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Phenomenon of the post-soviet business elite
Leonid Gurevich BISAM Central Asia, President In post-soviet perception entrepreneurship was associated with robberies, corruption, cheating and social parasitism. In the last third part of the 90-s in XX century we see changes. Social research that was conducted with an author of this article have shown that Kazakhstan society have separated “true businessmen” from idleness parasitism and exploitation of labor. The trust of society towards businessmen today is much higher than to officials and members of the law machinery. Moreover, business has involved a big part of population in XX century. Along with the population growth, role of the social analysis of the free enterprise has also grown. According to the science canons sociological analysis starts from the definition of the forming social community sources. If we had to review the history of the business we would probably meet the same functional types of employers: producer, incarnating their production; merchants and mediators; usurer, social ancestor of the present banker; adventurer; robber, that “washes out” money stolen in market deals; stock gambler and currency speculator; hired organizer; and a last official, that was using his power for organizing his own affair. All or almost all these types are observed on the background of the Egypt pyramids, gothic temples and present sky scrappers. In different historical periods social concernment of the business undertakings was changing. Some of the functions were becoming totally different, economical and technological conditions, level of social demand and social prevalence, employer’s activity were changing as well. We can single out 3 eras in business undertakings world history. First covers ancient times and middle ages. Entrepreneurship in those times didn’t play important role in socio-economical relationships. Element of “Risky-criminal” was dominating it in relations of state towards business undertakings tyranny and extortion were dominating. And the figure of the businessmen in mass that meant religious society consciousness was more often negative. Next era starts in Common Era with the birth of capitalist relationships. Market of goods transforms, labor and capital markets arise. It takes entrepreneurship into a completely new level. Moral consciousness of people under a religious cover changes. Firstly described by Max Webber “Spirit of capitalism” was forming. Capitalism changes entrepreneurship into one of the most important human activities. It makes business wide spread and forms new type of employer for whom the main goal in life is to earn money for new “working” money, employer in whom rationality and innovational way of thinking are combined. In the second half of the XX century postindustrial civilization and society of the mass consumption stipulate for the approach of the third era in history of entrepreneurship. Its distinctive feature is mass entrepreneurship. In developed countries business becomes either basement or additional feature for the majority of the population. Small and middle business makes a basement for forming and developing new middle class, which in his part becomes a main factor of the social stability that combines with economical and technological progress. Different groups of businessmen are dispersed in their social status. Representatives of the large and partly middle business will get into a superior class if we will take internationally adopted system of social stratification. Small business in most cases shall make up the core of the middle class. The biggest part of the farmers and traders will shift into a lowest class. Stratification among businessmen is particularly expressed in the post totalitarian societies. Business undertakings pass here the stage of initially formation. That’s why businessmen should be classified first of all by their social origin and starting position. Those sources of forming business elite and “mass” business in post soviet societies are totally different. I would choose several basic positions of forming post soviet business elite: “shadows”, “cooperators”, “komsomols”, “directors”, “party men”, “criminals”, “young intellectuals”. You would find “Shadows” even in the soviet history. Their existence in totalitarians-distributing economics earnestly confirms us that market relations for human kinds are naturalness and scantiness. After official prohibition market didn’t disappear, it went to underground. Shadow business had always existed in Soviet Union, including those periods of military communism and WWII. It reached golden age in 70-80 years of the XX century. Population at this period had excess means which couldn’t be incarnated in manufacture or in consumption because of the present economical situation. Simultaneously detention of the international tension made Soviet Union more open. Commercial exchanges with West had also increased and at the same time many soviet people were able to go abroad. It all brought to the new quality of consumer inquiries, demand for foreign currency. Directive planning couldn’t control economics as good as before. Mechanism of the government planning couldn’t solve problems of distribution and control functions. On this good basis shadow business had grown up. Mostly, it had criminal and anti social character. In the second half of the 70-s and the beginning of the 80-s, and not in the period of the Gorbachev’s rebuilding, soviet mafia appeared. It combined criminal elite, “thief in law”, shadow business and power. The highest sections of the ruling party were also infected with corruption. However, part of the underground business brought public benefits. First of all it was underground production of wares, organized on the base of the wastes that were not used by soviet factories. These were services of the qualified specialists, whose work in legal sphere were priced much lower. In particular this part of shadow workers legalized along with the first market changes. But they couldn’t meet competition with the next generations of businessmen and they do almost not exist in business elite in our days. Mentioning in pass criminal and mafia capital that was earned in soviet time, it played some part of role in forming the top of post-soviet business, but in its majority it was taken out of the country. Cooperators were pioneers in post-soviet business. In 1988 in USSR “Cooperation law” was