Yevgeny Yasin, Doctor of Science (Economics), is Research Director of the Higher School of Economics and Director of the Expert Institute of the Russian Union of Industrialists and Entrepreneurs, former Russian Minister of Economics (1994-1997). This article is based on a report made by Dr Yasin at the international conference “Modernization of the Russian Economy: Social Aspects,” April 2003, Moscow.

As the history of post-Soviet Russia advances, each additional year provides more evidence that the process of change will be dragged-out and controversial. We are increasingly often turning to most inertial factors affecting the country’s economic growth – the system of values and culture in the broad sense of the word. It seems apparent that a successful economic modernization in Russia will be highly contingent upon the evolution of our culture, values, informal institutions, as well as the direction these factors will take in the future. The importance of this evolution goes beyond the shaping-up of a social context of modernization. Its deep-rooted implication is that we must become different ourselves in order to make Russia an economically affluent nation.

Many Russians hold to the idea that their country is unpromising and affluence will always remain beyond reach. Such is our national character and cultural tradition and there is really nothing we can do about it, they say. The Bolsheviks pressed forward with their revolution in the hope that a totally different system of economic relations would eventually change the character of the nation, but their aspirations were to be proven futile. There is a saying that a farmer can be pulled out of a farm, yet the farm will never be pulled put out of his soul. Is that really truth?

Another adage says: “It is no use trying to change things that are not liable to change.” It implies that cultural specificity and national values must be factored into reform strategies in order to avoid disrupting a nation’s identity. If that is so, is the goal of bringing Russia to a level of affluence with other advanced nations a realistic one?

THREE PILLARS OF RUSSIAN VALUES

Russia survived two major upheavals in the 20th century, which left profound chasms in the continuity of its history. In the wake of it, the heterogeneity and controversies of Russian values are not at all surprising. The reform years have augmented their inherent historical complexities with all of the conflicts of a transitional period.

The three national symbols of Russia represent the three pillars of our value system. The double-headed eagle of the Byzantine Paleologus dynasty, a coat of arms discarded after the 1917 Bolshevik revolution and re-established by the democratic revolution of the 1990s, symbolizes the Old Russian traditions. The Soviet-era national anthem invokes comforting memories of a recent past, which many people feel nostalgia for because of the problems associated with the present reform. And the pre-revolution tricolor national flag has become the symbol of a new democratic Russia since August 1991. On the one hand, these three symbols are argued to symbolize the consistency of Russia’s statehood at different historical stages, as well as to create a combination of its traditional culture together with the new energies of the present. On the other hand, these old symbols may be an incendiary mix that is capable of frustrating the country’s progress. The goal of this article is to try and determine what this combination is all about.

Traditional Russian Values

The analysis of variegated literature on traditional Russian values was used in selecting ten values that are the most significant for the economy. These were compared with the opposing weaknesses, which Russian culture is treating rather benevolently. An approach of that kind appears to be lucrative in terms of judging the productivity of values. The results of the analysis are summed up in Table 1.

Table 1.  Traditional Russian Values and Reverse Implications Values Reverse Implications Emphasis on spiritual principles and moral laws Contempt for material interests Collectivism, the propensity for teamwork Suppression of individuality; authoritarianism Selflessness Obedience to authority; ability to tolerate prolonged suffering Sobornost (community of the individual will and endeavors of the people), a strong state power A risk of the emergence of messianic trends; extolling state power as an embodiment of the people as a whole Push and luck as prerequisites for success. Expectations of a miracle; the lack of ability for systemic work Labor as a joy of life and creativity Laziness, inactivity and lack of organization Far-reaching plans and tendencies for sweeping actions Carelessness, unconcern, underdeveloped "medium level of culture" Shunning mercenary behavior - generosity, heartiness Insufficient incentives for persistent work, saving and business Justice. Importance of so-called out-of-court sanctions Justice prevailing over law. Widespread system of informal relationships Emotionality, offbeat thinking, originality

Emphasis on spiritual principles and moral laws. This is one of the most frequently cited values of Russian culture. As a rule, people understand this to be the prevalence of non-material assets over material concerns – “man does not live by bread alone.” Intellectual aspirations evoke interest in literature, the arts, social affairs, and emotional involvement going beyond material demands. Spiritual values can be productive, since they are manifest in the creative endeavors of engineers, scientists, and people associated with the artistic professions. At the same time, regarding the inherent stress that Russian culture places on its non-material assets, in opposition to Western materialism, it can hardly be considered correct or rewarding.

