The Russian Way of Being Free

My article for Novaja Europa about freedom and Russian mentality.




"The severity of Russian laws is balanced by their non-obligatory execution".

Mikhail Saltykov-Shchedrin


Is Russia doomed to be authoritarian? In order to answer this question, we must try to analyze both the Russian mentality and the political history of the country.


Do not mix politics and "mentality"

A common place is the assertion that authoritarianism is a necessary part of Russian mentality, unlike that of other European nations. Thus, the current dire situation regarding democracy and human rights in Belarus is often attributed to the fact that the Belarusian lands have been occupied by Russia for over two hundred years. During this time, it is assumed, oriental authoritarian mentality and manners have been planted in what is now Belarus.

Another common point is the assertion that the seemingly authoritarian mindset has not prevented Japan and Germany from becoming prosperous democracies after the Second World War. Both countries, though not without an external stimulus, have built their "economic miracles" based on economic liberalism.

Thus, it is necessary to distinguish between the possibility of building a social system based on liberal principles and, on the other hand, specifics of business and labour culture (within a liberal economy), which are influenced by traditions and mentality. This also applies to Russia, where traditions of authoritarianism should not be grounds for the idea that Russian people are somehow predisposed to slavery and dictatorship.


In what way are Russians freer than western Europeans?

Western Europeans are accustomed to an institutionalized freedom guaranteed by law and custom. Western liberal legal culture has a long history: from Magna Carta and the medieval German urban communes where "city air makes you free", to women's emancipation and the desire to overcome the effects of racial segregation in the U.S. (as evidenced by Obama's election for president).

Legal culture in Russia has gone through the tragic history of the Mongol yoke and has been forming differently, also influenced by the huge territorial extent of the country. At the core of this culture lays the balance of power between the rigid dictates of the center, on the one hand, and fragmented execution of orders on the regions, on the other side.

At the same time the Russian people have traditionally learned to see a greater importance of "objectivity" and of a justice higher than formal law. The law has traditionally been of poor quality, and therefore required a critical approach. Russians have been able to develop this critical approach to a much greater extent than western Europeans. Law in Russia is not a norm to be executed, but at best a "guideline" or, in some cases, simply an obstacle to be overcome. Western Europeans are not accustomed to such wit and intelligence in relation to execution of laws. A famous Russian proverb says "You can turn the law the way you want" - perhaps in this respect a Russian is more free than a Western person.


The Russian conflict: man versus bureaucrat

Russia has traditionally had an authoritarian and usually irrational government, which hindered realization of the people's potential. The history of Russia is the history of an eternal silent battle between reason and the law, between Man and the Bureaucrat. Because of the poor quality of modern Russian legislation, enormous intellectual and organizational resources used to withdraw assets to offshores and reinvest them back instead of developing the business.

As a result of that, the small island of Cyprus has formally become the second largest foreign investor in Russia. Besides, countries that may potentially be used as offshores are the source for more than half of "foreign investments" into Russia: the Netherlands take 18.6% of the total volume, Cyprus - 16,6%, Luxembourg - 15,1%, the Virgin Islands - 2 8%. Up to USD 300m were being annually spent on bribes and kickbacks in Russia before the crisis. The large scale of tax evasion and license tricks greatly distorts national economic statistics.

There are also "everyday" examples of violations of the imperfect Russian laws. For instance, the prohibition of advertising of strong alcohol is being overcome by advertising vodka brands as mineral water, chocolates or even books - and that openly on TV.

Authoritarianism is considered a distinctive feature of the Oriental mentality, dominating in countries like China or Japan. But that authoritarianism is a functioning one, where people irrevocably subdue to the leader and do not grumble or sabotage the production process like Soviet workers did. Since the Mongol yoke, which largely determined the characteristics of the statehood of Muscovy and its derivative Russia, the Russian mentality is a mentality of a Western man enslaved by an Oriental ruler.

Italian-strike-like protest against the government, silent and motivated rather at a subconscious level, is a feature of such mentality. There is a corrosion of public institutions, but also is the converse: Russian society is capable of self-regulation and self-government. Along with the failing state institutions informal institutions arise. These informal institutions are often even more effective and more fair than the government.


Modern Russia: no czars and no great guiding idea

In modern conditions, where there is no will of the hated lord to be sabotaged, a Russian mind may start treating the legitimate interests of fellow citizens as this "obstacle to overcome". And this can, under certain conditions, become quite dangerous. In some respects such behaviour is demonstrated by the rulers of modern Russia. For the first time in Russian history these people do not feel some transcendental and spiritual mission upon themselves (by will of God Emperor of the Third Rome, the Head of Russian Orthodox Church, Father Czar), nor a secular but still global and pathetic mission (a Global Socialist Revolution, or, conversely, the romantic liberation from communist dictatorship of the early 1990s).

The current Russian leadership has been formed behind the scenes from representatives of middle and lower grades of Soviet and post-Soviet nomenklatura. Now these people do not have a boss over their own head, but are accustomed to act on the same schemes as previously. In such circumstances corruption becomes part of the governing mechanism, the real decision-making is quite different from what is defined in the Constitution. The state itself, among its priorities, pursues primarily the interests business groups close to the Kremlin.

