However much we may debate its merits and pick at its flaws, there can be no doubt that capitalism is the engine that empowers the progress of civilization. In providing markets for products and rewards for risk, it has banished agrarian economies to the dustbin of history, rejecting its centuries of stagnation in favor of the decades of swift progress generated by industrialism. In doing so, it has been the mechanism by which positive change has built our world and given us hope for better futures.
But for all of capitalism's power, it is not a self-guiding system. It requires men and women to refine its rules and establish its aims. No surprise then that capitalism comes in many flavors ranging from the relatively free markets of the United States to the authoritarian ones in China. These strains are shaped by history and culture, experiences and values, from the tragic to the revolutionary, that characterize economies. Nowhere is this cultural influence more apparent than in Russia's 25-year relationship with capitalism, a journey chronicled here by Mr. Hoffman.
In 1991, with the arrest of Mikhail Gorbachev and the ascension of Boris Yeltsin, Russia's 70-year experiment with Communism came to an earthshaking end. After decades of speeches and marches, of command economies and five-year plans, the Soviet Union could no longer hide, from an ever more sophisticated world, that it had fallen into the past. Where the West was rising high on profitable markets demanding fancy cars and ever-more-powerful planes, the USSR, despite its countless bureaucrats and endless training, could not even manage to fill its stores with fresh vegetables, let alone entice anyone to choose its brands. Its promise, that the organized power of the people would ignite a worldwide revolution and a new age of enlightenment, had collapsed under the weight of its inefficiencies, its corruption and its politics, none of which encouraged innovation.
Over the next five years, Russia would embark upon one of the most ambitious and fraught economic experiments in human history. Through shady auctions and even shadier schemes, it would sell off its nationalized banks and oil companies, airlines and car dealerships, hoping to create an entrepreneurial class that would fill new markets with new products that the people would be proud to purchase. Instead, in its haste, it created opportunities for a handful of ambitious individuals to control Russia's most powerful and profitable assets. Practically overnight, oil barons and media titans, kings of construction and lords of finance, became Russia's board of directors, using their outsized influence to shape government policy and shape a better future for themselves and those who'd invested with them.
A chronicle of the lives of Russia's new class of industrial titans, The oligarchs is a thorough examination of a pivotal period in Russian history. David Hoffman, an author and journalist for the Washington Post, so thoroughly reconstructs the sociopolitical climate that characterized Russian life during the fall of the Soviet Union that the outcome -- the accretion of power into the hands of an extraordinarily exulted few -- seems inevitable. From the voucher schemes to the influence peddling, from the banker War to an actual war, we watch as men of unbridled ambition steal, cheat and grind their way to power, largely at the expense of the Russian people who, thanks to life under Communism, are ill-prepared to be worked and swindled for the benefit of others.
Though the work is primarily an introduction to the first generation of Oligarchs who rose to power in the early 1990s, vividly describing their lives both before and after the fall of the Soviet Union, The Oligarchs reaches for something grander than a dry recitation of past events. In diving deeply into the mechanisms that were meant to transition Russia to capitalism, Mr. Hoffman paints a portrait of the perniciousness of influence peddling and how it has disfigured the Russian economy. In allowing favoritism to play a key role in the minting of fortunes, in the merger of corporations, even in the selling off of national assets, a handful of officials have managed to create a version of capitalism in which the winners have already been chosen. The people, whose decisions ought to shape the markets, have no choice but to use untrustworthy banks and consolidated oil. After all, the very government that should be regulating these industries is simply encouraging them so long as they follow a few proscribed rules that suit the men who happen to be in power at the time.
Every system, be it economic or political, has some level of corruption. And yet, The Oligarchs does such a good job describing how its pervasiveness, its institutionalization, has lead to the present moment in Russian history that it is hard to care about the Boris Berezovskys and the Mikhail Khodorkovskys of the world. Their stories may be individually different, but the result is the same. They were winners who either demanded to be chosen by the system, or were chosen by it anyway. Yes, their ascendance required skill and cleverness, but it was also completely inevitable given the manner in which Russia was privatized. Someone would have won. And in doing so, they would have reaped absurd riches that were bound to create class resentment for generations to come. The flaw is in the system, not the men who simply fail, here, to be interesting.
An interesting primer on one of the sketchiest and most formative moments in recent Russian history... (3/5 Stars)
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