Collectivism, or the aptitude for teamwork, is a generally productive value. It may also be interpreted as the ability for cooperation (cf. Western expression “cooperative man”). Russia has its own version of collectivism – traditional artels, or cooperative associations of workers.

On the other hand, collectivism may entail the subordination of an individual to the collective, and the cession of individual rights to the leader. Authoritarianism, together with a shortage of personal responsibility, surfaces as a reverse facet of that value. The leader accumulates the rights and responsibility of the collective members, in which case the individual is depersonalized. Facts testifying to this conclusion are found in abundance in Russian history and through the events of the present.

Collectivism in Russia is often explained by the harsh natural conditions that make survival very difficult. But any natural conditions are hard to withstand at the initial low phases of development, and that is why primitive societies always have distinct collectivist properties. Individualism, as an opposing feature, can only appear in a fairly developed society that is based on market mechanisms rather than inter-communal relationships.

Selflessness stands for sacrificing one’s own interests, or even life, for a collective cause, such as the community or state. Following this logic, privacy is subdued to a common cause. Proponents of selflessness always stress the role that this value has played in Russian history. It implies, among other things, obedience to the authorities and the ability to endure prolonged discomfort, which makes it possible for the government to ignore or usurp the rights of the individual.

Selflessness is characteristic of a traditional hierarchical society that is self-sacrificing to a lord or seigneur as a duty of vassals or serfs.

Sobornost (community of the individual will and endeavors of the people) is often mentioned as a crucial value for the Russians, together with the spiritual values. Opinions on this definition differ, with some scholars suggesting that it is a symbol of paternalism; others indicating that it presupposes a consensus in separate social groups and society in general.

Sobornost does not constrict individuality but strengthens it. It stands in opposition to both depersonalized collectivism and freewheeling individualism.

It is a productive value if it fosters the ideas of a civic society, but it may become counterproductive if its propagators conceal the repression of individuality under the banner of universal love.

It is noteworthy that the idea of a strong statehood is often regarded as a separate traditional value. One can clearly see a common thread of the above-mentioned values, which make up a single block, conventionally called “etatism.” It grew out of a hierarchic social structure that Russia possessed for centuries – an indigenous style of feudalism.

Values pertaining to the treatment of labor processes and achievements form another block. Success is achieved by push and luck, not by laborious efforts. Add to it an inclination to make strenuous efforts, to push oneself all the time regardless of the price one has to pay for it. The reverse side of this is the expectation of a miracle for success, which may partly explain why church services for fair harvests or rainfall were so popular in old Russia.

Many scholars say that the absence of a drive for success, typical of the Russians, stands in opposition to the Protestant culture with its stress on achievement. Lack of a desire to achieve is certainly not a value, and falls into the same category as the crucial emphasis on spiritual values and disregard for materialism.

Dr Chesnokova1 believes that what matters for the Russians is a phenomenon sometimes called ‘ascriptiveness’ – moral scruples, and the unwillingness to work one’s way through the crowd with elbows in order to promote oneself. She calls it a Russian alternative to the Western practice of self-propulsion and self-promotion.

Labor is a joy of life and the embodiment of the master’s creativity. Work for profit is blameworthy. The reverse side of this stance is laziness, inactivity and lack of organization. These qualities are rooted in geopolitical conditions and the social system.

The Russian historian Vassily Klyuchevsky (1841-1911) made an observation that “one thing that the Russians are definitely confident of is that they must not squander the warm days of summer, that Nature allots too little convenient time for farming… The Russians have developed the habit of short, overstrained and efficient work in the warm months and dragged-out, forced leisure during the fall and winter. No other European nation is capable of working so strenuously over such brief periods of time, and nowhere else in Europe will you find such an impressive inability to work permanently and rhythmically as in Russia.”2

The hierarchic structure of society compounded the climatic factors. Labor could be a joy of life when it was for one’s own benefit, if not, then it was considered coercive labor. Laziness and inactivity are common attributes among slaves and serfs.

Far-reaching plans and the tendency for sweeping actions brought to fruition many achievements of the Russian economy, state and culture. The huge territorial gains during Russia’s eastward expansion, which met virtually no resistance from the indigenous people, played an important role in these achievements; another was the abundance of natural wealth within the boundaries of Russia.

The reverse side of this achievement is negligence, carelessness, wastefulness, and irrelevance, or what Russian philosopher Nikolai Lossky (1870-1965) labeled “the medium level of culture.”3  According to Lossky, the medium level of culture is the space that begins at the threshold of one’s house and ends where the business of state importance begins. It can be otherwise called the realm of daily responsibility – land amelioration, local self-government, the collection of garbage, etc. All of these activities have become Russia’s traditional weaknesses. Let us recall the medieval European towns, where swill would be thrown out of the window right onto the street. They were short of space, however, and the urban dwellers eventually came to the conclusion that such a practice could not continue. In Russia, on the other hand, the land was plentiful, and people were able to live as they pleased for quite some time.

