Круглый стол 23.06.2010



The 4th Roundtable in the series “Diversification of Russia’s economy” was held at the Moscow House of Economist on June 23, 2010. The purpose of the event was to find out how mentality (‘the Russian soul”) affects economy and whether it is possible to place this influence under control. Philosopher, political and cultural scientist SERGEI KARA-MURZA delivered the key address. In addition to expert participants, the meeting was attended by representatives of mass media and the head of the press service of the national Union of Theater Workers. The complete record of the discussion was published on the website of VICTOR BIRYUKOV, the initiator of the roundtable series. The abridged version of the record follows.




In his report “Diversification: socio-cultural aspects,” SERGEI KARA-MURZA, chief associate with the Institute for Social and Political Studies of the Russian Academy of Sciences, proposed two postulates:
– a national economy rests on a certain ideology. This heavily inertial system was developed in a particular space and, hence, cannot be deliberately removed onto the basis of another ideology; and
– a national economy is part of national culture and is strongly impregnated by ethnicity i.e. by specific attitudes and elements of culture.
“Any nation exists with a balance between stability and mobility of this entire system of ethnic relationships and ideological elements,” stressed KARA-MURZA, PhD (Chemistry). “World history knows numerous cases when peoples rejected extremely efficient innovations for fears of disintegration of these relationships. Therefore, innovative activities and modernization, especially modernization implanting Western enterprises and institutions to the national soil, are parts of economy associated with very sensitive issues.” 
The keynote speaker put forth a thesis that the introduction of private entrepreneurship in the 1990s violated both aforementioned postulates. Moral restrictions were abandoned and traditions of national culture were ignored. As a result, entrepreneurship suffered a heavy birth injury: “child’s head and some other organs were injured by forceps of nomenklatura that assisted in childbirth.”  
The new Russian businessmen (as it was planned, 10 percent of the population) were designated to become a new “demos” dominating over a miserable and deprived “ochlos” (the rest 90 percent). Entrepreneurship was introduced with the only purpose to eliminate the Communist “evil empire.” However, failing to meet standards of national ideology and culture, in mass consciousness it failed to become legitimate either as a constructive national force or as a constructive social force. On the contrary, “ochlos” was humiliated by “a Saturnalia of their demonstrative and absolutely swinish consumption.” 
Conclusion: without a legitimate integration into the society of a new for Russia cultural and historical phenomenon of the entrepreneur, not only innovative activities and modernization but mere production will be impossible in this country. So far, we don’t see even a slightest rapprochement between “demos” and “ochlos.” Moreover, at least half of the population rejects a possibility of such integration. Nevertheless, KARA-MURZA believes that they have a chance to reach agreement. For that purpose it is necessary that “the state and business by words and deeds conquer cultural hegemony and respect of the society.” 
Е.Я. Сатановский 23.06.2010 Speaking “on behalf of the defamed business” as he put it, President of the Institute of the Middle East Studies YEVGENY SATANOVSKY objected to the keynote speaker: “Before appealing to the state it would be good to clean one’s own house.” As a result of the past 20 years, Russia’s private business has created the previously non-existent consumer market and financial infrastructure, and has integrated the country into the global economy. 
Moreover, we cannot even say for sure that mentality in any way affects economy. Meanwhile, sloppiness is typical not only for the Russians but also “for businessmen from South America (some of them are familiar to me).” He noted that business that was not involved in the predatory privatization also does not care a damn for the society”: businessmen are interested to build for their loved ones, relatives and friends “a country, which is not disgusting, but comfortable, safe and interesting to live in.” 
SATANOVSKY sees the main problem of the national economy not in the rejection of businessmen by broad layers of the population but rather in the bitter confrontation between business and officials.  
“If you look at the list of billionaires, not the list provided by Forbes, but at the real one, if you look at those who live in London and at their houses there, you will see quite many people from the Army elite, from the customs elite, from the (Communist) party elite and others who supposedly must not have big money at all. Excuse me, but what this has to do with Russian mentality? Historically, this always happened in any country where a massive plunder occurred, during land enclosure in England and during the industrial revolution in France that produced a class of nouveau riches.” 
