THE FATAL TRIANGLE of the PEOPLE, BUSINESS, and AUTHORITY
By Nikolai Popov

   

The deepest changes the last two decades of reform brought to the mass consciousness have taken place in the population’s attitude toward property, its owners and entrepreneurs, that is, business, and toward the society’s principal institutions, above all to the government agencies. The attitude to the authorities is shaped according to whose interests, of what society strata the authority pursues, and how much business influences political decisions. In other words, whether a financial and industrial oligarchy has developed in the nation, and, if so, what is to be done about democracy.

Hands do what eyes fear

In the course of the restructuring and market reforms noticeable changes were taking place in the attitude towards the entrepreneurship and the people engaged and made fortunes in it. The initial reformers of the 1980s spoke of a multistructured economy as our ideal, one with different patterns of ownership: state-owned, private, cooperative, farmers’ and other kinds of property which promised flexible economy and freedom of choice to the people. The majority were of the opinion that retail trade, services and small-scale production should be entrusted to private business while large industries, construction, transportation and communications should be left to the government. In agriculture, a peaceful competition was supposed to be between collective farms and state-owned farms and farmers.

Then the state property was privatized, primary accumulation of capital, property redistribution, bankruptcies, consolidations, foreign capital entry, capital flight abroad, and many other things took place. Currently the composition of the Russian capitalist society is as follows.

Business owners and independent entrepreneurs are about 5 percent, of whom about 3 percent are not juridical persons. Employees of the private enterprises are 43 percent but a majority (51 percent) are still employed by state-owned enterprises. Nevertheless the people have an extensive knowledge of private enterprise practices, taking into account the fact that many relatives, friends and acquaintances have some relation to entrepreneurship.

In less than two years the number of Russians having friends and acquaintances in business has increased from 52 percent to 61 percent. Meanwhile the number of people whose business experience, in the opinion of the people polled, proved a success grew noticeably from 23 percent to 31 percent. Thus, many people’s apprehensions regarding that way of earning money are subsiding and the temptations to try it are increasing.

Another consequence of the growing personal acquaintance with men of business who are friends or acquaintances (these are mostly engaged in small and medium-sized business) is a more positive attitude towards that stratum of the population. Asked, “What, on the whole, is your attitude to those engaged in private entrepreneurship (small and medium-sized business)?, 36 percent said their attitude was “good,” 44 percent “rather good,” 5 percent “bad” and 9 percent “rather bad.” 6 percent of the queried did not have an opinion.

Thus it can be said that the traditional Soviet despise for hucksters and profiteers is gone. Most people realize that they are also working people.

Business success of friends and acquaintances is explained by the fact that conditions for business are steadily improving; starting and registering new businesses, especially small ones is becoming easier. Nevertheless, the assessment of the government bodies on which the small business depends, is mostly negative: 44 percent believe that government officials impede the development of small business, and 27 percent think they help it.

In the opinion of the majority of the population the barriers the government bodies put before the small businesses are not businessmen’s major trouble. As before, rampant are fears of bandits’ raids and the militia’s racket as can be seen from answers to the question: “How safe is private entrepreneurship (what is the crime situation?)”

An overwhelming majority of 81 percent believe that to run a business is dangerous, and only 15 percent think it is safe. It is possible that a positive attitude to small business stems, among other things, from sympathy of people for that dangerous occupation.

Important in the popular vision of the businessmen’s class is the conception of its honesty and respect for the law. A question asked among others was: “Do you think one can do honest business without breaking law?”

A majority of 78 percent believe that to do business “honestly, without breaking laws” is impossible, and only 20 percent think it is possible. It is not so much the matter of an original dishonesty of every person entering the world of business but of laws and officials that make it impossible to abide by the law in business.

Thus, experience, both my own and other people’s shows that, on the one hand, a person can start a small business on one’s own from scratch and be a success, and, on the other hand, entrepreneurship involves, in one way or another, breaking the law, particularly paying bribes to officials, and places one’s life in danger because of the crime environment of business.

As a result of these trends with different vectors, 37 percent of the polled still say that they would like to do business on their own while 58 percent would not like it. The principal motivation of those willing to be in business but are indecisive is “lack of the starting capital”; this was stated by 68 percent with 7 percent adding “the difficulty of getting credits.” Much behind the financial problems are “lack of entrepreneurship skills” (21 percent), next to it “fears of failing in business” (15 percent) and “bureaucratic officials” (11 percent).

Many more people would like their children to take up business: of those having children 67 percent said that “they would like their children to have businesses of their own” and 33 percent would not like it.

A question was asked during the polling: “Do you think a majority of your acquaintances have, or have not adapted to the market conditions?” 59 percent think they have adapted, 31 percent think they have not, and 11 percent could not make an assessment.

Why are the oligarchs disliked?

