A Redhead at the Pushkin by John Francis Kinsella - HTML preview

It took nearly a quarter of a century and Vladimir Putin to rein in the oligarchy and business classes, who were effectively transformed into the Kremlin’s yes-men.

Ownership and dynastic succession depended entirely on Putin’s whims with no effective system of transferring wealth from one generation to another and little or no legal framework to protect the assets of Russia’s nouveaux-riches.

The Russian tradition of dynastic wealth had ended when the Bolsheviks seized power almost a century earlier and the aristocracy was destroyed, notably under Stalin’s reign of terror.

The new post-Soviet economy was shaped by Putin with his system of rewards and punishment, where the prosperity of Russia’s rich depended on their continued good relations with the Kremlin and its network of lawmakers, regulators and tax authorities.

Those whose loyalty was in doubt saw their wealth seized, were imprisoned or even murdered. Khodorkovsky of Yukos Oil was an example. Convicted of tax evasion, money laundering and embezzlement, he spent a decade in prison. Others, like Mikhail Guryev, whose fortune was estimated at more than four billion dollars, were luckier. Guryev was one of the few who succeeded in passing the control of his London-listed company to his son.

Putin’s system not only held the power of life and death over Russia’s oligarchs, it kept the tens of thousands of middle sized businesses under surveillance, the owners of which faced the constant threat of losing control of their assets, their only hope being to sell their businesses and put their capital out of the system’s reach.

 

A Hard Line

 

We’ve been together three years and in those three years my life has changed. My old life seems so near and is yet so far behind me. I have discovered a new country, with all its roughnesses, pimples and warts, one that I thought I knew, only to discover my knowledge was no more than a superficial caricature. A lesson that impressed upon me the narrowness of our experiences.

Pat Kennedy and Tom Barton had almost certainly experienced the same changes, even Sergei, who had changed worlds, by marrying Ksenya, who is after all Irish, and making his home in London.

Sergei was remarkably lucky, in more ways that one. His story, at least in part, began in 1995 or 1996, when Russia found itself in dire economic straits and many large state-owned industrial businesses were privatized in a ‘Loans for shares’ programme in which the shares of major state owned enterprises were offered as guarantees.

The sales were carried out in public auctions organised by Russian banks during which bidding was rigged in favour of the banks and businesses controlled by powerful men with strong political connections.

These were members of Russia’s post-Communist nouveaux-riches who had appeared in the late eighties, making their fortunes in banking and commodity exports as Mikhail Gorbachev pursued his policy of perestroika. In this way state enterprises fell into the hands of these influential men, soon known as oligarchs, at prices far below than their real market value. These oligarchs held immense power and dominated the Russian business and political scene until the arrival of Vladimir Putin.

The most conspicuous example was that of Mikhail Khodorkovsky, who grabbed control of Yukos, a company created in 1993, when the Russian government of the time ordered the break up of the oil and gas industry for privatisation. Khodorkovsky, then only thirty two years old, acquired through his bank, Menatep, nearly eighty percent of the ownership in Yukos in 1995, then worth an estimated five billion dollars, for a mere three hundred million.

I myself remember being warned by Kalevi Kyyrönen at that time to avoid anything to do with Menatep, which was listed as having doubtful links, by Western consular officials.

Another was that of Sibneft, acquired by Boris Berezovsky, for about one hundred million dollars, when its real value was estimated at three billion.

As Khodorkovsky himself explained, ‘In those days everyone in Russia was engaged in the primary accumulation of capital. Even when laws existed, they were not very rigorously followed. If you conducted yourself too much in a Western manner, you were simply torn to pieces and forgotten.’

In a similar manner Sergei Tarasov, through loans put together by InterBank, acquired, together with Aquitania, a French oil company, a controlling share of Yakutneft, a major East Siberian producer of oil and gas.

When Vladimir Putin came to power in 1999, almost all of the country’s oil production lay in private hands. In the eight years since the dissolution of the Soviet Union the country’s energy sector had been sold off at give-away prices to a handful of oligarchs.

Putin’s plan was to return his country to its past glory, Greater Russia, a dream that was impossible while it’s wealth remained in the hands of a clique of oligarchs that pulled the Kremlin’s strings. At the end of 2000, the newly elected president commenced by warning the oligarchs to keep out of politics and proceeded retake control of Russia’s oil and gas resources.

