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Society, Politics & Law

Not so flash with the cash: Oligarchs and the other side of entrepreneurial culture

Updated Tuesday, 1st July 2014

The oligarchs in former Soviet states are finding new outlets for their wealth beyond chunky watches and spending sprees. Alan Shipman suggests why - and what it might mean.

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Viktor Pinchuk Creative commons image Icon David Shankbone via Wikimedia under CC-BY licence under Creative-Commons license Viktor Pinchuk Russia's rich may have good political reasons for avoiding ostentatiousness. Advertising private wealth too openly risks attracting unwelcome attention: from a government now bolstering its support through anti-corruption measures, and from a public no longer convinced (if it ever was) that 'oligarchs' are progressive conquerors of the Soviet political elite.

Elisabeth Schimpfossl's research, focused on the "the lower end of the richest 1% of Russian society" in Moscow and London, shows they also have strong social reasons for curbing conspicuous consumption. These individuals (especially the males) aspire to be not just an elite, but an intelligentsia: acquirers of learning, refinement and cultural discernment that money might facilitate but can never just buy.

Some claim to have left the extravagant shopping, and even the day-to-day business management, to partners or associates, so they can focus on philanthropy and knowledge creation. All wish to steer their children through good schools and elite universities. And their next round of wives and girlfriends must, it seems, sport a higher degree as well as a low-cut dress.

Schimpfossl shows how social observation from a distant past can sometimes clarify the present. Her rich Russians, interviewed between 2008 and 2011, adopt casual dress in the manner of English aristocrats of the 19th Century, and sponsor literary and scientific talent like the Paris salons of the 18th. The gold mobile phone, which can be flourished in business circles but kept invisible on the street, digitally echoes the fountain-pens and cuff-links of an earlier boardroom.

Industrialist Arkady, at 49 one of the oldest in her sample, explains that his summer-house is in a newly developed area and built in imported Scandinavian style to show "his family has little in common either with [the] ordinary Russian, or the 'tasteless' rich." That intriguingly inverts the distinctions of a century ago, when Europeans with established fortunes complained that their 'nouveau riche' successors were buying the art and craftwork without knowing what it meant.

As always, this change in the behaviour of the upper echelons could be explained in other ways. The first to get rich were able to claim claim, like Boris Berezovsky, that they were creating a credible counter-force to the fossilised Soviet 'nomenklatura', so quickening the transition to democracy.

Or, like Mikhail Khodorkovsky, that they were speeding up the economic transition by transforming decrepit state enterprises, serving the public even if they'd initially seized abstracted public assets.

The fate of these pioneer plutocrats – one having died in exile, the other recently freed from ten years in a labour-camp – inevitably makes the next cohort more reticent about flaunting their good fortune.

For many of the lower-profile second wave of entrepreneurs, with net worth measured in millions rather than billions, discerning application of the proceeds of business has greater importance than accumulating more. But sponsoring philanthropic foundations and convening global summits need not be a distraction, or a subtraction, from the bottom line.

Across Russia's now tank-tracked eastern border, the Ukrainian millionaires Dmitry Firtash and Viktor Pinchuk moved early to set up foundations that sponsor study and research at prestigious western universities.

For Firtash, these provided a valuable character-reference when his probity became the subject of later courtroom battles. Such visible good deeds are an especially important defence when 'smart sanctions' against individuals take the place of traditional trade sanctions against the businesses they run.

As longstanding Russia expert and elite-watcher Chrystia Freeland observes, a re-orientation from mere trade to intellectual exchange gives top businesspeople express access to international meetings of minds – such as the World Economic Forum, China's Boao Forum and the Bilderberg Group. These offer plenty of room to swap ideas – but also to do deals and harmonise strategies.

Schimpfossl's subjects do indeed seem determined to step away from the commerce, and assign more time to culture and intellect. It's a choice made by many distinguished west European and American forerunners, from Lords Nuffield and Runciman to Miriam Rothschild and this University's own vice-chancellor, Martha Lane Fox.

As business becomes a more intellectual pursuit (and as intellectual pursuits become more of a business), the next generation may not even have to make it. Equally, if Russia can’t stop them taking their capital abroad.





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