Khodorkovsky Responds to Questions on his Third Lecture in Novaya Gazeta

July 13, 2012

In April, Novaya Gazeta (issue No. 42) published Mikhail Khodorkovsky’s lecture “Modern-day social liberalism and economics”.  Having received such a quantity of responses and comments, Khodorkovsky deemed it necessary to answer at least a few of them. At the same time, he thanks everybody — both those who agree with him and those who do not — for participating in the discussion.

Oleg Damaskin, 15 April 2012,

I do not agree with Khodorkovsky about everything… after all, the ability to pass on one’s wealth, factually one’s business, to heirs is an important impetus for developing a business. A true owner puts his incomes into the development of his business, and not into yachts and houses, specifically in the hope that his children and grandchildren will continue his business. Firms report about the date of their founding with pride. But in Russia, businessmen, not to mention government officials, strive to tear off as much as possible and as quickly as possible and invest the money in another country, where a truly liberal economy is in operation.

An important problem — the passing on of property by inheritance. Let us exclude the question of relatively not-large wealth, i.e. the kind that provides for a desired average standard of living (a flat, a car, a dacha, a not-large income). Here there is a common position — the transfer of such an inheritance is justified.

But large wealth, especially if what is being spoken of is the ownership of a business — this is something extremely dangerous for both the heirs and for society.

Let us rule out the variant when the future heir is factually already running the business. If he is unsuccessful, there is nothing to inherit, if he is successful, the transfer is not a problem, to wreck a well-running business is stupid.

Let us take the variant of a rentier or a person who has come by chance to manage a business, to own large funds.

First, a serious responsibility is laid on him thereby, one that limits his freedom and, perhaps, undermines the stimuli for independent development. Far from everybody will be prepared to refuse, and when the heir at last realises that he has destroyed his own individuality, it will be too late.

Second, a serious social inequality is reproduced, one that in the second generation is already no longer perceived of by people as being deserved.

But after all, protection of property ownership is something that people pay for with lives —moreover, not only (and often not so much) their own. Both at war and during disasters. Is it ethical to demand such privileges for oneself for something one did not earn, if we recognise the equal value of the individual?

If it is not, then are we not provoking people to “restore fairness” during the first crisis that comes along?

Third, we already have noticeable problems with “golden youth”; are we prepared to aggravate the problem, to make it hereditary?

In previous centuries, the privileges of estate were maintained by a deep social gap between the classes. The situation was maintained by (besides force) traditions, education. A liberal conception of human rights was absent.

Are we prepared to roll back a hundred years?

To my view, passing on large wealth by inheritance is unethical and dangerous. As to a business, let it bear the name of the founder, if this makes him feel good. This is normal.

Semyon Semetr,

The lecturer forgot a very important question: “Liberalism and fascism”. Nationality, gender, age and sundry other discrimination in a liberal economy. And yet he has a lot of experience in precisely this area: after all, it was specifically at YUKOS that age discrimination first began to be practiced openly.

A series of other questions flow out of this one. How should the state act if these problems develop into state-wide ones? For example, in the mono-cities there are now tens of thousands of unemployed, who are dying from malnutrition and suicides, seeing no way out. The majority of them are healthy, very hardworking and disciplined people. But nobody will hire them anywhere — they are over 35 years of age. Should the state pay lifetime (and decent) support to people who have suffered because of this state’s inability to ensure the fulfilment of the Constitution (which categorically prohibits discrimination)? Or should it ensure its fulfilment with any measures, including criminal cases and fines? Or, as the really liberal types imagine it, simply introduce the system of Gentle Death from Yefremov’s novel?..

Yet another important problem — “discrimination”. There will be a separate lecture about the nationality problem, but I shall respond to the question about “age” discrimination now.

An entrepreneur, the head of a company, does not need to be convinced to hire (or not to fire) a good specialist capable of handling his job, irrespective of his age.

The situation becomes more complex when you need to choose between two good specialists, one of whom is of pre-retirement age.

At YUKOS, for example, there existed the “Veteran” programme, which provided a material incentive to retire (it was terminated after the rout of the company).

However, of course, clear-cut legislative regulation and independence of the judiciary are imperative for the honest resolution of such disputes.

It is even more complex for a person who is “getting on in years” to get a job if he requires retraining or is in poor health.

The social-liberal approach consists not of throwing a person to the whim of an employer, nor of forcing an employer to make a knowingly disadvantageous business decision.

