When two small Russians, each barely 165 centimeters in height, place for-sale advertisements for $3 billion apiece in the Financial Times of London, a tall story is certain to be in the offing — though not much taller than the Mother Goose tales, which are truer than you think.
In “The Sorcerer’s Apprentice,” for example, a father is overwhelmed by having to care for too many children. Accordingly, when a new infant arrives, the father sells it to the Devil in exchange for enough to eat for twelve years. At the end of that period, the boy returns home. Once again, the larder is stripped bare, and the family faces starvation. Only this time, using a ruse the boy has picked up from his apprenticeship with the Devil, he turns himself into a hunting dog and is sold again to the Dark Lord. After the father collects his fee, the boy/dog runs home again. The trick is played once more with the boy turning into a horse, except that, this time, the Devil manages to prevent his escape. A series of other tricks are recounted, in which the boy turns into a frog, only to escape the jaws of the Devil in the form of a fish. They then pursue each other as bird and hawk, respectively, until they fly into the window of a rich but ailing king who believes he will be saved by the orange into which the boy has metamorphosed himself. The Devil appears as a doctor, demanding the orange as his fee for curing the king. The boy then turns himself from an orange into seeds of grain, while the Devil becomes a hen. He is about to gobble the last grain, when it turns into a fox, which finally ends the transformations by eating the hen. That’s it for the Devil.
When this story was first told in the peasant households during the 18th century, it was clearly understood as a parable of what happens when people fight each other over scarce resources. In some versions of the tale, this is made poignantly, if not historically clear, when the moral of the boy’s triumph over the Devil is described as a case of the servant eating the master. Not exactly a call to revolution at the time, but perhaps so today, in Russia.
When, on Aug. 8, Roman Abramovich allowed it to be printed in the Financial Times that he is aiming to sell his remaining Russian assets, including half of Russian Aluminum, for $3 billion, and Oleg Deripaska, the part-owner of the other half, invited the newspaper’s readers to help him borrow the money to meet Abramovich’s price, it should have become obvious that a revolutionary transformation is underway in Russia. For that is what the cashing out by the so-called “oligarchs” amounts to — if President Vladimir Putin can exploit the unparalleled opportunity that presents itself.
For almost a decade now, the wily little devils who picked up most of Russia’s wealth while their giant master was in a corrupt and drunken sleep have claimed that, without their rapid transformations, Russia would have become even more impoverished that it was. Never mind that 3 million or so wretched people died in the meantime, who might otherwise have survived under the old standard of living, under the old regime. Never mind that these tricky fellows have been quite unable to restore the standard of living Russians had enjoyed before the Yeltsin revolution of 1991 while the profligacy of their own style of living has become notorious throughout the world. Never mind that a highly diversified industrial economy has been transformed into an oil, gas and metals exporter, its reserves almost entirely discovered and paid for during the Soviet period, its revenues now dependent on the international price curve and its capital requirements on the international money markets. Never mind that, in exchange for not being put in prison for their trickery, these devils have promised another 12 years of full larders — not for most Russians, but for those officials fortunate enough to be first with their hands out.
If you can’t see that the conditions of the 18th-century peasantry regaled in Mother Goose have been the outcome of the Russian revolution Boris Yeltsin and his devils initiated, then it’s time for you to go back to school. There, a simple teacher might express skepticism that it is possible to take the trickery out of the devil. The simple-minded might even think that the resort to 18th-century methods — the public pillory, prison, lettres de cachet and forced exile — is the only method we have for catching the Devil before he slips through our fingers and transforms himself yet again.
But, there, the Russian government has the edge on Mother Goose. It’s true that the kind of compact the devils have offered — to behave themselves if they are allowed to keep the property they took from the state in the 1990s — is an invitation to gullibility and unending corruption, without a remedy for the future requirements of the Russian economy.
On the other hand, it isn’t necessary to convict the devils of their past crimes. It goes without saying that, if devils didn’t commit crimes, they wouldn’t be devils. And jails aren’t built to contain them. Instead, all that is necessary is to charge them for the privilege of being what they can’t help but be. Two taxes will do the trick nicely, of a type that almost every civilized government in the world imposes.
The first tax should be placed on corporate dividends that are remitted abroad and the second on capital gains since their privatization. It will be readily appreciated that the bigger the dividends the oligarchs pay out of corporate cash and capital, the more the state can return those funds to equilibrate the commonwealth. The cheaper the price the oligarchs paid for their fraudulent privatizations, the larger the gain for the commonwealth when the capital gain is toted up and the tax assessed.
Let the devils argue their social usefulness after they pay their taxes — these taxes — and let us see if any further social compact between them and the state will be necessary. If Abramovich wishes to launch luxury yachts and football teams; if Mikhail Fridman wishes to endow New York art galleries, Vladimir Potanin Los Angeles opera houses and Mikhail Khodorkovsky the collected wisdom of Henry Kissinger; if Oleg Deripaska enjoys acquiring bauxite mines in Queensland and Guinea, then let them proceed — after they and their corporations have paid these taxes. And let those Western newspapers and governments who favor the rule of law and the reform of the Russian economy dare to explain why the oligarchs shouldn’t pay their taxes.