Oligarch (pronounced ol-i-gahrk)
(1) In
political science, one of the rulers in an oligarchy (a system of government
characterized by the institutional or constructive rule of a few and the
literal or effective exclusion of the many); a member of an oligarchy.
(2) A
very rich person involved in business in a manner which interacts intimately
with the organs of government, the nature of the relationship varying between
systems but usually with the implication of mutually beneficial corrupt or
improper (if sometimes technically lawful) conduct.
(3) In
cosmogony, a proto-planet formed during oligarchic accretion.
1600-1610:
From the French oligarque & olygarche,
from the Late Latin oligarcha, from the
Ancient Greek ὀλιγάρχης
(oligárkhēs) and related to oligarkhia (government by the few), the
construct being olig- (few) (from
stem of oligos (few, small, little)
(a word of uncertain origin)) + -arch
(ruler, leader) (from arkhein
(to rule)). The noun plural was oligarchs. In English, an earlier form of oligarchy was
the circa 1500 oligracie, a borrowing
from the Old French. Oligarch & oligarchy are nouns, oligarchal, oligarchical & oligarchic are adjectives, and oligarchically is an adverb; the noun plural is oligarchs. The playful minigarch (the offspring of an oligarch) and oligarchette (a female oligarch or an aspiring oligarch not yet rich enough to be so described are both non-standard while oligarchie & oligarchisch are sometimes used to convey a deliberate
sense of the foreign. Oligarch is now
almost never used in its classical sense to refer to rulers of a political
entity but instead to describe the small numbers of those who have become
exceedingly rich, usually in some improper (even if technically lawful) way
with the corrupt and surreptitious cooperation of those in government, the
implication being they too have benefited.
Words like plutocrat, potentate and tycoonocrat are sometimes used as
synonyms but don’t covey the sense of gains improperly and corruptly achieved.
Oligarchs are sometimes described in the press as "colorful characters", something a bit misleading because many seek a low profile, something often advisable in Mr Putin's Russia. In a movie about oligarchs Netflix presumably would focus on some of the more colorful.
In
modern use, an oligarch is one of the select few people who have become very
rich by virtue of their close connections to rule or influence leaders in an
oligarchy (a government in which power is held by a select few individuals or a
small class of powerful people). Unlike
the relationship between “monarch” & “monarchy”, “oligarch” & “oligarchy”
are not used in the literature of political science in quite the same way. A monarch’s relationship to their monarchy is
a thing defined by the constitutional system under which they reign and that
may be absolute, despotic or theocratic but is inherently directly linked. However, even in a political system which is
blatantly and obviously an oligarchy, the members of the ruling clique are not
referred to as oligarchs by virtue of their place in the administration, the
more common descriptors being autocrat, despot, fascist, tyrant, dictator,
totalitarian, authoritarian, kleptocrat or other terms that to varying degrees
hint at unsavoriness. Instead, the word
oligarch has come to be used as a kind of encapsulated critique of corruption
and economic distortion and the individual oligarch a personification of
that. The modern oligarch is one who has
massively profited, usually by gaining in some corrupt way either the resources
which once belonged to the state or trading rights within the state which tend
towards monopolistic or oligopolistic arrangements. Inherent in the critique is the assumption
that the corrupt relationship is a symbiotic one between oligarch and those in
government, the details of which can vary: oligarchs may be involved in the
political process or entirely excluded but a common feature to all such
arrangements is that there is a mutual enrichment at the expense of the sate
(ie the citizens). The word oligarch has
thus become divorced from oligarchy and attached only to oligopoly.
The
word oligopoly dates from 1887, from the Medieval Latin oligopolium, the construct being the Ancient Greek ὀλίγος (olígos)
(few) + πωλεῖν (poleîn) (to sell) from the primitive
Indo-European root pel (to sell) and
describes a market in which an industry is dominated by a small number of large-scale
sellers called oligopolists (the adjectival form oligopolistic from a
surprisingly recent 1939). Oligopolies,
which inherently reduce competition and impose higher prices on consumers do
not of necessity form as a result of improper or corrupt collusion and may be
entirely organic, the classic example of which is two competitors in a once
broad market becoming increasingly efficient, both achieving such critical mass
that others are unable to compete. At
that point, there is often a tendency for the two to collude to divide the
market between them, agreeing not to compete in certain fields or geographical
regions, effectively creating sectoral or regional monopolies. If competitors do emerge, the oligopolists
have sufficient economic advantage to be able temporarily to reduce their
selling prices to below the cost of production & distribution, forcing the
completion from the market, after which the profitable price levels are
re-imposed.
