Our state is often called “oligarchic.” The belief is that this property is inherent to it, and that it is the root of all our problems. The wrong people supposedly rule us, serving their own interests and those of the “capital” standing behind them. This is the most common version of the formula explaining our failures.
It seems to me that this formula is maximally far from reality. It is not difficult to see for oneself if one simply ponders the phrase “oligarchic state.” Where should the emphasis fall — on “oligarchic” or on “state”? Simple reflection leads to the conclusion that Ukraine is quite far from oligarchy in its classical form. An oligarch is a wealthy person exerting influence on political power, or exercising it himself. But in Ukraine, it is not wealth that gives power, but power that gives wealth. This small difference already makes the “oligarchic” thesis highly questionable. I prefer to believe that the main problem lies with the word “state,” and I will try to explain this briefly in what follows.
Big confusion
First, let us clarify what actually interests us. What do we mean, what do we want, when we discuss our state and what to do with it all? The subject of this interest can be designated as social functions and their implementation. People, speaking precisely, unite into a society because such a union allows them to achieve goals they could not achieve alone. The interaction between people makes it possible to identify social functions useful to many: exchange of goods and services (production and trade), security, care for the elderly, and so on.
Now let us look at who implements these social functions. For us, the situation is familiar: the state is the main and only executor. However, a closer look reveals this to be an illusion. People perform a multitude of social functions without the state — for example, supplying each other with goods and services. The “functional approach” reveals the complete relativity of notions about what the state “should” and “should not” do. Not long ago, it was believed in our country that the state should produce consumer goods and “supply” them to the population. And in North Korea, the concept of security still includes a ban on owning certain types of radios.
In general, what interests us is the fulfillment of social functions, regardless of who specifically performs them.
The crucial difference
The state as executor of social functions differs greatly from any other executor, and not for the better. First, the state receives income regardless of the quality of its activity — it simply forcibly extracts part of the income of its “clients.” Second, the state is a monopolist: it forcibly compels the use of only its services and prosecutes competition. Third, the state is a corporation, fully reproducing all its negative properties, the main one being work not for results, but for “reporting.” In a free market, competition and losses force corporations to adapt to the needs of consumers. This does not happen with the state. The state never bears losses in the economic sense of the word, and no one competes with it. Elections lead, at best, only to the replacement of personnel of the state corporation, without changing the main thing — its character and motivation.
Additionally, government expenditures — the state’s main method of implementing social functions — are actually final consumption, not exchange, because the state spends other people’s money on goals it sets itself, not the former owners of this money. One can debate whether these expenditures increase national wealth, but it is unlikely that anyone would dispute the assertion that even if such wealth does increase, the efficiency of this process in the hands of the state is worse than that of a steam locomotive.
Civil society agents are free from these shortcomings. From commercial firms to volunteer organizations, the activities of these agents are fully determined by the needs of society. Moreover, both free volunteer activities and charity, and activities based on voluntary contributions — not to mention the direct sale of goods and services — are exchange during which people voluntarily give up some benefits (money, time) in favor of others. That is, this activity directly increases national wealth.
“Here” and “there”
From this perspective, the question “why does nothing work out for us?” in its version “why did it work out for the Baltics” (Poles, Czechs, etc.) has a clear answer. It “works out” for those peoples who have better preserved the habits of doing everything themselves, without relying on the state — in our case, those who suffered less from communism.
In the practice of more developed and successful countries, the powers of the state are limited by civil society — that is, by the fact that people implement many social functions without the state and do not consider it necessary to allow it into these functions. But the biggest limitation is traditions, habits, and public opinion regarding what the state is “allowed” to do and what it is “not allowed” to do. Respect for property and law comes first on the list of these traditions. In our practice, the powers of the state are limited by nothing — neither the practice of civil society nor traditions.
Prospects
The state has an extremely unpleasant property — it constantly grows. A corporation whose income is guaranteed and whose functions it actually defines itself naturally tends toward expansion. Expansion means the desire to maximize the “front of work” the state is engaged in. This happens at the expense of the state gradually seizing those functions previously performed by civil society.
It seems to us that it was the state that invented social insurance or maintaining order, but this is not the case. These functions have always existed in society. For example, in England, voluntary societies of workers’ mutual insurance successfully operated, providing their members with assistance in case of job loss, help finding new work (a service the state is still unable to manage), medical assistance (including hospitals and even sanatoriums belonging to mutual aid societies), and support for families in case of loss of the breadwinner. In the matter of maintaining order, criminal prosecution, hiring detectives, preparation for trial, and ensuring the judicial process were also handled by associations of private individuals based on voluntary contributions — not by state or municipal police or prosecutor’s offices. All this was gradually appropriated by the state.
The expansion of the state occurs inexorably. In the twentieth century, the state nationalized (it would be more correct to say — privatized) the functions of social insurance, maintaining order, and — most terrible of all — the monetary system. Moreover, the expansion of the state has a tendency to accelerate. The thing is that the consequences of state regulation are always treated with new state regulation. Extremely rarely do politicians like Thatcher, Reagan, or Saakashvili come to power, who try to chop off the tentacles of the state monster. And after their departure, the tentacles always grow back. The state grows especially quickly during and after crises, the cause of which, as a rule, is itself.
Modern Ukraine and similar countries are not some specific formations, but rather a caricature of the Western “welfare state.” Institutionally, Ukraine does not differ fundamentally from Western countries. If our formal institutions (constitutions, etc.) were miraculously placed in a “developed country,” they would, of course, be slightly modified, but would not exert any particular catastrophic effect on that country. The whole difference lies in the volume of civil society and the state — here versus there. At the same time, one must understand that it is not actually Ukraine moving toward “Western standards,” but “Western standards” are moving toward Ukraine. If existing trends continue, the social functions that today in Western countries are performed by civil society will be appropriated by the state, and Western countries will differ little from us.
What to do? Democracy 2.0
The art of strategy, as is known, consists in turning shortcomings into advantages. Ukrainians are often “scolded” for being incapable of “state building.” Thank God. In our case, this is an advantage, not a shortcoming. Unlike our Western friends, we see the state in its, so to speak, virgin and unclouded form. And this gives us a chance to break the state spell more quickly.
The real problem, as we remember, lies in the fulfillment of social functions, not in which particular office performs them. It is clear that it is impossible to describe alternatives to the state in a short note. Answering the question “how to do this” is even more difficult. However, no answers at all can be obtained if one does not know what goal to strive for.
In our case, there are two such goals. The first is the elimination of compulsory taxation — the situation of eating up wealth that, in our case, is already quite meager. The second goal is the elimination of the corporate nature of the state, of the consequences it causes, and above all, the tendency toward constant expansion.
Both of these tasks are solved if the fulfillment of social functions is built not as the regular activities of some corporation, but as a set of projects proposed for voluntary funding. If a project collects the declared budget by the set deadline, it is implemented; if not, it is not. A project that has not collected the funds returns the money to the contributors and closes. The state familiar to us disappears in this case — there is no longer any office with a permanent “staff” who busy themselves looking for work. Projects are proposed by brigades of contractors (one can call them “parties”), who compete with each other to receive contributions from citizens. The main thing is that project-based organization means that during the project, only what was declared is done; there are no ways to expand and make one’s “work” permanent, since the project has a clear budget and a beginning and end of implementation. It is clear that such things can be implemented through the internet, and it is precisely the existence of these technologies that allows us to speak of such a form of implementing social functions.