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Pride for One's Country vs. Soviet Luxury: Top Papers of the April Conference

Selected by journalist Boris Grozovsky specially for IQ.hse.ru, below are some of the must-reads from the 900 papers presented at the HSE's XVII April Conference.
See also: 'Normal Is Not Ridiculous': The Most Interesting Reports Presented at the HSE's XVII April International Academic Conference


Preference was given to papers with thefull text posted in the public domain. Not included here are papers mentioned in other top lists atIQ.hse.ru (see a full listingbelow).

1. Ronald Inglehart (Michigan University, HSE). Reshaping Human Motivations and Society, 1896 - 2014

In this paper, Inglehart summarises a number of articles he has published in recent years. In part one, he shows humanity's shift from materialist to post-materialist values made possible by the fact that survival and dealing with hunger, disease and war were no longer people's main concerns. In the past, survival required strong in-group solidarity, including solidarity against outsiders, and xenophobia was virtually essential for society's survival. Since land was the main — and finite — means of production, war in agrarian societies was a zero-sum game.

In more recent decades, people have started to take survival for granted, and this has opened up the way for new cultural strategies and changing political and economic behaviours. Between 1970 and 2000, the prevalence of self-expression values increased significantly in each new age cohort compared to the previous one. Demographic transition has resulted in a shift of attitudes towards high birth rates and growing tolerance of homosexuality.

People's willingness to fight for their country has declined nearly everywhere. Inglehart notes a shift in male roles: there is no need to fight to assert one’s domination. He describes it as a broad feminization of culture.

Bill Gates and Mark Zuckerberg have replaced alpha males as today’s role models.

In recent years, however, this process has slowed down in developed societies due to rising inequality, where the incomes of 90% of the population have stagnated, while the gains have gone to the top 10% (in the U.S., the top decile accounted for 34% of all income in 1970, which has now increased to 47%). This is the result of economic growth in the past forty years. In terms of household net worth, the top 0.01% of Americans now own as much as the bottom 90%. The net worth of the 400 wealthiest American families is more than that of 60% of all U.S. households.

Globalization and large-scale migration to developed countries have reinforced the cultural backlash against post-materialism. Industrialization has led to a decline in agricultural workers' incomes, while globalization has resulted in lower incomes of workers in developed economies. Today, computer programs are increasingly replacing and thus affecting the incomes of lawyers, journalists, academics, doctors, and other highly-educated professionals in the service sector.

While 50 years ago, the largest employer in the U.S. was General Motors, whose workers earned the equivalent of $50 per hour (in today’s money), currently, the largest employer — Walmart — pays around $8 per hour. As a result, xenophobic and populist political forces are rising, from the National Front in France to Donald Trump and Bernie Sanders in the U.S. This is the result of a conflict of interest between the top one percent whose gains are growing and the remaining 99% whose incomes continue to stagnate.

Discontented electorates have not yet become mobilized along these lines because low-income voters are diverted by non-political issues, such as attitudes towards same-sex marriage. But a coalition based on 99% of voters could redirect the state to focus on policies maximizing the quality of life, inter alia by investing in better infrastructure, environmental protection, education and healthcare.

2. Mikhail Chernysh (RAS Institute of Sociology). The Impact of Structural Factors on the Prevalence of Civic Culture Types in Russia

The paper's title does not really reflect its key message that elections are little more than a cargo cult for most Russians; 40% of respondents consider going to the polls mandatory, regardless of the political situation, election campaign, type of candidates or offices they are running for.

Going to the polls is in fact a preconditioned behaviour dating back to Soviet times; the smaller the community, the stronger its residents tend to believe that voting in elections is their sacred duty and failing to do so amounts to political protest. This old Soviet stereotype has remained intact, particularly among villagers and older people in cities, who continue to see elections as "an important ritual for reproducing the power hierarchies." In contrast, younger urbanites tend to view elections as an opportunity to express their views. 

