I am not among those who would believe that rich people shouldn't be allowed to do politics. In fact, they may even do some of these activities at the same time. And Silvio Berlusconi's activities in Italy seemed borderline OK to me. But I am shocked by many people's selective inability to see the risks (and actual wrongdoings), especially in the case when the politicians are very rich entrepreneurs.
When talking about the post-Soviet realm, we often talk about "oligarchs". This word comes with some negative connotations. Some of them are unjustifiable signs of racism of a sort. When a wealthy Russian guy is doing the very same thing as his American or Italian colleagues, he may still be just an "oligarch" rather than a legitimate mogul or tycoon.
Well, sometimes the negative flavor may be justifiable. What is the difference between the "bad oligarchs" from the post-Soviet countries and the "good moguls" from the West? I think that the assumption is that the "oligarchs" are mixing their political and economical powers in ways that are not kosher and that abuse the poor existing standards when it comes to the enforcement of laws.
Most Ukrainian wealthy men in politics deserve to be called "oligarchs". One of them, President Poroshenko, just fired another one, the Dniepropetrovsk Regional Governor Kolomoisky. The latter created a private army (which was helpful for Kiev during the Donbass war) and decided to protect his power over two Ukrainian oil-related companies. Poroshenko said that he wouldn't tolerate private armies and similar things. Kolomoisky seems out of business but it is not guaranteed that he will accept this weakened position.
At any rate, the idea that Ukraine is ending the "era of oligarchy" seems silly. And the recent theatrical public arrest of two government officials (doing emergency services, accused of corruption) during the meeting of the government may scare some people but I think it's ultimately counterproductive and hypocritical, too.
The percentage of Ukrainian public officials who are routinely bribed is estimated to be something like 70%. It seems pretty much unavoidable that not just most of the people who watched the arrest of their colleagues but also most of the people who were working on the arrest are corrupt, too. At the end, the "winners" of such anti-corruption witch hunts are not going to be the "worse offenders" but the people who have less power, or a useless kind of power.
As long as one keeps democracy, one simply can't "abruptly" reduce the amount of corruption because the democratic management is being done by the "same people" as before and the concentration of corruption is ultimately determined by the people's average feelings "what is tolerable" and "how the fight against corruption is important next to other priorities". People who believe in "miraculous cures" are brainwashed simpletons. Almost all of the vigorous anti-corruption speech is an example of hypocrisy and demagogy and some of the loudest preachers against corruption were (and probably are) corrupt themselves. As long as public officials decide about some money or stamps that have a value, corruption is unavoidable and more or less determined by the overall ethical standards in the nation (or environment).
This brings me to Czech politics. We have this weird, Slovak-born "political star" named Andrej Babiš, a the world's fifth most powerful billionaire according to a recent survey, probably a former informer of the communist secret police who began his food industry business as a director during communism, and a guy who founded the political party ANO 2011 to fight against the standard post-Velvet-Revolution democratic political arrangement in 2011. He has bought numerous major newspapers and lots of other things, too. The degree of the power concentrated in his hands is pretty much unprecedented in the post-feudal history of our lands.
He is currently the finance minister, the vice-premier, and the "de facto prime minister", as some people say (because the social democratic prime minister Sobotka lacks charisma and generally looks invisible). He would win the elections if there were elections today – with a gain of more than 30 percent. His party is a classic, NSDAP-style one-man show. As a leader, he had no competitors in the intra-party "elections" and he was elected unanimously. Lower-tier folks in his party, ANO 2011, are chosen according to the number of their joint photographs with Mr Andrej BabiÅ¡ they can offer, and according to the good words that the leader BabiÅ¡ says about them.
Lots of people are excited about him because they believe that
The first point is wrong because a free and democratic country isn't really similar to a company. In a company, the employees obey the boss' orders. But in a free and democratic country, citizens simply don't obey the leader's orders. Much of the art of politics is about the ability to achieve consensus, agree with other people, and political trade. A society where the leader may manage things as directly as a boss of a company is by definition a dictatorship.