Shunning mercenary behavior stresses that wealth is a sin and poverty is a virtue. It simultaneously applauds generosity, disinterestedness, heartiness, and the readiness to lend a helping hand to your neighbor. This idea has certainly been influenced by the Eastern Orthodox call for asceticism and reclusion from worldly ambition and vanity, which also incorporated traditional social customs. Generosity was made possible by living from the fruit of one’s own labor, grown on the vast farmlands, not by living on wages. Work that is not mercenary, together with virtuous poverty, facilitate and justify life under oppression, when a great part of the final product is handed over to the landlords. This idea supports long-term suffering and the notion of oppression and arbitrary rule.

Other effects of non-mercenary behavior are laziness, inactivity and carelessness. The landlords who take away the products must assume fatherly patronage toward their subordinates, and paternalism becomes their duty in the social hierarchy.

Non-mercenary behavior certainly helps keep greed and envy in check, as well as refine the public morals, but it does not lead to prosperity.

Justice is not an exclusive value of Russian culture. Scholars who refer to it usually mean a somewhat sharper sense of justice in Russia, since especially the government has regularly violated it. It also explains the Russian preference of total freedom to civic liberties. One more aspect is the common belief that justice prevails over law, which prompts authorities and citizens to disregard the law.

In many cases, justice is perceived as a leveling of revenues due to poverty.

Emotionality, impulse, inspiration. The Russians tend to praise intuition more than rationality; they also praise beauty and aesthetic values. S. Hakamada, who compared the Russians with the Japanese, a nation not inclined to act on impulse, noted this. Alternative thinking, inventiveness and originality explain the achievements of Russian artistic culture.4

Thus, we see that the traditional Russian system of values does have many attractive elements. Despite some negative features, it encourages teamwork (like in artels), describes labor as a joy of life, and encourages sweeping offbeat and original approaches. Nonetheless, the traditional values of Russian culture, combined with their inherent forbearance of some contradictory human qualities, are counterproductive in our present day. They are based on institutions and relationships of an archaic society that had a hierarchical structure with a domineering state power, and an economy hinged on feudal agrarian relations, in which vast geographic spaces, natural and climatic conditions exerted great influence on both economic development and human souls.

Soviet Man

“Away with all your superstitions Servile masses arise, arise! We'll change henceforth the old tradition And spurn the dust to win the prize.”

The Bolsheviks attempted to translate that quotation from Internationale into reality. But what, in fact, did they achieve? Table 2 sums up the values of the Soviet period of Russian history.

It shows in bold relief that the Soviet value system took over many properties from the traditional Russian values. The new state and social order had much in common with the previous one. The government played a greater role in it, the social structure remained hierarchic, and market relations were substituted by the rationed distribution of goods. Bearing this in mind is very important, since the root-cause of the problem goes beyond the question of values, which the Russian nation has allegedly had since its inception – it lies in the steadfastness of crucial social institutions that form the values. “The most advanced social order” – the metaphor that ideologists often attached to communism – turned out to be a replication of state feudalism, a prolongation of its life.

Table 2.  Soviet Values and Reverse Implications Values Reverse Implications Collectivism, readiness to cooperate, mutual help Suppression of individual, authoritarianism, irresponsibility Engagement in a common cause, idealism, enthusiasm Obedience, ability to endure prolonged suffering Egalitarianism, hostility toward social climbers and the wealthy; ascriptiveness Leveling of profits, absence of incentives to achieve Labor as a joy of life Laziness and lack of organization Far-reaching plans and tendencies for sweeping projects Carelessness, absence of the medium level of culture Education Modest requirements Weak incentives to work and succeed, inclination to pilfer, careerism Generosity, selflessness Paternalism Living at the expense of state generosity

Certain changes are noticeable within the value system, as the attitude toward wage work became somewhat different. People stopped regarding work as a punishment, and low labor efficiency during the Soviet times can be explained by the lack of concrete incentives. Officially publicized modesty, which was typical of many people, stemmed from the deficit of many goods and services and concealed a growing passion for consumption at the same time. People no longer regarded stealing from the state (of a property that was held in “common” and hence nobody’s) as a crime. A nesun (a person who stealthily takes something that was the property of the state) was not regarded as a thief – he was simply taking something that was commonly owned, or to be more exact, owned by nobody in particular. Material wealth and career climbing were still officially derogatory, but under Soviet conditions climbing to a new official position was tantamount to material gains.

