As the great and the good (as well as John Major) filed into Moscow’s reconstructed Christ the Saviour cathedral to pay their last respects to Boris Yeltsin, the debate over the legacy of Russia’s first elected president was only just beginning. As the more generous appraisers of our own Charles J. Haughey were apt to say, he was a man of great talents as well as great flaws. He was skillful enough to outmanoeuvre Mikhail Gorbachev and courageous enough to defend the democracy emerging from the ashes of the USSR. (Alas, the “controlled democracy” ushered in by his successor, Putin, illustrates that such a term is not a mere paradox, but a grim oxymoron.)
Then there are the flaws. Aside from the 1993 order to shell the same Parliament building he had defended two years earlier, perhaps the greatest blot on Yeltsin’s record was the rise of oligarchs during his watch. Indifferent to the trivia that goes with prudential accounting, Yeltsin overlooked and even encouraged the vultures who swooped down to devour the carcase of the Soviet economy. The result: Russia has gone from a state in which—in theory–everybody had a share in everything to become one of the world’s most unequal societies, in which “a quarter of [the] economy is owned by 36 men.” (See this BBC report on “Moscow’s suburbs for billionaires).
But is Russia unique in suffering from a parasitical class of super rich? A New York Times report this week covered a list that estimated the earnings of top hedge fund managers:
“To make Alpha's list, a manager needed to earn at least $240 million last year, nearly double the amount in 2005. That is up from a minimum of $30 million in 2001 and 2002. Combined, the top 25 hedge fund managers last year earned $14 billion – enough to pay New York City's 80,000 public school teachers for nearly three years.”
And some of these characters made hundreds of millions of dollars for providing a return on capital investment that would be shamed by a decent post office account:
“Raymond T. Dalio, head of Bridgewater Associates, which has more than $30 billion in hedge fund assets, for example, took home $350 million last year even though his flagship Pure Alpha Strategy fund posted a net return of just 3.4 percent for the second consecutive year.”
Maybe there’s some money to be made from re-issuing Das Kapital…