SATANOVSKY acknowledged that the system of favoritism is typical for this country and noted that exactly because of it Russia does not have its own motor industry and maybe it is the reason why the defense sector is degrading. Key positions in the economy are occupied not by the most clever, educated, responsible and energetic people but rather by the most loyal, flattering and unprincipled ones. However, this situation will most likely start to gradually improve, more or less naturally. There is competition between groupings inside the ruling elite, which “will have to introduce certain meritocracy because either you profit from your fellow or axe him if his work on a key post brings only losses.” 
“In the regions they have built new boyar estates in the form of governorates. Each of them may separate any day and proclaim itself an independent state simply because Russia has no unified road system. Therefore, it looks probable that in the 2030s or the 2040s the country will start collapsing when today’s youngsters from the Nashi party occupy governors’ posts,” SATANOVSKY said. 
In conclusion, the opponent to the speaker noted that “compared with Mexico with its drug trafficking, criminal world and feudalism,” countries of the Middle East or India “our overall situation is not that bad.” SATANOVSKY believes that in about 80 years Russia will “evolve to the situation of normal relations between business and society.” “There is the will to live high. It will unite everybody from the Communist party headed by Zyuganov, who like everybody does not want to drive a foreign-made (Ukrainian) Zaporozhets car, to various asocial elements like (Eduard) Limonov. This means that this society will thankfully not die.” 

Е.Ю. Стеблов 23.06.2010 People’s Artist of Russia YEVGENY STEBLOV stressed that a dominating form of political authority is not decisive for the wealth of the society. History convincingly proves that not in every democracy people live better than in a monarchy. 
He called on the audience to remember that, “Spirit, not production, rules the world. Production is just a derivative from spirit. Hence, comes the conclusion that business must be moral, and all the more so in the multinational Russia where the brotherly Abrahamic religions – Christianity, Islam and Judaism –have been living together in peace for centuries. 
“A human being is a dual creature with two vectors of movement. On the one hand it has potential to become a beast and on the other hand it has potential to become an angel,” STEBLOV said. “Upwards or downwards, that is the universal principle of this world. Any man’s path is either to God or to Devil.” 
In order to create a moral business, it is most important that people change themselves, improve, and be purer in mind. At first it seems very complex, but in reality one must just discipline his mind. The easiest way is turning to religion: purification through prayer. 
The actor centered of the role of television in the formation of the moral climate in this country. “Just switch on any channel and 90 percent it is garbage, except maybe the Culture Channel and some programs on other channels. But the rest is absolute garbage. When you try to speak to manufacturers of this garbage they always respond that it’s all is just a business, television is business! Television has never been just a business. It is a far more complex phenomenon that includes policy and ideology, whether we want it or not. It has elements of culture, arts but not those of business. How come? This business boils down to making money on ads and nothing else.” 
А.В. Чуев 23.06.2010 Advisor to the Speaker of the Federation Council ALEXANDER CHUYEV focused on mechanisms of national business. On the one hand, every businessman to a certain extent used or uses state property: either in the form of direct financing from the general coffer or developing natural resources belonging to the state. 
On the other hand, the “legal cacophony” and the “unsystematic system” make him lie and cheat: “In this troubled water, they go up who can use these gaps in the law, especially problems of conjunction of laws, to their favor. This way of making money cannot be called good or fair. A moral and honest person who thinks about the soul does not feel good and comfortable working as a businessman.”  
And if the state calls on businessmen to be moral, officials who speak on behalf of the state must start with themselves. Today officials do not work for the good of their country but rather for the good of their family, kindred, clan or company. “Honest and worthy people in the bodies of state power simply cannot approve themselves and show their worth. They have to survive. Often they cannot take it, slam the door and quit for small business, for university fellowship or for some other jobs as distant from the state power as possible.”
