The scandalous story about the attempt to strip “Afghan” veterans of their benefits, on the grounds that “there’s no money in the budget,” has once again drawn attention to the problem of so-called privileges. The first thing our people did was to express outrage at the fact that deputies are canceling benefits for unfortunate Afghan veterans while enjoying numerous state perks themselves. This is, of course, true—but in reality, the origin, essence, and social and economic consequences of Afghan and deputy privileges are one and the same.
To see this more clearly, one simply needs to transport oneself back to the era when the relationship between the “political class” and its subjects was honest, transparent, and uncorrupted by various ideological chimeras. The first such state was probably the Roman Empire, the progenitor of pensions. However, for various reasons, medieval Europe will serve better as an illustration. Medieval society, despite its diversity, was clearly divided into two groups of people: one forcibly takes part of the income from the other. The “political class”—that is, the nobility—lives off taxes from its subjects, pays no taxes itself, and owes a duty to defend its territory and that of the state (duty to the monarch). This is where our benefits come in—or, more precisely, privileges in the form familiar to us. And it is crucial that privileges usually manifested themselves as weakening of certain feudal duties—from the “right” to sit in the king’s presence to economic privileges like the “right” to hunt in the royal forest, and so on. Privileges were granted to private individuals, cities, and corporations, of which there were so many in the Middle Ages. Very often, the essence of political struggle in various countries at different times came down to obtaining or defending privileges. The Middle Ages demonstrates two key features of privilege. First—privilege is a kind of payment, a handout in exchange for loyalty. Second—privileges are always carried out at someone else’s expense; that is, at best, at the cost of reduced revenues from the “donor’s” extortions.
The era of mercantilism that replaced the Middle Ages was privilege’s triumph. States granted all kinds of “rights”—that is, privileges for trade or production of certain goods—to particular groups of people and corporations. A defining feature of privileges is that they are easy to “grant” but very difficult to take away; few dare to do so. Therefore, the number of privileges grew like a snowball. The economy suffered as regulation became ever more extensive and tangled. It all ended with the “bourgeois revolutions,” whose ultimate essence came down to the principle that the law should be the same for everyone—that is, there should be no privileges.
Yet privileges did not disappear anywhere, though they were, of course, pushed hard out of the economic sphere. States began using privileges to strengthen their power, especially their repressive organs. The police, army, and courts were the main recipients of privileges. As a former military man, I know well that many were drawn to service precisely by promises of privileges—a not-inconsiderable pension at forty-five and prospects of “free” housing. Thus, future privileges became the most important factor in ensuring discipline and loyalty to the system. A privilege received after service has another crucial property: the closer to “demobilization,” the less the desire to argue with the boss. In this way, states achieved that the higher the personnel’s experience, the higher their loyalty.
Socialism was, to a certain extent, a return to mercantilism. We grew up in a system overflowing with various privileges and handouts, which became an integral part of our lives. The trouble is that over time, privileges begin to be perceived as something self-evident and even come to appear as certain “rights.”
The existence of privileges causes extensive and diverse harm. This includes both the constant growth of state expenditures (that is, the growth of the share of wealth that the state extracts from the economy) and a constant distortion of incentives (people receive certain benefits without making any effort to do so, that is, they receive them outside of exchange relations). Privileges—such as state pensions—destroy social institutions (the family, and so on), lead to parasitism, and ultimately to the degradation and decline of nations. This was the path the Roman Empire and other “social states” followed: the number of working people shrinks ever smaller, the number of various parasites grows ever larger, incentives to do and strive for something disappear, and the country perishes.
Ukraine inherited the USSR’s “social gains,” which were originally viewed not as a burden on society and a cause of robbery, but as a grand achievement. There is an opinion that during the time of independence, the number of various privileges has actually increased. Our society regards privileges as a legal right—and in this, the “top” and the “bottom” are united. Significant in this sense are the privileges the “political class” grants itself. The “political class” absolutely does not need them, but, as they say, it’s a matter of habit. People do not become deputies and ministers for the sake of a pension, yet pensions and other privileges for them exist, spread, and multiply.
As a result, in addition to the traditional harm caused by privileges, in Ukraine they also become a source and lifeblood of social conflicts. After all, it is obvious that owners of “rights” to privileges have different opportunities to exercise those “rights.” A deputy can always use his right to “free” treatment, while someone holding the same “right” but not belonging to the political class will have to make serious efforts to actually use it. And, incidentally, it is precisely this “inequality” that provokes the greatest irritation among people. Ukrainians busily fight for privileges—and this is another harm they cause: social and political activity is channeled into a false direction.
Moreover, if the state promises as a privilege a benefit that is actively sold on the market, the market begins to work against the owner of the right to that privilege. A classic example: the free travel for retirees on public transport, which the state supposedly guarantees. The same applies to spa vouchers, medicines that certain retirees and disabled people should “freely” receive, and so on.
Finally, there arises the problem of compensation by the state for expenses incurred by private enterprises that are legally obligated to implement privileges gifted by the state. Purely technical problems of administration, accounting, control, and the like come up. It is one thing when a “traveling employee” presents a train ticket to his company’s accounting department for reimbursement of expenses; quite another when, say, a minibus driver tries to get compensation from the state for carrying a retiree. One can easily guess that the state will invent such conditions that it will be simpler to carry retirees at their own expense.
Privileges must be abolished without exception, or they will destroy us. However, this must be done using the grey matter between one’s ears. The “Afghan” case, as usual, shows that the “Donetsk faction” cannot and does not want to use its brain. I fully agree with the “Donetsk faction” when they say that deputy privileges constitute an insignificant part of the budget. However, I disagree with the conclusions they draw from this fact. In canceling privileges, one should be guided by political, not fiscal considerations. Before proceeding with any reduction of privileges for the civilian population, one should eliminate the legal privileges of the political class—no matter how insignificant the savings from this measure may seem.
There is another important point. Groups using privileges—such as, for example, “Afghan veterans” or “Chernobyl victims”—use them as a systemic factor for business. Therefore, before canceling privileges, the correct solution would be to simplify all business to a “preferential” state and cancel official privileges. Only after that could one safely cancel all privileges for able-bodied people. Then cancel the privileges of the security forces and monetize the privileges of the disabled.