The positive assessment of my friends and acquaintances engaged in small business, is mostly applied to medium-sized and big businesses. Asked, “What is your attitude to large entrepreneurs, owners of companies and enterprises?” a majority of the polled (62 percent) said “good” (25 percent) and “rather good” (37 percent). Thirty percent of the polled disliked or almost disliked large entrepreneurs. Eight percent had no opinion. The positive view of the big business is comparable to that of the small and medium-sized businesses -- 62 percent and 80 percent, though the gap is substantial.

The positive view of any private business is partially due to the popular vision of business and large enterprises as principal employers, in fact, and that their jobs are the most attractive and best paid. The part played by business as an institute that realistically ensures the population’s employment and well-being, is seen in the answers to the question: “How important is, in your opinion, the activity of private entrepreneurs for the development of your region?” A majority of answers were positive. Private entrepreneurship and business have been largely legitimized in the mass consciousness. At least the state property, the government as an employer is no longer seen as the only right form of social and economic system. One can rather speak of the mixed economy ideas having struck roots in the masses, with some areas of activity to be ensured by the state while others can be quite reasonably left to private initiative, commerce, and business.

The population’s main complaints about business in general and big business in particular are in the moral area, in the views of a just social system, and of the part business plays in running the country. Basically approving the private companies’ activities, especially in the manufacturing industry and services, the population does not accept the manner in which the government’s, “all nation’s” property was passed into private hands (“robbery privatization”). Russians believe that “all the large properties were acquired dishonestly. Such is the view of 88 percent of the population.

Accordingly, a majority believes that the privatization must be reconsidered, the illegal and unfair privatization deals be annulled and the property returned to the state. Those general sentiments got new weight and urgency when criminal action was taken against YUKOS. In 2003, 57 percent were unambiguously firm: the state should resort to criminal prosecution of big capitalists connected with privatization of manufacturing industries, 31 percent thought that it should be done only in special cases, and only 8 percent thought it should not be done.

These views were more specifically reflected in the reaction to the investigation of YUKOS’ failure to pay a large percentage of taxes. Two thirds of the polled or 66 percent approved the government’s action, with 32 percent saying that “time has come to pay for concealing profits, evading taxes”; 15 percent called for a harsher prosecution of large companies, such as YUKOS:

“it is a half measure; the illegally acquired people’s property must be taken away from them;” 12 percent thought that the prosecution would have an educational effect for the entrepreneurial activities: “now, maybe, all businesses will be more honest”; 7 percent stressed the part the criminal proceedings will play in weakening the political role of business: “at last they will lose their power and political sway”.

Only 17 percent criticized the policy of prosecuting the company: 12 percent approved the steps against tax evasion in principle but were against show trials: “they are used as whipping boys, all business underpays the taxes but punishment is meted out only to the most obdurate, those who do not bend to the authorities”. On the YUKOS side were 3 percent who believed that “the authorities are slaughtering the hens that lay golden eggs”: these are the most advanced companies that feed our budget; and 2 percent who thought that “the prosecutors’ actions against YUKOS and other companies are unlawful, now foreign companies would not come to us”.

All the three claims against the owners of large companies are fused in the mass consciousness: illegal privatization (robbery), concealing multimillion profits from taxation and control over the country’s policies. The oligarchs have a negative image in the people’s consciousness as can be seen in the answers to the question: “How do you evaluate the role of big capitalists (oligarchs) in contemporary Russia?” “As totally negative” or “rather negative” was the evaluation by 78 percent of the polled, “rather positive” by 13 percent and only 4 percent as “totally positive” (figures on July of 2003).

Undoubtedly, the provoking riches and life style of the more prominent figures of that social group play a major part in creating a negative image of the oligarchs. However, there is an overall feeling of social injustice in today’s Russian society. These sentiments do not manifest themselves in the awareness of the class divisions in the society into the owners of the means of production and hired labour, these perceptions exist in the moral spheres, a fact that has been in evidence for decades in Western sociology: “the rich get richer, the poor get poorer”. While a majority of the populace do not even know the social statistics indicating that in Russia incomes of the 10 percent most affluent people are 19 to 20 times above those of the 10 percent poorest (to compare: it is 13 times in the USA and 3 times in Finland) the people feel it.

That widespread feeling of social unfairness does not manifest itself directly in public or political actions; on the contrary, they often take the form of a mass feeling of despair and apathy. However, they nourish the mood of protest, so it may happen that one incident (like monetization, for instance) would provoke a crush of the seeming stability of society and cause social tensions and mass protest.

Who runs the place?