A
classic game theory model of oligopolistic behavior.
Although not thought
desirable by economists, they’ve long attracted interest interest because they create
interesting market structures, especially when they interact with instruments
of government designed to prevent their emergence or at least ameliorate the
consequences of their operation. The
most obvious restriction governments attempt to impose is to prevent collusion
between oligopolists in an attempt to deny them the opportunity to set prices
of particular goods. Even if successful,
this can only ever partially be done because most prices quickly become public
knowledge and with so few sellers in a market, most of which tend to operate
with similar input, production & distribution costs, each oligopolist can
in most cases predict the actions of the others. This has been of interest in game
theory because the decisions of one player are not only in reaction to that of
the others but also influences their behavior.
Dartz
Prombron, produced in Latvia and manufactured to much the same standard of robustness which during Great Patriotic War (1941-1945) made the Soviet-built T-34 tank so formidable.
The Prombron is now typical of the preferred transport for an oligarch, the
traditional limousine not able to be configured to offer the same level of
protection against attacks with military-grade weapons. Prombrons were originally trimmed with
leather from the foreskins of whale penises but the feature was dropped after
protests from the environmental lobby. It was a rare victory for the greenies in their battles with the Kremlin, usually a most unequal contest.
Oligarchs in the modern sense operate
differently and the Russian model under Mr Putin has become the exemplar
although some on a smaller scale (notably Lebanon since 1990) are probably even
more extreme. The Russian oligarchs
emerged in the 1990s in the chaos which prevailed after the dissolution of the
old Soviet Union. They were men, sometime
outside government but often apparatchiks within, well-skilled in the
corruption and the operations of the black market which constituted an
increasingly large chunk of the economy in the last decade of the USSR and
these skills they parlayed into their suddenly capitalistic world. Capitalism however depends on there being
private property and because the USSR was constructed on the basis of Marxist
theory which demanded it was the state which owned and controlled the means of
production and distribution, there was little of that. So there was privatization, some of it officially
and much of it anything but, the classic examples being a back-channel deal
between the oligarch and someone in government purporting to be vested with the
authority to sell the assets of the state.
Few in government did this without a cut (often under the guise of a
equity mechanism called “loans for shares”) and indeed, some apparatchiks sold
the assets to themselves and those assets could be nice little earners like oil
& gas concessions or producers, electricity generators, transport networks
or financial institutions. One of the
reasons the assets were able to be sold at unbelievably bargain prices was a
product of Soviet accounting: because the book value of assets had so little
meaning in communist accounting, in many cases recorded asset values hadn’t be
updated in decades and were in any case sometimes only nominal. There were therefore sales which, prima facie, might have appeared to
verge on the legitimate.
2021 Aurus
Senat, now the official presidential car of the Russian state.
Few were and in
any event, even if the aspiring oligarch didn’t have the cash, somewhere in
government there would be found an official able to arrange the state to loan
the necessary fund from the resources of the state, if need be creating
(effectively printing) the money. From
that point, newly acquitted assets could be leveraged, sold to foreign
investors at huge profit or even operated in the novelty of the free market, an
attractive proposition for many given the asset obtained from the state might
be a natural monopoly, competition therefore of no immediate concern. Thus was modern Russian capitalism born of
what were economic crimes on a scale unimaginable to the legions condemned to
death or years in the Gulag under comrade Stalin (1878-1953; Soviet leader 1924-1953). Even before becoming prime-minister in 1999,
Mr Putin was well aware of what had happened, being acquainted with some of the
players in the process but shortly after assuming office, he had small a team
of lawyers, accountants and economists undertake a forensic analysis to try
more accurately to quantify who did what and who got how much. Although the paperwork his investigative
project produced has never been made public, it was reputed to have been
reduced to a modestly-sized file but the contents were dynamic and put to good
use.