When asked about their reasons for going to the polls, more than half of Russian respondents refer to procedural rather than substantive arguments (such as supporting a particular candidate or party), thus emphasizing their respect for the electoral process per se perceived as their duty as citizens. People sharing this attitude do not really want to know more about the candidates; 61.6% of Russian respondents said they voted because they believed it was their duty as citizens, and only 20.6% went to the polls to support a particular candidate (respondents were allowed to choose more than one option; thus the total is higher than 100%). In addition to that, 6.9% went to the polls as 'a family event', 3.5% were required by their employer; 3.4% said they just did what everyone else was doing, while another 2.5% were attracted by the 'nice atmosphere and music' at the polling stations.

The size of residential settlement was found to be the only variable having an effect on voter motivation. Many people report that taking part in the voting process makes them feel elated and optimistic.

People enjoy the festivities without thinking much about whom they elect to a position of power.

Bureaucracy, of course, would want to maintain this type of voter behaviour for as long as possible. More rational voter behaviour is only characteristic of big cities with a better-developed civic culture.

3. Andranik Tangian (WSI in the Hans-Böckler-Stiftung and Karlsruhe Institute of Technology). Decreasing Labour-labour Exchange Rate as a Cause of Inequality Growth (see his presentation here)

Over the past quarter of a century, the G7 countries have seen a marked increase in income inequality, reflected in the Gini coefficient measured before and after taxes. In France, for example, the same type of house which a middle-class family with one income earner could afford forty years ago is now affordable only to a middle-class family with at least two income earners, while a family with one income-earner can only afford a type of house which a worker could buy forty years ago, and worker families today simply cannot afford a house.

The LLER (labour-labour exchange rate index) indicates the amount of labour needed to earn an amount sufficient for purchasing various consumer goods. For example, if a worker produces four coffee pots per hour and their hourly wage can buy two coffee pots, their LLER stands at 50%. A downward change in this ratio — e.g. if 25 years later the hourly wage in this position can only buy 1.5 coffee pots — is perceived as unfair. According to Tangian, he pays his car mechanic 40 euro per hour, while the mechanic's hourly wage stands at 20 euro; one hour of servicing his own car in the same garage would cost the mechanic two hours of his work; thus, his LLER equals 50%. Back in 1990, LLER in the same context stood at 60%, with the garage charging customers 25 euro per hour and paying the mechanic an hourly wage of 15 euro.

Over the past 25 years in the U.S., average hourly wages have increased at the rate of inflation, yet all gains from the increase in labour productivity have gone to business owners and managers rather than workers. Over the same period, LLER decreased in relation to consumer price inflation by 24% in the U.S., 23% in Japan, 17% in Germany, and between 5% and 8% each in the U.K., Italy and France.

Even greater was the drop in LLER in relation to house prices, as labour productivity in the construction sector tends to grow much slower than in the manufacturing industry. Essentially it means that in 2015 compared to 1990, industrial workers did not get paid for a certain portion of their hours, i.e. 30%-33% in the U.S., 23-28% in Japan, and a little less in Europe. Devaluation of labour was the highest in the U.S.

4. Galina Monusova (IMEMO RAS). Actual and Perceived Social Mobility Across Countries

Social mobility is an indicator of an individual's changing position in society. Such changes can be measured objectively, yet people tend to perceive them differently, "one person may think they have made significant progress, another may believe they could have achieved more but something prevented them, while a third may not even notice any real change."

Monusova examines the differences between objective and subjective measures of social mobility by using data from 37 countries. Objective social mobility was measured by comparing the occupational groups of fathers and their sons (11 groups characterised by different levels of training, intellectual vs. manual work, hired worker vs. business owner, etc.) and subjective social mobility was estimated on a ten-point scale.

She found relatively high objective mobility in Cyprus, Norway, Korea, Poland, Switzerland, Italy, Finland, Spain, and Ukraine, but lower mobility in Israel, Argentina, Turkey and the U.S., with Russia in the lower middle of the list.

However, an individual may fail to notice they have objectively moved up on the social ladder or dismiss their progress as inadequate.

