controversial. Respect for Khodorkovsky as a courageous fighter against the ruling regime made it possible to put forward several different interpretations of the past activities of the disgraced oligarch. In one case, one could speak of the insight of the new management of the YUKOS Company, who decided to renounce once and for all the old methods of the accumulation of wealth and sacrifice their assets and freedom for the sake of establishing democratic institutions, rule of law and free market based on honest competition in Russia. In another case, it was necessary to present Khodorkovsky's business as a miraculous exception among business ventures of other oligarchs. Finally, the third strategy presupposed apologetics of the Russian financial oligarchy as one of the excesses of the historically inevitable stage of the primitive accumulation of capital. All these strategies were based on a whole number of reservations and defaults and thus they proved vulnerable to both the supporters of the existing authorities and to those who did not recognize legitimate the redistribution of property undertaken in the 1990s despite the sad plight of Khodorkovsky.
After his arrest, the so-called systemic liberals have found themselves in a rather delicate situation. Although this term emerged only at the end of the first decade of this century, the arrival of systemic liberals in the Russian political arena can be synchronized with the coming to power of Vladimir Putin.2 Throughout the 1990s the neoliberal reformers had the
opportunity to exert considerable, if not decisive, influence on choosing strategic development direction for Russia. Under Putin, they continued to use this influence, however, it was already the influence of executors or supervisors within the framework of any system or subsystem controlled by other forces. Sometimes things were going as far as to their readiness to fulfill the role offered by the authorities, which could hardly have been tackled by any ideologically motivated state-oriented political figure. A case in point was the participation of one of the main organizers of "loans for shares" scheme Alfred Koch in establishing government control over the NTV television channel owned by Vladimir Gusinsky. For real democratic reformers with the perestroika spirit, like, say, Yuri Afanasyev, such "systemic liberalism" was tantamount to collaborationism [Afanasyev 2011]. Along with unfolding the YUKOS case, accusations levelled against systemic liberals of collaborationism from the radical enemies of the regime became ever more resolute. It was more difficult to find convincing arguments to approve the active participation of systemic liberals in the vertical of power.
The traditional self-defense of systemic liberals boiled down to the contention that participation in bodies of power or cooperation with them makes it possible to minimize damage from "a turn to authoritarianism," preserve the basic gains of the 1990s, and prevent the total domination of representatives of law-enforcement agencies in the key sectors of the economy and the abolition of the autonomy of civil society. Along with this, appeal was preserved to the Pinochet model, allowing to make socioeconomic transformations under the protection of the security and military services - something which the liberal forces were unable to achieve through free elections. Finally, the thesis was put forward from time to time that the very existence of systemic liberals would contribute to a softening and further on a change of the regime. The "YUKOS case," as well as the forced resignation of Prime Minister Mikhail Kasyanov in February 2004 gave enough grounds to speak of the degeneration of liberals themselves
continuing to stay in the ruling bodies. In essence, at the beginning of the second presidential term of Vladimir Putin the pact between the elites was revised and in accordance with the new version systemic liberals were not only given, on the outsourcing basis, some major spheres of economic, social and scientific and educational policies, but they were duty bound to be drawn in the system of relations between branches of power. At the same time, having stopped to occupy key positions in the high echelons of state power, they did not turn into a screen to cover the consolidation of the autocratic ruling regime. The systemic liberals rather play the role of some balance beams or cut-outs allowing the authorities to avoid the overstrengthening of other interest groups or keep their confrontation within an acceptable framework.
* * *
In 2018 the Putin's "deoligarchisation" turned fifteen-years-old. No doubt, without it, and the struggle accompanying it, the development trajectory of Russia would have been considerably different. The outcome of the struggle, above all, meant that the removal of a serious threat to the vertical of power and the latter remains on the present dominating position. In a way it can be regarded a return to the Russian "historical rut," or a system of relations formulated by Emperor Paul I in the latter half of the 18th century: "Il n'y a de grand chez moi celui je parle et pendant que je lui parle." (He spoke in French) ["There is no important person in Russia apart from one to whom I talk and while I talk to one."]. Anyway, at the beginning of the 21st century possession of a really big property in Russia is possible only on the actual permission of the political power and only until this permission is valid. A possibility of conversion of property into political influence, if not completely abolished, is reliably restricted. It can be said that these restrictions have been established quite in time: the first of the so-called color revolutions in the post-Soviet area - the "rose
revolution" in Georgia - broke out one month later after the arrest of Mikhail Khodorkovsky. Meanwhile, one of the most important mechanisms of developing political crises called "color revolutions" is the readiness of some or other groups of the economic elite of a given country to render a sizable resource support to the forces striving to seize power. In the absence of this crucial factor outside pressure aimed at destabilization or change of the ruling regime proves ineffective. This is why the weakening of oligarchs' influence should be a must for strengthening the sovereignty of Russia as one of the most important international actors.
Notes
The shadow of Augusto Pinochet seemed to be following Russian reformers of the 1990s. Their hopes that the role of the Chilean dictator who provided the forces for the success of the actions of the invited team of neoliberal experts would be played by Boris Yeltsin (subsequently Vladimir Putin) laid an indelible imprint on the reforms. Their hopes concealed their well-based disbelief in the possibility to carry through such reforms along with the functioning democratic institutions [see Klein 2007]. In the apologetic interpretation of Yevgeni Yasin, this position is presented as follows: "The creation of a democratic Russia, if you wish, is the task, which was postponed in 1992 for the sake of radical economic reforms. But now, when the basic reforms have been implemented and we have a market economy, its further development is only possible under a democratic system" [Yasin 2010].
Apparently, this view belongs to Lilia Shevtsova, a political analyst. She suggests the following interpretation of systemic liberalism: "The point is liberal rhetoric: words, phrases, slogans, etc. used by the authorities to camouflage their anti-liberal, anti-democratic policy. They also include the technocratic elements in Yeltsin's government, and later in Putin's government where they continue to rule the roost in the country's economy. Serving autocracy, they discredit the ideas of democracy and liberalism. As long as there exists the phenomenon of "systemic liberalism", and also the readiness of intellectuals to serve the ruling kleptocratic bodies, we will hardly make a step toward a real transformation" [Opyt I uroki ... 2010].
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