Education was essentially a new, and productive, value.

Some values received a different perception due to sweeping social changes. Large-scale demographic shifts, brought about by forced urbanization, and a swift increase in the population signaled an acceptance of different attitudes toward life and death. “It is God who gives life and God who takes it away” was a typical viewpoint before the Bolshevik revolution of 1917. By the end of the Soviet era, the people had developed a liking for higher standards of living. They enjoyed living as individuals, and more and more women preferred not to have children. The struggle against death was now waged by doctors and patients alike, and the value of human life became definitely more important – a true feature of growing individualism.

The lifestyles of millions of people changed dramatically during the Soviet era, as they relocated from the countryside into the cities. They abandoned their houses, patriarchal families and the omnipresent community control over one’s private life and settled into multiunit residential blocks where they barely knew their neighbors; the families would have only one or two children. City life made people freer, yet more vulnerable at the same time.

However, the new townsfolk and their children remained, by and large, villagers in terms of their mentality and values. Almost half of all urban residents at the time of the breakup of the Soviet Union were city residents in the first generation. Their bonds with rural relatives were often stronger than were their ties with neighbors or colleagues.

A Soviet city was a far cry from the nestling place of market relations and civic liberties that the European urban centers had known since the Middle Ages. Residence permits restricted a person to living in a particular place, and the very design of the city districts restricted personal freedom; there were also shortages of consumer goods, and a give-and-take system of distribution (including housing). All of this made city life similar to living in the countryside.

All this is important for understanding the changes in the system of values shared by the Russians. They remained traditional or Soviet-like until fairly recently, and their radical transformation began only in the early 1990s.

Do Values Change as Reforms Proceed?

Beginning with 1989, the All-Russia Public Opinion Research Center (VCIOM) has conducted sociological research under the Soviet Man program.5 Table 3 indicates the changes in the merits of the people in this country over the past 15 years.

Table 3.  Russian Man’s Portrait

The responses indicate very little change in public opinions concerning laziness and patience. There was some increase in positive answers concerning the love for freedom. Significant change is evidenced in the following parameters:

Energetic – up 11% (20% in 1999 versus 9% in 1989) Irrationally-minded – down 9% (22% and 31% respectively) Irresponsible – down 6% (16% and 22% respectively) Laborious – up 8% (35% and 27% respectively)

This change in percentage generally indicates an adaptation to the market economy.

Table 4 displays people’s attitude toward the state.

Table 4.  State Power and People Positions % of respondents The State has given us everything we need, no one has the right to demand more from it 5 1 The State gives us many benefits, but we can demand more from it 10 6 State benefits are so meager that we are not obliged to do anything for it 7 38 Our state is in a critical situation, and we must help it even at the expense of sacrificing something 38 17 We must become free people and make the state serve our interests 27 37 Other opinions 1 2

Source: Levada, p. 442

The data reveals a general tendency: people are making fewer demands on the state, and are far less prepared to make sacrifices for its benefit. There is an increasing alienation with state power, and a growing belief that it is the state that must serve the people, and not vice versa.

Another project that is worth noting is the study of Russian values, which has been conducted since 1990 under the guidance of Dr Lapin.6 Professionals insist that its methodology is highly reliable.

The authors of this work single out 14 basic values, which they say help integrate individuals into society, but have diversified effects at the same time. At least 57 percent of the people polled said they shared the core values, namely their attachment to the family, law and order, and inter-personal communications. The group of 14 values also includes the so-called integrating reserve. In a liberal society, this is defined as freedom, independence and initiative, while members of traditional societies single out their observance of tradition, values of community (collectivism), and selflessness. A third group typically includes values contravening the integrating reserve, while the fourth group features rather controversial values. In Russia, the latter set of values center on state power and anarchic freedom; power is broadly viewed as an opportunity to subordinate others, rather than the opportunity to take responsibility for public affairs. This understanding of power makes Russia rather similar to Latin America. Freedom tends to be boundless in Russia and is thus different from normal civic liberties, which presuppose self-restrictions and social responsibility.

This research indicates that the core values have remained unchanged over the past twelve years.  The parameters making up the integrating reserve attract 45 to 57 percent of those polled. In 1990, that reserve consisted of morality, freedom, and life; freedom was the only liberal value on that list. Two more liberal values – independence and initiative – were added to the reserve by 2002, which is a definite hint of a liberal drift, although one would be mistaken to claim that those values have been firmly settled in the public consciousness. The Russian system of values seems to be in a phase of productive transition.