In either 2003 or 2004, Mr Putin,
assisted by officers of the FSB (successor to the alphabet-soup of similar
agencies (Cheka, GPU, OGPU, NKGB, NKVD, SMERSH, MGB & (most famously) KGB))
experts in such things, “arranged” a series of interviews with the oligarchs
whose conduct in the privatizations of 1990s had been most impressive (or
egregious depending on one’s view). Well
aware of the relationship between wealth and political influence, Mr Putin’s
explained that the oligarchs had to decide whether they wished to be involved in
business or politics; they couldn’t do both.
Mr Putin then explained the extent of their theft from the state, how
much was involved, who else facilitated and profited from the transactions and
what would be the consequences for all concerned were the matters to come to
trial. Then to sweeten the deal, Mr
Putin pointed out that although the oligarchs had on a grand scale stolen their wealth, because “they had stolen it fair and
square”, they could keep it if they agreed to refrain from involvement in politics. The Russian oligarchy understood his language,
the lucidity of his explanation perhaps enhanced by oligarch Mikhail
Khodorkovsky (b 1963; then listed as the richest man in Russia and in the
top-twenty worldwide) being arrested on charges of fraud and tax evasion,
shortly before the meetings were convened (he was convicted in 2005 and sentenced
to nine years in prison and while serving his sentence was charged with and
found guilty of embezzlement and money laundering. Mr Putin later pardoned Khodorkovsky and he
was released to self-imposed exile in late 2013). Few failed to note the significance of Mr Khodorkovsky having been "meddling in politics".
Alastair Campbell (b 1957; Downing Street Director of Communications & official spokesperson (1997–2003) rear) with Vladimir Putin (b 1952; Prime-Minister of Russia 1999-2000 & 2008-2012, President of Russia 1999-2008 & since 2012, left) and Tony Blair (b 1953; UK Prime Minister 1997-2007, right). Mr Putin in recent years has stretched plausible deniability well beyond the point at which plausibility can be said to have become implausible and the not infrequently seen: "cause of death: falling from window of high building" is known by Russians as the "oligarch elevator". Predating even the Tsarist state, grim humor has a long tradition in Russia.
Mr
Putin being taken for a drive by George W Bush (b 1946; George XLIII, US president 2001-2009) in the Russian president's GAZ-21 Volga (left) and casting an admiring glance at his 2009 Lada Niva (right).
In
a sign the oligarchs were wise to comply, it was estimated by Bill Browder (b
1964; CEO and co-founder of the once Moscow-linked Hermitage Capital Management)
during his testimony to the US Senate Judiciary Committee in 2017 that the
biggest single increase in Mr Putin’s personal wealth happened immediately
after Mr Khodorkovsky was jailed. Given
the history, Mr Browder is perhaps not an entirely impartial viewer but the pact
between the autocrat and the oligarchy has been well-understood for years but
what has always attracted speculation is the possibility that attached to it
was a secret protocol whereby Mr Putin received transactional fees, imposing
essentially a license to operate in Russia, alleged by some to be a cut of as
much as 50%, based apparently on assessed profits rather than turnover. Even if a half-share is too high and his cut
is a more traditional 10%, the amount payable over the years would have been a
very big number so there’s been much speculation about Mr Putin’s money, some
estimates suggesting he may have a net wealth in the US$ billions. That would seem truly
impressive, given the Kremlin each year publishes a disclosure of their head of
state’s income and assets and the last return disclosed Mr Putin enjoys an
annual salary of US$140,000 and owns an 800-square-foot (74 m2)
apartment, his other notable assets being three cars: a 1960 (first series) GAZ-21 Volga, a 1965 (second series) GAZ-M21P Volga and a 2009 Lada Niva 4x4. Keen on outdoor pursuits, he also owns a camping
trailer.
A country cottage on the Black Sea coast alleged to be owned by Mr Putin. The large grounds surrounding the cottage are an indication why Mr Putin needs his 2009 Lada 4x4 & camping trailer.