The way out is for state tax policy to serve not only fiscal objectives, but, as in such a situation, to equalise the chances for different categories of people.

Under such a tax policy, the retraining and hiring of not-young people will be advantageous for the entrepreneur. To create such conditions is the task of the government.


It remains to pose but one question here: just how did Mister Khodorkovsky decide that the liberal approach is effective, if some twenty countries out of 200 have achieved success in the liberal economy? Would Mister Khodorkovsky put capital into an enterprise whose success is estimated at 10% at best? It is obvious that he is sitting [in jail] correctly, he obviously does not have enough sense to have earned billions with such meagre brains; this means that he obviously stole it all.

How many countries have achieved success on the path of liberalisation of the economy? Today, all developed countries or countries whose economy is successfully developing are based on the liberal economic model. The alternative to it is a planned economy or a state monopoly. Such models, as a rule, are less successful.

The best example — China, an authoritarian political regime and sufficiently liberalised economic activity.

However, liberal political reforms are imperative in order to implement the transition to the next stage of modernisation (to a knowledge economy), inasmuch as the “main production resource” becomes the free, educated, creative person. This problem is already come up over the horizon for China.

Blog repin

There are words that are easy to use irresponsibly. They are filled with such different meanings that the topic of discussion is lost with their participation. The name of Khodorkovsky’s article consists of four words [in Russian—trans.], not counting the conjunction “and”. Three of these four are irresponsible words. These are “social”, “liberalism” and “economics”.

“Social” is literally “of society”. But when what is being spoken of is policy, this word more often has the meaning “paternalistic”, “patronising”, “solicitous”.

“Liberalism” — this is adherence to liberty. Political slogans in which liberty stands in first place must ring warning bells. Excessive freedom can contradict law and flow into criminal permissiveness. This is why liberalism (see, for example, in Ozhegov[’s dictionary]) is often understood as excessive tolerance, leniency, harmful permissiveness.

“Economics” — this is both a science and business operations, moreover not simply operations, but very big operations: agriculture, the national economy, etc. When a country is imagined as a national economic unit, then it is much easier in such a country for a Chief, a Helmsman, a Leader to gain a foothold than in a country where the notion of a national economic unit is considered harmful, dangerous, criminal.

Present in Khodorkovsky’s article are calls to everything from paternalism to permissiveness to management of the national economy as an economic unit.

The paternalism consists of Khodorkovsky’s calls for free health care, education and the equalisation of incomes by way of the de-kulakisation of the rich.

Khodorkovsky’s permissiveness consists of the fact he calls for feeding up the aggressive poor at the expense of plundering the rich through taxes.

And Khodorkovsky intends to re-orient the “national economic unit” of Russia from a raw-materials economy to a knowledge economy.

In his article, Khodorkovsky wanted to appeal to both the left and the right. An attempt to reconcile rightist and leftist views is always a concession to the leftists. Whoever is not quite right is not right. You can not be a little bit right.

Is it possible to combine liberalism (i.e. a faith in the free individual) and sociality (i.e. concern) in a discussion about economics (i.e. about the aggregate of productive forces and business processes)? Is it not impossible to reconcile rightists and leftists?

Life itself has already given the answer to this question. Our nearest neighbours in Western Europe have been living for many decades in conditions of social liberalism. For now, we can only envy their quality of life. Most of us, at any rate.

Of course, they have got plenty of conflicts of their own, and they have powerful forces on the radical left and radical right flanks. These forces acquire additional popularity in periods of crisis, which also happen regularly.

But life goes on the way it does, according to the “rules” of social liberalism.

Nearly 20 years ago, I was in the RSA with a government delegation. The white minority then was still living noticeably richer than the black minority. Only their houses were already looking like fortresses.

In the 21st century, it is not only amoral, but even stupid to attempt to insulate oneself from other people’s problems with the help of wealth. Our civilisation has become far too interdependent. We will sink or swim together.

At the same time, one must not suppress the free individual in his desire to attain material success, or else global competition for minds and capitals will seriously punish such a society. Besides that, the aspiration to line one’s pockets on someone else’s talent, success, having taken away from a person the results of his labour or good luck, is no less amoral than a refusal to support the weak on the part of the strong.

Social liberalism — this is the path of social accord.