In 1992, Schwartz7 applied his method of research to the residents of St. Petersburg. He came to the conclusion that Russia occupied the bottom position among the countries of Western and Eastern Europe in terms of its praise for equality, professionalism, intellectual and affective autonomy. In 1999,

Dr Lebedeva,8 supported by the Russian Humanitarian Research Foundation, applied Schwartz’s methodology in polling students and teachers in St. Petersburg, Penza, Moscow, and Yaroslavl. Results of Schwartz’s and Lebedeva’s researches are compared in Table 5.

Table 5.  Comparison of Values in Western Europe,   Eastern Europe, and Russia Blocks of values     Teachers Students Western Europe Eastern Europe Russia Western Europe Eastern Europe Russia Conservatism 3.51 4.15 4.38 3.32 3.88 3.71 Hierarchy 1.28 2.19 3.05 2.02 2.23 3.10 Harmony 4.30 4.24 4.28 4.05 4.11 3.69 Equality 5.35 4.74 4.93 5.21 4.63 4.27 Intellectual autonomy 4.60 4.15 4.05 4.61 4.63 4.65 Affective autonomy 3.76 3.13 2.95 4.23 3.78 3.98 Professionalism 3.98 3.84 3.98 4.27 4.22 4.44

Notes: 1) points ranging from 1 (negative value) to 7 (paramount value) 2) Western Europe – eleven countries, Eastern Europe – nine countries, including Russia, from 1992 through 1996; data on Russia for 1999.

From the data, it seems that in 1999 the values shared by Russian teachers remain non-conducive for positive development, except when we consider the category for professionalism. The figure for this latter position demonstrates a growth that is essential for inventiveness and business-mindedness; this level is approximate with those of Western Europe. Russian students place even greater stress on professionalism than their West European peers. They place less emphasis on conservatism than East European students and see less significance in harmony than the European students. On the other hand, their high esteem for autonomy, and most particularly in the intellectual realm, received the highest percentage in all of Europe.

The positive shifts are obvious – the energy potential of the young people has grown. Surprisingly, young people place more importance on hierarchy now than they did before. Most probably, this is an effect of the crisis that Russia experienced in the 1990s – the increase of crime, abuses of power and rampant corruption. It temporarily increased the demand for stability, security, and a more prominent role of the government.

A research into the structure of orientations supporting traditional, Soviet and liberal values was made in 2002 under a program designed by Dr Klyamkin.9 The pollsters asked the respondents to select the most correct and appropriate statement from among three given choices. The first judgment in the selection would reflect a traditional viewpoint, the second, the Soviet view, and the third, liberal ideas.

Percentage of responses to other propositions is shown in Table 6.

Table 6.  Sharing of Traditional, Soviet and Liberal Judgments Topics Traditional judgment Soviet judgment Liberal judgment Undecided or no answer Legality and law 29.6 24.9 39.0 6.5 State power 9.0 30.7 53.4 6.9 Labor 20.4 35.5 38.8 5.2 Collectivism vs. Individualism 23.4 22.4 45.7 8.4 Tolerance 15.5 24.2 48.4 11.8 Averaged percentage on all topics 19.6 27.5 45.1 7.8

The data proves that liberal judgments outweigh the traditional and Soviet judgments, yet their prevalence is inconsistent and the respondents easily combine them with opposite viewpoints.

It is important here to warn analysts against making overenthusiastic conclusions to their discoveries. Neither liberalism nor democracy has turned into popular ideas in Russia, and the respect for human rights and freedom remains more rhetorical than actual. The percentage of people agreeing with liberal statements is growing, but their everyday experience lags far behind their beliefs. This testifies to the tenacity of old values, popularized by the tenacity of negative social institutions, as well as through simple inertia (mistrust, arbitrariness of power, corruption). A period of time for overcoming these barriers may be required, possibly as much as several generations, but tangible shifts in attitudes may occur relatively fast.

Global Development: From Hierarchy to Network

Karl Marx was obviously correct in his supposition that our social existence determines our consciousness. Economic changes trigger transformations of values at one stage or another. If this does not happen, a given civilization and a given culture start to decay.

We have witnessed over the past four hundred years the steady transition of social structures from hierarchy to network, from a subsistence economy to a market one, from feudalism to capitalism. Theoreticians differ in their views concerning feudalism: some argue that it was a purely European phenomenon, which dated from the 10th century. They also believe that the despotic systems of the Orient and other traditional societies must be viewed in opposition to feudal rule. But there is no escaping the fact that medieval European cities were the only places to witness the emergence of an economy and society based on market principles and networked social structures. These squeezed out the hierarchy and continue developing in our time.

