Dr Sam Vaknin

Mira Markovic is an "Honorary Academic" of the Russian Academy of Science. It cost a lot of money to obtain this title, and the Serb multibillionaire Milan Karic was only too glad to cough it up to gain another ally in case he fell out with Milosevic. Whatever else you may say about Balkan cronies, they rarely bite the hand that feeds them (unless or until it is expedient to do so). And whatever else you may say about Russia, it has adapted remarkably well to capitalism. Everything has a price and a market. Israel had to learn this the hard way when Russian medical doctors with only nurse-level training and civil engineers trained to the level of construction-worker flooded its shores. Everything is for sale in this region of opportunities, instant education inclusive.

It seems that academe suffered most during the numerous shock therapies and transition periods showered upon the impoverished inhabitants of Eastern and Central Europe. The resident of decrepit communist-era buildings, it had to cope with a flood of eager students and a deluge of anachronistic "scholars." But in Russia, the CIS and the Balkans, the scenery is nothing short of Dantesque. Unschooled in any major European language, lazily content with their tenured positions, stagnant and formal, the academics and academicians of the Balkans are both failures and a resounding indictment of the rigor mortis that was Socialism. Economics textbooks stop short of mentioning Friedman or Phelps. History textbooks would be better off being relegated to the science fiction shelves. A brave facade of self-sufficiency covers up a vast hinterland of an inferiority complex fully supported by real inferiority. In antiquated libraries, shattered labs, crooked buildings and inadequate facilities, students pursue redundant careers with the wrong teachers.

Academic sleaze

Corruption seethes under this repellent surface. Teachers sell exams, take bribes and trade sex from their students in exchange for grades. Furthermore, they refuse to contribute to their communities. In all my years in the Balkans, I have yet to come across a single voluntary act by an academic. What I have come across are numerous refusals to help and to contribute to society. Materialism incarnate.

This sorry state of affairs has a twofold outcome. On the one hand, herds of students are the victims of rigidly dictated lectures and the suppression of free thought. These academic products suffer from the twin afflictions of irrelevance of skills and the inability to acquire relevant ones, the latter being the result of decades of brainwashing and industrial educational methods. Unable to match their outdated knowledge with anything a modern marketplace can offer, they default on to menial jobs, rebel or pull levers to advance. Which leads us to the death of meritocracy and why this region's future is behind it.

In the wake of the downfall of all the major ideologies of the 20th century (Fascism, Communism etc), the "New Order," as heralded by President George Bush, emerged as a battle of "open club" versus "closed club" societies, at least from the economic point of view.

All modern states and societies must choose whether to be governed by merit (meritocracy) or by the privileged few (oligarchy). It is inevitable that social and economic structures are controlled by elites. It is a complex world and only a few can master the knowledge it takes to govern effectively. What sets meritocracy apart is not the number of members of its ruling (or leading) class, which is usually no larger than in an oligarchy. No, it is distinguished by its membership criteria and by the mode of their application.

Welcome to the club

The meritocratic elite is an open club because it satisfies three conditions. Firstly, the process and rules of joining up (ie the criteria) are transparent and widely known. Secondly, the application and membership procedures are uniform, equal to all and open to continuous public scrutiny and criticism. Thirdly, the system alters its membership requirements in direct response to public feedback and to the changing social and economic environment.

To belong to a meritocracy one needs to satisfy a series of demands, whose attainment is entirely up to the individual. And that is all that one needs to do. The rules of joining and of membership are cast in iron. The wishes and opinions of those who happen to comprise the club at any given moment are of no importance and of no consequence. Meritocracy is "fair play" by rules of equal chance to derive benefits. Put differently, it is the rule of law.

To join a meritocratic club, one needs to demonstrate that one is in possession of, or has access to, "inherent" parameters, such as intelligence, a certain level of education and a potential to contribute to society. An inherent parameter must correspond to a criterion and the latter must be applied independent of the views and predilections of those who sometimes are forced to apply it. The members of a committee or a board can disdain an applicant, or they might wish not to approve a candidate. They may prefer someone else for the job because they owe her something, or because they play golf with him. Yet, they are permitted to consider only the applicant's "inherent" parameters: does he have the necessary tenure, qualifications, education and experience? Does he contribute to his workplace, community and society at large ? In other words: is he "worthy" or "deserving"? Not who he is, but what he is.

Granted, these processes of selection, admission, incorporation and assimilation are administered by mere humans and are, therefore, subject to human failings. Can qualifications always be judged "objectively, unambiguously and unequivocally"? Can "the right personality traits" or "the ability to engage in teamwork" be evaluated "objectively"? These concepts are vague and ambiguous enough to accommodate bias and bad will. Still, at least appearances are kept in most cases, and decisions can be challenged in courts.

The old school tie

What characterizes oligarchy is the extensive, relentless and ruthless use of "transcendent" (in lieu of "inherent") parameters to decide who will belong where, who will get which job and, ultimately, who will enjoy which benefits. The trouble with transcendent parameters is that there is nothing much an applicant or a candidate can do about them. Usually, they are accidents, occurrences absolutely beyond the control of those most affected by them. Race is such a transcendent parameter, as is gender, familial affiliation, contacts and influence.

