Richard Sakwa. The Quality of Freedom: Khodorkovsky, Putin, and the Yukos Affair. Oxford: Oxford University Press, 2009. 426 p. ISBN 978-0-1992-1157-9.
Ararat Osipian. Address for correspondence: Department of Leadership, Policy, and Organizations, Peabody College of Education, Payne Hall 205, Vanderbilt University, Nashville, TN, 37203, USA. email@example.com.
A new category of property crime—corporate, property, and land raiding—is flourishing in post-Soviet space. This is not just a new type of crime, but an entirely new phenomenon that has spilled over from Moscow to other regions in Russia and other former Soviet republics. Western media have estimated the total number of raiding attacks in Russia at an astronomical seventy thousand cases per year (Harding 2008). The issue of raiding in Russia and problems directly related to raiding are addressed in the work of Barnes (2003; 2006; 2007a; 2007b); Black, Kraakman and Tarassova (2000); Firestone (2008); Frye (2000; 2002); Kireev (2007); Volkov (2004; 2005); and Woodruff (2004; 2005). Raiding in Russia differs significantly from what is perceived to be raiding in the Western world. Russian raiders use a wide variety of tools and activities including pressuring minor shareholders; bribing managers and bureaucrats; creation of artifi cial debts; fraudulent production of charter documents, deeds, and titles of property; and violent storming of enterprises with the help of private security firms and freelance storm-troopers. Above all, some have claimed that the state itself is used as an instrument of corporate raiding. Such voices are especially loud and persistent when it comes to the Yukos affair and its virtual personification in the widely publicized prosecution of the Yukos’s former chief and owner, Mikhail Khodorkovsky.
A recent work by a leading sovietologist, Richard Sakwa, The Quality of Freedom: Khodorkovsky, Putin, and the Yukos Affair, is the single most comprehensive source of information and analysis of the Yukos case for English-speaking readers. This makes the book groundbreaking. Sakwa presents a well-balanced analysis of the Yukos affair and is cautious in his judgment, avoiding extremes and relying on facts. Like a physician observing a tumor as it develops, he observes the rise and fall of the oil giant Yukos and the economic mogul Mikhail Khodorkovsky. Sakwa takes a neutral position, an outsider’s stance, rather than employing a political activist agenda. This is perhaps the best and the most productive position when it comes to the highly contradictory Yukos case. Objectivity in assertions and comments is a strong feature of the author’s approach, effectively counterbalancing the still-widespread Cold War mood in the West. Sakwa is right that Khodorkovsky is neither a saint nor a villain.
Sakwa starts by discussing the fundamental ties between the categories of freedom and property rights and then proceeds directly to the history of Yukos, describing the birth and transformation of Russia’s once largest oil company. The issue of the changing relationship between the Kremlin and the oligarchs comes next. Vladimir Putin advanced the equidistance policy, placing oligarchs at an equal distance from the Kremlin and changing the disposition of favoritism toward particular nouveaux riches. After considering the complicated relationship of the newly emerged Russian billionaires and the post-Soviet state, Sakwa turns to the question of why Yukos was targeted for dismantling by the state machine. The author describes the state-led assault against Yukos in much detail, presenting court trials of Mikhail Khodorkovsky and his partners, after which the oil tycoon eventually goes to jail. Sakwa addresses his transformation from Russia’s richest man to political dissident, a symbolic figure of the Russian opposition movement. He also addresses the issue of how state propaganda was used to manipulate public opinion in regard to the Yukos trials. A discussion of the issues of political and moral economy and polity and power conclude the book.
The author chooses a chronological approach, perhaps the easiest methodology in a case such as this. He draws intensively on the media coverage of the Yukos case, including numerous reports in the Russian news media. The text contains a total of around 1,500 footnotes, a rather enormous informative base. At the same time, there are no original interviews conducted by the author, even though this would seem logical for this type of scholarly research.