adopted. At this time all reforms were made under socialistic slogans that were posing a problem of “mobilizing unused socialistic reserves”, “opening the second breath of socialism”. Lenin’s “New Economical Policy” was used as an ideological textbook in the reformers sphere, especially those chapters, where the cooperation was observed as a road to create and develop socialistic economy. Private enterprise was still considered as a penal action, and cooperation at the same time was considered as a socialistic movement. “Cooperation law” has legalized some types of the private activities, making them suitable for communist ideology. Brave and talented people used this opportunity. Mainly they were active in business-mediations spheres. Publishing business, mass media, recycled sources were also becoming their part of business; they paid less attention to the scientific and technological advances. Representatives of the “cooperators” exist in present Kazakhstan business elite, but as a rule not in the key branches. Komsomols organization men played one of the main role in the post-soviet business standings in 80-s. some of them were flexible, mobile and even being officials they were western oriented. For making their own business they used so called “komsomols-youth organizations”: youth’s research organizations, building cooperatives and so on. Some of the Kazakhstan businessmen are from the generation of “komsomols”. The leading positions in Kazakhstan business elite were occupied by the “headmasters” and “party men” from the largest enterprises and big bosses from C.P.S.U. that were occupying the highest positions in government at the time of it collapse. They had all financial and rough sources of the country. They made business in Kazakhstan becoming a family business. Process of transferring government property into the hands of the economical and political elite, took place in all post-soviet countries. It meant that old ruling class was transforming into a new ruling class. All common features of this unexampled mechanism are still not studied well. We still look at the privatization and division of the state ownership through lenses of politics and ideology. Let’s try to analyze and single out something common and particular in the process of forming the main body of post-soviet business elite. We shouldn’t forget that all below conclusions have only prior character. For the final conclusion we need to collect and analyze huge sociological information about the origin and structure of the industrial-financial group that appeared after the privatization. The forming process of the business elite on the main stage in the markets transformation started from privatization and division of the national property, and had this features: 1. Privatization was economically and politically needed step. None of the post soviet countries could solve its problems without it. Those privatization of the property was made in different countries in different periods, in different sizes in different economically-juridical forms and in different politically-ideological shell. 2. The process of privatization was remarkable with its economical inefficiency and social unfairness. More and more new facts come out, illustrating us barefaced pillaging of the state ownership. The fact that privatization had the same character in all post soviet countries, makes us believe that it was some kind of pattern. In other words: “It was terrible but there were no other ways”. Privatization of the state ownership in USSR has no analogs in the world history. Those authors who want to compare it with transmission of national enterprises in the USA to the private property after the WWII or in England in the period of the Margaret Thatcher’s reforms are not stand up to criticism. In developed countries privatization was a kind of intrasystem economical measures. It wasn’t changing the character of economical and political system. We can not weight privatization in former USSR with economical processes in the countries of Western Europe. We can compare but can not equate. Most Western countries had no mass totalitarian consciousness and in contrast to Soviet Union they had some elements of civil society, which could control the process of national economy plundering. In post soviet states they had still unknown law, which I called “The law of Gold Dragon”. Many nations have the same legend in which the city is ruled by the horrible Dragon. He’s making many bad things to the citizens. Of course there is one Hero that finally fights with the beast. He wins and before dragon dies he takes the hero into the storeroom of the palace to see the treasurers. “Soon you’ll become a Dragon” he says and dies. Hero sees all treasurers and quickly forgets his liberation movement, his face stretches into the beasts face and he orders the army to dispel exulting crowd from the palace. The difference of new soviet bureaucracy that have transformed into a business elite from the fairy hero is that it shouldn’t have won the Dragon. It was already living in the palace but didn’t have the access to all storerooms. On the other hand it had to move from the palace into other storages. And when storerooms finally opened it has taken the chance and carried off everything. It happened everywhere. 3. In soviet society the social status was clarified by the closeness to the authority, and in last two decades more by the closeness to the system of distribution. These factors played the main role in the soviet economical systems collapse. In the beginning of privatization the most profitable positions had those, who were close to a ruling party. 4. Groups of businessmen that were formed in last Soviet years were displaced by those who captured the key positions during privatization. Forming of the first businessmen groups were taking roots from “shadow” , “cooperators” and “komsomols” and took place in soviet socio-economical sphere. It had no strongly marked nationally-regional features and in contrast to it business elite from the first waves of privatization were distinguishing with its national specifications. Main distinguishing feature is in “genetic”, structural and functional mutual interactions of business and authority, economical and political elite. Using this feature post soviet countries can be classified and divided into 3 groups: 1. In Russia, Ukraine, Moldavia, Baltic and Transcaucasia states at the moment of soviet unions collapse formed political counter-elite. And at the same time old party split. Part of it changed its ideological thoughts and integrated into a new authority and the rest were followers of the old ideology and gradually became opposition. Communist parties in these countries are fairly called “parties of losers”. 