“Very often the state not only does not support an honest businessman but it itself with its programs inspires deception and unfortunately itself becomes a source of deception,” CHUYEV said. In this connection he mentioned as an instance the “Young Family” program of the Moscow city government. In its framework the city authorities i.e. the state deceived 11,000 young couples. However, officials as a rule never bear responsibility for their unlawful actions. 
“All our ministers are still in their chairs while our law enforcement bodies are again being reformed. It would be better to dissolve them and build anew on a foundation of a new staff than to reform what is rotten,” CHUYEV said. 
In order to improve the situation he proposed to endorse a Code of Discipline, to teach officials moral conduct at special courses and maybe even to send them to pilgrimage. 
The absence of comfortable conditions for entrepreneurship in this country suppresses popular initiatives and leads to social apathy. The reverse of the coin is the hatred of the impoverished masses for those few who achieved even a slightest success in business in spite of all obstacles from the state. As a matter of fact, our successful entrepreneurs often ignite this hatred themselves parading their incredible luxury. 
Moral decay of the society is aggravated by morally destructive practices of some media: porn and obscenities are nor rare on television. CHUYEV insisted, “mass media, especially controlled by the state, must carry positive energy. We do not have enough people who still favor a strong role of the state. For almost nobody a strong state is a priority. Almost nobody cares for the state as for his motherland.” 
In conclusion CHUYEV proposed to involve the church into all spheres of our life. “We could do nothing without God and without spiritual renaissance. “A person who is his own master and sees no authority above him, in 99 percent of cases will go down in his soul: if everything is permitted, I may do everything what I want to do. This is the main trouble that we must overcome
И.Г. Яковенко 23.06.2010 Professor with the Chair of History and Theory of Culture at the Russian State Humanitarian University IGOR YAKOVENKO drew experts’ attention to the fact that over the past 20 years the system of public relations radically changed but the basic characteristics of the society remained intact. Businessmen have to cheat much like directors of Soviet enterprises and chairpersons of collective farms had to cheat in Soviet times. This fact as such is an evidence of the existence of mentality. “Mentality is a firm characteristic for the majority of people. It could be stronger or weaker, depending on individual’s microenvironment, but it exists.” 
Mentally, the population of Russia is divided into two segments, actually into two different peoples that distinctly differ from one another in generations, education and dwelling either in metropolises or on the periphery. For representatives of one “people” business is acceptable, irrespective of whether they go in for business themselves or not. , 
For representatives of the other it is inadmissible. However, nobody tackles the problem of this rift.
The most important problem of this country today is that the ruling elite (government officials and big business integrated into the system of state power) has completely lost the strategic vision: nobody thinks about the future and nobody works for the future.  
“People are limited to the tactical horizon,” concluded YAKOVENKO, PhD (Philosophy). “Lenin and Stalin had the chimerical future but they were visionary leaders. (Nikita) Khrushchev proclaimed a 20-year program. (Leonid) Brezhnev was a tactical man and hence, all development during his tenure was limited down to the tactical horizon. When a crisis looms and the situation is sharply worsening, authorities lose the strategic vision. In a bad situation, strategy is simply ignored.” 
He agreed with the keynote reporter that some people reject innovations destructive for them. As an illustration of this he mentioned the Bolshevik revolution: the society rejected the path of market development on which it stepped since reforms of Alexander II. 
“The Russian society preferred to modernize itself according to a Communist scenario,” YAKOVENKO noted. ”If a culture rejects some innovations or technologies as contradicting its principles, its level of competitiveness starts to decrease. And when it falls below a certain line, this culture simply vanishes together with its carriers.”  
The scientist also reminded that any modernization, starting from England that was the first to modernize, inevitably leads to the death of “the socio-cultural universe of the traditional culture.” For example, the emergence of modern farming means the end of traditional peasantry: “It is a tragic process. The 20th century eliminated the traditional Russian culture and the Russian peasantry.” 