The second point is pretty much the opposite of the truth. If someone is rich, his desire to become rich was probably a necessary condition for the outcome. Because he has earned a billion of dollars, it indicates that $100 million simply wasn't enough for him. It is simply a totally naive, foolish idea that people get automatically "satisfied" when they become much wealthier than the average citizen. Most of the wealthiest people clearly didn't. Just like there is a difference between earning $20,000 and $40,000 a year, there is a difference between $100 million and $200 million and the rich people are instinctively aware of the difference.
Now, can someone like Mr BabiÅ¡ be bribed? Everyone can be bribed – the question is just "how much". So obviously, $100 will be unlikely to be enough to bribe him. But that doesn't prevent the people beneath him to be bribed by $100; and it doesn't mean that he won't be bribed by $100 million which may also be a problem. In fact, it's likely to be a bigger problem.
Mr Babiš is unlikely to get his illegitimate income in the same way as a traffic cop. However, his tools to devour huge amounts of the public money are extremely powerful and the voters who were so impressed by the witch hunts based on accusations that a couple of people stole millions of dollars from the public finances seem to be totally blind when it comes to Mr Babiš' stealing.
Days ago, we just saw a shocking example of Mr BabiÅ¡'s conflict of interests. In 2010, BabiÅ¡ was actually one of the main forces behind the lobbyists who made the Parliament adopt a bill about the support of first-generation biofuels. Mr BabiÅ¡ built some refineries – which were running at full steam to produce subsidized oil from his oilseed rape – and he has made huge amounts of money from this dirty subsidized business.
Fields somewhere in Czechia, oilseed rape, May
It was always insane and immoral to subsidize the first-generation biofuels, to use fields to grow fuel instead of food. But you would expect that now, when everyone – from sensible people to Greenpeace, Al Gore, the EU, and the IPCC – agrees that the first-generation biofuels were a giant blunder, the subsidies would be terminated as soon as possible.
The 2010 bill was supposed to end in this year, 2015. That's what the EU expects to happen, too. However, some regulations allow the bill to be extended so he wants to extend the subsidies for the oilseed rape oil by five more years – up to 2020 and Mr BabiÅ¡, the politician, seems powerful enough top make this happen. This will allow his refineries to produce money at full steam for five more years. People have estimated his company's profits from this extension as $200 million. This amount is vastly higher than any single "big claim" about misappropriation of public finances that the brainwashed voters obsessed about "corruption" have gone ballistic about.
Why do these people suddenly cease to care when we are talking about $200 million stolen in this way? Probably because the amount is already so huge that they can't see it. Even more precisely, they probably consider Mr BabiÅ¡ to be a super-human who is flying in the heaven and that's why they are no longer envious about his wealth. Well, I view Mr BabiÅ¡ as another semi-corrupt parvenu and stupid, inarticulate bumpkin – and yes, I think that even Mr BabiÅ¡ must be primarily grateful to great people like Václav Klaus who have made such things and wealth possible – so of course that I am about 200 times more upset when he steals $200 million than how I am upset about similar people who steal $1 million.
He can escape such problems with extremely ludicrous arguments. The first aspect of his "innocence" is that "he didn't want to become a politician", he claims whenever he gets into trouble during an interview etc. We are supposed to assume that because he didn't want to become a politician (which is a questionable claim by itself), we shouldn't demand him to obey the same ethical and legal conditions that other, mortal politicians have to obey. Sorry but even if he didn't want to become a politician, it can't work in this way. Once you are in politics, you are a politician and you have to be held accountable just like everyone else.
But his arguments about the economic details of his "innocence" are ludicrous, too.
In a recent TV debate, he argued that he won't get a "crown" [penny] from the subsidies because those subsidies are only paid to consumers of the fuels (which are obliged to contain some biofuels) and not to the producers such as himself. The TV host understood why this excuse is totally lame. But the problem is that millions of Czechs are so incredibly stupid that they don't see it, and perhaps they don't want to see it, so they are not able to conclude that Mr Babiš is planning to steal $200 million using this conflict of interests and he can continue to do such things.
When a government pays X dollars to buyers of Y whenever Y is being bought, it is helping the transaction between the buyers of X and sellers of X. It doesn't really matter whether the seller of X or the buyer of X is getting the subsidies. The effect is exactly the same. If the producer/seller were getting the subsidies, the price of Y (dictated by the market distorted by the subsidies) would drop by the subsidies, so the consumer/buyer of Y would save those X dollars, anyway.