Traditional societies based on hierarchy were stagnant, and witnessed almost no technological progress or improvements in the quality of life over the millenniums of their history. That sort of stability was glorified by their cultures and commonly accepted values. The rulers came and went, but the system of rule based on subordination and domination remained intact.

A market society that gave birth to the present market economy displayed much more flexibility and dynamism. Financial assets replaced the land as the primary element of affluence. Unlike the land, capital is dynamic and vulnerable to the impact of competition. It has to be on the move, while finding new opportunities for growth all the time. Together with this economic dynamism, social values became flexible as well. The Reformation was one of the phases of this change, and the revolutions in England and France were also characteristic of this upheaval.

The current developments in Russia fall into the same reforming category. The revolution of 1917 could have played a huge transforming role, had it not taken the path of authoritarian socialism, which meant the continuation of Russian feudalism under the guise of the Soviet system. Joseph Stalin was a Bourbon, not a Napoleon. Over the 75 years of Communist rule, Russia was transformed into a mighty superpower but, having squandered its precious resources, found itself in the void by August 1991. Other countries made serious economic, social and cultural progress over the same period of time, but Russian values remained archaic and based on Soviet/feudal concepts of social arrangements. Nevertheless, some signs of a transformation were noticeable in the Soviet period. To set the situation right, the democratic revolution had to start from the very beginning, but the most important thing is that it finally did happen.

The reforms provided a powerful impetus, which invigorated Russian values through free market, trade, private enterprise and private ownership. Step by step, these vital new social institutions, coupled with others, began to replace the former system of values; this process is continuing today.

Does all of this translate into the demise of our self-identity with the Russian national culture and its replacement by universal, Western-style human values? Not at all.

The Russian self-identity is not vanishing. And it can be preserved to a degree that does not put the brakes on development and competitiveness. The Russian self-identity will not go away because of many factors, such as our unique nature, climate, and history. Finally, self-identity may also become an element of our competitiveness. The ability for hard work is a common feature of East Asia, for example, and Russia may reveal new identities when it reaches the pinnacle of the post-industrial stage. Earlier in this article we named the traditional Russian values, such as the enjoyment of work, far reaching actions and alternative thinking. Education was added to that list in the Soviet epoch. If we combine these elements with the freedom of the individual, and other liberal values, the mix could very well result in a powerful charge of productivity under the new conditions.

RUSSIAN VALUES IN THE WORLD

A system of values should not be an insurmountable obstacle for Russia’s development in the upcoming post-industrial stage.

Russian civilization enjoys a promising position among world cultures. Arnold Toynbee10 described Russia as an Eastern Christian civilization and a sister of Western civilization. Russia budded from a common Hellenic culture, although there are some rather significant differences. On the other hand, the Iberian Catholic culture has probably as many differences with the Protestants as Russia does, yet Spain has scored impressive economic achievements over recent years.11

To size up the differences between civilizations and the obstacles that culture may place in the path of development, a glance at Islamic civilization could be illustrative.

Many Islamic countries are awash in riches – due almost exclusively to huge resources of crude oil. At the same time, their institutions and values are extremely conservative. Lucrative oil exports enable Saudi Arabia, for example, to retain its medieval customs and even promote them beyond their frontiers. The Saudis did not consider reforms until very recently, when they discovered that their population had doubled over a period of just two decades to reach 23 million people. The population explosion falls at a time of falling oil revenues, which are unlikely to grow in the future.12

At the end of the 1970s, Iran, a country also living on its oil exports, exchanged a rather Westernized regime under the shah for the intensely reactionary regime of the ayatollahs. The new regime is also based on medieval values and enjoys broad support by the people. Iran has something in common with the Russia of 1917, the only difference being that during the Bolshevik revolution its proponents waved banners with bold slogans proclaiming that theirs were “the most progressive ideas in the world.”

The three most secular Islamic nations – Turkey, Egypt and Malaysia – are presently facing far more complicated problems than Russia. Despite obvious achievements, Turkey has been forced on several occasions to resort to military force in order to prevent Islamic fundamentalists from coming to power. Egypt has an authoritarian, albeit pro-Western, system, in which the heads of the various clans are appointed as cabinet ministers and use their government offices for profiteering. An Arabic country of longstanding culture, Egypt is highly adept at assimilating the achievements of other nations, but incapable of producing any profound achievements itself. Egyptian talent and capital is successful in other countries at the same time.