Over the past 3,000-4,000 years, carriers of outgoing cultures always branded their successors as immoral. However, actually there is no such thing as immoral society. There is such thing as different morality seen by carriers of the outgoing morality as something immoral and impossible: “Before the institution of couple marriage was set up sexual promiscuity was a normal practice.” 
The modernization of the Soviet society in the 1990s has brought a new morality that originated from the old one: it’s only natural that the majority of population condemns the privatization of the 1990s as immoral. 
“Do you remember tskekhoviks (owners of an underground workshops or factories in the Soviet Union) of the 1970s?” YAKOVENKO asked.” They were illegal and the situation in the USSR forced them fly into the arms of the criminal world. Looking for cover they turned to gangsters. In this sense, the participation of the criminal community in the privatization of the 1990s was only logical. The Soviet situation simply could not produce anything else.” 
Moreover, if a culture treats somebody as capable of stealing, this “somebody” will inevitably start stealing. In the USSR, culture, propaganda and mass consciousness treated trade personnel as potential thieves and indeed some of them thieved. Culture caricatured a businessman presenting him as an unprincipled thief with an odd high hat and a long cigar: “Nothing else could happen, except exactly what happened in 1991. The society was rejecting private property and treated businessmen as criminals and violators of egalitarianism.” 
In this respect, it is only logical that people transfer money to off-shore accounts from the country where property is illegitimate. The problem is to create an efficient proprietor independent from the state, but this “contradicts clan interests of the ruling class.”  
С.Ф. Черняховский 23.06.2010 Professor with the Chair of Culture of Peace and Democracy at the Russian State Humanitarian University SERGEI CHERNYAKHOVSKY believes that “modernization” is an absolutely inapt term. In fact, the authorities today call not for modernization understood as any bringing up to date, but rather to a technological breakthrough. The same happened 25 years ago when the idea of technological breakthrough was substituted by the concept of democratization and introduction of market mechanisms, which effectively barred the way to a technological breakthrough. . 
Neither democratization nor market mechanisms could drive technological innovations. “Business as such cannot secure a breakthrough. For that purpose it must reach the stage when it is planning long-term strategies, when corporations with dozens and hundreds years of experience have long think not about their profits but rather about what will be in 50 years and not in ‘this’ but in ‘their’ country.” A technological breakthrough needs colossal investments that will not pay back soon. Therefore, market as such is not enough. And another thing, in all countries where a technological breakthrough took place private property existed but market relations were regulated by the state.” 
Speaking about mentality, CHERNYAKHOVSKY, PhD (political sciences), noted that “with all differences in mentality of various social groups,” a common Russian mentality exists determined by something deeper than just spiritual or religious factors. 
It appeared in Russia even before Christianity under the effect of the pulsating rhythm of life of Slavic tribes that originally lived in one area and then spread from Brandenburg to Eastern Europe. This situation made self-identification difficult. Other peoples could say “we are the people that lives on these hills” or “we are the people that has moustache of this beautiful color,” whereas Russia’s self-identification was rather a search for truth and went under the effect of surrounding cultures. 
“By virtue of this pulsating rhythm, it’s only natural for Russia to make a leap, to build something wondrous and never-yet-seen and… go into hibernation,” the scientists said. “Then we wake and see that we lag behind again, we start preparing another leap. This needs making some things sacred. In the long run, people’s readiness to work their fingers to the bone building the first Russian navy was caused among other things by Russian fairy-tales about the sea that made it sacred. The aspiration to build ships and fare the seas and the ocean was overwhelming and, in conformity with mythological conscience, justified the readiness to die where the czar orders.”  
“To make something really great the Russians need to make it somewhat sacred. Short impulses are ineffective,” CHERNYAKHOVSKY said in conclusion. “They are enough to put the house straight but in order to build a fleet or a temple another system of making things sacred is needed. Not only in Russia but in all complex societies material stimulus – market, business – make up a system of short-term stimulation. Even Western countries with the developed capitalism have long been building a new system of stimulation. On a certain stage it is the so-called system of human relations but already in the 1980s it developed into a Herzberger’s system of stimulation with more complicated types of labor activity. According to polls conducted in the United Stated, already by the 1980s money was only third in the ranking of stimulus and priorities.  
