Rags to riches?

On a Sunday in March 2016, at 2pm, I visited Konstantin Ernst at his broadcasting house to interview him. He was in a splendid mood and we spent at least two hours together. That is, he spoke; it wasn’t easy to sneak in my questions. At one point I succeeded: why did he omit the 1990s in the opening ceremony of the 2014 Winter Olympics in Sochi, I asked. Those years were still too close, he replied, being much more reserved than just a minute ago: they are far too painful to be shown on television, he said.

If artistic Ernst struggles for words, no wonder that the many rich Russians did whom I interviewed for my book. Whenever they did mention the 1990s, they did so to distance themselves from the toxic legacy of those years. Pyotr Aven switched into English: the loans- for- shares auctions of 1995 were “totally unfair”, he said and added that they had repercussions till today: “It will be many years till private property will be seen as legitimate in Russia,” he said. He is right: 70 percent of the Russian population still view enrichment as either based on theft or on other dodgy practices.

However reluctant people are when it comes to talk about those years, the willing they are to share their thoughts about what – in very general terms – made them gain their riches. This is, according to their self-assessment, their hard work, their innovative thinking and maybe a little bit of luck. Being self-made features prominently in those narratives.

They are not alone with this. The Sunday Times Rich List of May 2018 declared 94 percent of the top thousand UK-based richest as self-made. Being “self-made” might sound banal and straightforward, but it is in fact a hugely tricky term. We all accept that it means from having been born into something modest and then making the leap into a completely new strata, accompanied my financial and possibly political powers. But where do you cut the line between where to come from and where to go to in order to qualify as “self-made”?

If we look at post-Soviet Russia, everybody without any exception is self-made. As we know pretty well, there was no capital accumulation in the Soviet Union; hence any capital accumulated was necessarily new. Once we take into account other potential head starts, things become much more complicated.

The large majority of those who made it in the 1990s and early 2000s enjoyed head starts that were hardly to match by mere mortals. If they were not born into the nomenklatura, they were born into the Soviet intelligentsia. Curiously enough, the superrich in Russia have become massively conscious and proud of this, however in different contexts. Their intelligentsia background, with all its baggage of good tastes, knowledge and sophistication, pops up when it comes to underlining one’s culturedness and historical lineage, but not so when the talk is specifically about what might have set some ahead of others.

An aspect that is widely emphasized is the presumably superior quality Soviet education, including the whole myth around it. “None of us has inherited anything”, Boris Mints told me, adding: “except for education”. Sitting in his modern house in Kensington in London, Igor Tsukanov shows reminiscence for the some elements in Soviet apartments: “We had nothing else except education. The only thing that allowed educated people to express themselves was the choice and range of books on their shelves.” In his family, there was “a big library at home” and, of course, he grew up on books.

Cultural resources are one aspect that catapulted some people ahead of others. Along with them came educational settings that favoured beneficial networks and prosperous career paths. And thus it happened that many young people who were about to advance closer to the top managed to make the best out of the opportunities that opened up in the early 1990s.

Given these trajectories, nobody should be fooled by the fact that Mikhail Fridman got his start running a window-washing business or that German Khan started off his path to enrichment with selling T-shirts and jeans at a market. Here it is important to keep in mind that their expressively manual businesses were not their predetermined social destiny, but aberration. Both of them were studying at good universities as the offspring of well-situated parents. Fridman’s father, an engineer, was awarded a USSR State Prize for developing military air traffic control systems. Khan’s father was a well- known scientist specializing in metallurgy. They grasped such “adventurous” opportunities at moments when they were clearly stratospherically profitable.

Another element crucial to success was the social networks their family settings and educational institutions provided to them. A brief glance to educational paths shows how neatly billionaires’ career cluster. Shared living space was equally important for close tights.

The billionaire Alexander Svetakov made his first money from import­ing calculators and other electronic goods from Singapore. To get his finances afloat, he set up a in the basement of his parents’ apartment on Leninsky Prospekt. The house was home to several members of the Moscow beau monde; not least Konstantin Ernst. “From the window of my room I could see into his room”, Svetakov told me, leaving it unclear whether that was a thing to be proud of or one that made him shudder.

This op-ed first appeared in Forbes Russia: http://www.forbes.ru/milliardery/366723-rozhdennye-v-sssr-pochemu-rossiyskie-milliardery-ne-lyubyat-vspominat-90-e?from_alt_domain=1

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Elisabeth Schimpfössl

About Elisabeth Schimpfössl

My research focuses on elites, philanthropy and social inequality as well as questions around post-Socialist media and self-censorship. I did my PhD at the University of Manchester and taught at Liverpool University, Brunel and UCL before taking up my current post as Lecturer in Sociology and Policy at Aston University, Birmingham, UK. I live in London.