In many corners of the globe, to join a closed, oligarchic club, to get the right job, to enjoy excessive benefits, one must be white (racism), male (sexual discrimination), born to the right family (nepotism), or have the right political - or other - contacts (cronyism). And often, belonging to one such club is the prerequisite for joining another. In France, for instance, the whole country is politically and economically run by graduates of the Ecole Normale d'Administration (ENA). They are known as the ENArques (loosely translatable as "the royal dynasty of ENA graduates").

The privatization of state enterprises in most Eastern and Central European countries provided a glaring example of oligarchic machinations. In most of these countries (the Czech Republic, Macedonia, Serbia and Russia are notorious examples), state companies, the nation's only assets, were "sold" to political cronies. In the process this created a pernicious amalgam of capitalism and oligarchy known as "crony capitalism" or privateering. The national wealth was passed into the hands of relatively few, well-connected, individuals, at a ridiculously low price. The nations involved were robbed and their riches either squandered or smuggled abroad.

In the affairs of humans, not everything falls neatly into place. Take money for instance. Is it an inherent parameter or an expressly transcendent one? Making money indicates the existence of some merit, some inherent advantageous traits of the moneymaking individual. To make money consistently, a person needs to be diligent, resilient, hard working, be able to prevail and overcome hardships, be far sighted and possess a host of other, universally acclaimed, traits. On the other hand, is it fair when someone who made his fortune through corruption, inheritance, or luck, is preferred to a poor genius?

That is a contentious issue. In the USA, money talks. Being possessed of money means being virtuous and meritorious. To preserve a fortune inherited is as difficult a task as to make it in the first place, the thinking goes. Thus, the source of the money is secondary.

An oligarchy tends to have long-term devastating economic effects. The reason is that the best and the brightest, when shut out by the members of the ruling elites, emigrate. In a country where one's job is determined by family connections or by influence peddling, those best fitted to do the job are likely to first be disappointed, then disgusted and then leave the place altogether.

Brainpower down the plughole

This is the phenomenon known as "brain drain." It is one of the biggest migratory tidal waves in human history. Capable, well-trained, educated, young people leave their oligarchic, arbitrary, influence-peddling societies and migrate to less arbitrary meritocracies (mostly to be found in what is collectively known as "the West").

This is colonialism of the worst kind. The mercantilist definition of a colony is a territory which exports raw materials only to re-import them in the form of finished products. The brain drain is exactly that: the poorer countries are exporting raw brains and buying back the finished products masterminded, invented and manufactured by these brains.

Yet, while in classical colonialism the colony at least received some recompense for its exported goods, here the poor country is actually the poorer for its exports. The bright young people who depart (most of them never to return) carry with them an investment of the scarce resources of their homeland, and award it to their new, much richer, host countries. This is an absurd situation, a subsidy granted reluctantly by the poor to the rich. This is also one of the largest capital transfers (and in reality capital flight) in history.

Some poor countries understood these basic, unpleasant, facts of life. They extracted an "education fee" from those emigrating. This fee was supposed to, at least partially, recapture the costs of educating and training the emigrants. Romania and the USSR imposed such levies on Jews emigrating to Israel in the 1970s. Others despairingly regard the brain drain as a natural catastrophe. Very few countries are trying to tackle the fundamental, structural and philosophical flaws of the system, which is the root of the disenchantment of those who leave.

The brain drain is so serious that some countries have lost up to a third of their young, educated population (Macedonia in Southeast Europe, some less developed countries in Southeast Asia and Africa). Others, like Israel during the 1980s, were drained of almost one half of their educated work force.

It's all in the mind

Brains are an ideal natural resource; they can be cultivated, directed, controlled, manipulated, regulated. They are renewable and replicable. Brains tend to grow exponentially through interaction and they have an unparalleled economic value added. The profit margin in knowledge and information related industries far exceeds anything common to more traditional, second wave, industries (not to mention first wave agriculture and agribusiness).

Even more important is that poor countries are uniquely positioned to take advantage of this third revolution. With a cheap, educated work force, they can monopolize basic data processing and telecommunications functions worldwide. True, this calls for massive initial investments in physical infrastructure. But the important input is the wetware, the brains. To constrain them, to disappoint them, to make them run away to more merit-orientated places is to sentence oneself to a permanent disadvantage and deprivation.

This is what the countries in the Balkans are doing. Driving away the best part of their population by encouraging the worst part. Abandoning their future by dwelling on their past. Caught in a fatal spider's web of family connections and political cronyism of their own design, their factories and universities and offices and government all filled to the brim with third-rate relatives of third-rate professors and bureaucrats. They are turning themselves into third-rate countries in a self-perpetuating process of decline. And all the while eyeing the new and the foreign with the paranoia that is the result of true guilt.

Dr Sam Vaknin, 27 September 1999

The author is General Manager of Capital Markets Institute Ltd, a consultancy firm with operations in Macedonia and Russia. He is an Economic Advisor to the Government of Macedonia.

Dr Vaknin's website is here.