Sakwa attempts to explain why and how it happened that in post-Soviet Russia one of the richest and most powerful men was arrested and later sentenced to eight years in prison, while his huge company was dismantled and sold off. The author suggests that the state-led attack on Khodorkovsky had far-reaching political and economic consequences for Russia as the world’s energy superpower. He also points out that the story of Yukos’s rise and fall raises fundamental questions about the quality of freedom in contemporary Russia as it continues its transition from a planned economy to a market economy.
One obvious shortfall of the book is its lack of background data, especially on the history and development of the oil and gas industry. Sakwa tells us a lot about how politics have been transformed but not enough about how the industry has changed. It would be productive if the author would talk about the quantity of economic assets at stake in addition to the quality of freedom. Numbers have explanatory power, but sometimes they are simply missing from the analysis. Five tables for such an extensive 500-page long volume is clearly not enough, and even these few tables contain a rather modest amount of data. What this book needs is tables composed by the author from different sources, if not primary then at least secondary.
It is obvious that deeper theoretical developments, more synthesis, and more generalizations are needed. It would be beneficial for the author to exploit more profoundly the notion of duality in relation to contemporary Russia. He has already started doing this in two separate sections, “A new dual state” and “The dual economy”. The synthesis and synergy of the notions of dual state and dual economy with the notion of post-transitional corporate, property, and land raiding could, if elaborated further, produce a qualitatively new type of scholarly work.
The terminology used by Sakwa is exceptionally rich and includes some Russian terms as well. This adds to the book’s anthropological flavor. At the same time, we cannot but wonder about the author’s scant use of terms like “corruption,” “corporate raiding,” bribery, and fraud. Whatever the author’s position on this issue might be, these terms could appear in the text on a more frequent basis. One may get an impression that Sakwa almost avoids such loaded terms.
The book, however comprehensive, does not close the topic of Yukos, simply because the Yukos saga continues and remains of interest to many. We as readers look forward to new scholarly works that will touch upon the issues of property rights, corporate and state-authorized raiding and corruption, including in the justice system, and the changing role of the state in Russia.
Barnes, Andrew. 2003. “Comparative Theft: Context and Choice in the Hungarian, Czech, and Russian Transformations, 1989–2000.” East European Politics and Societies 17(3):533–565.
Barnes, Andrew. 2006. Owning Russia: The Struggle over Factories, Farms, and Power. Ithaca: Cornell University Press.
Barnes, Andrew. 2007a. “Extricating the State: The Move to Competitive Capture in Post-Communist Bulgaria.” Europe-Asia Studies 59(1):71–95.
Barnes, Andrew. 2007b. “Industrial Property in Russia: The Return of the State and a Focus on Oil.” SAIS Review 27(2):47–62.
Black, Bernard, Reinier Kraakman, and Anna Tarassova. 2000. “Russian Privatization and Corporate Governance: What Went Wrong?” Stanford Law Review 52:1731–1808.
Firestone, Thomas. 2008. “Criminal Corporate Raiding in Russia.” The International Lawyer 42(4):1207–1230.
Frye, Timothy. 2000. Brokers and Bureaucrats: Building Market Institutions in Russia. Ann Arbor: University of Michigan Press.
Frye, Timothy. 2002. “Two Faces of Russian Courts: Evidence from a Survey of Company Managers: Reforming Russia’s Courts.” East European Constitutional Review 11 (1–2):125–129.
Harding, Luke. 2008. “Raiders of the Russian Billions.” The Guardian, June 24, 2008.
Kireev, A. 2007. “Raiding and the Market for Corporate Control: The Evolution of Strong-Arm Entrepreneurship.” Problems of Economic Transition 50(8):29–45.
Volkov, Vadim. 2004. Violent Entrepreneurs: The Use of Force in the Making of Russian Capitalism. Ithaca, NY: Cornell University Press.
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Woodruff, David. 2004. “Property Rights in Context: Privatization’s Legacy for Corporate Legality in Poland and Russia.” Studies in Comparative International Development 38(4):82–108.
Woodruff, David. 2005. “Nestabil’nost’ chastnoi sobstvennosti v Rossii: ekonomicheskie i politicheskie prichiny”. Pp. 206–219 in Russkie Chteniia. Vypusk 1. Moskva: Gruppa Ekspert.