In the 1990s Russia started a transformation towards a market economy and pluralist democracy. However, such transition could turn into stagnation, which apparently happened in this case. In such situation the "adolescence problems" may cause complications and increase the risk of destruction of the Russian state as such. Fortunately, considering statements of President Medvedev, some fractions within the Russian government seem aware of the danger.

Many peolpe speak a unique and special path to democracy and freedom for Russia. Those who use such rhetoric, if they do not aim to justify the de-facto deconstruction of democratic institutions, should really search for ways to make liberal reforms and to redefine the role of the state in relevant Russian national traditions. These traditions, these traits of national character existed before, and are still valid now.

// Novaja Europa
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To Study, Study and Again Study Capitalism*

My new article on market reforms and privatization in Belarus, for Naša Niva:



To Study, Study and Again Study Capitalism*



For several weeks, before and after the Belarusian Investment and Economic Forum, the media was being bombarded by news on developments around the privatization of Belarusian state property and plans for further liberal reforms in the economy of the country. Belarusian authorities finally outlined plans to make order in the Augean stables of the national tax system - the world's worst according to international rankings. Movement in the right direction is good, but its shortcomings must be corrected.

How to attract adventurers

The Belarusian economy is perceived as a high risk investment target. To improve the image of Belarus, more than just one year is needed. Old scandals (unsuccessful investors to Belarus in the 1990s, like "Baltika" or "Ford") are much better remembered than new success stories. No protection of investments, biased courts and the overall exotic totalitarian image of Belarus - the government has a huge scope of work to do. Positive changes must happen and be recognized by the international community.

Only adventurer-type investors would be ready to invest in Belarus now. For ignoring the risky image of Belarus they want high returns on their investments. Prospects of such returns are vague: Belarus doesn't have natural resources that attract investors to Russia or Kazakhstan It is hardly possible to transform Belarus from the "Assembly Shop of the USSR", as it was called in Soviet times due to Belarusian heavy industry supplying the rest of the USSR, to "a Small Assembly Shop Near the EU" because Belarus is not even a member of the WTO. Today, when Finnish wood processors sometimes find it easier to handle Russian wood in China, Belarus is not physically able to compete with Asian countries as an eventual location for foreign production facilities.

"To be proud of one's export potential is past century," a senior foreign delegates of the Belarusian Investment Forum said in a private conversation. Investors are more interested in domestic market and the effective domestic demand, on which Belarus is not very attractive, he added.

The government could sell state-owned companies, which it can't manage anyway, for a lower price, but today the Western investors have enough cheap objects at home. This makes them less interested in Belarusian enterprises. There are many assets for sale in Belarus, but many of them lack a realistic valuation, the forum participant complained.

Bluff as style

Arrogance and inflated self-importance are usual for the foreign relations of the Belarusian government under Lukashenka. Their speeches sound like foreign capital just can't wait to rush into the country. This is where the high prices for state companies, which still require a lot of work to be done prior to a sale, come from.

So, it was strange to hear Prime Minister Siarhiej Sidorski presenting the Belarusian centralized economy as a successful model compared to the crisis-causing free market capitalism. Just as free market has very little to do with the causes of the current economic crisis, even the Belarusian Investment and Economic Forum, where Mr. Sidorski has held this speech, seems specifically to have been organized because the old approaches to the Belarusian economy had stopped working. There is a need for Belarus to catch up two decades of market reforms. In 2010 Belarusian accounting standards will be brought closer to IFRS, the licensing system will be radically simplified et cetera. Just why couldn't it all have been done in the previous years?

Already too late, or not yet?

The Belarusian government only learns to act in the circumstances of a modern economy. There has been a comic phrase occasionally said by Chairman of the State Property Committee some time ago, according to which the government of Belarus had then finally realized, what the difference between transforming of a unitary enterprise to a joint-stock company and privatization was. However, some publications in the media or the sudden appearance of the still unitary Beltelecom on the privatization list for 2009 indicate that there is still large space for the elimination of illiteracy.

Belarusian officials have found out about such a thing as a listing on a stock exchange and carefully repeat words about preparations for IPOs of companies of the Belneftekhim holding. It brings optimism to hear such things from previously conservative officials. Professionalism of the key people in the government and their ability to learn - that is what gives hope to investors.

The reforms are advancing very rapidly and even demonstrate short-term benefits of an authoritarian regime, that is not burdened by a discussion of new legislation with the parliamentary opposition. The latter is what has been drowning reforms in neighboring Ukraine over the past years. The problem is that the effect of reforms and good international ratings can be expected only in not less than five years. Much earlier will we know whether the government of Belarus is not already too late with its today's reformist enthusiasm. Those who come too late will be punished by life, Mikhail Gorbachev used to say.


// Naša Niva, translated by myself and Google Translate

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* "To study, study and study communism again" - a quote attributed to Vladimir Lenin
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