The problem of capitalism is that it is what I describe as “protean”: it has many, many different forms. Our argument on this side of the motion is that the particular forms of capitalism that were adopted by the former Soviet states were wrong for you, and have turned out badly, worse than it could have been, had more care been taken and better judgments made.
The form of capitalism you adopted bore many more relations to the capitalism of the United States in 1880s, when there were incredible monopolies, when there was effective rule and an interlacing between politics and hugely rich and powerful men (almost always men) who ran the economy, and therefore ran democratic politics. It was only in the course of a massive effort in the end of the 19th century by democratic forces and by people who sought a new form of capitalism that it was changed.
So how do we find ourselves here?
The world’s most expensive home, costing £80 million (around $120 million), is in London. It was a five-story detached house in Kensington, which is where embassies are in Britain. And it was a Victorian villa.
Once bought, it was refurbished for an estimated £10 million. Eighteen months of building work happened; an underground swimming pool, a gym, and a cinema were put into this house.
The person who bought this house was Olena Franchuk, wife of Ukrainian billionaire Victor Pinchuk. We also know that the Pinchuks bought a work by British artist Damien Hirst for £10.3 million.
I had the immense pleasure of traveling into Ukraine on your rail system, and I can assure that £10.3 million could be very usefully spent on improving the infrastructure.
As I understand it, Pinchuk got a lot of his money because he was the beneficiary of state sales of assets when Leonid Kuchma, his father-in-law, was president. There is something utterly remarkable about his wife describing herself as a philanthropist because she gives some money to the fight against AIDS when so much money has been robbed by that family from Ukraine. It is a bit like somebody stealing your wallet and then giving you $10 back and saying: “I’m a philanthropist.” (See story on Pinchuk, page 18; editorial on page 4).
But the problem is not individuals, even though the incredible 80 percent of the Ukrainian economy which is owned by a few oligarchs is bad enough. It also has its influence on the political system. The New York Times in 2006 described the scene outside parliament as like “an open-air luxury car exhibition.” Inside, the reporter said, parliament is used as the forum to protect the interests of these wealthy men. These include campaigning for tax breaks, retaining customs fees, protecting their companies against import and ensuring a weak, poorly-paid judiciary under their control.
Capitalism itself is neither pro, nor anti the public interest. This is a lesson that the mature capitalist countries had to learn the hard way. It does what it does, unless it is regulated by a state and by citizens to act to their benefit.
A capitalist does not act for public benefit, nor act for charity, unless the system is constructed so that it happens. But there has to be the clearest separation between private capital, on the one hand, and the public interest and state on the other.
The key term remains one that appeared near the end of the Soviet Union – glasnost. You have the right to know what they’re doing and should demand it. Knowledge should be with the people [who then] have the capacity to run the country.
David Aaronovitch is a British broadcaster and journalist.