Moreover, Russian culture and conscience need a constant feeling that they are discovering a new Truth for the world. Hence, there is a constant threat of a split and fighting between the algorithm of the found truth and the algorithm of the search for the truth: “if we find the truth this means that we no longer need to look for it.” 
Г.А. Смирнов 23.06.2010 GENNADY SMIRNOV, deputy chairman of the national Union of Theater Workers, Merited Worker of Culture of Russia, Professor with the Russian Academy of Theater Art (GITIS), pointed to an old delusion of both business and state authorities: the naïve assumption that “economy will place everything where it needs to be and market will regulate everything.” The developed market economies have long realized it is a mistake to think so. 
In Russia this delusion worsened with the glorification of criminals by film-makers already in the 1990s and a fairly low authority of law enforcement bodies. In this situation the role of culture (not only of arts but of culture in a broad sense) looks absolutely unique. “Culture and culture alone can create not only conditions for life and survival but also such an ephemeral (for many) things as dignity, without which nothing is possible in principle.”
The underestimation of the role of culture by both the state and business leads to cultivation of a concept of culture free development. Leaders of the nation in their fundamental reports never pronounce the word “culture” but enjoy speaking a lot about sports, especially the sport of records. “They do not divide culture into high culture and mass culture, they simply ignore it.”
Without understanding the fundamental role of culture in the society, many high ranking officials took a very comfortable stance towards people of culture: “you’ve got freedom. Do what you want and don’t bother us with your problems.”
С.П. Пыхтин 23.06.2010 Editor-in-chief of “Zolotoi Lev” (Golden lion) magazine SERGEI PYKHTIN said the Russian civilization is “young but extremely weak.” Twenty years ago Russia approved as the main economic mechanism “the political economy of shopkeepers” and since that the aggregate might of the state decreased ten-fold. The reason is that the intellectual class has a por understanding of its country and its civilization. We rely on logic which is alien to the Russian civilization and it is a great mistake. “Every time we plant a European palm in the Russian soil we wonder why it does not grow.”
Only the specific Russian mode of production is appropriate for this country. This mode principally differs from those inherent for Japan, China or the United States. First of all it is necessary to revise the role of money because “Russia has never been a monetary civilization.” Czars paid for services with lands not with cash. Neither czars, nor first secretaries used money to boost the development. 
“In 1991 and 1993 as a result of two coup d’etats power was usurped by officials,” PYKHTIN said. “Officialdom has turned into bureaucracy and rules everything. Probably nobody would object if this is done for the good of the nation, temporarily at least. But, on the contrary, we all are dissolving in the so-called globalism and have abandoned the values of our own civilization.”
Then the expert asked himself why everybody believes that officialdom is power. An official is an instrument of power but he is by no means power. Moreover, an official by nature cannot be power. However in Russia today officialdom and power are one and the same thing. Power turned officialdom into bureaucracy and a result we have the all-penetrating corruption. This situation must be changed and primarily in the mind of new generations and this is the priority of university professorship.

В.С. Бирюков 23.06.2010 VICTOR BIRYUKOV, board member of the Russian Union of Industrialists and Entrepreneurs, had to suddenly leave the Roundtable but left the brief outline of his report to the moderator. According to BIRYUKOV, behind mental differences between Russia and the West is that historically Russia has been always extremely rich in resources. 
European civilizations were built in the situation of a desperate shortage of space and resources, which resulted in epidemics, flourishing crime and even “culinary extravagances.” Russian landlords never stooped to eat moldy cheese, shellfish or frogs. The best brains in Europe struggled with the problem of economizing and optimal distribution of vital resources. They created then high-tech technologies (sewage and water supply systems, street lamps and stone houses) and abolished serfdom in order to increase farm labor efficiency. 