Malaysia is the only Islamic country to have gained success on the basis of a catch-up development model. Those gains were largely propelled, however, by a powerful Chinese community, which holds the majority of top business positions. The country also drew amassed foreign investment to develop its export-orientated industries and reduce labor costs, which is typical for the entire region.

Even the newly independent Moslem republics of the former Soviet Union are bound to encounter far graver problems in their development than Russia or Ukraine.

It would be wonderful to find the easiest possible solutions to these problems, but the traditional Islamic culture and values will invariably erect huge barriers against development, incomparable to the ones Russians have to face. As for India and Africa, they seem to be destined for even more difficulties than the Islamic world.

But let’s turn back to the problems confronting Russia, which seem to stem from its irreplaceable national traits.

Managing power. The traditional administrative style is provoking Russia to reincarnate the former methods of the Central Committee of the Soviet Communist Party in the Russian President’s Administration, much the same way that the same Central Committee tried to revive the habits of the usurped imperial court. The major reason for re-establishing those former methods is that it permits the state to forego much of their responsibility; the state remains above the law while maintaining a monopoly on decision-making. When Russia changed over to democratic rule, President Boris Yeltsin apparently felt it necessary to secure the levers of power and make the nation subservient, although he was a stated advocate of democracy. He succeeded in his drive, and any trace of a division of powers was eliminated by the end of his presidential term. He did it for the sake of democracy, of course.

The government showed the people its unchecked omnipotence at every opportunity – and casually interpreted the law so that its actions would look legitimate. The same behavior could be observed in the country’s constituent territories, although the officials there seldom thought it necessary to make reference to the laws. At this moment, old traditions have gained the upper hand. Interestingly, the rank and file are encouraging the establishment to become more authoritarian, while ignoring any circumstances that may impede their drive for attaining specific goals, which are often far from strategic ones. Bureaucracy is seeking to stay in control while kicking many of its responsibilities upstairs to the president. It is also willing to share controls with some oligarchs for meeting selfish interests. That is the way it was in the past, and that is the way it is today. Will it continue to be so in the future?

In the wake of this scenario people do not trust state power, and President Putin is the only statesman to maintain high popularity ratings. All other state institutions are down in the opinion polls. The government continues to confront the unruliness of the people and their unwillingness to observe the law, since the people believe that the authorities are reluctant to abide by the law themselves and are simply using it to advance their own petty interests.

So, what is the way to break this vicious cycle? Clearly, this problem stems from tradition only, and is supported by special interest groups but devoid of economic props. It is also clear that unlike the Soviet economy, a market economy can exist without a hierarchy – and works much better in its absence.

The Russian government is facing an inordinate problem that compels it to resort to techniques of subordination and authoritarianism: the Russian people are passive, rely on paternalism, and are more inclined to be obedient and steal rather than to defend their rights and freedoms. In practice, the authorities find it easier to issue orders and coerce the nation into doing something irrelevant, rather than developing its ability for independent action. Resorting to traditional techniques allows the authorities to reproduce and strengthen those institutions that impede Russia’s development.

The current spread of crime has the following factors behind it:

1) the democratic revolution has enfeebled the state and undermined the authority of the law-enforcement bodies; 2) civic rights and freedoms are growing while the attendant concept of social responsibility is lagging behind; 3) gaps between social groups have widened and many strata of society have limited access to the new material benefits. Where could a poor young man who reached adulthood in the early 1990s find the most convenient and quickest means of satisfying his wants? It was mostly in organized crime and the so-called “private power structures,” which engaged in protection rackets and collected debts for other businesses. This kind of “business” involved relatively few risks at the time. It should be noted that these “private power structures” were in high demand during the period of deteriorating laws; 4) frivolous traditions remain strong. Is there any other country where prison songs and prison slang are so popular? In Russia, they are even recited by the educated elite.

Crime is not an irreparable national sin, however. It is a symptom of a very difficult transition period.

Corruption poses a far greater concern. It is widespread in practically all countries with a low or medium level of development, and impedes their attempts to rise to higher levels. One of the key problems is the people’s patience with corrupt officials, and the widespread belief that bribes are required to solve their bureaucratic problems, which may otherwise become even worse.

It is important to create an atmosphere of public intolerance toward corruption – something that is possible only if society develops more trust in their authorities.

The black-market economy was a natural appendage of the Soviet economy and became a predictable and convenient medium of businesses and individuals for progressing through the painful transitional period. But it has evolved into a system of tax evasion and a way for concealing illicit acquisitions. As a result, there is a growing demand for the legalization and protection of ownership rights. It is also understood that a good reputation is required for business expansion and the attraction of more investment into Russia. As this occurs, the scale of the black-market economy will reduce accordingly.