Soon, Mikhail Khodorkovsky, the CEO of Yukos Oil, then the country’s richest man, discovered the true face of Vladimir Putin, who publicly criticised him and Rosneft for its opaque dealings. However, Khodorkovsky’s greatest sin, much to to Putin’s ire, was to unveil his own political ambitions.

The oligarchs assets, principally Yukos Oil, were seized and auctioned off in a forced sale to Rosneft, via a front company.²⁹

Rosneft’s strategy was growth through acquisition and soon they set their sights on Yakutneft, one of Russia’s major oil producers, which led to a secret meeting between Michael Fitzwilliams and a group of lawyers in early summer of 2013, at the offices of a Luxembourg bank. Guided by his friend and lawyer, James Herring, his task was to monitor the transfer in real time of nearly six billion dollars from a bank account owned by Rosneft, to one owned by Sergei Tarasov, in payment for his twenty percent share in Yakutneft.

This coincided with Rosneft’s purchase of TNK-BP, a joint venture between the British company and a trio of Russian billionaires, for more than fifty billion dollars, by borrowing forty billion dollars in cash. The loan was put together by a pool of leading international banks, amongst which were INI Moscow and InterBank Corporation, both of which were controlled by Sergei, in the largest-ever financial deal by a Russian company. An arrangement which obviously facilitated the deal for his share in Yakutneft.

As a result of all these acquisitions, Rosneft became the largest publicly traded oil producer on the planet.

 

Cornucopia

 

Cornucopia would not commence with a bang, neither a revolution, nor by violence and coercion.

Robotisation and automation were already creating an economy in which small numbers of very rich lived alongside armies of low paid manual workers. Economists and pundits explained robots could not replace all workers, as this would create mass unemployment. But what if employment became obsolete, workers were no longer needed?

It does not mean consumers in all forms would not continue to exist in the economic chain, in their different forms, that is the people, other actors and the state.

Would robots create more jobs? No, but they would certainly produce more robots. Would the service sector grow? Yes, human workers would always be needed, with suitable rewards and incitations.

In the simplest of terms, society would be like a sports association, a non-profit organisation with a committee, players and organisers. Some liked to manage, some liked to play and others would contribute their services for the material benefit of all concerned.

Economists were often short sighted, fixed in their known world with its known variables, not imagining anything that fell outside of existing structures.

Cornucopia would not prevent people from earning more credits by working in education, healthcare, services, sport and entertainment.

Further, Cornucopian society would see questions of credit, debt and interest disappear.

As with Communism, Cornucopia would commence in areas where there was a high level of unemployment and assistance, where the working classes were ready to experiment in a new social system, a cashless society with supermarkets that functioned like food banks. Where those qualified were attributed allowances for rents, paid directly by a board that controlled public housing or negotiated contracts with private renters. Health and education would be free as would activities such as sport and associative activities, such as bridge, Scrabble, art, dance and music.

Cornucopians would enjoy free transport and vacations in holiday clubs, like Soviet sanatoriums or the ClubMed if you don’t like Soviet connotations, either at home or abroad with affiliated organisations paid directly by the board.

Associates would identified bio-electronically when shopping for necessities such as food and clothes either from conventional style supermarkets or from online suppliers delivered by an Amazon type provider paid directly by the Cornubank. Entertainment would be provided by a free online service offering news, music, films, documentaries and sport and well as educative services and social networks.

Progressively the service would be extended to all those whose jobs were lost to robotisation and the development of AI.

 

PART 17 1984

 

Philistines

 

Pat was in London and joined me for a visit to the gallery to see what was new. We’d just signed up a couple of Chinese artists recommended by Lili and were preparing a vernissage.

‘What do you think of Banksy,’ burbled Pat.

Ekaterina looked a little surprised.

He informed her Banksy had been voted Britain’s best known artist and his Girl with Balloon was their favourite work.

‘Who Pat?’

‘Who?’

‘Who voted?’

‘It was a poll.’

‘Organised by who?’

‘Samsung,’ replied Pat crestfallen.

I knew what she thought when she heard people say they knew what they liked. Philistines!

A survey carried out by Samsung as part of its promotion to launch a new flatscreen television, polled over two thousand people, asking them to chose from a short-list of twenty works or art drawn up by arts editors and writers.