On the basis of that, income and net
wealth seem not at all out of alignment but intriguingly, he’s been
photographed with some high-end watches on his wrist, including an A. Lange & Söhne 1815 Tourbograph which
sells for around US$500,000. He is rumored to be the owner of a 190,000 square-foot (17,650 m2) mansion which sits
atop a cliff overlooking the Black Sea (reputedly Russia’s largest private
residence and known, in a nod to the understated manner of the rich, as “Putin’s country cottage”) which has an ice
hockey rink, a casino, a nightclub with stripper poles, an extravagantly
stocked wine cellar and the finest furniture in Louis XIV style, the
toilet-roll holders apparently at US$1,250 apiece (although, given the
scale of the place, he may have received a bulk-purchase discount). It demands a full-time staff of forty to
maintain the estate, the annual running costs estimated at US$2-3
million. Designed by Italian
architect Lanfranco Cirillo (b 1959), and officially owned (though alleged to
be held under a secret trust of which Mr Putin is the sole beneficiary) by
oligarch Alexander Ponomarenko (b 1964), the construction cost was estimated to
be somewhere around a US$ billion which seems expensive but a yacht currently
moored in Italy and alleged also to belong to Mr Putin is said to have cost not
much less to launch so either or both may actually represent good value and to assure privacy, the Russian military enforces a no-fly zone around the
property. Like many well-connected chaps
around the world, a few of Mr Putin’s billions figured in the release of the Panama
Papers in 2016.
A GAZ-23 Volga at a Moscow car show, 2006.
Apart from
the Black Sea cottage, there are unverified reports Mr Putin is the owner of 19
other houses, 58 aircraft & helicopters and 700 cars (although it’s not
clear if that number includes his two Volgas and the Lada). No verified breakdown of the 700 cars has
ever been published but given Mr Putin’s obvious fondness for Volgas, it may be
his collection includes the limited-production variant of the GAZ-21 Volga,
603 (as the GAZ-M23 Volga) of which were produced between 1962-1970 for the
exclusive use of the KGB (Комитет государственной безопасности (Komitet
gosudarstvennoy bezopasnosti), the Committee for State Security) and other
Soviet “special
services”. Equipped with the
5.5 litre (337 cubic inch) V8 engine from the big GAZ-13 Chaika (Gull)
(1959-1981 and in the Soviet hierarchy, second only to the even bigger ZiL
limousines (1936-2012)), the car was said to be a not entirely successful piece
of engineering but it was certainly faster than the four-cylinder model on
which it was based. It’s never been
clear just what was the top speed because the speedometer was calibrated only
to 180 km/h (112 mph) but one intrepid KGB apparatchik claimed to have achieved
that and reported his Volga was “still accelerating”. Known to be nostalgic for the old ways of the
KGB (with all that implies), it’s hoped Mr Putin has preserved at least one.
Restored GAZ-23 Volga.
Identified as 1962 model (still in the "transitional" bodywork used between the second and third series) the car is
claimed to be a genuine, fully-restored GAZ-23 and while there were some sites
which suggested it was a “Russian restromod” (ie a M-21 built to M-23 specifications),
a hard-to-replicate detail like the special locking mechanism which permitted
the trunk (boot) to be opened only when the passenger’s side back door was ajar
(said to prevent the prevents the penetration of anyone unauthorized) does lend
credence to the claims of authenticity. Additionally, the supplied documents do
support the claim and tie in with the extant license plates (5487 ЮБЯ). This car wasn’t allocated to the KGB and the
20 years it was in government service were spent as a courier vehicle, transporting
people or packages between Moscow and one of the space institutes and period photographs
suggest that while white-wall tyres did exist behind the iron curtain, they
were rare and not all M-23s seem to have been fitted with either the “chrome
package” (the “keels” & “arrows” on the fenders) or the amber turn signals
(used on export models). While a million
odd of the four-cylinder versions were produced, between 1962-1970, only 603 V8
M-23s left the factory and in the era, none were ever offered for general sale,
availability restricted to the select few organs of the state deemed to require
the inconspicuous hotrod. As far is known,
19 still exist, mostly in museums or private collections although whether any
remain stashed away in the Kremlin’s garages has never been disclosed which may
seem strange but much in Mr Putin’s Russia remains a state secret.