Accusations against the class of big capitalists are not limited to the unfair privatization of the state property and evasion of taxation. To a large degree the mass antagonism is caused by the opinion that the big business, the oligarchs have usurped the political power. Of course, the people do not have in mind exact categories of finance and industrial oligarchy that overrides the government, but their responses to sociological queries reveal that such ideas are prevailing. An example is the distribution of responses to the question: “Who, in your opinion, hold the real power in Russia?” “Big capital, oligarchs” – 40 percent, “the president” – 21 percent, “organized crime” – 12 percent, “officials, bureaucracy” – 9 percent, “local governments” – 4 percent, “the State Duma” 3 percent , “chiefs of regions, territories, republics” – 2 percent. Assessments of the role of big business in politics have been regularly high during the last decade, while the authority of the president and other institutions varied somewhat. Furthermore, a majority (73 percent) think that big business may become more powerful. The larger part of the population finds such a situation absolutely unacceptable: the nation must be ruled by the president (72 percent), parliament (14 percent), government (19 percent) but not the moneybags. (March of 2004).

Moreover, nine tenths of the population think that “Russia needs a strong authority”, with only 6 percent believing there is no need of such authority. Questions about “a strong hand” are asked regularly, and the answers indicate the spread and nuances of these opinions, as well as their stability: up to 59 percent of the population believe that such a hand is needed permanently.

To have a clearer notion of what the population means by “the strong hand” one should cite the people’s assessment of Stalin’s role in the nation’s life. 45 percent of the polled see it as positive, and 42 percent as negative (poll of February, 2004).

Thus, the actions of leaders of the Soviet Union and Russia is compared to those of Stalin; against this backdrop Putin looks quite impressive: in February of 2004 37 percent saw him (more than any other, including Lenin) as “the nation’s most successful leader” (Stalin with 18 percent rated second in the poll).

It follows that in the evaluation of Russia’s leaders the principal criterion is a strong will, resolution and a set of personal traits that meet Russian traditional imperial and monarchic concepts. Of no less importance are such features as young age, health, and personal attractiveness.

Nevertheless, there still remain such requirements or expectations of the supreme leader as solution of the people’s and society’s most pressing problems. On top of the list of problems to be resolved are poverty, low wages, growing prices, inflation, unemployment, drug addiction, growth of crime, weak government authority, self-interest, bribery, bad communal services, environment pollution, low morals, delay of payments of wages and pensions. The least worrisome are interethnic, international and regional problems.

Priorities of importance of these issues have undergone certain changes in the last decades but three material problems were always on top of the list: poverty, price increases, and unemployment. They are a headache to as many people as all the other problems taken together.

Almost similar is the list of priorities that the people expect Putin to deal with in his second term as president.

During his first term Putin enjoyed a considerable credit of confidence. The people did not pester him with reproaches for inadequate solution of problems. A flood would be the fault of local authorities, terrorists exploding bombs in aircrafts and schools were oversights of law enforcement ministers. However, at the start of his second term assessments of his performance revealed that there were visible differences between the problems the president was able to resolve and those of most importance to the people. This is seen in the answers to the question: “What problems, in your opinion, Putin has succeeded to resolve during his first presidential term?” The top positions were “delays with payment of wages and pensions” (31 percent) and “development of the Russian economy” (26 percent).

Very low are the assessments of the major problems: “improvement of the people’s living standards”, “price increases and inflation” (8 percent and 7 percent). Moreover, reducing poverty and improving the living standards is the principal problems for the president to resolve. The population is pessimistic about the chances to solve them soon.

The increasing demands that the president should tackle society’s most pressing problems brought about a drop in confidence in him over the last five years. The most considerable decrease (65 percent) was registered in December 2004-January 2005, when a reform of the benefits (monetization) and increase in the rates of communal services were announced.

No way back

The sociological research of the past years indicates that the population, as a whole, has accepted as an accomplished fact the country’s change over to the market economy and does not suppose a return to socialism. About 5 percent are personally involved in a commercial activity, have become owners or co-owners of private enterprises, mostly in small-size business area. Besides, about a half of the economically active population are employed in private enterprises. A larger part of the population has a tolerant and positive view of the people engaged in entrepreneurial activities, especially in the small and medium size business, and would like to join entrepreneurship and involve their children in it.

At the same time two thirds of the population encounter insurmountable material problems and live in poverty, while one third with incomes below subsistence level are destitute. Three fourths of the population expect a better situation in a remote future. This situation is aggravated by the realization of the expanding social inequality with the affluent building up their wealth while the poor getting poorer. The fact that the last five years have seen no social outbursts makes an illusion of stability in society and conceals the growth of social tensions that may grow into social unrest, as the mass manifestations in the first thee months of 2005 have shown.

Dissatisfaction with the low standard of living is aggravated by the growing feeling of social insecurity, political alienation, inability to influence the adoption of major political decisions that determine the people’s lives. The blame for this situation is laid on the big business that seeks to usurp power, and the government that, being weak and corrupt, do not use the instruments of controlling the economy, raising the living standards and eradicating poverty. For the time being the president’s high esteem is making up for the loss of confidence in all institutions and bodies of power, filling up the growing vacuum of the people’s confidence in the authorities.

http://www.newtimes.ru/eng/detail.asp?art_id=1410