Why the oligarchy follows after socialism?

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One of the favorite socialists’ bed stories is about the “greedy oligarchs who replaced them and made everything even worse”. As propaganda goes, it is effective, for it builds upon the known ‘rosy retrospection’ bias quite common to the human brain: we tend to overconcentrate on bad things happening in the now and forget the unpleasantness of the past, focusing instead on our best memories which are oh so much better than the ugly present. This kind of self-therapy is everywhere: people who fail to adapt to the present are always grumbling about how “everything was better in our time”. However, what is really worrying is that sometimes this attitude infects the younger generation who starts telling stories of “how it was before” without having actually experienced it, ever. For instance, young Russian bloggers tell nostalgic stories about the USSR – and are not at all fazed by the fact that they are typing them on Western-made computers and smartphones, which they would not even have had back there. It’s the same in Argentina – except here the stories are about the golden days of Peron, under whose heavy-handed military regime these youngsters would probably not have survived a year.

All these types of disinformation – the post-Soviet, the post-Peronist and all the similar others – are due to the lies spread by and absorbed from the media. In Russia, for instance, the media keeps up the Soviet-learned etatistic drivel, which is very well received by the viewers who acquire the rhetoric based on “relatively comfortable life under the communists” and the “horrible oligarchs surrounding us now”.

As a matter of fact, there is nothing wrong in the oligarchic regime. It is a common and natural stepping stone from socialism to capitalism and from dictatorship to democracy. It is not, of course, the only way; another possibility which allows the state to avoid both the oligarchy and the return to socialism is the way of foreign privatization – i.e. letting the private foreign companies buy up state property – the factories, the infrastructure and the banks. However, it is a very rare thing for a modern state to allow this level of intrusion; they are too afraid to lose control and sovereignty. Thus, the privatization, if and when it happens, is done by the citizens of the state itself.

Before we can fully understand oligarchy, though, let’s review what we know of socialism and its methods.

First and foremost principle of socialism is the absolute, immutable control over everything. Whatever type and color they are, from Marxists to fascists, the socialists work hard at creating a system which either turns elections into a farce or abandons them altogether, and put the economy under the direct control of the state. Next, they move against their main and most dangerous enemy – the rich and the powerful citizens who possess either money, power or both. These get destroyed – either physically, as did the Bolsheviks after the October Revolution of 1917, or financially, by nationalization – seizing their property “for the good of the people” or some such drivel – as did Velasco Alvarado in Peru, Maduro in Venezuela and Putin in Russia. In the latter case, those privateers not overtly loyal to the state get their possessions transferred to the State-owned corporations and are forced to flee the country. The nationalized goods serve the further purpose of strengthening the socialists’ power. That’s the end of the free business – potentially, the main enemy of the leftist dictatorship.

The next step is moving the economy into the Planning and Distribution system. Naturally, everything collapses, and the state is forced to gradually reduce the amount of goods its citizens are “allowed” to own. Take a look at USSR or at Venezuela: once rich and prosperous, they failed year after year to build their communist paradise on earth and were finally forced to the shameful food stamps system. The new genius, Nicolas Maduro had lately declared his intention of moving even further and distributing food not even based on stamps but on fingerprints, “to avoid the deficits and illegal resales”. Venezuela is near to starving! Truly insightful, that a country in Latin America is worse off than some African states.

Unless the socialists are deposed the society slips further and further into poverty. The riches sucked out of the movers during the nationalization are spread unevenly within the governing elite circle, never reaching the “people” for whose proclaimed “good” they were taken. No amount of reforms can cure the disease at this stage; the state should be destroyed, the system abandoned; only then has this failed state any chance of rising back to a relatively normal level of existence. The only way to do this is with free market economy and large-scale privatizations. The question is, though, who is going to do it. The people have no means, the private businesses are ruined. On the other hand, taught by the state to hate the “for’ners”, the good and loyal citizens resist any attempt to attract the foreign capital. Thus, in a seeming paradox, it is yesterday’s socialists, directly responsible for the near-African level of the country who must need become today privatizers. Only they have the means, the money, they – having destroyed the banks, the businesses and the elections – control the distribution and the finances. The socialism may break down but the socialists land on their feet – and with all the money of the state held tight in their fists. This is what happened in Russia in the 1990s. This is what happens now in Argentina, Venezuela, Nicaragua and Bolivia. The former (or even current) party leaders live in luxurious palace-like villas and buy whatever properties they desire.

A direct consequence of the socialist idea is a complete lack of any serious opportunity in business career-building. One can become a great actor, a scientist or even a manager of a state-run institution or factory; but in terms of serious control this means little. In a socialist state one simply cannot become a millionaire – unless one is a party bonze. One cannot own quality things or property – except as and when granted by the state – and if one gets a hold of some such there is a significant risk of having it taken away and/or having self questioned about one’s income and spending habits.