For the Russians it was easier to develop extensively: to plow up more land and to raise more cattle. In the course of the Soviet industrialization peasants moving to towns brought their “tellurocratic arrogance” with them. Where is the good of innovations when we have diamonds, in another 2,000 kilometers – gold, yet in another 5,000 kilometers – oil and so on? It is easier to extract them, sell abroad and use revenues to buy, say, cell telephones. What is the use of modernizing plants? In order to double production it is easier to build several morally outdated plants. Diversification is also pain in the neck: it’s easier to buy machines and equipment than to create our own upstream industry as an alternative to the extracting one. 
Nevertheless, in the 1990s a certain modernization of economy took place after all. Bt it was like Russia bought computer hardware and decided not to buy software at all. Taking from the West an element of their system we ineffectively tried to install it in our system. Trying to catch up with the West we effectively lagged more and more behind. And when It looked like we were almost taking over, instantly the West was far ahead again. 
“Is there any sense in buying ‘a full set, hardware plus software,” the expert asks himself. “But in this case we must obtain ‘Western soul.’ ‘Lords of vast territories’ cannot, all at once, become “lords of overcrowded cabins’. So, a third way remains possible: to change ourselves and modernize according to our own scenario. For this it is necessary to learn to respect space and try to take a maximum from each square meter of land. 
BIRYUKOV believes the “extensive” mentality could be replaced by the “intensive” one provided Russia becomes a “society of knowledge.” “Homo conscious” will not show a devil-may-care attitude to space because his deep knowledge simply will not allow him do this. Knowing people will consume resources with full awareness, moderately and without silly superfluity.  
As a would-be “country of knowledge” Russia is a source of territorial and human reserves for the planet. The concept of a “nation of knowledge” would also attract peoples of the former Soviet republics. In the epoch of information with its high speeds the formation of a “nation of knowledge” could be accomplished faster than in a calm time. 
Сергей Кара-Мурза 23.06.2010 Summing up the results of the discussion, Professor KARA-MURZA said that advocates of “our enlightened business” are not prepared yet for such debates. They have not realized the menace from the society that rejects and does not respect the capitalist elite basing on private property. 
Speaking on relations between the society, state and business (replying to a query by CHERNYAKHOVSKY) the key reporter noted that a “savage state” is better than a “barbaric business:” “The Russian business community in reality was created by the state. But it is better for us to have an anti-popular state than to have no state at all because if there have not been a state that tames, robs and sometimes beats up those businessmen with batons, the majority of population would have turned toes up. Because history does not know such a business community full of stupid social Darwinism like that we have today. And of course, only the state is capable of establishing a firm framework for their activities.”
In conclusion, KARA-MURZA noted that neither Russian ideologists of reforms nor Western supporters of free market could even imagine that the transition from Soviet socialism to a society based on private property would result in such a monstrous entrepreneurship. Any dialogue with it and a search of a compromise could be only possible with the assistance from the state.  
Traditionally, the event was moderated by ALEXANDER NOVIKOV, member of the board of the Free Economic Society of Russia and editor-in-chief of magazine “Our Power: Deeds and Persons.” 
Series “Diversification of Russia’s economy”: 
– The 3rd Roundtable was held on April 13, 2010; the keynote address was delivered by YEVGENY GONTMAKHER, board member of the Institute of Contemporary Development and deputy director of the Institute of World Economy and International Relations of the Russian Academy of Sciences (see the complete record).
– The 2nd Roundtable was held on February 10, 2010; the keynote address was delivered by RUSLAN GRINBERG, corresponding member of the Russian Academy of Sciences and director of the Institute of Economics of the Russian Academy of Sciences (see the complete record).
– The 1st Roundtable was held on December 9, 2009; the keynote address was delivered by Academician VIKTOR IVANTER, director of the Institute of National Economic Forecasts at the Russian Academy of Sciences (see the complete record).