The real difference that the subsidies make is that the producer of Y won't go out of business with the product – in this case, the first-generation biofuels – that would otherwise be uncompetitive. It's so simple. How can someone fail to comprehend it? Just in this single "innocent" episode, Mr BabiÅ¡ is stealing a greater amount of public money than any Czech has ever been accused of. And he can do similar things on a weekly basis.
If you look at the actual policies of Mr BabiÅ¡ and social democracy, his coalition partners, they are very similar. For example, both of them are waging a war against small entrepreneurs and freelancers – they just differ in the details "how to do it" (social democrats want to increase the healthcare payments by the small entrepreneurs etc., BabiÅ¡ wants to copy electronic cash registers from Croatia so that he can look into finances of every single entrepreneur and they have extra work, hassle, and expenses, and so on). All these policies and the philosophy behind them are pretty bad and designed to impress the typical jealous losers who (openly or secretly) preferred communism but they are perhaps still tolerable.
However, it's the long term in which Mr BabiÅ¡ scares me, and probably more so than the social democrats. Well, assuming that he will exist in the long term: lots of business-linked Czech apolitical parties have faded away after a year or two (he already seems more resilient than all of them). The social democrats have been tested and they have never "fully reverted" the post-1989 evolution towards capitalism and democracy. However, Mr BabiÅ¡ represents the style of politics and its "moral justification" that is pretty much isomorphic to that of Mr Adolf Hitler. He is also considered to be "above everyone else" by his fans and they think it's right. Everyone else is so dirty, and so is democracy and capitalism. I am terrified by that. Of course that I prefer a million of dollars to be occasionally lost – the inefficiency reflecting that we are an imperfect nation, like every other nation – over this dictatorial regime symbolized by Mr BabiÅ¡ where billions may be redirected to the leader's pocket and everyone is supposed to clap his hands.
And I am scared that the greatest fraction of the Czech voters – about one-third – has a different opinion about this fundamental question. In my viewpoint, they are mentally and morally inferior voters and a politician building on such people is bound to do very bad things.
When talking about the post-Soviet realm, we often talk about "oligarchs". This word comes with some negative connotations. Some of them are unjustifiable signs of racism of a sort. When a wealthy Russian guy is doing the very same thing as his American or Italian colleagues, he may still be just an "oligarch" rather than a legitimate mogul or tycoon.
Well, sometimes the negative flavor may be justifiable. What is the difference between the "bad oligarchs" from the post-Soviet countries and the "good moguls" from the West? I think that the assumption is that the "oligarchs" are mixing their political and economical powers in ways that are not kosher and that abuse the poor existing standards when it comes to the enforcement of laws.
Most Ukrainian wealthy men in politics deserve to be called "oligarchs". One of them, President Poroshenko, just fired another one, the Dniepropetrovsk Regional Governor Kolomoisky. The latter created a private army (which was helpful for Kiev during the Donbass war) and decided to protect his power over two Ukrainian oil-related companies. Poroshenko said that he wouldn't tolerate private armies and similar things. Kolomoisky seems out of business but it is not guaranteed that he will accept this weakened position.
At any rate, the idea that Ukraine is ending the "era of oligarchy" seems silly. And the recent theatrical public arrest of two government officials (doing emergency services, accused of corruption) during the meeting of the government may scare some people but I think it's ultimately counterproductive and hypocritical, too.
The percentage of Ukrainian public officials who are routinely bribed is estimated to be something like 70%. It seems pretty much unavoidable that not just most of the people who watched the arrest of their colleagues but also most of the people who were working on the arrest are corrupt, too. At the end, the "winners" of such anti-corruption witch hunts are not going to be the "worse offenders" but the people who have less power, or a useless kind of power.
As long as one keeps democracy, one simply can't "abruptly" reduce the amount of corruption because the democratic management is being done by the "same people" as before and the concentration of corruption is ultimately determined by the people's average feelings "what is tolerable" and "how the fight against corruption is important next to other priorities". People who believe in "miraculous cures" are brainwashed simpletons. Almost all of the vigorous anti-corruption speech is an example of hypocrisy and demagogy and some of the loudest preachers against corruption were (and probably are) corrupt themselves. As long as public officials decide about some money or stamps that have a value, corruption is unavoidable and more or less determined by the overall ethical standards in the nation (or environment).
