My wife, Inna Khodorkovskaya
Progress became easier as the years went by. It was a lawless decade in Russia, but we worked hard and Menatep Bank gained a reputation for honesty and reliability. People came to understand that their cash was safe with us. It helped us not only to acquire many private investors, but also to build relations with ministries, departments and state organisations, which opened accounts with us. Within a couple of years, we had a large number of branches and a substantial turnover. We were the first Russian bank to list its shares.
Things were changing fast in the USSR and anyone with the nous and agility to keep up could make a lot of money. There was no stock exchange back then and no developed system of private banks, so if a company managed to earn hard currency it could only exchange it through the state bank at a very uncompetitive rate. Our idea was to find companies in that position and offer them a better exchange rate to convert their hard currency to ‘soft’ roubles. At the same time, we knew that many state enterprises had massive reserves of soft roubles that they were desperate to turn into foreign currency in order to purchase vital technology from abroad. We travelled up and down the country looking for such firms, offering to help them out and charging healthy margins for doing so. This in turn allowed us to enter the field of foreign currency trading, which had been forbidden under the old Soviet Constitution, punishable by long prison sentences or even death, but was not specifically banned under the new legislation of the Gorbachev era. We were a bunch of youngsters – most of us were still under 30 – but we had grown Menatep into one of the biggest commercial banks in Russia, and the future offered even greater possibilities. Gorbachev’s liberalisation was beginning to allow us to see how things were done in the West and we wanted the same freedoms for ourselves.
CHAPTER 2
AN OPEN SOCIETY
Russians who have struggled for freedom and democracy have traditionally looked to the West for inspiration. The values of Western liberal democracy, and the prosperity associated with it, inspired generations with the knowledge that the repressive autocracy imposed on their homeland was not inevitable, and that there was a better way of doing things. In the years of Bolshevik rule, the Kremlin recognised the danger of such aspirations and strove to prevent the Russian people from learning about the advantages of life in the West. The communist state exercised a monopoly on the sources of mass information, bringing the media under its control, preventing access to foreign news outlets and banning travel abroad. The Kremlin’s censors decreed what could be written in the press and dictated how the media should describe life outside of the Soviet Union. Much was made of the defects of capitalist society – the inequality, the poverty, colonial exploitation, crime and racial discrimination – and only very limited reporting was permitted of its achievements. Many Soviet citizens – me included – grew up believing what the Kremlin told them. It took independence of mind and assiduous curiosity to discover that the reality was different from the official portrayal. We did catch glimpses of the good things in the West, however, amplifying them through word-of-mouth and samizdat publications that were consumed with great eagerness, largely because they contrasted so sharply with the unpleasantness of day-to-day life in the USSR.
Matters changed in the late 1980s, when Mikhail Gorbachev permitted a cautious easing of the secrecy practised by his predecessors. There were several reasons for Gorbachev’s policy of glasnost (openness), including his need to circumvent the old-style orthodox communists in the Kremlin who were opposed to his liberalising reforms. Because the hardliners controlled many of the official levers of power, Gorbachev took the bold decision to appeal directly to the Soviet people, over the heads of the apparat, the hidebound politicians and officials who ran the system. In order to encourage a groundswell of support for his perestroika policies, he actively encouraged people to think for themselves – something that had long been frowned upon – by allowing them access to much greater information than in the past, including greater truth about life in the West.
When UK Prime Minister Margaret Thatcher came on an official visit to the USSR in March 1987, Gorbachev took it as an opportunity to expand his glasnost initiative. Not since Richard Nixon in 1959 had a Western politician been permitted to speak openly on Soviet television, and on that occasion things had ended badly, when Nikita Khrushchev was widely seen to have come off worse in an ill-tempered exchange with the then US vice-president. Gorbachev knew it was a gamble to accept Mrs Thatcher’s demand that any interview with her should be broadcast unedited, but he did so.
Margaret Thatcher greets the crowds in Moscow during her official visit in 1987
Many Russians who saw her realised for the first time that the West was different from what they had been told.
Three of the Soviet Union’s top journalists were assigned to grill the zheleznaya leidi – the iron lady – whom the Kremlin had long portrayed as an enemy of the USSR, a capitalist ogre who had described Moscow as ‘bent on world dominance’ and Soviet communism as ‘synonymous with getting one’s way by violence’. Boris Kalyagin, political editor of Soviet Television and Radio, Tomas Kolesnichenko, international editor of Pravda, and Vladimir Simonov, a political commentator from the Novosti Press Agency, agreed that the interview would last 45 minutes and that all of Mrs Thatcher’s answers would be broadcast in full. Speaking many years later, Kalyagin said the three of them were confident they could run rings round any capitalist.
It didn’t work out that way. The journalists pressed Mrs Thatcher on why Britain insisted on maintaining nuclear weapons and, at first, the iron lady was studiously polite. When the interviewers tried to cast doubt on her answers, however, she showed her steely character, saying things that the Soviet people had never heard before.
‘Well, you have more nuclear weapons in the Soviet Union than any other country in the world,’ declared an unflustered Prime Minister. ‘You have more intercontinental ballistic missiles and warheads than the West. You started intermediate weapons; we did not have any. You have more short-range ones than we have. You have more than anyone else and…’ The hapless interviewers tried to cut her off, but Mrs Thatcher was having none of it. ‘One moment!’ she commanded. ‘Please may I say this to you … All weapons of war are dangerous. Would it not be marvellous if we did not have to have them? But we can only get to that stage when we have more trust and confidence in one another. That means much more open societies. And let me put this to you: since the First World War, which finished in 1918, there has been no case where one democracy has attacked another. That is why we believe in democracy. So, you want to get rid of the weapons of war. It would be marvellous if we could, but we have to get more trust and confidence.’
Mrs Thatcher had steered the debate to the relative merits of Western democracy versus Soviet communism. Millions of television viewers pricked up their ears.
‘We have an open society,’ the prime minister continued. ‘This goes to the depth of our fundamental freedoms: freedom of speech, freedom of worship, freedom from fear, and freedom from want; a much more open society means that you [in the USSR] could discuss all of the things in the same way as we do … You really have two ways in which you can work: you either have a completely centralised control system in which you are told what to produce, how much it will cost, how much you are paid – and that does not really work to best advantage, as you have discovered, because it does not pay people if they do better. Or you go to what is called an incentive society when the harder you work, the more reward you get; and one has to recognise, you know, that people work not only for their country but they work to better their families. They work for a higher standard of living and so if they see the point of working harder, they will. And, you know, no matter what the theory, and there are lots of political theories – I wish there were fewer – no matter what the theory, there is no person alive and no computer which can plan a country as large as the Soviet Union, take into account all its various different conditions in all its various republics, all the various ambitions and needs and wants, the requirements of the people. You have got to disperse responsibility to the people who are much nearer to the life in those republics, towns, rural areas and then you have got to give them responsibility – and for that they must have incentives.’