It seems we are once again observing the phenomenon of “redistribution of property.” This is evident from the Zhevago group saga and the attacks on Epicentr, along with other less publicized incidents. With the arrival of the “Donetsk people,” pressure on small businesses and single-tax payers has intensified. The state is trying to take control of any economic activity by its citizens, moving into areas it previously deemed insignificant and “unprofitable.”
Why is this happening, and is it connected only with the current authorities? Can the “mighty of this world,” erroneously called “oligarchs,” stop redistributing property and start investing in the country where they work?
Let’s start with the simplest. After the arrival of the “Donetsk people,” the state became more active for two reasons. The first is the shrinking portion of national wealth available for subsequent redistribution. The previous authorities also pressured business, but this was more like gravity than a system. The “Donetsk people” are distinguished by their thoroughness of approach, especially when it comes to someone else’s property. In conditions where national wealth is shrinking—meaning people see no point in working—instead of reducing state expenditures, they decided to increase its revenues. And this always and everywhere means lower citizens’ incomes and increased pressure on business, which is what we see.
The second reason is Mykola Yanovych Azarov. I think nothing needs to be explained here. I will only say that the goal of any state is the production of politically convenient reporting. What specific actions lead to this reporting is not particularly important, and Mykola Yanovych wonderfully demonstrates this effect. I will go further—I am absolutely certain that GDP does indeed grow under him. By the way, this is a wonderful reason to think about what is really important: whether it’s GDP growth or something else after all.
Now about the state. The phrase “the state attacked business” implies two sides—“state” and “business.” However, in our country, this is rather two sides of the same phenomenon. On the one hand, it is difficult to be even a medium-sized entrepreneur without depending on the state in the person of a specific official. On the other hand, the “state” exists precisely to “do business.” The state not only attacks some impersonal business for the sake of obtaining the reporting it needs—mostly, this happens with small and medium businesses. It is also used by some “businessmen” against others.
Sometimes these processes are difficult to distinguish from each other. Note that the victims of aggression often take a conformist position—they do not report details, avoid evaluations and comments. They hope to “solve issues” with the aggressors, relying on their connections in the state. The system exists precisely because the aggressors know that the victims will first run to the state looking for people with whom they can come to an arrangement.
Now let us turn to more complex matters. In economics, there is the concept of “time preference”—how much people prefer the present to the future. High time preference is usually found in the poor. They spend everything on consumption, not saving or investing. The richer a person is, the more they can afford to care about the future, and the more distant the future covered by their activities becomes—that is, their time preference decreases.
However, here is what is important. Time preference itself does not depend on wealth or poverty; it is, rather, a cause rather than a consequence. We all know many stories of people who economized and denied themselves everything in order to achieve a result in the future, and achieved it. And this in our day and not in poor countries. This is precisely the work of time preference.
And let us immediately note the following. Our wealthy, in terms of time preferences, are the same as the poor. The poor in Ukraine consume everything they earn, and the wealthy in Ukraine do too. The difference is that the rich consume Lexuses and houses in London, while the poor spend money on food, but the time preference of both is almost equally high. The present is valued by us many times higher than the future. After us, let there be a flood.
So, the essence of this note is that the time preference of Ukrainian society, from my point of view, is some “beginning” of a circle that under different consideration appears to be closed. After all, nothing new is actually happening now. The state has always robbed business and been used for “raider takeovers.” It is just that there were no such words then. Recently, while looking for one material, I came across an old note of mine, which quoted one of the members of the NDP (there was such a party). He says: “You talk with officials—each one individually is quite a sane person. But together—it’s like a swarm of locusts.” This note is from 1998, and at that time there was nothing new in these words. And another acquaintance of mine in about 1993 said that in his observation, in our business you can work calmly as long as your income does not exceed 3,000 dollars. He claimed that from that moment the state starts to take an interest in you and can take away your business.