It seemed people power and populism was now at the centre of decision making process with polls, referendums and elections decided by the people overriding all common sense.

It would have not been of much importance had it not been echoed across the planet by just about every newspaper, magazine, TV channel, radio station and Internet blog in existence.

In a flash Banksy, a street artist or graffitist, had eclipsed Constable, Turner, Gainsborough, Hockney, Moore and fourteen others painters in the poll. Who the two thousand polled were, or the selection committee, God only knew.

Girl with Balloon was the artistic equivalent of a Tweet, who was I to criticise it. I suggested Warhol’s silk-screen Campbell’s Soup Cans, which marked the start of the West Coast Pop Art movement, was no different, after all it helped transform Warhol from being a commercial illustrator to a world renowned artist.

Was an image of soup cans less crass than the emotionally obvious work of Banksy?

Certainly soup tins gave the observer more to think about, I mean in Warhol’s complex and ambiguous expression, on the other hand looking at his cans you could hardly wax poetical.

About the time we’d visited the Guggenheim in Bilbao, for an exhibition of Renoir’s works that had been loaned by the Hermitage to the Museo de Bellas Artes.

That evening we were invited to a concert where the star of the evening was the popular violinist Ara Malikian. It was a strange mise-en-scene, with the artist accompanied by a group of TV variety show style dancers, in a programme that consisted of the most easily recognisable classics interpreted in a wild travesty of the original works.

Curiously, the wilder the music and dances, the wilder the applause, with the audience screaming its approval as strobe lights swirled and flashed, and a hundred violins shrieked out their notes. Ravel, Paganini, Mozart, Chopin, Boccherini or Paganini, all got the same treatment, reduced to their simplest expression, mixed with Rock and Folk numbers, creating instant gratification for an audience evidently oblivious to the beauty of the works in the form created by their respective composers, now reduced to variety show turn, a product to be consumed and soon to be forgotten.

Of course you may say that I’m an old fashioned, out of date, fart, but the hackneyed phrase, ‘I know nothing about art but I know what I like’, needs to be qualified by knowing what we like and why.

Perusing the Renoir exhibition that afternoon I stopped at one of the painter’s portraits of Andrée Heuschling. I was fascinated, with her flaming red hair, there was an astonishing likeness with Ekaterina. Drawn into the painters life and his models and felt drawn back in time to what the painter had seen with his own eyes. It was a moving experience.

Unfortunately as Maxwell L. Anderson pointed out, commercial exhibitions assume that visitors hunger for theme-park experiences, rather than unvarnished individual encounters with works of art.

Ekaterina had grown up surrounded by art, studied art, earned her living in art, and knew the reasons for liking particular works were exceedingly difficult to define. But studying art and its history is not necessarily liking particular works, which is a subjective experience, though their history and meaning is not.

As are price and quality are two different things, where price is set by the market mechanism.

John Ruskin, a leading Victorian art critic, whose interests ranged from painting to literature and architecture, wrote in his five volume work Modern Painters:

‘If it be true, and it can scarcely be disputed, that nothing has been for centuries consecrated by public admiration, without possessing in a high degree some kind of sterling excellence, it is not because the average intellect and feeling of the majority of the public are competent in any way to distinguish what is really excellent, but because all erroneous opinion is inconsistent, and all ungrounded opinion transitory; so that while the fancies and feelings which deny deserved honour and award what is undue have neither root nor strength sufficient to maintain consistent testimony for a length of time, the opinions formed on right grounds by those few who are in reality competent judges, being necessarily stable, communicate themselves gradually from mind to mind, descending lower as they extend wider, until they leaven the whole lump, and rule by absolute authority, even where the grounds and reasons for them cannot be understood. On this gradual victory of what is consistent over what is vacillating, depends the reputation of all that is highest in art and literature. For it is an insult to what is really great in either, to suppose that it in any way addresses itself to mean or uncultivated faculties.’

That is a little bit too didactic, and we shouldn’t overlook the fact that aesthetic movement rejected Ruskin’s high-minded approach to art.

His contemporary Walter Pater believed art existed to give us pleasure, just like wines, or divans, or tobacco, whilst to Ruskin’s mind art was not a matter of taste, but involved the whole man. ‘Whether in making or perceiving a work of art, we bring to bear on it feeling, intellect, morals, knowledge, memory, and every other human capacity, all focused in a flash on a single point.’