Monusova observed high subjective mobility in Finland, Cyprus, Norway, Switzerland, Germany, and France, and low in Russia, Ukraine, some other post-socialist countries, and Turkey. In most countries, more people were found to have underestimated their progress than overestimated it. Yet in Nordic countries and the U.S., many people tend to believe they are making progress whether or not it is objectively true, while in post-socialist countries, people have generally been found to underestimate increases in social status. According to Monusova, the difference between objective and subjective estimates of social status may be due to the fact that people tend to take for granted the role of macroeconomic development and only take into account their own efforts in making progress.

5. Lev Gudkov (Levada-Centre). The Paradoxes of Studying Social Structure in Russia

Most people in Russia (62%) live in villages and small towns characterised by chronic social depression, stagnation and anomie. 70% of all Russians have no savings, and 75% live from paycheck to paycheck. This situation is not supportive of new forms of social solidarity, long-term life planning or the active pursuit of a better life.

Low population mobility (52% to 54% of Russians live today in the same community where they were born) is a major barrier to a market economy, as most people lack the resources to improve their quality of life by moving elsewhere.

The proportion of entrepreneurs is low at 4% to 7% of the population, and barely growing. Instead, the proportions of bureaucracy, administrative staff, police and security forces are rapidly increasing. Elites lack cultural and symbolic significance; instead, being 'average' is perceived as the norm.

Thus, Russian society is not keen on upward mobility, and most people are content with being "as good as the next guy." The lack of social engagement enables the authorities to establish hierarchies of domination and subordination. According to Gudkov, these factors hinder Russia's social development potential.

6. Vladimir Sokolov (HSE), Laura Solanko (BOFIT).Firm Performance, Political Influence and External Shocks

Mid-sized Russian firms with high self-reported political influence at the regional level tend to show better financial performance than firms without such influence, but can face specific risks. According to the authors, influential firms tend to achieve higher profitability and hold more cash. Yet they often take out more bank loans and grow twice as slowly as non-influential firms when measured by assets and are 40% slower when measured by revenue. The authors conclude that influential firms may be channeling their additional profits to owners or connected politicians rather than reinvesting it in the firm's development.

Since the 2008 global financial crisis, influential firms have faced a significantly higher likelihood of going bankrupt than their non-influential peers. Their business model appears to make them particularly vulnerable to sudden, exogenous shocks in an environment where political decision-makers cannot help them.

7. Margarita Fabrycant (HSE), Vladimir Magun (IS RAS, HSE). Country Pride and Basic Values ​​of Russians

This paper further expands on issues raised by the same authors at the 2015 April Conference (see here).

Having examined the different types of national pride, the authors look at whether such sentiments are selfish or altruistic. One could reasonably assume the former, since selfishness — raised from the individual to group level — lies at the heart of national identity. Alternatively, national identity can be viewed as being based on solidarity, where the emphasis is on one's willingness to sacrifice personal interests for the sake of compatriots rather than sacrifice other nations for the sake of one's own.

National identity can motivate people to be altruistic. The European Social Survey (ESS) has found that national pride correlates positively with values such as caring for others and negatively with self-assertion. According to the authors, in the Russian context, national pride is the opposite of selfish values.

8. Evsey Gurvich (EEG). Macroeconomic Policy Development in Russia: Progress and Problems

Since the 1998 and 2008 crises, the Russian government has adopted a different approach — instead of trying to maintain key macroeconomic indicators, it is seeking a new equilibrium. This is reflected in the Central Bank's response, such as continued targeting of inflation, floating the exchange rate, high interest rates, and the government's policies of keeping the anti-crisis package minimal and focusing its fiscal policy on cutting costs to achieve a sustainable balance. However, the process of adaptation to new circumstances is far from over. In 2015, oil prices stood at about $20 less than in 2005, while the physical GDP volume was 26% higher. At the same time, real wages exceeded the 2005 levels by 61% and budget expenditures — by 74%. According to EEG, adaptation will require budget consolidation by 4 to 4.5 p.p. of the GDP before 2020.

9. David Card (Berkeley), Evgeny Yakovlev (NES). The Causal Effect of Serving in Army on Health: Evidence from Regression Kink Design and Russian Data

The study's authors examine the causal effect of serving in the Russian Army on health.