The origins
of the M-23 lie in a commission the KGB in 1960 issued to the Gorky Automobile
Plant for the design of a vehicle able to be used for pursuits, VIP escorts and
other “special missions”, the KGB doing a great many of the latter. On the same basis “plain clothes” police in
many jurisdictions use cars visually indistinguishable from those run by
private citizens, the KGB specified that externally, their special model had to
look exactly the same as the standard Volga GAZ-21 but be more powerful and
thus faster. In other words, KGB Volgas
were to be “equal to” and yet “more equal” than the others. In the commission, it was specified the car
must be able to attain a top speed of 170 km/h (106 mph) and achieve 100 km/h
(62 mph) within 16 seconds which may not now sound impressive but in the Warsaw
Pact of 1960, it would have been supercar stuff.
GAZ 5.5 litre V8 in M-23.
The Chaika’s
V8 was a tight fit in the smaller engine bay of the M-21 and the engineers were
compelled to align it 2º off centre of the crankshaft and even after redesigning
the right-side chassis member, the clearance between parts of the structure and
the engine was in places just a few millimetres. The V8 was by Western standards inefficient
and generated much heat so the use of the Chaika’s large radiator was essential,
meaning the frontal internal panels had to be changed, the opportunity taken
also to strengthen the front cross-members, better to support the V8’s greater
weight. As was to become the practice
when Detroit did such things, the suspension was upgraded using springs coiled
from steel bars of increased diameter and heavy-duty shock absorbers were
fitted. Being a V8, there were of course
two manifolds and thus two exhaust pipes but to disguise the identity of the
thing, the two pipes terminated near the rear bumper but did not protrude into view. As the US manufacturers
also discovered, when it came to putting big, wide V8s in cars designed
originally to house something more narrow, few components were as troublesome
as exhaust manifolds and the performance of some muscle cars (notably the big-block
(383 & 440 cubic inch (6.3 & 7.2 litre) Dodge Darts and second
generation Plymouth Barracudas) was compromised by the need to use more
restrictive systems.
Separated at birth: 1962 GAZ-23 (left) and 1964 Pontiac GTO (right).
Although
barely mentioned by collectors, the GAZ-23 pre-dated the Pontiac Pontiac GTO (1963-1974) by more than a year though it's the GTO which usually is cited as "the first muscle car" (a
concept defined as "a big engine from the full-sized line installed in the
smaller intermediate platform") but the KGB's project was exactly that. In a sense, the true MRCA (most recent common ancestor) of the muscle
cars of the 1960s was probably the 1936 Buick Century, a revised version of the
model 60, created by replacing the 233 cubic inch (3.8 litre) straight eight
with the 320 cubic inch (5.2 litre) unit from the longer, heavier Roadmaster. It wasn’t exactly a transplant into an “intermediate”
(a concept unknown until the 1960s) but the process was not dissimilar. Still, if one sticks to the accepted the
definition, it’s the V8 GAZ-23 which came first and not the GTO but the Soviet
vehicle rates not even a mention in Mike Mueller’s (b 1959) otherwise comprehensive
Muscle Car Source Book (2015, Quarto Publishing Group), something which is that’s publication’s
only omission of note. Mr Mueller’s book is
unusual in that it appears to contain not a single error, a rarity
in a field in which misinformation is rife. His book is data-dense and highly
recommended though should Mr Mueller ever release a revised edition, hopefully the KGB’s seemingly thus far unacknowledged contribution to the muscle
car ecosystem will gain a footnote. While chief engineer of GM's (General Motors) PMD (Pontiac Motor Division), shamelessly John DeLorean (1925–2005) stole the GTO's name (Gran Turismo Omologato) from the Italians so it's at least not impossible he pinched the concept from the Soviets.
Mr Putin has admitted: "I am
the wealthiest man, not just in Europe but in the whole world: I collect
emotions. I am wealthy in that the people of Russia have twice entrusted me
with the leadership of a great nation such as Russia. I believe that is my
greatest wealth." In conventional (ie money) terms, quite how rich Mr Putin might be is such a swirl of estimates, rumors, supposition and doubtlessly invention (lies) that it's unlikely anyone except those disinclined to discuss the matter really know and after all, if he's rich as his detractors claim, he probably isn't exactly sure himself. Given that, his statement seemed intended to clear up any misunderstandings.
