Grigory Yavlinsky: “The key cause of the tragedy in Kemerovo is the merger of business and government”

Smart Power Journal, 02.04.2018

The key cause of the tragedy in Kemerovo is the merger of business and government on all levels, which underlies the economic, the political and the socio-political structure of modern Russia.

First, this evident corruption unity of regional / local authorities and business destroys the possibility of effective inspection of fire or some other safety. The whole institute of inspection has a different purpose: either getting corrupt benefits, or maintaining good relations with the government’s “protection racket” of a particular business. The effect of all inspections of objects initiated after the Kemerovo tragedy will be brought to nought by this factor. This factor will turn all the demands to “tighten the controls” into correct in principle, but meaningless statements, into the “letting off the steam”.

Second, this is a less obvious, but more important factor: a system based on the merger of power and business, prevents the creation of a stable and strong institution of private property, turns the business into time-servers.

The owner needs living people, working and bringing profit to enterprises, and a stable reputation. A business, proceeding from its own interests, should not build facilities (especially such where presence of a large number of people is expected) from flammable rapid-burning plastic. And this was the most likely the cause of deaths of people [during a fire in the shopping mall Winter Cherry in Kemerovo] – rapid ignition and a lot of toxic smoke, plus uncontrolled erection of internal partitions [in the building], without taking into account the specifics and capabilities of fire extinguishing and smoke removal systems, if they functioned there at all.

But this [can be] in a high vision horizon, long-term planning, and taking into account the transfer of the business to children and grandchildren. In the situation of instability, constant threat of losing the property title (but in modern Russia it is temporary, transient, a business smaller than large-scale, not even an ‘estate’ that the ‘tsar’ gave for service, the sovereign can take it away, it is a chance, luck, a purse found on the road, which all passers-by who are stronger or have a strong patron can encroach on), the main goal is to earn as much money as possible in the short term.

Certainly, the psychological specifics of domestic businessmen and the world trends play a role in  striving of business to profit, but this can be combated by reviving other traditions of the domestic business culture (business reputation, a merchant’s word, alms / charity) and offering a different global vision.

However, in the absence of the institution of private property as a basis, any “superstructure” turns into a sand castle, which will constantly fall apart, washed away by rain and winds of everyday reality.

But the state, in the end, bears the main responsibility, because its duty is to establish and maintain the rules of the game, provide a favourable business climate, tax stability and independent arbitration.

But here we return to where we have started – there is no separation between the state and business, the state and its officials without an institutional separation from business based on specially adopted laws (the package has been prepared for a long time, we have written and spoken it about many times) – also represent businessmen – time servers, striving to maximization of momentary profit (in the vernacular they are called crooks and thieves).

Toughening of the state control and granting new powers to the law-enforcement will not help, either, because it will only intensify the situation of instability in the rules of doing business.

The foreign policy, including the missile show at the Manege (the President’s Address to the Federal Assembly in March 2018, – Ed.), also adversely affects the situation. The politics leaves the economy to balance on the verge between stagnation and recession, which makes the probability of a crisis permanent, and political factors directly affect the exchange rate of the national currency and so on.

Thus, the basic situation of unpredictability and instability consolidates and develops further.