Blog of the political scientist Oleg Volodin

…Khodorkovsky, as in his final statement in the Khamovnichesky Court, is engaging in clear-as-day manipulation. For example, in his article he speaks of liberalism and its “antonym” — authoritarianism. The only thing is that the antonym of liberalism is not authoritarianism, but conservatism. You can even look it up in Wikipedia. Why does an oligarch need this? In order to create a distorted system of coordinates, into which he inserts his “theses”. Thereafter, as they say, all stations…

What is liberalism the opposite of? Conservatism or authoritarianism?

Indeed, when the conservative teaching and its principal doctrines arose at the end of the 18th century, it stood in opposition to the growth of liberalism, nationalism and socialism.

The conservatives stood up in defence of the old order. In particular, they deemed that power ought to belong to the natural aristocracy, at the same time as the liberals considered the principle of equality in the sphere of rights and politics to be true.

It would be strange to speak of continuing this dispute now. In the sphere of declarations, at any rate.

Today, when we speak about conservatism, in particular the ideology of the CSU in Germany, we see the slogan “private entrepreneurship without egoism”, perfectly acceptable to liberals, which led to the corresponding political alliance.

But getting back to Russian realities, it is easy to notice: the ideology of the liberals, defending the ideas of liberal democracy with its rule-of-law state, regular changeover of power based on the results of honest elections, balance and independence of the branches of power etc., stands in opposition specifically to the ideology of authoritarianism — a teaching about governance under which the power acts without a backward glance at public opinion.

We shall notice that D. Medvedev, who has called himself a conservative, publicly declares about the need to listen to society, to conduct reforms aimed at the democratisation of political life.

But in general, speaking about political processes using Wikipedia is like attempting to perform an operation on a person whilst glancing into the little library of [the popular health magazine] Zdorov’ye.

Dmitry Cherny’s blog

…only a person who is still intoxicated with his Yukosian achievements and accomplishments in the brief period of Yeltsin’s privatisation can declare that state property is in no way better or worse than private property… Second, privatisation, the planned systematic disruption of the relations of the planned economy, of inter-production-unit chains — everything that warms Khodorkovsky’s and Chubais’s hearts to this day — it is precisely this that became the “basis” for the raw-materials economy. As a former “leader” of this industry, Khodorkovsky is of course free to be proud and to posture, but the disastrousness of liberalism for Russia today is obvious to all, even Gundyayev… In this situation, to preach the usefulness of liberalism is to talk about rope in the house of someone who has hanged himself…

Is state property truly in no way better or worse than private or communal property in principle?

Yes, if we speak in the broad sense. There are spheres where state ownership is indispensable, inasmuch as it reflects the indivisible interests of all of society (for example, ownership of nuclear weapons). There are spheres where the incontestable advantage is in the side of communal ownership, i.e. parts of society that are joined together according to that or the other principle (the religious holy sites of some religions).

The same thing concerns private ownership (items of personal consumption, family heirlooms that have a specifically personal value).

In all other situations, only impartial and honest comparison in a competitive milieu allows the optimal owner to be determined.

Experience (including the Chinese, or in the raw-materials industries) shows — in economics, with rare exceptions, private enterprises are more efficient.

One can speak separately about the reasons for this, but such is the factual state of affairs. In so doing, unsuccessful steps and decisions can bury any undertaking, even the most correct one.

Privatisation, for example.

Mabel | Елена, Mikhail Khodorkovsky press-center website

…As a committed liberal, I would be extremely beholden to MBK if he would turn his sage attention to the question of how to dismantle authoritarianism in Russia and how to prevent autocrats from creeping into power in the future, and would expand upon, so to speak, the ideas of “separation of powers, separation of power and property and the creation of a working system of civic control”.

How to dismantle authoritarianism in Russia and how to prevent autocrats from creeping into power in the future?

There exist three variants: force, non-violent pressure from below and voluntary reforms from above. Combinations are possible.

Unfortunately, we are slowly moving towards the worse scenario. At the same time, it is easiest of all to prevent a repeat of the authoritarian model under the second or a combination of the second and third variants of transition.

What is imperative for this is to create a system of checks and balances, based on a regular changeover of power, by way of honest elections. Besides it, it is imperative to balance the powers of the government, the parliament and the courts, to ensure real federalism and local self-administration (i.e. the spheres of competence of regional and local power must be secured with opportunities for their independent realisation by way of changes in the Tax and Budget Codes). It is imperative to provide an independent opposition a real place in the political system, one that allows control over the bureaucracy to be implemented, etc.

I.e. the entire package of actions is absolutely comprehensible.

The main thing — people’s desire to determine their own life by themselves.

Translated from Novaya Gazeta (the original can be read HERE)