Global Policy Forum

By Boris Kagarlitsky

Last week, the Russian Union of Industrialists and Entrepreneurs, or RSPP, proposed that the executive branch of the federal government sign a social contract. This immediately brought to mind the many treatises on this subject written by the Enlightenment philosophers of the 18th century. But there's no reason to suspect that the ghost of Jean-Jacques Rousseau will turn up in the corridors of the Kremlin any time soon.

It was previously thought that the social contract was made between the authorities and the people, the elite and the masses. The people agree to recognize their rulers' right of dominion over them, and the ruling elite promises to circumscribe its power and to respect the rights and dignity of its citizens. The contract proposed by the RSPP, on the other hand, is between the oligarchs who wield economic power and the bureaucrats who control the mechanisms of political power. It's not hard to see who is left out of this nonaggression pact: absolutely everyone else. Public opinion and the interests of the majority aren't even mentioned in passing. In fact, it's nothing short of an anti-social contract.

Under the proposed contract, the bureaucrats promise not to take bribes or prosecute businessmen for violations committed during privatization. The businessmen, for their part, promise to pay their taxes and to achieve corporate transparency. In other words, both parties pledge to do what they are already required to do by law. The thing is that the law holds no meaning for either group. The parties in this contract negotiation, like the mafia, live not by the law but by "the rules of the game," as RSPP president Arkady Volsky put it, apparently referring to a tacit pact reached in 2000 between the oligarchs and President Vladimir Putin.

The RSPP is simply following the standard logic of the criminal business world. When you go to the mattresses, your protection (in this case, the RSPP) is supposed to arrange a sit-down with the aggressors (in this case, the Kremlin) and resolve the dispute according to "the rules of the game."

In fact, neither side has any interest in upholding the law, because under the law they would have to answer for their actions not only to one another, but to society. For the business community, the point of all this is to secure a guarantee that the results of privatization will not be reviewed. Paradoxical though it may seem, a state that functions in accordance with constitutional law cannot give any such guarantee. If the voters were to elect a government that, in accordance with parliamentary procedure, passed a law on nationalization, the oligarchs would risk losing their property. It has happened before, and not just in Russia and Latin America. Precedents can also be found in France, Austria, Britain and other "civilized" countries.

After prosecutors launched their "attack" on Yukos and other companies, business leaders warned that if law enforcement is allowed to go after major corporations with impunity, there will be no stopping beat cops from taking apartments away from average citizens. For some reason, this didn't send apartment owners into a panic. There is no love lost between the average Russian and the government, but people hate the oligarchs even more. Opinion polls show that a majority of Russians support reviewing the results of privatization, and not just because it corresponds to their notions of social justice. Without such a review, it will be impossible to achieve basic economic efficiency. The oligarchic system is ineffective, but no one anywhere has ever managed to take property from oligarchs without using force and political methods. Oligarchic structures are removed from economic competition, so there is no point in waiting for the market to sort everything out.

In the West, when law enforcement agents enter the offices of major corporations, this is seen as proof that no one is above the law. In Russia, prosecutors' attempts to apply the law to businessmen is seen as an indication of just how far we still lag behind the "civilized world." In a country where everyone steals, the authorities can only restore justice selectively. Our prosecutors operate like Robin Hood, though only with approval from on high.

This situation will only improve when the law applies to everyone equally. But this is impossible in a state whose elite despises its own people. For the rule of law to triumph in Russia, we need to replace the elite and review the results of privatization.

This kind of raid on corporate offices is no more likely to achieve this goal than gang warfare is to establish justice.

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