However that was in the nineteenth century and what the nineteenth century would have made of Lucien Freud or Francis Bacon is another thing. As Bacon said, ‘It’s always hopeless to talk about painting, one never does anything but talk around it.’

 

Santa’s Workshop

 

What would Cornucopians possess? Would they live in an egalitarian throwaway Ikean world, where everything came from the same workshop. New, shinning, modern, efficient. Cornucopia could not exist without a workshop. But what kind of workshop?

Well Foxconn provides us with a good example of such a workshop. With one of its mega production sites the size of a medium sized town in the US or the UK, such as Oakland in California or Coventry in England. Of course it is not a town or city rather a dismal industrial site composed of endless drab office buildings, warehouses, dormitories and assembly shops, a vast excrescence sprouting from the side of the Chinese city of Shenzhen, a megalopolis of eight or ten million souls that had mushroomed on the northern flank, that is over the border in Mainland China, of Hong Kong's New Territories. I’m talking about Foxconn’s enormous Longhua plant, where amongst other IT products Apple’s iPhones were produced, making it the largest assembly plant in the world of smart phones, tablets and other electronic devices.

‘Designed by Apple in California Assembled in China’ could have been its trademark, with iPhones conceived and designed in California and assembled in China, by Foxconn’s manual and by robotised production lines.

It was one if the beating hearts of Cornucopia on the march. A vast secretive gated compound, sealed-off by high walls and fences with security guards manning each point of the entry. Each employee possessed a company electronic ID card. Drivers entering entering or leaving were subjected to search and fingerprint scans.

Visitors or curious observers were warned, ‘This factory area is legally established with state approval. Unauthorised trespassing is prohibited. Offenders will be sent to police for prosecution!’

The availability of docile, low cost, labour and highly skilled workers made the Cantonese city, which was anything but Cantonese, the manufacture hub of smart phones.

Though it production facilities were in Mainland China, Foxconn³⁰ was in reality owned by a Taiwanese company,

founded by Guo Taiming, son of a modest police officer who had fled Shanxi, on Mainland China, to Taiwan to join the Nationalist leader, Chiang Kai-shek, ousted in 1949 by the Communists led by Mao Zedong.

Guo’s story was one of Chinese legends, rising from the rank of lowly worker in a rubber factory to head of a multinational business with total sales of nearly five hundred billion dollars and seventy billion in assets, commanding well over a million workers.

Dick Whittington couldn’t have done better.

Critics pointed to a spate of worker suicides, which Steve Jobs had remarked was within the national average. ‘Foxconn is not a sweatshop,’ he said. ‘It’s a factory, but my gosh, they have restaurants and movie theatres—but it’s a factory.’

Nevertheless, workers were subjected to long hours and high pressure by aggressive management methods, employing shaming and humiliation techniques, in addition to poor living conditions, all of which resulted in high turnover rates, depression and in extreme cases suicide.

But that is today, as I write.

Foxconn has other plans for the future.

The IT manufacturing giant is not a philanthropic organisation and is already ahead of my story with plans to replace almost every worker by robots, using what they call software Foxbots, robots of their own design.

Initially for dangerous and repetitious tasks, then for greater productivity, and finally robotising entire factories where the only human input would be to control production planning, logistics, testing, and quality control.

Already fully automated production lines were operating in Foxconn's plants in Chengdu, Chongqing, and Zhengzhou, with the installation of forty thousand Foxbots and the loss of sixty thousand jobs within the group.

Until recently labour had been cheaper in China, but with the passage of time wages and social costs have climbed and will continue to do so. Foxconn sees no other alternative than to eliminate all human workers— replacing them with robots, so as to remain competitive on world markets.

What will happen to the workers? That is the governments heavy responsibility.

iPhone City has already set in motion its robotisation programme and in the near future will cease to function as an employment machine. With its young mobile workforce and a high turnover, it will progressively cease to replace departures.

Robots will of course not jump from roof tops or complain about their working conditions and can be switched off.

The human effect of such changes will pose an enormous social problem for China, where rural migrants who have lived and worked in urban areas for many years and contributed to the country’s prosperity, do not enjoy the same employment, housing, education and healthcare advantages as urban residents.