What unites these difficult problems is that their solution requires changing the system of values and informal institutions, while developing culture as a condition for economic growth.

WHAT RUSSIA NEEDS

To make its economy prosperous, Russia will have to learn how to produce and sell on the international market goods and services that meet the requirements of a post-industrial society; products that incorporate innovations and sophisticated professional skills.

Oil, gas and metals sell well, too, as they are competitive commodities, but revenues from their sales will remain highly dependent on international consumer demand. The world economy is unlikely to grow at a faster rate than 3 to 4 percent a year, while the demand for fuels and energy will be growing at an even slower rate as the consumer countries begin to adopt alternative resource-saving energies. This means that economic growth in Russia will be limited to 2 to 3 percent a year, if it continues to focus its exports on the fuel and energy sectors.

To achieve stable prosperity comparable with other developed countries, Russia must learn how to develop competitive products. These would integrate Russia into the international realm of technological and economic progress, which are not relegated to isolated samples for international shows. High-tech products should account for no less than 10 to 15 percent of its exports, while at present the share is several times smaller. Russian companies will have to export competitive ready-for-use products, be it power-generating machines, metallurgical equipment, software or ecologically safe food products. It is desirable that Russian products occupy 75 to 80 percent of the domestic market under the conditions of its full integration with the global markets. When Russia attains this parameter, it will have achieved a perfect balance of payments, a steady national currency and fair prospects for development. Making national products competitive is a goal of modernization; Russia’s national task is to learn how to manufacture and sell such products. The solution will predetermine Russia’s future position in the world, as well as the material wellbeing of its people. This is a historic challenge for post-Soviet Russia.

Modernization will require private initiative and huge investment. Whether these investments are domestic or foreign, the government will have to guarantee low risks and big benefits to the investors. In order to accomplish this, Russia will need better capital markets, together with an efficient mechanism for transforming savings into investments. In fact, the authorities require a higher level of public trust.

This challenge can be met only if Russia manages to alter its value system, informal institutions, and culture rapidly enough, and to make them more productive. The experience of other countries, like Spain, shows that meeting such challenges is always difficult, yet possible.

A change of values along a desirable vector does not demand presidential decrees, laws or special programs.

1. It takes time.

2. It calls for more institutional reforms that have begun but require more coherence and persistence. The list is well known – deregulation, cuts in bureaucracy and administrative reform. These reforms will also affect the Armed Forces, the judiciary system, the public sector, education, and public health. It also requires a slash of non-market elements in the natural monopolies and the housing and communal utilities sector. It will require an increase of the population’s cash earnings, and the elimination of various social benefits.

Competition and equal competitive conditions have particular importance, since competition is a unique prerequisite for the emergence of productive values.

3. A change of values demands steady democratization and the persistent observance of democratic norms and procedures, despite fears that the nation is not ready for such a transition and will wreck the efforts, and despite the conviction that the top officials are already aware what is to be done. There will be no trust without democratization, and anarchic freedom will never give way to real freedom. Nor will Russia be able to drop its Byzantine tradition of managing power.

It also means greater independence and responsibility of Russia’s constituent territories.

It requires the promotion of self-government as a prerequisite for developing the medium level of culture.

It demands the elimination of the government’s watchfulness over the mass media.

It may necessitate amendments to the 1993 Constitution. The idea of strong presidential powers, logical in the first years of the reform, may now be standing in the way of revoking anachronistic traditions of managing power.

4. Finally, a change of values will demand a more humane state power, politics, and public life. Russia is too hard on its compatriots; there are huge gaps in the incomes and material status of the people. If the situation does not improve, efforts to do away with crime, corruption and the black-market economy will be fruitless. The cure does not necessarily demand overblown social guarantees and benefits exceeding the capabilities of a growing economy, but simply assistance to the people who really need it. Humanitarian assistance concerns civic society, not the government; it must stimulate those who can offer their assistance to others. Society will become more consolidated and trusting through the process of humanitarian assistance. The assertions that efficiency is possible only when “man is a wolf to man” is untrue. The upholding of human rights, together with the insistence that others observe the same rules, should go hand in glove with social responsibility and human compassion.

There is a time to cast away stones and a time to gather stones together. There was a time when nobody would mention the need for values while other issues were too high on the agenda. We are living in a different epoch now, and the tasks of economic modernization, the upgrading of society’s institutional structure and affluence are impossible without embracing, at the same time, the concept of humanitarianism.

5. Once again, it will take time, and time is what we are always pressed for.