HOW DO YOU SLAY A DRAGON?

The most widely-discussed and perhaps seemingly most obvious way to proceed is nationalisation. It might appear to be the easiest solution: take it all back and hand it over to the state. But where will that lead us as a result? We’ll just go back to where we were: the USSR in the middle of the last century (and that’s the best case analysis). Once again we’ll have a huge, immovable economy, run by a sluggish bunch of officials, who’ll try to squeeze as many privileges out of the system as they can.

After nationalisation, these officials will once again become nomenklatura oligarchs, even if strictly speaking they don’t own the property that they’re controlling. This can end only one way: in exactly the same sort of crisis that finished off the Soviet Union.

There are better solutions that simply haven’t been tried. Russia doesn’t need nationalisation, but a new, honest and fair, privatisation. The temporary government’s task lies in creating a platform for such a privatisation to take place.

Under the new regime, all of the property currently held by this criminal gang that calls itself “the authorities” in Russia must be expropriated. I can see no alternative to this tough decision. The basis of this expropriation and its boundaries will have to be carefully worked out in the future, but they will be extensive. All of this property should be placed temporarily in a fund under social control.

All “escheated” property must also be placed there – enterprises that are controlled by clans dependent on the state that in reality have been bankrupt for a long time, but have been kept afloat only by direct and indirect grants from the state budget. By my reckoning, today both categories together account for up to half of the total national wealth; a significant sum.

The most difficult task, though, is not the seizure of these assets, but how to deal with them efficiently. I suggest that all of this confiscated property should not be handed directly to the state, where it will be managed by officials, but put into independent mutual funds under the direct control of society. We don’t need many of these funds, around ten or so. Some of them could be organised on the basis of certain industries. The principal criterion should be economic expediency. Every citizen of the country who reaches adulthood would become a shareholder in these funds.

Creating nationwide mutual funds from these confiscated assets is an emergency and temporary measure. It’s a one-off action to re-establish economic justice. Therefore, it’s the current population who should benefit most from this. Every citizen should receive their share of these funds, along the lines of the voucher system. But they won’t be allowed to cash in their share immediately. A moratorium will have to be enforced to prevent expropriation and to stabilise both the situation and, consequently, the value of the shares. It is vital not to allow a repeat of what happened 30 years ago.

After a certain period of time the moratorium will be lifted and people will have the opportunity to sell off their shares, receiving equal and fair compensation. Those who don’t live long enough to see this day should have the right to pass on their shares as inheritance. This will maintain for them, too, the principle of justice. Selling shares during the moratorium period could be allowed in exceptional circumstances and under conditions provided for by a special law (for example, were there to be a force majeure ).

Before the moratorium is lifted, these funds should work as normal commercial enterprises, the aim of which is to make a profit. Profits received should be reinvested in the fund. But part of it may be used as extra social insurance for the shareholders. Which events would be covered by insurance and the amount that should be paid if they occurred would be decided by law each year, depending also on the financial condition of the fund. Most likely this would cover expenses such as expensive medical treatment, for which today the state and society collect money according to the principle of “every little helps”; although somehow funds are always found for palaces and missiles.

The management structure of the funds should be on two levels. Each fund should have a supervisory board, whose members would be appointed directly by parliament. The responsibilities of the supervisory board would be limited. They would appoint a management company and take decisions on the acquisition or disposal of fixed assets. At some stage the sale of assets would become a valuable source of income for the fund, but this could happen only once normal economic conditions are in place.