This was a consequence of the ‘hukou’ system of household registration, a kind of internal passport, dating from 1950, which regulates rural-to-urban migration, denying immigrant workers from rural regions the same rights and benefits as pre-existing urban populations in the cities.

Almost two thirds of the young workers in Shenzhen are immigrant workers and few have any intention of returning to their villages. The trouble is their prospects are not very promising under the existing system, which excludes them from home ownership, marriage, tertiary education and healthcare. The prospective of less jobs and growing inequality poses a daunting problem in China as elsewhere.

 

Thought Police

 

Cornucopian society would evidently require the cooperation of its citizens, who would naturally be required to respect the laws and rules that governed their full and equal participation in plenitude.

It goes without saying that a robotised digital society would possess all the means necessary for the collection not only the data related to the needs of its citizens, but also monitor the behaviour of those same citizens in the interest of their well-being, permitting them ‘to be good and happy members of society’ wrote George Orwell.

There is of course a price for everything. I mean you didn’t think it would be a free for all, did you?

It did not signal the end of democracy, but it would be a different society with different rules.

Like in all societies there would be those who, for different reasons, opposed the evolution towards Cornucopia. In the same as those who had seen the printing press as a threat to their world, those who had smashed James Hargreaves spinning jenny, those who imagined newfangled things like the railways, telephones, television and computers would be harmful, and those who opposed progress in general.

But what is progress? I would say all that which provides our daily bread and material comfort. But not necessarily work. The work ethic was invented so as to encourage men to work for profit, for themselves or others. ‘He who does not work, neither shall he eat’, was a Soviet slogan. There were those for and against. Those for based their ideas on the theory that hard work and diligence had a moral benefit. Those against saw work as a submission to authority and social conventions, a means of controlling the masses—for the benefit of the powerful classes, capitalists.

So what if there was no work? That all needs were provided by machines, free, and in equal parts for each and everyone.

It stands to reason Cornucopia would need to be shielded from its detractors, from subversive action. This supposes tools to identify misguided individuals, and any ideologically motivated subversives opposed to Cornucopian well-being.

It sounds Orwellian, but don’t present day national data systems from defence to healthcare and social security systems require the protection against attacks, hacking and electronic snooping, with secure access codes, biometric identification and the physical protection of data centres.

A state security agency, Cornucopia Qualitat Vitae Custodiat, would require access to data from intelligence services, police departments and criminal records, health and disease control services, defence services, IRS departments, customs and immigration departments, financial institutions and services and their watchdogs, education departments, transport and travel organisations.

CQVC could in the interest of Cornucopia access the data of internet giants such Google, Facebook, Amazon, Microsoft and Apple, to pre-empt contrarian action.

This would allow the Cornucopian agencies to track subversive elements, even predict the actions of individuals and their organisations, thanks to DNA data, fingerprint records and other biometric measures, using advanced GPS localisation systems for surveillance along with sophisticated algorithms and the deployment of live CCTV cameras with facial-recognition software to track Cornucopia’s enemies.

Who would own the tools of Cornucopia? Individuals? The people?

Who would rule Cornucopia and how?

All these were questions, I put to my students. They would give food for thought to philosophers, intellectuals and leaders.

The answers were not easily forthcoming, but whatever they were, Cornucopia’s relentless march was underway, and as with all advances human society, it would find a way of regulating itself.

Cornucopia would be the first system of government to offer direct and immediate material well-being to its citizens, as opposed to the abstract ideologies offered by Putin, Erdogan in Turkey, Orban in Hungary, Maduro in Venezuela, Duterte in the Philippines and Modi in India, not forgetting Trump who seemed bent on destroying democracy and backtracking on the system of care extended to his nation's poorest citizens as he hacked at the foundations of Obamacare.

 

The Glass Wall

 

What would my—for the moment imaginary, Cornucopian world look like? Well the conditions necessary to achieve Cornucopia, would in any case be created progressive, including a stable, economically and politically mature society, if it was to succeed.

Western Europe would be the first to reach the kind of maturity needed for the changes necessary. Slowly the Cornucopian wave would spread across all of the Europe before it came to a halt at the frontiers of the former Soviet Union—Belarus, Ukraine, Moldav