So, under the above assumptions, let’s ask ourselves: who are the oligarchs? The answer is deceptively simple and intuitive. They are the clever ones who, having avoided the communists’ mantraps, managed to build shadow business. They did not let the hardcore system closely resembling concentration camps – no free access to foreign currency, no civil liberties, etc. – bog them down. They actively look for and sometimes find cracks in the iron curtain – and in those cracks, they plant the seeds of the future free market economy which, the while socialism lasts, remains in the shadow. An oligarch, therefore, is someone who have succeeded in profiteering under socialism without being arrested or exiled, and the hope of all future business. Someone who, in the prison-like conditions, have managed to deliver the goods to those who want them and can pay for them.

Having successfully created their system, their anti-state mechanisms, and amassed enough cash, they were then able, after the fall of the dictatorship, to become the only serious opposition to the communist bandits who have painted themselves as privatizers. And that is precisely why the oligarchs are always the focus for the socialists’ and fascists’ hatred. These thieves – the state bosses, the party bonzes – have always considered the state property their own; suddenly they are forced to compete with some complete outsiders, people not of the family, not of the ruling class. The communist thieves in power see these upstarts as thieves – for the oligarchs make claims on the property which “by right” should only belong to the communists. Their idea of privatization was a simple matter of dividing the spoils between themselves and then drawing up some legal mumbo-jumbo to make it all proper on paper. Suddenly, they have to fight for it.

And so they do fight. Their first and foremost weapon of choice, as always, is their massive propaganda machine. The socialists all over the world tell stories about the Great Enemy – the oligarchs, the greedy grabbers stealing money from the people, who should be opposed every step of the way. Their best way of opposing them is, naturally, the strengthening of the state, the recreation of the Soviet-type totalitarianism. Propaganda aside, the communist thieves and other dictators really do hate the oligarchs – they hate them for succeeding at working the system, at beating them at their own game. The oligarchs struck at them from a completely unexpected direction; the communists, fascists and other absolutists and totalitarian ideologists did not expect any liberal proponents of freedom, enemies of state and friends of the market, to survive. When they do, they are declared Evil.

Unfortunately, it cannot be denied that many of the Russian oligarchs became Putin’s allies. Some had their start in the lower circles of the Soviet elite, though through sheer incompetence had not been able to rise until Putin came to power. Others were honestly fooled by his deception of keeping up with the economic reforms. Others still paid no attention to his policies. And quite a few decided that the abstract ideals of democracy and liberalism are not worthy of a hard, bloody fight to the end. Similarly, many Argentinian businessmen find themselves courting Kirchner, those in Venezuela – allying with Maduro, in Nicaragua – with Ortega. Let’s not cast the first stone: every man should answer for his actions, and it is not to us to judge those who have fought the Soviet regime when they had no more strength to fight Putin’s Neo-Bolshevik one.

In any case, the strongest of the oligarchs, the ones who found became a sort of guarantors for the civic liberties in Post-Soviet Russia, tried to fight Putin on his own terms and turf. Their mistake was in fighting alone, every man for his own interests – they did not, or could not, unite. And alone, they were not strong enough. The Russian government easily exiled or destroyed them. It is not impossible that, had they presented a united front in, say, 2002, and fought together against the state, they would have prevailed.

So, let us review then.

In a post-socialistic country, standing before the so much needed economic reforms and privatization, there are only two kinds of people capable of carrying out said privatization. The first is the former party elite, socialist and communist bosses, heads of unions, state security and other pro-totalitarian criminals. The second is the unexpected, the new generation of businessmen who have managed to survive and thrive under the leftist state. The former have on their side the amassed cash and the populist rhetoric. The latter are masters of survival, strong enough to commit to and perform the first, most terrible wave of reforms.

With the socialist state crumbling and crashing, the leftists will always cry out about the “needs of the little people”, the “destruction of our glorious past”, the “end of the world”, the “conspiracies of Reagan, Hitler and the Elders of Zion”. Words are their weapon and they will employ it to the utmost to avoid bankruptcy and imprisonment. However, in order to survive, the people should ignore their rhetoric and support the businessmen. They should keep doing so in spite – or rather because of – their ability and their desire to attract foreign capital and foreign investors. If the country sticks to this path, it will leave the crisis behind, destroy the deadly leftist heritage, prevent the totalitarians’ comeback. The free media, the transparent legal and taxation systems will be created and will, in turn, guarantee the further improvement of the next-generation businessmen operations. In Russia, for instance, the second generation of the businessmen, unlike the first one who still clung to its shadowy past, were legality-oriented and optimistic. Too optimistic, alas, for they had been utterly crushed by Putin’s new dictatorship.

My friends, please remember: whatever else you think of the oligarchs personally, in a fight between them and the leftists, always pick their side. There is no one else to defend you and your families against the socialists’ coming back with a vengeance.

Kitty Sanders, 2014

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