Kjell NORDSTREM: “Marx was right”
In your view, what is the major principle a Ukrainian entrepreneur should follow in his relations with the authorities?
Traditionally, when the state functions properly in a market economy, it establishes certain rules of the game, and the rules are the same for everybody — big, small, foreign, or local. Therefore, in a way, there shouldn’t be too much relationships between the state and business. They should mind their own business: business — the business, and the state — the state things, and there shouldn’t be that much of the mix between the two of them. This is one of the points today, that there should be a clear division of labor, as you say.
What economic advice would you give Ukraine’s government? Should we improve state management of the economy or give it up entirely, giving the enterprises the most economic freedom possible?
This is the question that every state is struggling with: how big should the influence of the state be. Should it be very small, as in the case of the United States of America? They have a Constitution that basically forbids the involvement of the state, and Washington cannot become too big — it’s in the Constitution. Market economy is not an ideology; it’s just a mechanism, which has the ability to tell what is efficient and inefficient. That in itself does not necessarily create a good society, it just divides between the efficient and inefficient. So, that is a role for the state to play: to provide some basic services that the market economy does not take care of (healthcare, defense, police, and a number of basic infrastructure issues). It also has to regulate the things that are very important here and in many other countries: antitrust legislation, by which no one can become too big and too dominant in the market. This is very important, because there should always be competition.
What is your forecast concerning Ukraine’s economy? Will it be able to stand the competition in the globalized world system or will it be content with the role of a transit country and raw materials supplier?
No, I don’t think so. You shouldn’t forget that I come from a country that was one of the poorest in Europe a hundred years ago. You are very rich compared to what we had then. And many of us also drank a lot at that time, so one can say we were poor alcoholics (laughing). We were a raw materials country; we no longer are. We were poor; we no longer are.
So, how did you do this? What was the trick, so to say?
The secret is very much in getting the public system, the legislation, and infrastructures to work properly. No bribes, clear rules of the game, quite open economy; as open as possible to the rest of the world, letting foreign companies come and work here, bringing as much foreign people as possible here, bringing out as many Ukrainians as you can so that they get the experience. Business is very much a trial-and-error process. There are no ready-made recipes. This means the more things you try and the more errors you do, the quicker you learn. It’s very difficult to look at other countries and try to copy their methods, because the conditions are usually so different. Even our children do not learn from us and from our mistakes, and they shouldn’t because they are designed by nature not to copy you. Their life can be different from yours, so your recipe for success is no good for them. So the recipe for, say, Sweden is not the recipe for Ukraine. But of course you can look at the others, get the inspiration, maybe borrow small things, but you cannot copy the whole thing from Thailand, Korea, etc. The religion is different, the role of the public sector is different, relation to the former Soviet Union...
Among your mottoes there is one saying that Karl Marx was right. Precisely in what sense?
It’s a caricature of Karl Marx in a sense. You have studied Marxism, so you know that one of the things he was philosophizing about was that the workers should own everything that is important in the society. And what has happened in Western companies today is that gradually their stuff, their education, and ideas become the most important things, and this you cannot own. This means that the people own it. So the market economy was able to do what Marx once upon a time wanted to do. I don’t think that he ever could dream of that this would happen but it happened. What else does Microsoft have than its people? Nothing. A few desks and chairs and the building, but this is nothing. What they have is good engineers, who do programming, products, and services. This is all in the minds of these people that Microsoft cannot own. So they have to invite them to become owners of the company, give them bonuses, and treat them very well because otherwise they’ll lose them.
You also argue that in the future business will be mostly ideas and creativity, not hard work. But who is going to carry out these ideas? Do you mean that there will be a sharp division into elite and simple executors?
What happens when you open up the economy the way you have done is that we individuals take initiatives. It is not someone else but us who decide to start a company, open a restaurant, start a pop group, or found a newspaper. There is no plan; no one has told us to do it. The elite usually gets nothing done. The initiatives for change usually come from anyone in the society, and this is what the open economy is all about. No plan!