This brings me to Czech politics. We have this weird, Slovak-born "political star" named Andrej Babiš, a the world's fifth most powerful billionaire according to a recent survey, probably a former informer of the communist secret police who began his food industry business as a director during communism, and a guy who founded the political party ANO 2011 to fight against the standard post-Velvet-Revolution democratic political arrangement in 2011. He has bought numerous major newspapers and lots of other things, too. The degree of the power concentrated in his hands is pretty much unprecedented in the post-feudal history of our lands.
He is currently the finance minister, the vice-premier, and the "de facto prime minister", as some people say (because the social democratic prime minister Sobotka lacks charisma and generally looks invisible). He would win the elections if there were elections today – with a gain of more than 30 percent. His party is a classic, NSDAP-style one-man show. As a leader, he had no competitors in the intra-party "elections" and he was elected unanimously. Lower-tier folks in his party, ANO 2011, are chosen according to the number of their joint photographs with Mr Andrej BabiÅ¡ they can offer, and according to the good words that the leader BabiÅ¡ says about them.
Lots of people are excited about him because they believe that
- he has already managed a big corporation and he is likely to be similarly successful with a country
- he won't try to suck money from the public budgets because he is already rich
The first point is wrong because a free and democratic country isn't really similar to a company. In a company, the employees obey the boss' orders. But in a free and democratic country, citizens simply don't obey the leader's orders. Much of the art of politics is about the ability to achieve consensus, agree with other people, and political trade. A society where the leader may manage things as directly as a boss of a company is by definition a dictatorship.
The second point is pretty much the opposite of the truth. If someone is rich, his desire to become rich was probably a necessary condition for the outcome. Because he has earned a billion of dollars, it indicates that $100 million simply wasn't enough for him. It is simply a totally naive, foolish idea that people get automatically "satisfied" when they become much wealthier than the average citizen. Most of the wealthiest people clearly didn't. Just like there is a difference between earning $20,000 and $40,000 a year, there is a difference between $100 million and $200 million and the rich people are instinctively aware of the difference.
Now, can someone like Mr BabiÅ¡ be bribed? Everyone can be bribed – the question is just "how much". So obviously, $100 will be unlikely to be enough to bribe him. But that doesn't prevent the people beneath him to be bribed by $100; and it doesn't mean that he won't be bribed by $100 million which may also be a problem. In fact, it's likely to be a bigger problem.
Mr Babiš is unlikely to get his illegitimate income in the same way as a traffic cop. However, his tools to devour huge amounts of the public money are extremely powerful and the voters who were so impressed by the witch hunts based on accusations that a couple of people stole millions of dollars from the public finances seem to be totally blind when it comes to Mr Babiš' stealing.
Days ago, we just saw a shocking example of Mr BabiÅ¡'s conflict of interests. In 2010, BabiÅ¡ was actually one of the main forces behind the lobbyists who made the Parliament adopt a bill about the support of first-generation biofuels. Mr BabiÅ¡ built some refineries – which were running at full steam to produce subsidized oil from his oilseed rape – and he has made huge amounts of money from this dirty subsidized business.
Fields somewhere in Czechia, oilseed rape, May
It was always insane and immoral to subsidize the first-generation biofuels, to use fields to grow fuel instead of food. But you would expect that now, when everyone – from sensible people to Greenpeace, Al Gore, the EU, and the IPCC – agrees that the first-generation biofuels were a giant blunder, the subsidies would be terminated as soon as possible.
The 2010 bill was supposed to end in this year, 2015. That's what the EU expects to happen, too. However, some regulations allow the bill to be extended so he wants to extend the subsidies for the oilseed rape oil by five more years – up to 2020 and Mr BabiÅ¡, the politician, seems powerful enough top make this happen. This will allow his refineries to produce money at full steam for five more years. People have estimated his company's profits from this extension as $200 million. This amount is vastly higher than any single "big claim" about misappropriation of public finances that the brainwashed voters obsessed about "corruption" have gone ballistic about.
