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29 August, 2011  ▪  Rostyslav Pavlenko

Tricky Balance

Only a force that relies on the middle class and a right-centrist ideology can pull Ukraine out of the oligarchs' vicious circle

Ukraine has been a country of great potential for two decades now. Potentially, this is one of the most influential countries in its region; it has sufficient natural resources and is a leading player on key world markets (from agriculture to energy). It also has cutting-edge scientific research and plays the role of a powerful regional security factor. There is perhaps no need to list the human, natural and material resources which our country has and which give us hope that this optimistic picture may be real.

However, all this potential remains mere potential. Ukraine as a system lacks a fundamental success factor – effective cooperation between existing elements. The structure of governance, the organization of society and ways in which resources are distributed have led to an inefficient “oligarch” model: a handful of oligarchs make decisions and redistribute the national wealth, while most people are barely making both ends meet. The political class is in cahoots with key oligarchs and has failed to offer the country a realistic strategy for a national breakthrough. Despite the accumulated protest potential, our society lacks an organizing force and an understanding of what the specific goal of transformation is or how to achieve it.

Consequently, the existing system may last for a long time — as long as it has enough resources or as long as oligarchs are able to withstand pressure from the outside without letting the country be swallowed by its neighbors. However, against the backdrop of a crisis both threats become very real and systemic changes will be needed for the country to continue being an independent player and exit stagnation. These changes will affect (moreover, require the involvement of) both oligarchs and society. But it will take a different force to initiate them and push both the highest and lowest strata toward them. It would be a force directly interested in changing the situation and having resources to launch transformations.

THE DARWINIAN MODEL

A society in which a group of oligarchs on the top monopolize resource distribution and crack down on the opposition (especially the organized opposition) and there is a large number of poor at the bottom who depend on the oligarchs and hope to obtain paltry scraps from them (while their attempts at self-organization are brutally repressed) is not a Ukrainian invention. This is a primitive social pyramid which emerges in communities where no force exerts a conscious and sufficiently persistent effort to establish a different state of affairs. This is how primitive tribes are organized. Similar pyramids emerge among prisoners, army draftees or other people who find themselves in these types of situations.

Strikingly similar situations of “self-organization” in which the mind is turned off and primitive instincts rule can be found in the animal kingdom. For example, monkeys have a highly similar structure of “society”: they have their “oligarchs” and small fish who serve the former for a pittance. There are also average members – those whom the oligarchs keep in submission. Those who advance to the rank of oligarchs are not the smartest or even the strongest individuals – they are simply the most brazen, cunning and loudest.

The above system is primitive and stable in its primitiveness. Social sciences refer to this state as nonoptimal equilibrium. Lacking any powerful outside pressure or dramatic change of circumstances, this equilibrium may exist for a very long time. However, it has a fundamental flaw in that it distributes resources in an utterly inefficient manner.

There is no shortage of signs that Ukraine’s current model is inefficient. The GDP per capita is about USD 7,000, which is near the bottom in Europe. On the UN human development index, Ukraine ranks 69 out of 169 countries. On the list of countries in terms of the conditions for operating a business as compiled by the World Bank, Ukraine ranks 145 out of 183, below all other European countries.

Around 7 million Ukrainians, approximately a fifth of the total population, are working as labor migrants abroad. According to surveys, over 46% of people are prepared to leave Ukraine in search of a job, while almost half of university graduates dream of finding a job outside the country. The flow of capital out of the country is an estimated USD 19 billion, which is nearly half of Ukraine’s annual budget.

These sad statistics can be continued. The primitive, thoughtless model of society that has emerged in Ukraine is unable to secure progress and achieve the country’s potential. Moreover, it is even incapable of sustaining all its representatives on a minimally acceptable level. The oligarchy-centered economy simply lacks resources to this end. Furthermore, oligarchs’ fear of losing their status is pushing them to clamp down on the sprouts of self-organization which would enable the society to figure out on its own the best way to provide for itself. There are good reasons to rank Ukraine as Europe’s least attractive country for doing business. Against this background, ruling party members sound especially cynical when they express outrage over people who, instead of “honestly” sweating here for peanuts at oligarchs’ enterprises, flee abroad to earn a living there or dare open their “own business.” Lurking behind these statements is a domineering baboon from the African savanna all worked up over a disobedient troop of monkeys.

RETURNING TO THE HUMAN WAY

To overcome the problems of society’s primitive organization, the disadvantaged need to take action. There are two such groups. First, most people whom oligarchs have made dependent on their own good mercy and who are now on the verge of poverty. Left –wing parties and movements have traditionally pinned hopes of social transformation on them. However, they have proved almost everywhere their inability to resolve the problems they tackle. At its extreme – Marxist dictatorships (Bolshevism/Stalinism, Maoism, etc.) – this path led the led societies to an even deeper abyss: millions of victims of repressions and even worse backwardness. However, even in countries where the left evolved together with the community without questioning the foundations of the political order, they made a bad reputation for themselves. The noted scholar Robert Michels, who studied the way parties were constructed in modern societies, formulated the “iron law of oligarchy”: political forces, even on the left wing, which set the goal of overthrowing the oligarchic system turned into hierarchical structures themselves, while their leaders adopted the roles of their enemies. The only difference was the origin of their wealth: production, market domination or other economic activity vs. appropriations of contributions and donations for one’s benefit.

Organizations that defended the immediate interests of workers achieved greater results and eventually turned into trade unions and other such associations. They were even the core of a dominant British party and a powerful political force in continental Europe, one with which governments had to reckon. However, the reverse side of trade union growth is the quick spread of corruption among their leaders and their increasing distance from workers. In Ukraine this danger has materialized in full – the trade union movement can hardly play its natural role, because its leaders are members of the ruling party.

In these circumstances, the one stratum that suffers from oligarchs and still holds out hope is the middle class — people who can provide for themselves with their own business or qualified professional activity, own real estate, and ask the state for nothing more than the opportunity to freely develop their business.

People in this category profess values traditionally classified as right of center or conservative. Foremost among them are demands to be able to freely develop one’s own business in order to attract investments and create jobs. At the same time, this stratum is interested in having a strong state capable of laying down and defending the rules of the game. In comparison with big (and, all the more so, oligarchic) business, the middle class has far smaller resources, so it is the state’s natural ally in preserving its independence and keeping law and order. There is one condition though: the above conditions having to do with the business climate need to be met. But considering the advantage of development secured for the state by this stratum, the game is worth it.

Finally, it is the middle class that is most interested in stability, because it suffers the most from a crisis when one comes. Thus, traditional values, morality and civic rights and freedoms are a natural component of this class's worldview and the foundation of a state capable of promoting these values.

Like any social group, the middle class needs political representation. Until now no party in Ukraine has been able to adequately formulate and, even less, realize in practice all of the above right-centrist demands for civilized development. Until a party of this kind emerges and comes to power, our country will have a primitive model with domineering oligarchs and a majority without a say.


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