Between 1945 and 1985, the Soviet Union had the world's biggest army of 5.4 million. It was only in Gorbachev time that its size was reduced. Between 1950 and 1980, more than 80% of males subject to military duty served in the army, while in the 2000s, only 30% did. The authors found strong effects of military service on unhealthy behaviors, such as smoking and alcohol consumption — in fact, smoking was subsidized in the Soviet army, and every conscript received 10 cigarettes a day for free. Military service was also associated with higher chances of getting hepatitis and tuberculosis and other chronic liver and lung conditions related to alcohol consumption and smoking. Similar effects on health were found in U.S. veterans of the Vietnam war.

10. Tatiana Nikanorova (Russian State Humanitarian University). Domestic Luxury of the Soviet  Nomenklatura (1940-1952)

Luxury is understood as excessive and conspicuous consumption of overvalued and rare items. During the period reviewed in the paper, Soviet society was extremely stratified: the war and postwar devastation had pushed most Soviet people to the brink of physical survival, where even common things — such as having unlimited amounts of bread or a salad of tomatoes and cucumbers — were perceived as luxury by many.

Nikanorova explores the consumption patterns of Soviet elites based on data from the archives of the Communist Party Control Committee, a body with a mandate to investigate Communist Party members' deviant conduct and thus harbor them from the general judicial system.

The general public perceived obvious inequality as painful and often complained by writing letters to the Control Committee. According to an anonymous letter dated 1943, the wife of a deputy chairman of the Saratov Regional Communist Party Committee had been saying loudly in a crowded food store that her children always had milk with chocolate and that only a bad housewife could lack a supply of jam in her pantry. Anther anonymous letter reported that a factory director in Kuibyshev (then Samara, 1944) would often throw banquets while his workers were starving and searching for food in rubbish bins. A 1946 letter to the Control Committee from the chairman of a manufacturing cooperative describes one such banquet where the guests were served roast pigs, lamb and cakes. In many cases, such banquets were paid for from illegally obtained money and were in fact a form of corrupting the party leadership.

The paper also describes Soviet bosses' rich homes as materialised dreams of physical comfort, with swimming pools, billiard rooms and greenhouses surrounded by tall impenetrable walls.

11. Natalia Kapelko, Natalya Volchkova (NES). Export Costs of Visa Restrictions

Visa restrictions can create strong barriers to imports, lowering by 26% to 40% the trans-border trade in the types of goods which require physical meetings and direct negotiations between the seller and buyer.

While it seems counterintuitive since the visa costs are not too high, non-monetary risks can arise if a visa is denied or delayed. While the exports of commodities or bulk goods are rarely affected by visas, the situation is different with goods which are not traded in commodity markets but are in a way unique with complex pricing rules and thus require direct contact between sellers and buyers; by complicating such contacts, visas tend to limit imports to visa-protected countries.

12. Irina Glazyrina (Chita, INREC SB RAS). The 'Eastern Vector' for Russia: New Prospects and Challenges for Cross-border Regions

Russia's pivot to China increases the potential effect of Chinese policy on the development of Russia's East. Recently, China has adopted an 'ecological civilization' approach, shifting its focus from economic growth rates to the efficient use of natural resources and improving people's quality of life.

Russia's eastern regions export timber to China, but the economic effect of such trade is poor for Russia. China has reduced its logging operations in line with the new environmental policy, which may result in increased demand for Russian timber. More logging may create environmental risks for Russia, while joint projects with China are not likely to provide a solution.

Glazyrina examines the case of the Amazar Pulp Mill construction project in Trans-Baikal Region. If launched, the facility is likely to cause catastrophic deforestation in the area.

Cross-border asymmetry between Russia and China perpetuates a commodity-focused economy in Russia's eastern regions and threatens the environment, while allowing China to pursue its new ambitious policy.

According to a paper on a similar topic by Irina Zabelina and Ekaterina Klevakina, over the past ten years, the sectoral structure of the economy has worsened in Russian territories bordering with China, but improved in counterpart Chinese territories.

Boris Grozovsky

May 12, 2016