2. In Uzbekistan and Turkmenistan ruling soviet elite have almost completely and in an organized manner changed communist ideology to national and transferred into regional elite. In this position they have monopolized almost all properties, but to these present days they are dependent on the government. 3. In Kazakhstan and Kyrgyzstan transformation of the ruling party elite into a national also was made in an organized manner. But their monopoly on privatization was not complete and their dependence from the government was similar to the situation in Uzbekistan and Turkmenistan. I didn’t include into this classification such countries as Byelorussia and Tajikistan. In the first mentioned country soviet regime in politics and economics were preserved for a long time, and the second one was in a condition of chaos and civil war for a long time. That’s why social appearance of the elite is very unclear. “Criminals” had the biggest response in forming the post soviet business elite group. In this case we need some terminological explanations. In order to enter the business elite all of the above groups used illegal and sometimes criminal methods. But under the “criminals” term we mean professional criminals that rushed into a business and distribution of the state property. In mass consciousness such businessmen are realized in the portrait of the “New Russian”. It is significant that this group played a small role in forming the business structure of the Kazakhstan. Kazakhstan had less “thieves in law” than in Russia. The biggest part of criminals was fast livers and soon lost their further perspectives in business. The smallest group of them was able to change social appearance and integrate into business elite; in this case we don’t mean the criminal business that is traditionally controlled by the organized criminality – drug dealing, gambling-houses, prostitution and etc. One of the most powerful groups in business elite in Kazakhstan is “young intellectuals”. Its main difference is that it has no soviet roots. We call economists, technocrats, managers of the new formation oriented towards liberal values and educated in west “young intellectuals”. It is indicative that this generation of “gilded youth” in Kazakhstan was raised owning to the efforts of N.A. Nazarbayev. Actually “young intellectuals” are the counter-elite, that have not yet forced out former economical and political elite groups. “Young intellectuals” are not good enough in political and economical aspects and they face the problems of bureaucratic intrigues. The best example is overthrow of the Kirienko’s government in Russia in August of 1998. We can also find the weakness of “young intellectuals” in Kazakhstan. At the same time their positions are getting stronger in some aspects of the financial-industrial groups. As a result in the beginning of the XXI century we can see their political consolidation. As you can see the forming of the business elite, large and partly the middle business in Kazakhstan had a very hard social genesis. According to the research of the small-scale business, not taking into consideration farmers, , its social sources reflect the social structure of the Kazakhstan. Social base for the small-scale business is the majority of the Kazakhstan population. Representatives of the technical science intellectuals played the main role in cities , managers and specialists of the former state farms and their subdivisions in villages. At the same time representatives of the soviet trade and human services became weak competitors. According to the social & psychological motivations of getting into a business, businessmen are divided on “born” and “forced” businessmen. First are those who came into a business using their inherent abilities and second are those who are forced to do the business. Sociological research that was conducted under my own supervision in the framework of the World Bank and Asian Development Bank showed that the biggest part of businessmen in Kazakhstan is “forced”. The biggest part of the managers in farms is “forced” as well. “Born” and “forced” entrepreneurs in Kazakhstan village are chronologically divided. Small group of farmers that became independent in last years of the Soviet Union have successful business today. Those who had to become independent after the mass privatization, that meant almost pillage of the state property, hardly make both ends meet and grieve for the soviet times. Nevertheless in 1999-2000 some of them are becoming successful. Into the group of “forced” businessmen we can add traders. Almost all of them are ready to leave business in case if they find well-paid work implementing their education. Owners, co-owners, stockholders, head of small-scaled and middle enterprises have other motivations. According to the results of sociological research , that were conducted under the author’s supervision in these countries, 40,1% of the owners in cities of Kazakhstan and top-managers of the small-scaled and middle businesses came into this sphere feeling that they are talented for this. 19,7% think that they can realize their knowledge and skills in business. Thus 60% have a positive motivation, at the same time 40% are “forced” businessmen, more than 23% came into a business in order to provide the family and 17% became businessmen by virtue of objective conditions (changes in forms of property etc). There are more women in the category of “forced” businessmen. 46, 7% of men are “born” businessmen while only 32, 9% among women are “born” business ladies. “Forced” men are 32, 7% and 46, 9% are “forced” women. According to the results of other research, almost 70% of business ladies are ready to quit in exchange for housekeeping in well-provided family or for a stable and well paid job. It is indicative that the biggest share of the “forced” businessmen is in the sphere of transport service, catering and commerce. We meet more “born” businessmen in manufacture. In conclusion, I would say it is reasonable to suppose that the share of “forced” businessmen is decreasing along with the growth of the business scale. Additional articles about Reviews & Ànalytics:
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