20 years under Putin: a timeline

In the coming weeks, IMR will begin publishing chapters from Alexander Auzan's recent book on institutional economics in Russian and in English. By way of introduction, we are presenting an interview with Dr. Auzan where he reflects on the possibility of major changes in  approaches to government worldwide and on the impact such shifts may have on Russia.



Olga Khvostunova: Russian Esquire recently published a collection of your articles. The introduction to these jokingly suggested that they were “Institutional Economics for Dummies.”  Who do you actually consider to be your audience?

Aleksander Auzan: We said "for dummies" because understanding my writing doesn't require a graduate degree. The book is for anyone with a high school or perhaps a college education  who happens to also be interested in economic problems.

OK: What appeals to you about this average reader? What are you trying to accomplish with this book?

AA: I expect that this book can change an average reader's worldview. The basis of new institutional economical theory, the Coase Theorem, can have an impact on everyday life. The theorem posits that besides other things, people are alienated  by the transactional expenses of communication. In other words, it’s hard for people to come to agreements due to irrationality and the human tendency to not play by the rules. Transactional expenses are always positive, which means that the ideal society is unattainable. On the one hand, it’s bad news, but on the other hand, it means that there are many ways of attaining a less-than-perfect state.

OK: What kind of conclusions do you expect the reader to arrive at when they finish your book?

AA: In each chapter, on every topic, I tried to make points that could impact the reader's perception of the world in general. It was important to me that the conclusions I drew could be useful in any behavioral situation -- in politics, economics, and even in regular human interaction.

OK: So your ambition is to change the way people see the world. Do you think this is an attainable goal? Especially considering the fact that Russians tend to be rather conservative?

АА: I don't entirely agree with you about the Russian mentality. Some conservatism is indeed inherent to  Russian culture, especially when it comes to embracing new ideas. Russians prefer to avoid uncertainty and risks, which is actually the source of many political problems. However, in other regards, Russians can be open-minded. They exhibit a powerful tendency toward self-realization, especially the educated classes. Which is to say that in Russia, it is customary to seek out knowledge and look for unusual, creative solutions. The Russian intellect's distaste for standards is both its strength and weakness. My book isn't a new testament or ideology, but the fruit of long-term reflection, based on scientific inquiry and research. It leaves some questions unanswered--there is a lot more to think about. To me, this approach makes the book more appealing.

OK: In a recent op-ed in Vedomosti, you spoke of the awakening of the Russian creative class. Not the middle class, not an intellectual elite, but a creative class. Who belongs to this class?

АА: We've been closely observing the emergence of the Russian middle class over the course of the past five to seven years. They are quite heterogenous, as the many studies of my colleagues--sociologists and economists--have demonstrated. In fact, in any country, the middle class is full of contradictions. On the one hand, it disavows revolution and aspires to stability; on the other hand, it longs for change, tackling new issues, and it rejects stagnation. It is these contradictions that make the middle class valuable for political stability and economic development. Within the middle class, these qualities are manifested among various groups. For example with entrepreneurs, or liberal professionals who work in creative fields, you have the bearers of diversity and creativity. These are the people who look for unique solutions. And then there are other groups, such as government officials, teachers, and doctors, who all advocate for stability. If all these groups are in balance within middle class, the country can evolve. But if the balance is upset, for example, if the creative class becomes too numerous and active while stabilization groups grow scarce and weak, it could be dangerous for the country. This kind of rift may tear it apart. Or, if you have the opposite situation and the middle class is predominantly conservative, the country might stagnate.

I think that Russian politicians will have to work very hard to be accepted by the creative class.

OK: Why did people suddenly start talking about the creative class now? It’s hard to believe that no one had realized that it existed before.

AA: From an economic angle, we have always known that the creative class existed. However, until the winter of 2011-2012, we did not see it as a political player. It all came out during the anti-Putin demonstrations, when they all took to the streets--despite the general reluctance of this class to do so. People felt compelled to express their views on the country's future out of their dread of the long-term stagnation in Russia. They are not able to leave the country, even when they are dissatisfied, because of the recession and unfavorable economic conditions worldwide. In my opinion, it’s a good thing they took to the streets.

OK: You say that creative class isn't partial to protesting. Now that they have declared themselves, what will they do next? Will the battle continue?

АА: The creative class will definitely keep fighting using unconventional tactics. For example, they will make satirical videos and generate jokes that  spread all over the Internet. If the creative class is unhappy about something, it goes to war online, a corrosive method that gradually erodes the regime. I think that Russian politicians will have to work very hard to be accepted by the creative class. They would have to effect some substantial changes to win them over.