The advantages of competition may not be very obvious, although it’s abundantly clear that competition beats monopoly. The experience of economic development in nearly all large economic systems shows this: USA, Russia, China. The death of the Soviet system is in many ways on the consciences of those who failed to recognise in time the fatal flaws of the monopoly. I would even dare to suggest that had the Soviet system evolved along the lines proposed by Alexander Shelepin and Alexei Kosygin, rather than that of Leonid Brezhnev and Mikhail Suslov, and had Kosygin’s reforms been carried out in full, then the end of the USSR might have been different.
But it’s less a question of what’s abundantly clear from experience, rather than the basic principle. Competition is simply a more efficient way of running any area of society. It’s very potential outweighs monopoly. Competition is an individual’s game, organised according to general and strictly observed rules. It encompasses both sides of the coin: there’s the players’ freedom of action, and their freedom to choose the direction in which they move, whilst at the same time having previously agreed rules that no individual can change or simply ignore. In other words, the main thing about competition is its rules which, by observing them, give each player a wide freedom of choice.
In monopoly, on the other hand, the main thing is orders. Under monopoly, only one player is free: the person who establishes both the rules and the direction of travel. It’s specifically because it encompasses the two elements – order and freedom of choice – that competition is more efficient than monopoly. Psychologically, it’s competition and not monopoly that suits man’s natural instincts more closely.
From this understanding of competition, it follows that its key features are the drawing up and then the observation of the rules. There can be no competition if “some are more equal than others”. But this isn’t enough.
There has to be equal and fair access to the process of creating the rules, because if they give someone an advantage then competition turns into the opposite of what it’s supposed to be: it becomes a hidden monopoly and leads to chaos. So genuine competition is possible only when there’s a developed civil society and a state governed by the rule of law. These things go together, rather like a “set menu”. If there is no constitutional state governed by the rule of law watching over the economy, then it will be impossible to build an economy based on the principles of competition.
And this is where we come to the most important point. There are countries like South Korea where a monopolistic private company that is under the control of a constitutional state works efficiently. There are countries like Switzerland or Norway, where state corporations controlled by a democratic state work very efficiently (just look at the Swiss railway system). But there are no countries where a state or a private monopoly that is controlled by an authoritarian and corrupt state works efficiently. A combination that starts out like this nearly always ends up like Venezuela.
Corrupt and unchanging authorities (a political monopoly) plus an economic monopoly is guaranteed to be a disaster.
Such a combination is destructive. These multifarious clan groups rip the very fabric of the state to shreds in trying to grab one of these monopolies for themselves. Igor Sechin came along and grabbed Rosneft. The Rotenberg brothers came along and got the Platon company to make money out of transport. And so it goes on, right down to the bottom, where you end up with situations like what happened in Kushchovskaya. All of these monopolies came about thanks to the corruption of the authorities, and they can’t exist without it. A whole vicious circle of corruption grows up, of “power – monopoly – power”, and this can be broken only by a revolution. This will go on forever, until an alternative model of political competition is presented that brings competition to these economic and social monopolies. And that, in turn, brings about political competition.
Chapter 17. The Social Choice:
a Turn to the Left or a Turn to the Right?
There are few things more deeply rooted in contemporary politics than the division between “the left” and “the right”. Yet at the same time it’s one of the most blurred distinctions. Nowadays anyone can call themselves “left” or “right” as the mood takes them. The left and right agendas have become indistinguishable. The extreme right-winger, Donald Trump, came to power with a programme built on left-wing, populist stereotypes.
At one time Putin seized the left-wing “anti-oligarch” agenda from the Communists, then carried out a harsh right-wing policy in favour of the bureaucrats and the new oligarchs. It’s become extremely difficult in today’s politics to determine exactly who is who.
A great deal of water has flowed under the bridge since it was possible to determine the left and the right depending on where people sat in the French parliament. “Leftism” and “rightism” were defined differently then.
Usually, those who were labelled “left-wingers” were the zealous supporters of state-owned property, the fanatics of “big government” and the regulated economy and the champions of high taxes for the “haves” and massive advantages for the “have-nots”. At the other end of the scale, people usually called themselves “right-wingers” if they were supporters of the free market, adherents of “small government”, preferred to give out fishing rods instead of fish, and were convinced that when Jesus Christ fed the five thousand he could have got by with three loaves instead of five, so as not to increase the national debt.
Keeping to my task here, I’ll confine myself to a working understanding of left and right, even if it’s incomplete. It seems to me that at the basis of the division into left and right lies the attitude to equality. Typical for left-wing politics is the desire to strengthen equality and eradicate inequality. In right-wing politics there is the inherent acknowledgement of inequality, but above all an attempt to stimulate economic activity specifically through inequality.
I accept that these are the extremes. Between them there are many mixed areas: we might call them “left-right” or “right-left”. But the heart of the matter is somewhere in here.
Neither in society as a whole, nor in the expert community is there a united approach to the question of equality (let’s not confuse this with equal rights). Therefore, there can’t be a united approach to left or right wing politics. Rather like fashion, the attitude to inequality experiences seasonal changes. When, like now, the level of genuine inequality in the world starts to increase, the level of concern about it increases, too. A whole host of studies appear that highlight the appalling economic, social and political consequences of inequality. And as a result, left-wing ideology becomes more popular.
When levelling out begins to triumph everywhere, and thus economic growth falls and the poverty that was the cause of the battle for this levelling out becomes excessive, another wave of studies appears, no less than the previous one, illustrating the dangers of equality and the usefulness of inequality. Consequently, right-wing views gain more adherents.
From this we can draw the very straightforward conclusion that there is no absolute, definitive truth in either left-wing or right-wing ideologies. They are like the movements into the wind of a sailing boat. In order to sail forwards you have to tack, now going a little to the right, now a little to the left. This in turn illustrates that the change from a course to right or left is a cyclical process, and generally the natural thing to do. This shows that the art of politics lies in seizing the moment at which point it’s right to switch from the left to the right and vice-versa.