That is, our system arose long ago; it has simply reached perfection now. If the present is everything and the future is nothing, then people will seek any means to get profit as quickly as possible. And as much as possible. They will also be much less inclined to notice moral and ethical constraints. If they can steal, they will steal; if they can take by force, they will take. They will not invest, but will consume. They will invest in preserving their status, which allows them to maintain and improve their level of consumption (“investments” of this kind are owed, for example, by many of our media). Those who were best at this kind of activity became the “elite,” the rest remained poor, but there is no difference in their economic behavior.
It is clear that the roots of all this are in Soviet slavery, because a slave who has nothing has the highest time preference. But it is interesting that time does not heal these wounds; on the contrary, it deepens them. It would seem that the market should have long ago put everything in its place. The tendency toward “quick money” cannot last long; “quick” projects cannot be widespread. This would be the case if not for one “but.” It consists in the fact that the system purposefully and regularly strikes at those institutions that would “trigger” market self-regulation. First and foremost, this is the institution of property, which today can only be called “private” by fantasizers. The state can take property from anyone, under any, even the most far-fetched pretext, or without any at all. In the USSR there was such a legal oddity—“personal property.” Well, our property has remained just as “personal.” The second institution, vital for market self-regulation, is the court. I think nothing needs to be commented on here. The third institution is “economic freedom”—to what extent I can choose my own type of activity, and to what extent this activity is regulated by the state. Year after year there is less and less “economic freedom.” This list can be continued; I have simply named the three most important institutions without which the invisible hand does not work properly.
All these years the system has been developing and improving. Now it is clear to us that the question “when will they finish stealing?” must be answered with—“never.” Now it is clear that waiting for the redistribution of property to cease is pointless. It will never end. The system has developed and is close to perfection. The “mighty of this world” no longer even live in Ukraine. They are here as if on a long-term assignment. Their families and they themselves prefer abroad, because life there is better. The existence of abroad frees them from even the thought of improving anything here. On the other hand, after all, they did not leave abroad for nothing, because living here is impossible. This system is wonderful precisely in its closed nature of the “chicken or egg” type. This closedness breeds hopelessness. It prompts exploitation at full throttle and as quickly as possible.
And this is only the visible part of the process. This process encompasses the entire adult population of the country; it is all participants in the system and works for its growth and improvement. Judge for yourself. They use the state to take businesses from each other. People rightly consider this abuse. They constantly demand that the state have more and more capabilities to combat abuse. As a result, the state receives greater capabilities, which are immediately used for even greater abuse. And so it will continue. It is very telling that people are not concerned with guarantees that the greater power they constantly demand be given to officials will not be directed toward abuse. Ask them about this and you will hear surprisingly naive things (considering that usually our person is difficult to call naive). You will hear that officials must be moral, patriotic, and Ukrainian. Or that mass shootings will help. Of officials. And the right to recall deputies, of course. It is unclear, however, where the morality of officials will come from if people do not demand it for themselves. Officials are not brought in from Mars, after all.
And here we come, actually, to the solution of the problem, or rather, to indicating the direction in which one must act. All this time the system has been developing and improving through the joint efforts of our people. Time preference has been growing. Everything has been changing. But there is one constant that has been constant all this time. This is the surprisingly consistently negative attitude of Ukrainians toward each other. After all, time preference depends on what a person thinks about other people. If he considers them complete scoundrels with whom it is impossible to do business, his time preference will be high. He will try to pull off his schemes regardless of morality and without thinking about the inconveniences he may cause others. He will try to pull off these schemes as quickly as possible and spend what he earned as soon as possible. After all, there are only bastards around, why be ceremonious with them? Now carry out a simple thought experiment. Think about what Ukrainians say about each other, and not personally about someone specific, but “in general.” How often, for example, do you yourself and your acquaintances utter phrases beginning with the words “with our people…” In general—yeah, that’s how it is.
Our revolutionary movements, which are multiplying like flies, should think not about revolutions on a global scale, but about how to introduce Ukrainians to each other. Because the fear that our people feel for each other breeds distrust, and it fuels time preference. And as long as this is the case, the system of mutual plunder will flourish, regardless of whose power is in charge.