Why do these people suddenly cease to care when we are talking about $200 million stolen in this way? Probably because the amount is already so huge that they can't see it. Even more precisely, they probably consider Mr BabiÅ¡ to be a super-human who is flying in the heaven and that's why they are no longer envious about his wealth. Well, I view Mr BabiÅ¡ as another semi-corrupt parvenu and stupid, inarticulate bumpkin – and yes, I think that even Mr BabiÅ¡ must be primarily grateful to great people like Václav Klaus who have made such things and wealth possible – so of course that I am about 200 times more upset when he steals $200 million than how I am upset about similar people who steal $1 million.
He can escape such problems with extremely ludicrous arguments. The first aspect of his "innocence" is that "he didn't want to become a politician", he claims whenever he gets into trouble during an interview etc. We are supposed to assume that because he didn't want to become a politician (which is a questionable claim by itself), we shouldn't demand him to obey the same ethical and legal conditions that other, mortal politicians have to obey. Sorry but even if he didn't want to become a politician, it can't work in this way. Once you are in politics, you are a politician and you have to be held accountable just like everyone else.
But his arguments about the economic details of his "innocence" are ludicrous, too.
In a recent TV debate, he argued that he won't get a "crown" [penny] from the subsidies because those subsidies are only paid to consumers of the fuels (which are obliged to contain some biofuels) and not to the producers such as himself. The TV host understood why this excuse is totally lame. But the problem is that millions of Czechs are so incredibly stupid that they don't see it, and perhaps they don't want to see it, so they are not able to conclude that Mr Babiš is planning to steal $200 million using this conflict of interests and he can continue to do such things.
When a government pays X dollars to buyers of Y whenever Y is being bought, it is helping the transaction between the buyers of X and sellers of X. It doesn't really matter whether the seller of X or the buyer of X is getting the subsidies. The effect is exactly the same. If the producer/seller were getting the subsidies, the price of Y (dictated by the market distorted by the subsidies) would drop by the subsidies, so the consumer/buyer of Y would save those X dollars, anyway.
The real difference that the subsidies make is that the producer of Y won't go out of business with the product – in this case, the first-generation biofuels – that would otherwise be uncompetitive. It's so simple. How can someone fail to comprehend it? Just in this single "innocent" episode, Mr BabiÅ¡ is stealing a greater amount of public money than any Czech has ever been accused of. And he can do similar things on a weekly basis.
If you look at the actual policies of Mr BabiÅ¡ and social democracy, his coalition partners, they are very similar. For example, both of them are waging a war against small entrepreneurs and freelancers – they just differ in the details "how to do it" (social democrats want to increase the healthcare payments by the small entrepreneurs etc., BabiÅ¡ wants to copy electronic cash registers from Croatia so that he can look into finances of every single entrepreneur and they have extra work, hassle, and expenses, and so on). All these policies and the philosophy behind them are pretty bad and designed to impress the typical jealous losers who (openly or secretly) preferred communism but they are perhaps still tolerable.
However, it's the long term in which Mr BabiÅ¡ scares me, and probably more so than the social democrats. Well, assuming that he will exist in the long term: lots of business-linked Czech apolitical parties have faded away after a year or two (he already seems more resilient than all of them). The social democrats have been tested and they have never "fully reverted" the post-1989 evolution towards capitalism and democracy. However, Mr BabiÅ¡ represents the style of politics and its "moral justification" that is pretty much isomorphic to that of Mr Adolf Hitler. He is also considered to be "above everyone else" by his fans and they think it's right. Everyone else is so dirty, and so is democracy and capitalism. I am terrified by that. Of course that I prefer a million of dollars to be occasionally lost – the inefficiency reflecting that we are an imperfect nation, like every other nation – over this dictatorial regime symbolized by Mr BabiÅ¡ where billions may be redirected to the leader's pocket and everyone is supposed to clap his hands.
And I am scared that the greatest fraction of the Czech voters – about one-third – has a different opinion about this fundamental question. In my viewpoint, they are mentally and morally inferior voters and a politician building on such people is bound to do very bad things.
Oligarchs, biofuel, and conflicts of interest
![Oligarchs, biofuel, and conflicts of interest]()
Reviewed by DAL
on
March 27, 2015
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